Rethinking the Economy

I’ve been wrestling with bits and pieces of a framework, but no matter how much I play with them, the end result is all over the place. So, time to get it out of my head. Here’s a quick dump of where I am:
Creating a Values-based Economy
A. The way we usually talk about the [...]

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[Part 7 of Values-based vs. Market-based Approaches to the Economy]
The case I’ve laid out over the last six posts is not an argument against using markets as a tool. As I’ve said, for example, despite all the problems with cap and trade it’s certainly possible that this usage of markets could be [...]

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[Part 6 of Values-based vs. Market-based Approaches to the Economy]
One of the fundamental principles underlying a market-based framework is that through consumer choice, everyone gets a say. Some bureaucrat doesn’t decide what shoes you get to wear, you do. If you decide hot pink ballerina slippers or combat boots — or hot pink [...]

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[Part 5 of Values-based vs. Market-based Approaches to the Economy]
It’s easy to understand why economists love market-based frameworks: they’re elegantly simple. Set the right prices and everything follows. Or as Krugman wrote about solving the climate crisis:
Econ 101 tells us — probably correctly — that the only way to get people to [...]

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[Part 4 of Values-based vs. Market-based Approaches to the Economy]
If you’ve ever heard someone preach the joys of a market-based solution, odds are at some point they’ve said, government regulations/bureaucrats can’t be smarter than the market — the economy’s just too complicated. But as we saw last week, creating a market-based solution runs [...]

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[Part 2 of the Promoting Broad Prosperity review]
Topos’ Promoting Broad Prosperity framework avoids a major problem with my approach. For the past few months, I’ve been focused on understanding how the nuts and bolts of the economy’s engine works. I think I’ve started to figure it out. But I haven’t yet figured out [...]

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Now that I’ve used Getting Green Done to flesh out part of my argument, here’s the latest version of my framework.
The conventional economic framework, a.k.a. Econ 101, says the economy can be broken into 3 layers:

People are calculators: they rationally pursue their self-interest given near perfect information about the world
Organizations are calculators
[...]

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Now that I’ve laid out some basic principles & assumptions, it’s time for my first extremely rough draft of a model for thinking about the economy to create a better world. With the principles & assumptions, I’ve been thinking about them for quite a while. This model? This is my first time — the “Stumbling [...]

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Most economists start from the same assumption about organizations that they make about people: they are rational and make well-informed, calculated decisions based on their self-interest.
You might ask, did these economists ever have a real job? If so, were they taking Acid or Ecstasy most of the time? How did they get the idea that [...]

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When most economists talk about the economy, they start from the assumption that people are calculators. If you want to understand how the economy works, they say, pretend that people are rational and that they have all the info they need to make a decision. Take a gazillion people making decisions in their rational self-interest, [...]

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