I found that economists either failed to test their models, or else when reality contradicted them, argued that we should reshape the world to conform to their assumptions.
No matter how wrong the economists’ predictions turn out to be, the main ideas in economics don’t change much, perhaps because “economics has always appeared to me to be more of a religion than a science, and religious convictions are not easily shaken,” says Farley, the co-author with Herman Daly of the key textbook Ecological Economics.
Farley makes it clear why we have to give up on the obsession with growth and rethink our assumptions about consumption:
The single feature that most clearly distinguishes ecological economics from other schools of economic thought is the recognition that we now live on a “full” planet – one on which rates of resource extraction, waste emissions and human population growth threaten the life support functions of planetary ecosystems.
Farley demonstrates that economics can be a source of insight, if economists are willing to abandon the failed neoclassical project:
The neoclassical assumption of self-interested Homo economicus is poorly adapted for solving our most important economic challenges, but is also a poor model of human behaviour. Human nature is in fact well suited to developing the cooperative institutions required to confront the problems of a full planet. We need to design economic institutions that produce the appropriate behaviour.
Farley teaches in the Community Development and Applied Economics Department at the University of Vermont, which is home to the Gund Institute for Ecological Economics.