Preview: A Case for Design and Speculative Economics

Introduction

“It is very bad in America to be right too early,” writes Sarah Kendzior in her book, They Knew, in regard to timing in journalism. This tendency for new ideas to be punished by the dominant paradigm in defense of the status quo is not new or limited to journalism, or America. In fact, in economics, the number of people excluded has been growing for decades. So much so, that perhaps the outcasts now outnumber the orthodoxy. This year the world lost one such transformative luminary in Hazel Henderson, who “went virtual” at the age of 89. A dynamic and long-time member of the futures community, Henderson ridiculed conventional economists and was an apostle of the green economy and socially responsible investing–for over half a century (Roberts, 2022). Having had the pleasure of some digital correspondence with Henderson over the past decade, I believe she will continue to inspire new thinking for decades to come. While “too early” may be “very bad” and subsequently heartbreaking, we can look to French poet Victor Hugo for the antidote: "Nothing is more powerful than an idea whose time has come." Henderson is not alone. In this proposal for design and speculative economics, I will introduce a few more of the “outcasts” whose times, I believe, have come.

Henderson among others would argue that the field of economics is woefully inadequate for addressing the demands of a society that must plan for increasingly fast-approaching futures. In America the period following the 2008-2009 global financial crisis was marked by high rates of employment displacement caused by digitization and globalization; a broken social contract with our youth to provide a better future through affordable education; and an unprecedented accumulation of private cash reserves due to outdated accounting practices. In the wake of the COVID-19 pandemic these problems have not been addressed by economics but instead are being exacerbated by economic gamesmanship that dates back over a century. Early twentieth-century progressive economic ideas supporting minimum wage for example were enthusiastically endorsed by social scientists in the thrall of the eugenics movement as a way to exclude ‘unfit workers’ from the labor market (Leonard, 2016). Redlining, mortgage discrimination, and other racist zoning and development practices denied black and other minority communities homeownership–the primary path to wealth accumulation for white Americans during most of the last century (Schuetz, 2020). Reductions in state funding for public university systems continually push tuition higher. At the same time, labor market credentialization has forced more students into graduate-level degrees to keep pace with employer demands, shifting education from a public good to private liability (Morgan, Steinbaum, 2018). Labor, housing, and education–among most other “wicked problems”–are rooted in an ideological fight regarding wealth inequality and distribution (Buchanan, 1992). This foundational conflict is unresolvable within economic orthodoxy as it currently exists and is impeding the ability of Western Democracies to ward off growing threats of foreign and domestic populism, authoritarianism, and theocratism.

Abstract

This article provides historical context for the current state of discourse in academic economics and an assessment of disparate and viable heterodox economic methodologies to support a proposal for establishing the disciplines of design economics and speculative economics. Coherent, modern, and viable academic challenges to economic orthodoxy exist but are largely ignored by departments of economics. This proposal addresses the disconnect between economics and the rest of academia with a collaborative and interdisciplinary effort based on three tenets. Borrowing from established foresight methods, design economics and speculative economics create a framework from which economics can evolve to embrace paradigm change.

More Information

This introduction is for a preprint article awaiting academic publication. It is also the beginning of a convening by the Institute for Economic Evolution . If you are interested in learning more, please contact me via LinkedIn.

References

Buchanan, R. (1992). “Wicked Problems in Design Thinking” Design Issues. Vol. 8, No. 2 (Spring, 1992), (pp. 5-21)

Morgan, J.M. & Steinbaum, M. (2018). “The Student Debt Crisis, Labor Market Credentialization, and Racial Inequality, How the Current Student Debt Debate Gets the Economics Wrong” Report. Roosevlevt Institute. (October 2018)

Leonard T.C. (2016). Illiberal Reformers. Race, Eugenics & American Economics in the Progressive Era, Princeton and Oxford: Princeton UP.

Roberts, S. (2022). “Hazel Henderson, Groundbreaking Environmentalist, Dies at 89”, New York Times (May 27, 2022)

Schuetz, J. (2020). “Rethinking homeownership incentives to improve household financial security and shrink the racial wealth gap”, Brooking Institute (December 9, 2020)?