EDITOR’S NOTE: What is represented by economics is an antagonistic way of thinking which disregards balanced mutuality and integrated wholeness. It inevitably leads to confrontation and disintegration, to chaos and self-destruction. The human race is in dire need of a spiritual revolution in the way of thinking for physical survival. By making this urgent call, the author of this essay is rendering a service to mankind that, history will prove, far surpasses the awarding of Nobel Prize for economics in its long-term significance.

THE TEXT

Since Paul Samuelson, the first American who won the Nobel Prize for Economics, passed away last year, economists all over the world have been cherishing his memory. But how many of those who have been praising him understand what he has done for the world, understand what economics really means, understand the true nature of the present “era of economics”?

Actually, if placed in the context of the whole history of human civilization, what economics has brought to mankind might be just disasters rather than blessings. And this “era of economics” might be ridiculed and denounced rather than respected and revered by our descendents, just as the European Middle Ages is by Westerners and China’s “feudal times” by the Chinese.

As we know, economics is not yet 250 years in age and the “era of economics” about 40 years only, while it has already been 100,000 years since the human species entered Eurasia after taking the present physical form in Africa, and more than 10,000 years since he started farming. In this relatively far too short period of time, the negative influence of economics and the harm done to the environment for human living by this “era of economics” has already been very obvious. However, those blind believers in economics, worshippers of “the cult of economics”, and followers of Samuelson still believe that economics will never fail, that the era of economics will be ever-lasting and that Samuelson will be immortal. As a matter of fact, a more probable scenario might be that economics, the cult of economics and the era of economics will only turn out to be but a splash in the whole long stream of human history, and that man’s choice of the way of life dictated by the economics’ way of thinking will prove to be more like a youngster’s choice of marijuana-smoking in pursuit of euphoric pleasure, thus committing a misconduct of self-indulgence. 

While Samuelson deserves our memory as a fellow human being, we should feel somewhat relieved that buried with him will probably be the whole “era of economics” as his death might have accelerated the latter’s fall into discredit. 

By “era of economics” here is meant the domination and overwhelming influence of economics’ way of thinking and the blind worship of economics all over the globe. It began with the award of first Nobel prize for economics in 1969 and made its first step toward its doom in 2008, the year of the subprime crisis. This era can be divided into two stages, the first being from 1969 through 1990 when the USSR collapsed and the second from 1991 through 2008. During the first stage, the cult of economics gained its dominating position in the Western developed countries, and, after the faith in communism began to wane, what is called here the “Cult of Economics” swept through the former USSR countries and mainland China, beating Christianity, Hinduism, Islam, and Confucianism in global influence and almost converting the whole world, thus becoming a global cult, wirh Samuelson, Freedman, Hayek, Coase, etc. as its gurus.

The ascendancy of economics to such a dominating position is attributable to two factors: the “scientification” of economics and the over-materialization, or de-spiritualization, of the social atmosphere.

Economics has always been highly regarded by economists as the crown jewel of social science, especially since the award of first Nobel prize for economics in 1969, because it almost perfectly embodies Western mainstream values of freedom and science. Ever since its birth, with “laissez-faire” as the core doctrine of its classical version, economics advocated unlimited freedom and opposed government intervention. On the other hand, since mathematics was introduced into economic analysis, the “scientific” feature of economics has become more apparent. And the incorporation of Keynesian theory further improved and clarified the logical framework of economics, intensifying the liberalist core principle while supplementing some kind of governmental adjustment in an attempt to eliminate economic crises. Then, in both of the above two aspects, Samuelson made his outstanding contributions in the “scientification” of economics.

The two World Wars did not only destroy Westerners’ faith in Christianity but also smashed people’s belief in nationalism. Though both beliefs had been supposed to have a holy nature in transcending personal materialism, however, they turned out to be but a delusion in the face of the tragic realities of these wars. Due to a general lack of a spiritual belief after that, people came to be “realistic”, that is, caring about immediate materialistic satisfaction only. At the same time, the extensive destruction brought about by the wars created huge demands on the Western market, pushing Western economy out of the Great Depression into a historically unprecedented “golden age” of prosperity (1950s - 70s). Besides, another factor promoting the Western economic boom was Roosevelt’s New Deal, which, through reform in the distribution mechanism, raised the social security level for workers and narrowed down the income gap between the rich and the poor.

The general craving for material enjoyment in the wake of a spiritual disillusionment in people’s subjective consciousness and the possibility of getting rich because of the booming economy in objective reality together provided the conditions for the faith in economics to become a prevailing cult. The influence of “scientifically updated” economics after that started to rise steadily in the Western world and, after the institution of Nobel prize for economics in 1968, finally replaced Christianity as a new religion in the West.

 The faith in economics, however, was not sanctified until 1980s. Before that, during the 1970s, due to Roosevelt’s New Deal type of “leftist” policies, which had been carried out for long, such as large-scale nationalization of businesses and higher social security benefits for laborers intended for the protection of the disadvantaged groups, the efficiency of Western economy had been going down while costs going up, causing a “stagflation” which marked the end of the “golden age”. The public concern about the economic stagflation did not only stimulate the thriving of economics but also lead to the resurgence of economic liberalism. Roosevelt’s New Deal was completely rejected and Keynesian theory spurned. Thus, the materialistic de-spiritualization of the Western society has made economic efficiency the supreme criterion for judging all theories and policies. Under such a criterion, the de-nationalization of economy and liberalization of economics have been sanctified as the noblest of all values. This was how neo-liberalism became the “Bible” and economic liberalization the “Holy War” of this new era.

After the disintegration of the USSR, the “sacred” canon of economics and the “holy” campaign for economic liberalization began to sweep all over the former Communist world, making economics the very first globalized religion in human history. Those who do not believe in this cult would be arbitrarily branded as the “evil axis” and subjected to military punishment by the U.S. But, actually, economics is a discipline characterized by short-sightedness, narrow-mindedness and superficiality. In the traditional Chinese context of discourse, it can only be called a sort of “craft”, too far short of the loftiness of the “Dao” and should never be presented as a noble enterprise. Its short-sightedness, narrow-mindedness and superficiality are manifested in the following four aspects:

1. Lack of a real macro vision, i.e., a global perspective;
2. Indulgence in pursuit for material gains only;
3. Taking for granted that resources are inexhausible;
4. Taking for granted that Nature is forever tolerant.

These aspects in the way of thinking typical of economics have combined to cause negatively grave consequences, which are beginning to jeopodize the survival of the human race.

Lack of a Real Macro or Global Perspective

It is generally thought that the Chinese mind has a closed vision and lacks a global perspective because of China’s long-time closed-door tradition while the Western mind has a global vision due to the Western world’s open-door tradition and even more so is its economics – it is a science with a global perspective and applicable to the whole world. This is misunderstanding or just ignorance – it fails to understand what really distinguishes the Chinese from the Western thought. As a matter of fact, the idea of “openness” is based on, or presupposes, a vision from the stanpoint of one’s own limited part of the world, which does not take the interests of the whole world into consideration. That is to say, underlying the seeming “openness” of mind is in fact a parochial way of thinking, not holistic at all. In contrast, the seeming “closeness” of vision in traditional Chinese thinking actually embraces the whole world as far as it can reach (all-under-heaven, 天下), taking into account the interests of the whole world. When the whole is embraced, it is no longer a limited part of anything and therefore there is no “openness” to speak of. Openness can be an issue from a nation-state’s point of view, but no longer so from that of the human world as a whole, because it is already a closed one, there being no other human communities to open up to, unless other humans are found on other planets someday.

Now back to economics. It is the interests of a nation-state that econimics takes as its primary starting point, as is evidenced by the title of the first classic on economics An Inquiry into the Nature and Causes of the Wealth of Nations (or The Wealth of Nations for short). Britain was but a small island state, and it was only the interests of the inhabitants of this small island that was discussed by the author. All others on earth outside this small island were but means for Britain to make use of for the end of increasing its own wealth. That was why he fervently advocated free trade, as it could increase Britain’s wealth. Adam Smith never had the broad- and high-mindedness of looking at things from the standpoint of global interests and this has become the tradition of economics. Even the topics of the so-called macro economics, which originated with Keynes and discusses the general supply and demand, etc., of a nation, are still not “general” enough to cover the whole world economy – the same breadth of vision as that of Adam Smith. In the global perspective, Keynes’s is still micro, not macro, economics.

What pretentiousness it is for economics, that lacks a global perspective, to pose itself as the “Bible” for economic globalization! Take the 2009 climate conference in Copenhagen for instance. The cause of failure to reach an agreement on cutting carbon emissions was just the lack of a global perspective in the economic thought of the participating parties. While the issue confronting us is of a global nature, the way of attacking it is parochial, just like, to use a Chinese saying, applying a small knife for cutting chicken to a cow. It can predicted that the issue of carbon emissions reduction will not be solved until the emergence of a brand new economic theory with a real global vision.

Indulgence in Materialistic Pursuits

One major application of the idea of freedom flaunted by economics is its prompting and encouraging people to indulge themselves in pursuing material interests with no other considerations, thus sanctifying material consumption as a noble act. Hence, the value of a human life has come to be measured in terms of money, in terms of the prices of things a person consumes; that is, material consumption has become the ultimate purpose of human life. Nowadays, every country is trying to stimulate consumption. For example, an official in China has gone so far as to claim recently that consumption is an act of patriotism.

Economics’ indulgence of materialistic greediness is effected by bashing all traditions and civilizations that attach importance to necessaey restraint of human desires, despising the experiences of other peoples in different geographical locations tested by long history as junk or heresy. This is sheer superficiality. A tradition is the gene of a human society, which contains useful messages for its evolution and development. Just as it is not yet possible to unscramble the messages in a biological gene, we are still not able to fully recognize the wisdom accumulated in a tradition. Any tradition must have some hidden messages that explain why it has been able to survive for so long. To presumptuously allege that traditions are irrational and unenlightened only betrays superficiality, for which people will have to pay. Liberalism, that has come in vogue since around the 17^th or 18^th century, is just such a superficial ideology in its renouncing tradition for no reason. The shallow-minded human species are bound to pay for blindly believing in such superficial “thinkers”.

Now we are already paying the full price for our folly. Unrestrained indulgence in the pursuit for material gains has, on the one hand, prompted the strong to prey upon the weak, thus creating social crises, and, on the other, is exhausting natural resources and damaging the environment, thus creating a critical situation in resource supply and environmental compatibility. The global economic recession since 2008 is a recent instance of the former while the energy crisis and global warming manifest the latter.

Taking for Granted that Resources are Inexhausible

In indulging material pursuits, economics prompts unlimited production and unlimited consumption, taking for granted that resources are inexhausible. This assumtion has turned out to be short-sighted. People may disagree by saying that there is one version of economics defined as the study of options given the scarcity of resources. But the “resources” in that context are meant to refer to the specific natural resources that human beings are able to use at a specific time as raw materials for production, not resources in general. When economy was not yet quite developed, the shortage of material products was not caused by that of natural resources which can be used as raw materials for production, but by the lack of skills or technology for coverting raw materials into consumable products. At that time, relative to the limited productive capabilities of human beings, the supply of natural resources were unlimited. Not only air and water were inexhaustible, neither were forests and mineral resources. 

Now the general productive capabilities of human beings are qualitatively much higher than in the times of Adam Smith, and the restraint on human beings in general is no longer technical inadequacy but shortage of natural resources. The inexhaustibility of resources relative to limited productive capabilities has now been replaced by inexhaustibility of productive capabilities relative to limited suppliy of resources. For instances, oil supply is running out and water in short supply. The sharp jump in oil price not long ago was just a reflection of the wide-spread fear of a serious shortage of oil in near future. But such a restraint caused by resource shortages can hardly be eased through the fluctuation of prices. 

Taking for Granted that Nature is Forever Tolerant

Under the spell of modern ideology, human beings today insist on conquering, reforming and grabbing from Nature, foolishly presuming that conquering, reforming and grabbing from a part of Nature would not affect other parts. However, there ARE parts of Nature that are not suited for human life and survival, because Nature does not exist for the sake of the human species, though the fact that human species has emerged from Nature shows that there are parts that are suited for human life and survival. But the unrestrainedly greedy human beings have gone so far as to dream of making the whole Nature suitable for human living, and, driven by the urge for grabbing more wealth, have been trying endlessly, with the aid of science and technology, to conquer, reform and grab from some parts of Nature. And all this has been gradually destroying those parts of Nature that are suitable for human living. For instances, waters and air are polluted; the climate is warming up; and more and more species are dying out rapidly. In this sense, economic development and science and technology can be seen as killers of Mother Nature; and modern civilization, which is oriented towards the advance of economy and science, is a Nature-killing one.

At this time of globalization, problems of an exactly global nature are revealing themselves and calling for theories and methods with a truly global vision for their solutions. The short-sighted, narrow-minded and superficial economics is obviously not competent for this task. Or rather, many of the global problems are products of economics’ way of thinking. The cult of economics has become the new shackle impeding human progress. Therefore, while sorry to see Samuelson leaving the world as an elderly human being, we should also celebrate his exiting the stage as the guru of the cult of economics. We hope that, with him, the era of economics will be gone. And it has to be.