Quest for a New Paradigm in Economics - A Synthesis of Views of the New Economics Working Group

The remarkable economic achievements of the past two centuries have cast an illusion of omniscience on the discipline of Economics, which even repeated catastrophic policy failures have still not entirely banished. The gap and disjuncture between prevailing economic wisdom and its effective application to promote human welfare and well-being are enormous and widening rapidly. The gap between current economic performance and the economic potential of global society has never been greater. Both have been aggravated by the rapid evolution of economy and society in recent decades. An ideology masquerading as scientific theory, mainstream theory fails to provide the necessary insights to guide us through the next phase of global social evolution. This paper summarizes major conclusions from a series of meetings organized by the World Academy of Art & Science over the past half-decade. It examines important premises and principles of a transdisciplinary framework for ecologically-sustainable, human-centered development founded on knowledge of the underlying social processes that govern human accomplishment and social evolution. It challenges the implicit values and assumptions on which current theory and practice are based. It exposes the central role played by social power in determining the operations of economy and the distribution of benefits in society. It seeks to construct a holistic paradigm to reunite and integrate thinking about economy with the political, legal, social, organizational, ecological and psychological dimensions of which economy has always been an inseparable part. It points to the need for a transnational theoretical framework as a unit of analysis and emphasizes a global perspective, which aims to maximize the well-being of humanity as a whole. In recent times, growing awareness of the limitations of the present economic system and the real planetary boundaries and ecological constraints on unlimited growth has overshadowed exploration of the equally real social potential that lies unutilized due to limitations in current theory and policy. The central aim of the paper is to develop insights that will lead to formulation of a new paradigm of economics, which will generate effective public policies and solutions to existing crises; revolutionize textbooks and teaching of the discipline of Economics around the globe; unleash societal potential for meaningful transformations to benefit the welfare and well-being of all humanity; and safeguard the planetary environment for future generations