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The Sustainabilist View of Capitalism

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We offer a new equation for managing the world’s economies by valuing Natural Capital as the primary capital that Human Capital “values” into Financial Capital.  The full presentation can be found on SlideShare. The simple equations are presented below: ___________________________________________________________________________________________ … Continue reading

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Is Adam Smith The Founding Father of Sustainability?

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When I was working on my MBA in Sustainable Enterprise back in 2007 I remember the first time that Adam Smith popped into my consciousness.  It was a typical Sunday afternoon class. We’d been in classes since Friday morning at … Continue reading

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Taking On Adam Smith (and Karl Marx) – NYTimes.com | Talk & Politics

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Taking On Adam Smith (and Karl Marx) – NYTimes.com | Talk & Politics.

“To put it bluntly, the discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with the other social sciences. Economists are all too often preoccupied with petty mathematical problems of interest only to themselves. This obsession with mathematics is an easy way of acquiring the appearance of scientificity without having to answer the far more complex questions posed by the world we live in. There is one great advantage to being an academic economist in France: here, economists are not highly respected in the academic and intellectual world or by political and financial elites. Hence they must set aside their contempt for other disciplines and their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.”

Economic theorists and observational types continue to view the science only within the perspective of human populations.

Smith wrote in The Theory of Moral Sentiments (1759), “The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining.” This limit to growth is based in natural capital, the only form of capital that we share equally; i.e. an underdeveloped country breathes the same air as the most highly developed.

If we gave Smith a fresh look by including all his works I believe we’d view our economic framework in the context of natural capital as the most fundamental.

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Contrary to popular belief, Adam Smith did not accept inequality as a necessary trade-off for a more prosperous economy | British Politics and Policy at LSE

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The assumption that Adam Smith accepted inequality as the necessary trade-off for a more prosperous economy is wrong, writes Deborah Boucoyannis.

In reality, Smith’s system precluded steep inequalities not out of a normative concern with equality but by virtue of the design that aimed to maximise the wealth of nations. Much like many progressive critics of current inequality,

Smith targets rentier practices by the rich and powerful as distorting economic outcomes. Inequality is widely accepted as inevitable today, with disagreement confined to the desirability of redistributive action, its extent, and the role of government in the process. It is taken for granted even by the most progressive and contentious calls for high taxation on the top income earners, which aim to mitigate its effects.

But why has inequality been naturalized? This is where influential master-narratives of the market are so consequential in shaping public beliefs—from the 1970s anti-tax narratives that frame government intervention as a violation of free market principles to the original text that defined market discourse, the Wealth of Nations itself.

Adam Smith is assumed even by his most progressive interpreters to have accepted inequality as the necessary trade-off for a more prosperous economy. This is, in fact, the default assumption. But the assumption is wrong.

As I show in my article, the building blocks of Smith’s economic system do not allow the concentration of wealth—not due to normative constraints, but to how the blocks are set up in his theory to maximize the “wealth of nations.” Further, even in neo-classical economics, in a competitive economy with no entry barriers, profits should decline over the long term, so profit concentration is not an equilibrium prediction. Yet high firm profits, for instance, are treated as a sign of economic success that have to be sustained over time. These tensions have never been conclusively settled in economics.

via Contrary to popular belief, Adam Smith did not accept inequality as a necessary trade-off for a more prosperous economy | British Politics and Policy at LSE.

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Obama Invokes Adam Smith to Tout More Government Intervention in the Economy | TheBlaze.com

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“It’s well past the time to raise a minimum wage that in real terms right now is below where it was when Harry Truman was in office,” Obama said to applause.

“This shouldn’t be an ideological question. You know, it was Adam Smith, the father of free-market economics, who once said, they who feed, clothe and lodge the whole body of the people should have such a share of the produce of their own labor as to be themselves, to be well-fed, clothed and lodged,” he continued. “For those of you who don’t speak old English, let me translate: It means if you work hard, you should make a decent living.”

via Obama Invokes Adam Smith to Tout More Government Intervention in the Economy | TheBlaze.com.

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60-Second Adventures in Economics: An Animated Intro to The Invisible Hand and Other Economic Ideas | Open Culture

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Ever shaken an invisible hand? Been flattened by a falling market? Or wondered what took the bend out of Phillips’ curve? David Mitchell helps reveal some of the great dilemmas faced by governments trying to run an economy–whether to save or spend, control inflation, regulate trade, fix exchange rates, or just leave everyone to get on with it and not intervene. You’ll learn why Adam Smith put such a high price on free markets, how Keynes found a bold new way to reduce unemployment, and what economists went on to discover about the impact of policy on people’s and businesses’ behavior–which may not always be entirely rational.

60-Second Adventures in Economics is a fast and fun way to acquaint yourself with a few of the fundamental ideas in economics. All six episodes are here, beginning with “The Invisible Hand,” above, and continuing below.

via 60-Second Adventures in Economics: An Animated Intro to The Invisible Hand and Other Economic Ideas | Open Culture.

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