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Moving Beyond 20th Century Economics

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Learning activity

20th-century economic theory posits that growth will eventually lead markets to address environmental and social challenges. However, as Kate Ratworth shared, this theory has been challenged by modern data.

Do you agree with Kate's assertion? Are businesses in your country achieving tangible results in addressing pressing environmental or societal challenges?

Key Takeaways

Kate Raworth is critical of the outdated economic models still prevalent in contemporary education, arguing that concepts rooted in the 19th and 20th centuries are ill-suited for addressing the challenges of today and the future.

  1. The concept of Rational Economic Man, depicting humans as wealth-seeking and self-interested, is a narrow and misleading representation that influences actual human behaviour towards competition and self-interest.

  2. The pursuit of endless economic growth is unsustainable and inadequate for addressing the pressing issues faced by already wealthy nations.

  3. The fallacies of economics that suggest growth will naturally reduce inequality and pollution have been critiqued by modern data, emphasising the need for economies that are regenerative and distributive by design.

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Further Readings
  1. David Hope (2023)Tax cuts for the wealthy only benefit the rich: debunking trickle-down economicsLSE
  2. Kate Raworth (2017)Old economics is based on false ‘laws of physics’ – new economics can save us
  3. Juliana Kaplan and Andy Kiersz (2021)A huge study of 20 years of global wealth demolishes the myth of 'trickle-down' and shows the rich are taking most of the gains for themselvesBusiness Insider
  4. CFI (2023)Homo Economicus
  5. Syed Yusuf Saadat (2019)Is inequality temporary? Piketty's response to Kuznets' false optimismCentre for Policy Dialogue
  6. Kate Raworth (2018)Economic Man vs. Humanity: A Puppet Rap Battleevonomics