economics and society

Good practices for development need leaders who help turning ideas into action. A well-working economy needs leaders who push boundaries, innovate, and make inspirations doable. Any change needs visionaries with strong values and a bold, clear vision of a better world. This applies on both local and global scales. Theories about economy and development are just a part of the bigger scene on which the actors are the actual people with the potential to make things happen. And because people do matter—as agents of change—the contribution of those who plant hope and give inspiration should not be overlooked.

Paweł Adamowicz (1965-2019), the Mayor of Gdańsk city of Poland since 1998, was one of such great leaders. His successful management that turned Gdańsk into an important business centre in the Baltic Sea region, efficacy, passion and the love for people he served granted him popularity. The many accomplishments of his office include the development of a modern transportation and business infrastructure, and civil budget. Adamowicz promoted an economy that protects local business, but is also open to international investors and working force from abroad, welcoming immigrants. He was not shy of bold visions. Before his sixth, and last, reelection as the Mayor of Gdańsk in 2018, he envisioned his city—which he called “the city of freedom and solidarity”—as the most important port in the Baltic Sea, a goal that he wanted to pursue during his most recent post. Adamowicz was also known for his openness and respect for people across divisions and borders such as nationalities and gender. In many ways, this local Pomeranian leader embodied values of global development, global justice, and civil society. These values and visions made liberal Adamowicz also a controversial figure on a strongly divided Polish political scene.

On January 13, 2019, Mayor Adamowicz was stabbed during the finale of the biggest national charity event, The Great Orchestra of Christmas Charity (GOCC).* He was on the scene for the opening of the GOCC’s concert in Gdańsk. The assailant, Stefan W., was a 27 year-old man with a history of instability, violence, and assaults. The motives were, allegedly, a mix of a political vendetta against the Civil Platform party to which Adamowicz once belonged, and personal reasons, which remain unclear. After being stabbed multiple times resulting in serious injuries, Adamowicz underwent 5 hours of surgery. He died on January 14, leaving a mourning family and his people. Gdańsk lost a leader of great charisma and power to make things happen.

To many, the assault on Paweł Adamowicz is not a discreet event. It is more a representation of a deeper friction in society, reflected in hateful attitudes towards different orientations (be it political, sexual, national, or the like), lack of accountability in social media and public space that allows for the language of hate and destruction, and the propagation of vengeance rather than peace. But in the midst of such tragedy, beautiful things happen that give hope and inspire to development–personal and societal alike. The deputy of the Mayor Adamowicz for social affairs, Piotr Kowalczuk, reached out to the mother and family of Stefan W. offering them support. Such a gesture reminds us of the power of humanism and peace that stands with the legacy of the Polish pope Jean Paul II.

In the dawns of such a tragedy like the murder of a great leader, it is necessary to take a stand. And so this is a stand against hatred and ideological divisions that create mindsets capable of unspeakable crime. But more importantly, it is a stand for peace, solidarity, and responsibility. It is also an invitation to cultivate positive leadership, good practices, and bold visions of a better future. There are always plenty of reasons to criticize and improve economic theories and existing practices. But we should not lose from sight all the greatness around us that is nevertheless happening. With this tribute to Paweł Adamowicz, I invite you to acknowledge and share the goodness that comes from, and is inspired by, great leaders and good practices in your region.

The memory of Paweł Adamowicz has also a moral for teaching students. An economy that embodies the values of justice, civil society, and solidarity is a building block of global sustainable development and peace. We tend to look at the bigger picture, a perspective from which we can easily spot flaws. But the local level is the level where things happen on a day-to-day basis. While many of the great actors are not visible or recognized in the bigger picture, local governance, local leaders, and local community is what gives shape to universal, global ideals. Development goes hand in hand with a democratic mindset and institutions, a lesson learned from the real-world example of the work of Paweł Adamowicz in Gdańsk. The assault on these values should not be an excuse for creating more hatred and divisions. It should be an encouragement to carry on the legacy of our great leaders, and to act together for change.



* The Great Orchestra of Christmas Charity (GOCC) was founded in 1993. The foundation uses the collected donations to purchase the most modern equipment for hospitals that treat children. Over almost a quarter of a decade, the GOCC contributed with modern equipment to all hospitals for children in Poland, and to many other medical facilities. The initiator of this popular and trusted NGO is Jurek Owsiak, who resigned from his function of the Chairman of the GOCC after the attack on the Gdańsk Mayor. Owsiak has just been nominated for the Nobel Peace Prize 2019.


Economists do not understand inflation. Daniel K. Tarullo. Former Governor, Federal Reserve Board should surely be in a position to know. I will list some key conclusions from his paper with the revealing title:  Monetary Policy Without a Working Theory of Inflation :

  1. We do not, at present, have a theory of inflation dynamics that works sufficiently well to be of use for the business of real-time monetary policy-making
  2. Many … good monetary policymakers … have an almost instinctual attachment to some of those problematic concepts and hard-to-estimate variables.
  3. (Nonetheless!) Going forward, monetary policy decisions will need to be made with as much, if not more, emphasis on the constellation of observable indicators with which the FOMC is confronted
  4. (Despite all this!) Macroeconomists (should) continue to play a decidedly leading role.

The italicized words are mine, not in Tarullo’s paper. If we pause to reflect, these are breathtaking conclusions. Tarullo says — quite clearly and explicitly — that current theories of inflation are NOT of use for real-time monetary policy. Furthermore, despite their evident failure, economists are blindly attached to these theories — they are “ unmoved by lack of correspondence between their theories and facts of observation “. But, regardless of these, for reasons that I could not fathom, Tarullo advocates going forward with using current constellation of observable indicators, and having the blind macro-economists continue to play a leading role in monetary policy decision making.

The real reason that economists do not understand inflation is because it is an outcome of the class struggle between laborers and capitalists. This topic is taboo in conventional economic theory — it has been ruled out of bounds of the subject, and to study it is to commit professional suicide. My post on “ Marxism Revisited ” shows how graduate students are taught to ridicule and hold Marxist theories in contempt.  As an illustration, the Daniel Tarullo article cited above does not mention the conflict theory, even though he surveys all theories of inflation to show that they do not work. Like Vol-de-Mort, the conflict theory cannot even be named in order to be rejected.

Let me mention that it was in the process of teaching Macro from the MMT Textbook by Mitchell, Wray and Watts that I first came across this theory, which makes eminent sense. The heterodoxy has such a low profile that I did not even know about the existence of this theory until recently. According to the conflict theory, the workers demand higher wages in order to get a bigger share in the revenue pie. Firms usually find it easier to meet their demand and pass on the prices via markup pricing, rather than resist demands and risk a strike. This creates a spiral, as workers try to regain real wages lost due to inflation. There are many reasons why this story disagrees with neoclassical views. For one thing, the marginal productivity theory suggests that each party — capitalist and laborers — get exactly what they deserve in terms of marginal product. Furthermore, this share is technologically fixed, so that a struggle cannot take place. Even though the theory is absurd and easily refuted both empirically and theoretically, it continues to occupy dominant position in neoclassical textbooks. For a theoretical refutation, see my post on Simple Model Explains Complex Keynesian Concepts which shows that with a Leontief type production function, both the marginal product of capital and labor is the same at the total marginal product, so sharing between the two must be based on different principles — relative power of the two parties or the institutional structures which is often a concrete embodiment of this abstract power. Each factor cannot get its own marginal product because this would be twice the marginal revenue.

The 45m Video Lecture below on Employment and Inflation goes through Chapter 11 of the Mitchell, Wray, and Watts Intro to MMT textbook. This deals with evolving conceptions of the Phillips curve and the central role it has played in the making of Monetary Policy. In particular, the chapter documents how wrong theories of inflation have guided monetary policy with DISASTROUS effects. Even though inflation has been successfully controlled, the costs in terms of low growth and high unemployment have been extremely high. Again the conflict theory predicts this outcome, as the costs of this type of monetary policy have been paid by the powerless labor class, while the benefits are enjoyed by the powerful capitalist class.


For access to lecture notes, slides, and other course materials for my Advanced Macroeconomics course, use the link below:

 Advanced Macroeconomics at PIDE, Sep 2018, by Dr. Asad Zaman 

Scientific epistemology is a serious business in economics—as it is in any science. Not surprisingly, therefore, discussions about value-ladeness tend to focus on theoretical and methodological issues within the discipline, while the question of the social consequences of science is approached with more reservation. And for many good reasons, one may say, because it is not entirely up to scientists how will the scientific product be disseminated and interpreted in society, or how will it be used by policy makers. Or, that’s not the job of the scientist, one could reason, to determine and be ready for all possible applicative scenarios.

Since the last few decades, research practices have undergone a far-reaching transformation at the interface between science, policy and society. It involves an increased engagement of science in problem solving and policy advice, and the enhancing role of participatory research methods in problem-based approaches. The social consequences of science become therefore more readily visible, opening up new perspectives on debates about facts and values dichotomy, or the relationship between knowledge, truth, and values (cf. Kitcher, 2001). One way of looking at the transformation of scientific practices focuses on the criteria of scientific rationality with regard to scientific knowledge and the very process of knowledge production, echoing a Weberian contrast between instrumental and axiological rationality of social action (Weber 1968). Specifically, the scientific rationality criteria have been extended in the process from purely (i) internal rationality, that can be defined as a conventional scientific rationality approach focused on disciplinary epistemology and methodology, to (ii) external rationality that pertains to axiological, ethical, and societal elements of knowledge and its production (Kiepas, 2006). 

There are many reasons for including external rationality in scientific practices. For one thing, all applied sciences can be considered as value-laden in virtue of their goal-oriented values (Pullin, 2002). Furthermore, many contemporary problems, as subjects of research, are radically complex. They are laden with systemic uncertainties, meaning that “the problem is concerned not only with the discovery of a particular fact (as in traditional research), but with the comprehension or management of a reality that has irreducible complexities or uncertainties” (see more in Funtowicz & Ravetz, 1994, p. 1882). They also pose future incalculable risks in an unprecedented scope. For example, in the context of complex, adaptive problems such as climate change, uncertainty in science follows (Brown, 2013). Scientific uncertainty regarding the severity and scope of the problem fuels general disagreement about the appropriate actions to undertake. Attempts to accurately assess all the possible climate change impacts and to exhaustingly assign an economic value to alternative courses of action are bound to fail (Jamieson, 2010). That being the case, the policy-relevance of standard economic analysis as the sole knowledge-base for environmental decision making is limited.

In case of economics, the shift in approaches to rationality can be seen in debates about reflexivity in economics, bounded rationality, or performativity of economic models, to name a few topics. But for the most part, ethical- and value-neutrality continue to feature much of economic research, such as in standard normative theories of decision making under uncertainty and risk. The burgeoning of economics as a separate discipline, accompanied by distancing from philosophy, build up strong methodological foundations to prevent any extra-scientific elements to interfere in its analysis (cf. Hausman, 1992).

The classic conceptualisation of uncertainty and risk in economics is very specific and differs from the above-mentioned, sociologically incrusted understanding. Following the paradigmatic distinction formulated by Knight (1921), uncertainty refers to situations of radical uncertainty that cannot be expressed as sets of probabilities, whereas risk is related to situations in which actions do not lead with certitude to specific outcomes, but the alternative outcomes and their probabilities can be discerned. 

The categories of uncertainty and risk, as considered here, lend themselves to complexity of many policy issues, and are associated with the transformation of postmodern societies due to technology, consequences of globalisation, and environmental crises that follow (Beck, 1992; Giddens, 1990). These circumstances, “external” to standard methodological practices, motivate the extension of scientific rationality criteria and rethinking the role of science by researchers themselves. An example of this transformative process is the so-called advocacy science for environmental justice. It represents a socially engaged, multidisciplinary research approach that emerged in response to environmental toxicity movements, and developed an alternative epidemiological paradigm based on participatory research methods (see, e.g., Ottinger & Cohen, 2011).

With regard to the interface between science, policy, and society and the extra-scientific aspects of uncertainty and risk, one can note that the assessment and acceptance of risk are not purely a matter of data analysis or applying the “right” indicators. The perception and interpretation of uncertainty and risk are influenced by a mixture of social, political, and scientific processes that interact with each other. Consider the relationship between environmental pollution and risk. While pollution appears to be solely as a matter of scientific measures, the question of what is an acceptable level of pollution and its risk for a given society, and whether there are cases of unacceptable risks, involves our pre-conceptions and assumptions about what constitutes a good quality of life, wellbeing, and sustainable development (cf. Evernden, 1999).

Why would an individual economist care about the science-policy interface, or about considering extra-scientific elements of her research practice? There are several reasons to seriously reflect on this question. For one thing, transparency about the value content of specific research programs may translate into more careful and accountable approach to complex problems of public policy and the remedying capacity of science and technological progress. Furthermore, Söderbaum (2000) argues that economics should be more properly approached as political economics to make clear the fact that each scientist, as the discipline itself, has an ideological orientation (in the sense of means-ends philosophy) that plays out in the problem-framing, and reflects on the performative features of economic expertise. To the latter point, the analyst’s conclusion that reduces the extra-monetary aspects of a given problem to monetary ones is not without policy consequences; it suggests certain framings and solution-imageries to economic agents and decision makers. Besides, academia itself is not free of subjective interests and rent seeking. But—I haste to add—this does not undermine the value of scientific expertise per se. Neither does it suggest that citizens and policy makers are passive or unreflective recipients of scientific knowledge. It rather suggests a double-edge approach to science that recognises the subjective, cultural, and societal components in scientific practices on the one hand, and the aspiration of scientific community to reach objectivity (understood broadly as a normative objective) on the other hand. Although scientific practices are saturated with theoretical pre-conceptions and cultural perspectives, it does not immediately follow that science has nothing to do with truth and objectivity (a subject that deserves a separate discussion). 

The double-edge approach to science calls for more explicit discussions about the social consequences of science and scientific literacy in society:

  • Concerns about the role of science and scientific expertise in society may facilitate disciplinary reflexivity. It may also feed into methodological approaches. In case of economics, instead of focusing only on expanding the standard framework of economic analysis onto new subjects, concerns about the social consequences of science create a platform for a more direct consideration of methodological alternatives. Especially for contexts in which standard economic tools of analysis display some limits (e.g., cost-benefit analysis in sustainable development planning), alternative approaches that directly accommodate non-monetary impacts and justice concerns are needed (Brown et al., 2017). 
  • According to a political scientist Frank Fischer, in face of technical and social complexity that characterises most of policy issues, citizens and politicians need to display a good level of competence (2009, 1). In this context, an urgent question arises: how to democratise science on the one hand, and how to prevent populism and the spread of fake facts to take the provenience of science (as a source of information about the world) on the other hand? While the aspiration of science to be the absolute truth holder has been widely challenged, it does not immediately follow that there is nothing to scientific knowledge that would make it somehow different from other forms of knowledge. No differentiation at all can give way to anti-science of dangerous kind, in which “facts” are matters of preferences or interests. A caveat here is in order: such differentiation does not imply that scientific knowledge is inherently better than any other form of knowledge.

Certainly there are many challenges to balancing the double-edge approach to science both within and outside of the scientific community, as there are multiple philosophical framings of the role and status of scientific expertise in society. To be continued!


Beck, U. (1992). Risk Society: Towards a New Modernity. London: Sage.

Brown, J. Söderbaum, P. & Dereniowska, M. (2017). Positional Analysis for Sustainable Development: Reconsidering Policy, Economics and Accounting. London: Routledge. 

Evernden, N. (1992). The Social Creation of Nature. Baltimore and London: The John Hopkins University Press.

Hasuman, D. M. (1992). The Inexact and Separate Science of Economics. New York: Cambridge University Press.

Fischer, Frank (2009). Democracy & Expertise. Reorienting Policy Inquiry. Oxford: Oxford University Press.

Funtowicz, S. O. & Ravetz, J. R. (1994). Uncertainty, Complexity and Post-normal Science. Environmental Toxicology and Chemistry 13(2), 1881-1885. 

Jamieson, D. (2010). Ethics, Public Policy, and Global Warming. In S. M. Gardiner, S. Caney, D. Jamieson & Henry Shoue (Eds), Climate Ethics. Essential Readings (pp. 77-86). Oxford: Oxford University Press.

Kiepas, A. (2006). Ethics as the Eco-development Factor in Science and Technology. Problems of Eco-development 1(2), 77–86.

Kitcher, P. (2001). Science, Truth, and Democracy. Oxford University Press, Oxford, New York. 

Knight, F. H. (1921). Risk, Uncertainty and Profit. Chicago: University of Chicago Press.

Ottinger, G. & Cohen, B. R. (Eds). (2011). Technoscience and Environmental Justice. Expert Cultures in Grassroots Movement. Cambridge: the MIT Press.

Pullin, A. S. (2002). Conservation Biology. Cambridge & New York; Cambridge University Press. 

Söderbaum, P. (2000). Ecological Economics. A Political Economics Approach to Environment and Development. London: Earthscan/Routledge.

Weber, M. (1968). Economy and Society. New York: Bedminster Press.


That economics is a value-laden science is not a new idea. Most of the prominent economic thinkers were also philosophers, wary of moral and philosophical content of scientific assumptions, models, and theories. That economics needs philosophy, and the separation between these two cannot be maintained any longer, is gaining recognition, and has become a subject of debates in the field of philosophy of economics that brings together (to various extends) philosophers, mainstream, and heterodox economists. For example, Daniel Hausman (1992) discusses that at an analytic level economists do successfully separate the philosophical and ethical content from economic analysis, albeit this separation is possible only at the analytic level. Karl Polanyi (1957), in his discussion on the entanglement of economic activities in the social totality, gives insights from a different perspective how considering the subject of economic study in social vacuum can in fact lead to thinking that scientific practice indeed has disentangled from society.

Today economists of both mainstream (e.g., Jean Tirole) and heterodox approaches more readily admit: economics is a moral and philosophical science. Yet the meaning and scope of the normative components of economics, the epistemic consequences of the social embeddedness of science, and the social consequences of economics are raising so far inconclusive debates. These issues constitute two-tiered dimensions of scientific rationality: external and internal ones. While the criteria of internal rationality (which constitute the standard approach to scientific rationality) refer to disciplinary epistemology and methodology, the criteria of external rationality involve the axiological, ethical, and societal elements of the process of knowledge production and the social consequences of science.

Interestingly, as Gustav Márquez (2016) points out, even in the field of philosophy of economics, the discussions are often focused on the elements of what I call here internal rationality. Márquez argues that the predominant focus on these issues characterize the mainstream philosophy of economics, while the more normatively-laden issues, such as a broader theoretical reorientation towards more responsive and socially engaged approaches (which I considered as aspects related to the external scientific rationality), are not so much a part of the dominant concerns and discourse.

Why would an external rationality matter? What is the meaning of the social consequences of economics as a science? And how the acknowledgment of the value-laden component of scientific practices plays out in research practices of the scientific community, and of an individual researcher? These questions are not easy to answer, as they involve several complex issues, such as what is the meaning of scientific truth, scientific objectivity, how to account for the normative components of science, or what are the grounds for our confidence in scientific methods and analysis—to name a few. While each of these questions opens a Pandora box by itself, my goal is to simply open up some of the ways these profound issues can be approached for a discussion. My guiding thought is that one of the elements that drastically shapes our take on these questions pertains to the context in which science and the process of knowledge production is considered.

My specific focus will be on the role of science in society and for policy making. In my next entries of the WEA Pedagogy Blog, I am going to consider several issues, problems, and controversies raised at the intersection of economics, society, and policy, with an eye towards their educational and pedagogical challenges. My objective is to problematize, hopefully for a broader discussion with the readers, the fact that the specific philosophical commitments (e.g. ontological and epistemological assumptions about the role of science, function of knowledge, scientific truth, etc.) bear impact on how the epistemic consequences of the value-ladedness of economics are framed, and on the acknowledgment and role assigned to the extra-scientific components of research practices.


Hasuman, Daniel M. 1992. The Inexact and Separate Science of Economics. New York: Cambridge University Press.

Márquez, Gustavo. 2016. A Philosophical Framework for Rethinking Theoretical Economics and Philosophy of Economics. London: College Publications.

Polanyi, Karl, [1944] 1957. The Great Transformation. Boston: Beacon Press.

Major revolutions can be created by everyone doing the little bit that they can. This was the driving idea behind the article below, written for the Pakistani context. It was published in the Express Tribune on March 16th, 2017

The right nutrition between pregnancy and the second birthday has a dramatic effect on a child’s ability to grow, learn and thrive. Failure to provide adequately for the baby’s needs during this critical window can never be compensated for later. With one of the largest population of young people in the world, Pakistan faces a unique challenge. How can we ensure that all babies conceived and born in Pakistan receive the best care that we as a nation can provide? Our future literally depends on how well we can meet this challenge. At a rough guess, about 10 million children in Pakistan would lie in this critical target range. The challenge of providing adequately for all of them is too large for any organisation, including the government to meet. It would be entirely correct to call this situation a silent mega crisis, a problem bigger than the earthquakes and floods which received far more publicity and attention. Meeting the challenge requires all of us to work together on an out-of-the-box campaign, which could provide all the children of Pakistan with a brighter future. If approximately 100 million adults work together for a common goal, we can easily solve the problem which would be impossibly difficult to tackle by any other method.

The first step in this campaign is to take responsibility. We must not ask what other people or organisations are doing to address this crisis. We must ask ourselves what I can do to solve a tiny part of the problem that is within my reach. Ownership and responsibility have magical powers to create solutions. When it comes to my own children, I do everything in my power to ensure that they receive the best possible care. We must take collective ownership of all the children in Pakistan, and strive hard to do everything in our power to serve the needs of those children that fall within our circle of capabilities. The goal of our campaign is to create a million drivers of change — every driver takes creative responsibility for thinking about, and executing, what he or she, or the institution within which they work, can do about the mega crisis that faces our children. The possibilities are endless, and no one person can even conceive of all the projects that could be undertaken by one million drivers of change. Nonetheless, for the sake of illustration, let me list a few major areas which require attention.

Starting from the beginning, we need to take better nutritional care of pregnant women. Doctors and hospitals could design awareness campaigns about their dietary requirements, including micronutrients. The media could play their role by creating shows and news items which highlight the importance of providing the right kind of nutrition to pregnant and lactating women. Different institutions, like shops, restaurants, small scale business enterprises could offer to provide resources to women and children in their neighborhoods, according to their capabilities. Food manufactures should introduce special lines of nutritious foods, to provide delicious and healthy alternatives to junk food. Larger organisations like universities, big business, NGOs, etc., should participate on a grander scale. They should provide thought leadership in design and execution of appropriate strategies, as well as providing research input on the effectiveness on different types of interventions. If every individual and institution can take responsibility for changing a few lives, this would create the desired mega-response required to solve the mega crisis. But the key to this campaign is that we should not wait for someone to tell us what needs to be done. Just as we take responsibility for our own children, making plans without expecting other to help us in bringing them up, so we need to take ownership of all children that we can reach. As Gandhi said, “Be the change that you wish to see in the world.” We need to change our mindsets from being a spectator of events taking place in Pakistan to a game player and a game changer, who creates the events that others talk about.

The government should play the role of enabler and facilitator, cutting through bureaucratic red tape for the sake of our children. The First Thousand Days campaign must rise above political, racial, ethnic geographic, linguistic, religious and sectarian divides. There are many government programmes already in existence which deal with issues related to mothers and infants. Inefficiencies in these programmes exist because dying, malnourished and stunted babies do not figure prominently on our priority list of problems to be solved. Political obstacles could be removed if all relevant parties agreed to put our children first, ahead of all other concerns. Anxieties of Malthusians concerned about population growth should be relieved by research which shows that the poor have excessive children as old-age life insurance. When health and prospects for children improve, the birthrate goes down.

Babies come into the world as a bundle of joy, trusting and trustworthy, full of love for all, and with the capability to spread sunshine and happiness. If this campaign achieves nothing more than increasing our own personal interactions with the children of Pakistan, this will contribute tremendously to our own personal happiness in our daily lives. Just the memory of a baby’s smile full of love and trust is enough to bring warmth and happiness into our lives, and refresh our confidence in the future. To solve the great problems of the world — wars, terrorism, greed, violence, intolerance, hatred, etc., — we need to learn the qualities of innocent babies. As the Bible states, “Truly I tell you, unless you change and become like little children, you will never enter the kingdom of heaven.” Ancient wisdom, which we have neglected or forgotten, tells us that if we take good care of our children, they will take good care of us. Let us pledge ourselves to take better care of our children in Pakistan, and to personally ensure that at least a few children receive adequate nutrition through our own efforts. Amazingly, children thrive on love, developing stronger immunity, and better cognitive skills. Perhaps we don’t have enough material resources for all, but surely we can provide enough love to make our children feel that they are most beloved people on the planet.

1000 word summary of Quaid-e-Azam Lecture at PSDE 33rd AGM held on 14th Dec, 2017 at Islamabad. Published in Express Tribunethe Nation 13th Jan 2018. 43m Video Lecture on YouTube:

The main thesis of our lecture is that our quest for prosperity has failed to deliver the sought-after goals because we have misunderstood the meaning of prosperity , and looked for it where it cannot be found. We base our economic policies on modern economic theory, which is based on the amazing assumption that human beings act to maximize lifetime consumption, since this is the sole source of human welfare. Human beings are far more generous and cooperative than the assumptions of economic theory allow for. Even more important is Richard Easterlin’s discovery that enormously increased levels of consumption do not bring about corresponding increases in happiness. Consumption only brings short-run happiness; long-run happiness has no correlation with consumption, and is far better correlated with character traits like generosity and gratitude. Mindless pursuit of wealth, implemented by policies to maximize growth, has led to increasing misery, instead of prosperity . Growth-oriented policies have destroyed family lives, engaging all members in production of wealth, and they have damaged our environment, destroying the future of our species for short run gains. Can this damage be reversed? Can we improve human lives and welfare, and also stave off the impending environmental crisis? At the core of the crisis we face is the prioritization of wealth over human beings. A market economy cheapens human beings because it is based on the idea that human lives are commodities for sale in the labor market. Reversing these priorities requires the recognition that all human lives are infinitely precious, with amazing potentials and capabilities for growth in dimensions unknown. Taking this principle seriously would require re-writing all economics textbooks, and radically re-organizing our economic, political and social institutions. Taking collective responsibility to ensure that all members of a society get the chance to develop their capabilities would be a new definition of prosperity , very different from GNP per capita, which is the current focus of policy makers across the globe.

Modern economic theory makes accumulation of wealth the goal of economic activity, and values human lives only to the extent that they contribute to production. How can we reverse these priorities, putting the enrichment and empowerment of human lives at the center, and valuing wealth only to the extent that it is helpful in achieving this goal? The first requirement is to win the battle of ideas, creating consensus on the prioritization of human beings over material wealth. To do this, we need to recognize modern economic theory for what it is, instead of what it claims to be. To accomplish this goal, it is useful to label modern economic theory as Economic Theory of the Top 1% — or ET1% — and explain how all aspects of this theory are designed to portray increasing wealth of the top 1% as the goal of society, and also to show that this serves to benefit the entire society. For example, use of GNP per capita as a yardstick of social welfare exactly fits this description, since gains to the top 1% are first divided over the entire population and then measured, thus appearing to be generally beneficial, when in fact they are not. Overcoming this deception will involve replacing ET1% by ET90% — a new economic theory for the bottom 90%.

Karl Marx clearly recognized the deceptive nature of economic theory, and stated that functioning of capitalism requires convincing the laborers of the necessity and fairness of their own exploitation. ET1% does this by arguing the growth is the best policy to pursue for all, since benefits which obviously accrue to the rich will eventually trickle down to the poor. In contrast, Marx offered us ET90% by asking for a shift from each according to his abilities (to gather wealth) to “each according to his needs”, thereby prioritizing the needs of the poor over growth to provide more wealth to the already wealthy.

As a prescription for change, Marx urged the laborers of the bottom 90% to unite, and throw off their chains.  Experience shows that we can successfully unite laborers to revolt against the capitalists, but after the revolution, control necessarily remains in the hand of a small minority. The nature of power is such that this small minority is likely to be corrupted by it, and use it for personal gains, and to oppress the majority. Just like democracy has failed to give ‘power to the people’, so alternative systems of government also fail.

The Islamic solution works along different dimensions. It seeks to co-opt the rich and powerful, instead of killing them off, and replacing by another set of rich and powerful. This is done by creating social norms of generosity and social responsibility. Fourteen centuries ago, the revolutionary teachings of Islam led backwards and ignorant Arabs to world leadership. These teachings include the ideas that the best leader is the servant of the people, that power is given to us in order to protect the weak, and wealth is meant to be given to the needy. Widespread acceptance of these ideas created a society which provided basic needs, health care, and education to all members using the institutions of Waqf, and the norms of collective social responsibility and brotherhood. Because these ideas have been forgotten, they continue to have the same revolutionary potential today, as they did 1400 years ago. The most important first step in this revolution is sensitizing our hearts to feel compassion for sufferings of all mankind. The feeling that all of the creation is the family of God, and service to humanity, and all living creatures, is the highest form of worship, is essential motivation for the Herculean efforts required to create revolutionary changes required to reverse the increasing concentration of wealth at the top and misery at the bottom.

Current food challenges involve issues ranging from land and food access to commodity price volatility, besides national and international regulation. Although the scope and intensity of these challenges vary according to the different economic and social situations of countries, the debate has been global.

Today, once again, these issues arise deep concerns on behalf of the 2017 WTO ministerial conference  that has just been closed, in Buenos Aires, Argentina. Indeed, the WTO has not seemed to enhance effective actions on long-standing proposals. Agriculture negotiations remain among the most important and challenging issues. These negotiations began in 2000 as part of the mandated “built-in agenda” agreed at the end of the 1986-1994 Uruguay Round and, then, they were incorporated into the Doha Round launched at the end of 2001.

The process of globalization of capital in agriculture and food production has shaped a global network of institutions that supplies the worldwide food markets. Contract farming and integrated supply chains are deeply transforming the structure of the agriculture and food industries and, as a result, they have put the local farm sector under high pressure. Further, the expansion of big investment projects, led by transnational companies and institutional investors, has expose small farmers to a situation of hunger and food insecurity by expelling them from the land where they live. In addition to these challenges, the biotech revolution and the introduction of genetically improved varieties of seeds have fostered structural changes.

While the agriculture and food systemic changes are linked to financial and trade flows – mainly profit-driven – international organizations and non-governmental organizations have shaped hunger reduction projects. More recently, for example poverty and hunger reduction targets have been included in the Millennium Development Goals (MDGs) of the United Nations Development Program (UNDP). In truth, hunger and poverty are correlated issues. They are primarily linked to land access, income distribution, employment and food prices, among other factors.

In this scenario, even with the global financial crisis, international prices for agricultural commodities remained substantially above historical averages. Some factors contributed to these high prices:  growth of the world’s population, growth of the Chinese GDP and the urbanization of China. As a result,  at the end of the 2000s, the FAO predicted the global challenge of “a decade of high food prices” and pointed out the need to increase food production.

Since 2014, global commodity crop prices have come back to pre-food-crisis levels. Indeed, the pre-crisis rising food prices turned out to draw investment into agriculture, mainly in the U.S., Brazil, Argentina, Ukraine, and other exporters of commodity crops, such as corn and soybeans. However, according to the Institute for Agriculture and Trade Policy (IATP), the American exports of corn, soybeans, wheat and cotton at prices has been characterized by significant “dumping margins”.

What seems relevant to recall is that the financialization of cop prices and their volatility are systemic challenges. On behalf of these challenges, there has been a global increase not only in the vulnerability of small farmers but also in the number of chronically hungry people – that amounts more than 800 million. Considering this background, after a decade of high prices, current low crop prices and dumped crops – without effective WTO proposals and actions – will drive the most vulnerable people even more into hunger and poverty.


FAO. The future of food and agriculture – Trends and challenges. 2017. Rome.

Institute for Agriculture and Trade Policy. Excessive Speculation in Agriculture Commodities: Selected Writings from 2008–2011. Ben Lilliston and Andrew Ranallo (Editors). IATP, 2011. Available on line at:  Accessed 29 July 2016.

United Nations. The Millennium Development Goals Report 2012. Available on line at: Accessed 20 April 2016.

WTO. 2017 Ministerial Conference. Agriculture.