RETHINKING DEVELOPMENT
Local Pathways to Global Wellbeing
St. Francis Xavier University, Antigonish, Nova Scotia, Canada
June 20 to June 24, 2005
Mind Over Matter
Towards a New Paradigm for Business and Economics
Clearly traditional economics and business as usual do no longer work for everyone.
We are moving towards a new economic paradigm, one that is not based on maximizing profits or boosting abstract statistics such as GDP, but concerned with our whole being, the quality of our lives and our children's future.
Humankind is continuously striving for well-being. A series of recent developments, from growing social inequality, continued destruction of eco-systems, demonstrations against globalization, massive corporate financial scandals such as Enron, WorldCom and Parmalat, and the collapse of some national economies, have led to a global search for alternative approaches to economics and business. Clearly traditional economics and business as usual do no longer work for everyone.
The challenges range from the macro to the micro level. Economic pundits no longer provide coherent advice on the behavior of evidently irrational markets. In fact, a growing number of mainstream economists are now criticizing their own orthodoxies, such as Joseph Stiglitz, Jeffrey Sachs, Amartya Sen, George Soros, and Paul Krugman. There is a groundswell in business, too, as consumers, governments, staff and shareholders increasingly expect corporations to take full responsibility for the welfare of all corporate stakeholders, including society at large and the environment. With continued globalization, increasing complexity, accelerating speed in information exchange and market volatility, we are now faced with a reality almost unrecognizable from the view of what traditional business education has taught us.
It is increasingly evident that these challenges can no longer be readily solved within the conventional economic paradigm. One can say that the entire fundamentals of the mainstream western development model, based in capitalism, free-market enterprise and infinite material growth, are called into question. The industrial paradigm with its emphasis on production, specialization, its command/control type leadership and deterministic thinking is becoming obsolete. We have to revisit the assumptions that underlie our economic models. For better or for worse, economies and business don't function separately from our decisions, so if we want a better economy we have to look deeply at who we are and how we live.
Conventional economics has left human psychology outside its spectrum, tacitly assuming that material development, as measured by GDP growth and financial profits, is positively correlated to human well-being. Further analysis of the relationship between material development and the human experience has been outside the scope of economic and social theory. Yet this is changing: breakthrough research — in quantum physics, medicine, biology, behavioral science, psychology and cognitive science – is now making the science of the mind relevant to economics. Conversely, from within the profession of economics, attempts are being made to broaden the scope of economics into the domain of psychology.
This paper argues that principles of the new scientific paradigm, particularly fundamental interconnectedness and the role of consciousness could provide potential answers to today’s complex problems. While conventional science has focused on the material, tangible world, the new sciences indicate that we need to understand the tangible and intangible dimensions of life, and their mutual dependency. Matter and mind – and therefore economics and consciousness - are ultimately inseparable, as two sides of the same coin.
We are moving towards a new economic paradigm, one that is not based on maximizing profits or boosting abstract statistics such as GDP, but concerned with our whole being, the quality of our lives and our children's future.
The new paradigm economic model is far from clear. How to quantify and measure non-material values such as well being, the environment and the future? How to design an economic model that brings benefit and well-being for everyone? In order for us to deal with these questions effectively, we have to go back to the origins of our dominant economic ideology, and unravel deeply held (yet not necessarily valid) beliefs about reality and human nature.
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