Modern economics is sinking too

That's a good thing.

written by Graeme Maxton, Fellow of the International Center of the Club of Rome

Four years ago, modern economics hit an iceberg, in the shape of the global financial crisis. Since then, the 'dismal science' has been sinking, drowning in its sea of debt.

This is great news. Now we have the chance to build a better economic ship, and take a different course.

Unfortunately, modern economics has not been fit for purpose for some time. It has made growth a goal, not a consequence, encouraging us to focus on something pointless. Greed is not good. It has forced us to under-price the world's resources, and squander them. It has made regulators think they don't need to regulate, with disastrous consequences. It has widened the gap between rich and poor. And it has encouraged companies to grow so large that they have become global power-houses, thinking only about the next quarter and never about the wider world. As a result, almost a billion people are out of work or under-employed, hundreds of millions are starving and the outlook for many debt ridden countries is bleak.

It is time to scuttle that ship and think again. We need to create an economic system which focusses on the needs of all of us, not a few fat cats. A system which supports employment, rewards effort and ensures that growth actually has a point.

Economics is not rocket science. It is not even science. It is a system of ideas, most of which were created 200 years ago for another age, by us. It is time to think again about what our economies represent, what they are for and what we want from them.

The old economic ship was not unsinkable, a perfect design, as we once thought.

It's time to build another.

Graeme Maxton's book on the failings of modern economics was nominated for the FT's Best Book about Business Award 2011. www.endofprogress.com