Meanwhile, I spent the day teaching my economics students that human wellbeing is largely determined by the production and consumption of good and services. National wellbeing is determined by GDP which measures the total output of goods and services of a country. Politicians pay homage to maximising economic growth which is basically measured by increases in GDP. Simon Kuznets, who developed this measure in the 1930s, was highly critical of using it as a measure of human welfare. Yet somehow it has become the scorecard of national well being.
Scientific evidence is mounting that we are destroying the world we live on and possibly ourselves as a species. Teaching economics 101 is like teaching children how to build a campfire in a school that is burning down.
Economics 101 paints a very reductive view of human nature. People seek to maximise their satisfaction in life by consuming goods and services. The importance of family, friends, culture, religion, connectivity and our natural environment are never mentioned in standard economic textbooks.
Here's an alternative view of us as a species. We were a bunch of apes that emerged from the savannahs of Africa many millenium ago. We slowly spread across the globe in a fragile process that eventually established us as the dominant species on this planet.
We are generally myopic in our behaviour. For much of our existence, life was nasty, brutal and short. Short term gratification prevailed.
The evolutionary traits that allowed us to establish our current dominance still shape our behaviour. They provide a fascinating lens to understanding our current behaviour. Far more relevant than standard economic theory.
We are tribal in our behaviour. We define ourselves by the groups we identify with. Our early survival depended on our tribal affiliations. Individual apes stood little chance of survival on their own. Modern tribalism takes the form of nation states, politics, religions, sports teams, and even schools and work places. National tribalism has prevented any meaningful progress in resolving key global issues such as climate change, refugee flows or resource depletion. It's us versus them. A study of world history shows the concept of nation states is a relatively recent development. It is not the natural eternal state of the world that we think it is. In the western world the official concept of nation states generally dates from the Treaty of Westphalia in 1648. Yet the self interest of nation states currently prevails, preventing any meaningful progress on global issues.
The human mating instinct dominates much of our behaviour, especially in our prime years. Our reproductive urge is huge in shaping our behaviour. This encourages conspicuous consumption to signal superiority as a potential mate. A Porsche trumps a hop card. A shapely figure and pretty face trumps a doctorate.
Peter Lyons. Photo / Supplied
Alpha males were the primary actors in the financial crisis of 2008. Silverback male financiers were the dubious stars in this crisis. Chest beating and aggressive behaviour still shapes the behaviour of modern male primates.
We are generally myopic in our behaviour. For much of our existence, life was nasty, brutal and short. Short term gratification prevailed. We are usually not long term in our thinking hence the lack of urgent widespread concern about what the scientists are telling us. This likely explains the prevalence of obesity in developed countries where calories are now easily available where once they were scarce. It explains our inability to save for our retirements.
Primate herd behaviour means we are strongly influenced by those around us. Modern marketers understand this implicitly. Economics 101 teaches that we are all individual decision makers unaffected by the decisions of others. People at dinner parties are unaffected by discussions of rising house prices or school choices for their children. They make their own informed independent decisions based on objective data.
The financial crisis of 2008 was an unexplained anomaly according to standard economic theory. Markets for shares and housing are meant to be efficient based on the informed independent rational choices of thousands of people.
Hence, my disillusionment at what I am teaching my students on a daily basis. It is not giving them a sound understanding of the real world we live in. The market economy is just a small part of our reality as humans. We should be teaching our young people about what actually shapes and drives their behaviour and the behaviour of others. This may allow us to address the huge issues that confront us.
• Peter Lyons teaches economics at Saint Peter's College in Epsom and has written several economics texts.
