10 December, 2023


Two Fundamental Flaws In Economic Thinking

By Hema Senanayake

Hema Senanayake

I know it is an intellectual risk of challenging a main axiom in economics. Challenging two of them poses a major risk. Questioning two axioms at the same time is not an arrogant choice of this writer, instead it is required as both axioms are interrelated.

Axioms do exist. A dictionary definition says that axiom is “a self-evident and necessary truth, or a proposition whose truth is so evident at first sight that no reasoning or demonstration can make it plainer; or a proposition which it is necessary to take for granted” (Webster). This means axioms provide the foundation for all analyses. In other words, in the underlying processes of science, there are several philosophical assumptions or axioms that we take for granted -And application of method of science begins from there. Now think of the questioning the truth of two major axioms in economics and the intellectual risk it poses for the writer. It is huge, but it necessitates for the advancement of human civilization. There are two main flaws in our economic thinking. With these flaws we can thrive to a certain extent economically and most developed economies have reached to that point. To make civilized advancement beyond this point it is required to question the very foundation of economic thinking, questioning axioms themselves. 

Economics begin with perhaps a self-evident and necessary truth. It says that human wants and needs are unlimited and resources to satisfy those wants and needs are limited. So, deducing from this ‘truth’ what we could do is to allocate resources efficiently to produce optimum quantity of goods and services in varying quality and distribute them among the members of society for their wellbeing while trying to increase output on continuous basis as our wants and needs are unlimited. Accordingly, we put an economic system just to do this, to satisfy our increasing wants and needs to an optimum level, even though the system crashes time to time. The measure of this economic achievement is GDP.

But this is not the economic system we have today. It is completely a different one. The role of the economy has become to keep human needs and wants ever increasing in order to ensure that people will increase their consumption on continuous basis to prevent the economic system from crashing. Is this true? To understand this argument let us investigate the opposite of this notion. Let us assume that human wants and needs are limited and actually wishes to reduce consumption after having achieved a certain level of economic growth. Now I question as follows. Would the economic system be in its equilibrium if people reduce consumption based on their free choice? Or would the system be crashed if people as a society reduce consumption based on their free will? Think of the first question. The answer to the second question is big “YES.” The system crashes if we, as a society, reduce consumption. We do not want the economic system to crash because a good number of employments would disappear if the system crashes. The solution is to increase consumption whether people want to do it or not. Why?

Assume an economic system which generates a satisfactory amount of employment for the wellbeing of the members of society. Employment provides for livelihood. But if the said amount of employment has been generated subjected to a strict condition we have to adhere or satisfy that condition. If that condition is to increase the consumption on continuous basis as a society, we do not have an option or free choice to reduce consumption because if we reduce consumption (wants) the system will crash creating severe unemployment. In such an economic system, we need to manipulate human wants and needs in order to ensure that we increase consumption on continuous basis preventing the system from crashing. 

We, human beings, have created a peculiar economic system that forces us to increase our ‘wants and needs.’ Not only that. We have become blatantly ignorant by trying to justify it as a human nature. In other words, we ourselves have willfully designed an economic trap which harms ourselves and our civilization. 

It is true that humans and their civilization have some wants. Some of them fall into the category of economics. Such wants may require to be satisfied. We need to organize an economic system for the satisfaction of these wants. That system must provide a foundation to be free from uncivilized competition and relentless fear of losing someone’s livelihood. Such an economic arrangement is not possible if people are mandated by the system to increase their wants and needs on continuous basis. 

Humans might have unlimited wants and needs but when comes to economics this axiom cannot be verified if people do not have a free choice either to increase or decrease their level of consumption while retaining their livelihood determined according to their free choice. If we have had such an economic arrangement or system our civilization must have been more advanced than today because natural wants and needs of human being in understanding our own body, our environment and about universe are more prominent than the most wasteful and harmful consumption we make today under a forced machination to increase our consumption more and more while justifying it as a common nature of human being. The said true human nature has recently been evident from the invention of mRNA technology which was used to produce Pfizer and Moderna Covid-19 vaccinations in the United States. 

I know when one chooses to change axioms, different system emerges. Isn’t that what we want?

I will discuss the next flaw in economic thinking in my next article.

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Latest comments

  • 0

    Do humans have free will?

  • 0

    It’s truly frightening what’s happening, especially with the mRNA vaccines. It’s like a perpetual vaccine balm injected into our cells without the brain of our cell’s DNA to guide it and work with it.

    Traditional vaccines use the DNA to guide the cells to fight diseases. Eventually, we will evolve to get toughened against viruses. But mRNA vaccines will not allow our bodies to do its natural work to fight diseases. We will perpetually need such vaccines to cure any kind of disease.

    It is the new wave of medicine where pharmaceutical companies will hold to keys to life and living. Old age will be a thing of the past. People will be still youthful when they are 100s of years old. The young and their problems will not be needed. We will depopulate and only the elite will live via automation.

    No one has come up with another way for capitalism to come to some equilibrium; socialism being its antithesis. Global capitalist elitists are obsessively shackled to their money and find it impossible to break its chains. So this seems to be the only cure the global capitalistic elites have come up with to solve human economic woes.

  • 0

    I am an admirer enodma Senanayake’s writings for his forthright and decisive challenges to misinterpretations and misquotes by correcting and straightening such statements made by prominent persons or ideas that are made to prevail. I would like to refer to an article by Hema Senanayake to Colombo Telegraph regarding the speech made by President Mahinda Rajapaksa’s misquote at his opening speech at the CHOGM summit held in Colombo during his presidency.
    Presiden’s English translation to a Pali verse, viz;

    ” Let not one take notice of faults of others or what they have done or not none. Let one be concerned only about what one has done and left undone “.

    English translation by Hema Senanayake as follows –

    ” Do not pay attention to anybody’s blame or what others have done or not done. Yet be concerned about what you have done and what you have not done “.

  • 0


    ‘ I am an admirer of Hema Senanayake ‘

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