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“To help the poor, study economics”: income inequality, justice, and economic theory
Part 4: the rise of Spud Island
If you have read this far, thank you, Gentle Reader! If not, Part 1 outlined income inequality as a huge danger to the human species; Part 2 focused upon the inadequacy of current economic theories to address this reality, or even to predict booms and busts; Part 3 introduced the “new political economy” of Bernard Lonergan as a truly scientific approach.
Specifically, he paid attention to a fundamental aspect of every human economy, whether hunter-gatherers or our own: there are always two economies, not one, in play. The one we all participate in is the basic economy of selling and buying goods and services. The second distinct economy is the producing of those goods and services; Lonergan calls this one the “surplus economy”. Since mainstream economists rarely pay attention to this fact — so obvious as to go unnoticed? — they usually cannot account for the total reality of any economy. One exception is Joseph Schumpeter, though he did not develop his insight.[1]
More introduction
There are therefore always two economies, two types of firms, two interrelated processes that move at differing rates or velocities. Indeed, accelerations and decelerations are…
