For over fifty years, industrial societies’ policies in all sectors have been guided by economic forecasting and all the macroeconomic statistics and indicators from GDP to inflation, debt, deficits, unemployment — all measured by market-based prices. Yet since the financial meltdown of 2008, economists have been at a loss for their inability to forecast the problems brewing on Wall Street. They were taken by surprise by the events of 2008, labeling them as 'unforeseeable' or 'black swans' and totally unpredictable. In military models, such possibilities are classified as 'unknown unknowns'. We are learning the power of classifications and whether they turn out to enlighten or obscure our choices!

Since 2008, economic forecasting continued to be blind-sided by events disrupting the global economy from climate-related disasters: floods, droughts, super-storms, sea-level rise, as well as the covid-19 pandemic, still with victims in many countries. Most of these real-world events are classified scientifically in biological, ecological, physical, or thermodynamic terms. These classifications in other disciplines are rarely taught in economics classes or textbooks.

Thus, economists’ remedies, such as Q.E. (buying up dud mortgage-backed securities) create new asset bubbles in housing. Market failures now threaten the global food system and the US healthcare system, following the global climate crisis, a massive market failure.

The Great Repricing Conference was hosted by Gitterman Wealth Management in New York, during the United Nations (UN) General Assembly meeting in 2021. In this conference, few market players in any financial sector: from fixed income, publicly-listed stocks, private equity, to venture capital and crypto — virtually no one was sure of the price of any assets! All prices seemed susceptible to speculators, promoters’ powers of persuasion, and inventions of new asset classes out of thin air, such as non fungible tokens (NFTs) or based on monetizing the Earth’s natural resources as “ecological services” in natural asset companies (NACs) offering investors monetary returns, launched on the New York Stock Exchange by the Intrinsic Exchange Group.

Economists still can’t face up to their forecasting failures and why price-derived macroeconomic indicators fail to map complex interdependent societies. Today, these are linked in this market-based form of globalization governed by GDP-driven goals for ‘growth’. This has left many societies and angry millions of individuals, stranded behind in ‘rust belts’ and ‘flyover country’. Today economics is revealed as outdated, and its concepts found to be based on inaccurate classifications based on ideologies in a form of ‘politics in disguise’.

Now reality-based politics dominates economies, often seized by power-grabbing politicians with their own favorite classifications of societies’ problems. Central banks are challenged. Why do they think raising interest rates will lower ‘inflation’ (which doesn’t include rising interest payments, mortgage costs and for education, student loans, child-care, local taxes, and skyrocketing drug prices)? Why do politicians fixated on deficits and interest rates think they will burden their children, but respond by cutting public services, jobs, government investments in maintaining vital infrastructure for our future in the name of ‘austerity’? How did trillions of subsidies and tax breaks make societies dependent on fossil fuels? A small group of innovative economists, monetary experts, (see 4 Paradigm-Shifting Women as well as Ellen Brown, Rana Faroohan and Marianna Mazzocato) are redesigning and re-constructing our current economic system. How does our economy’s underlying assumptions and plumbing exacerbate the inequality now threatening our democracies?

Since 2008, futurists’ forecasting methods, developed for decades, based on creating alternative scenarios, have emerged to challenge economists and their models. Price-derived data is revealed as a function of human ignorance — still driving societies unsustainably over real-world cliffs. Prices are based on allowing accountants in all sectors to exclude many costs of production from their balance sheets as ‘externalities’. These accounting frauds are addressed in Ending Externalities: Toward Full-Spectrum Accounting (2016). While this helps, it still overlooks that prices are always historic, so we are still backing into the future looking through the rearview mirror.

Scenarios are now advised by forward-looking financial reform groups, including the Task Force on Climate Disclosure (TFCD) which demands the use of scenarios. These methods developed by futurists, always explore at least 4 alternative futures:

  1. business as usual;
  2. muddling through;
  3. positive new directions;
  4. mal-adaptation and retrogression.

In this way, scenarios embrace fields of wider opportunities and risks not included in economic textbooks or financial models. Scenarios go beyond price-derived forecasts to include actual data from the real world, measured in real scientific data-based assessments of risks and opportunities (see Transitioning to Science-Based Investing).

Before economists do any more damage to our prospects for a sustainable global future, we hope that futurists and their scenarios can shift to visions of alternative, viable, often overlooked future possibilities. These deepen our knowledge-richer approaches, as in the UN’s Sustainable Development Goals (SDGs), adopted by 193 member countries in 2015 and now thankfully, taking over from GDP.

Humans are learning our true situation on planet Earth: one species interdependent with all other species — all totally reliant on the free daily photons from our Mother Star: the Sun. Markets and money (shells, wampum, tally sticks, etc.) are ancient tools humans have used for centuries. Competition can foster good ideas over bad ideas. But only global cooperation, at every level, can provide the systemic framework for our survival. For many such scenarios, see The Millennium Project’s 17 global goals and scenarios1, as well as my own positive scenarios in Creating Alternative Futures (1978,1996) and The Politics of the Solar Age (1981,1988), both now free downloads from Ethical Markets.

Then start creating your own scenarios to challenge obsolete economic forecasts!


1 The Millennium Project 17 global goals and scenarios.