Introduction

Abstract

This chapter concerns how economics must change its conventional western- oriented paradigm from Adam Smith and his followers of “the market economy” to a new global economic paradigm that is rooted in societal issues and concerns, ranging from environmental, social, and health issues to more that include the solutions to climate change, medical health, education, and a broad range of concerns for humankind. The problems are vast. However, the solutions often start with innovations and technologies to support and solve societal problems. Hence, there are higher costs as with all solutions to any problem.

However, the basic barrier to stopping climate change rests with economics. The standard reply is that “it” (whatever “it” means) costs too much. The only economic cost-benefit analysis is higher taxes. While that may be true in some ways, according to the standard classical economic model, it raises a fundamental question about economics itself: economics is not a science because no one can predict that higher taxes enhances or hurts economic growth. Almost every scientist agrees with that statement. But most differ to the economic analysis since they are controlled by the corporate CEOs and political leaders, who allocate funds for research and new technologies. Yet as this chapter discusses, economics is not a science, as it cannot predict economic trends or events.

Hence, the chapter discusses what needs to be done to make economics a science, setting the stage for the other chapters in the book with their review of societal issues (primarily environmental) and how economics needs to address the financial costs in different ways ranging from externalities to life-cycle analyses. Each chapter is reviewed and summarized in this chapter to that the reader has a good solid basis for the last chapter that provides a new economic paradigm in detail that is grounded and based on science.