Blazoned across the front cover of The Ecomist in the Summer of 1997 was the title of its editorial: 'The Puzzling Failure of Ecomics'. The occasion for this frank admission was the publication of a new edition of Samuelson's Ecomics, probably the most widely used textbook in universities according to The Ecomist and w, in 2010, in its 19th edition. The article concluded that it 'is t a failure of ecomics, in fact, but of modern (one might say Samuelsonian) ecomics.' More than ten years later, modern ecomics has still proved a 'failure' and offered viable solutions to the causes and consequences of the recent financial crash. The authors argue there is thing puzzling about this failure. They document how the integrity of ecomics as a discipline was compromised towards the end of the nineteenth century with the rise of neo-classical ecomics. Classical ecomists like Adam Smith had described wealth as the product of three factors - land, labour and capital, whereas the neo-classical school reduced this to two - labour and capital, subsuming land within capital. While this paradigm change was a successful political ploy at the time, undermining arguments in support of the controversial ecomic reform called for by Henry George in Progress and Poverty, the authors point out it deprived professional ecomists in the capitalist world of the ability to diagse problems, fore-cast trends and prescribe solutions, thereby condemning the 20th century and beyond to protracted periods of ecomic failure. Socialist and Marxist ecomists were better: they too failed to recognise the significance of land in the ecomy, leading to even worse levels of environmental degradation. If the full potential of the market ecomy, the ecomics of abundance, is to be enjoyed by everyone, the authors argue, taxes must be transferred from the production and consumption of wealth onto the rent of land. This tax reform would lead to a more efficient ecomy, a more equitable distribution of wealth and greater protection for the environment. This book is for those who kw there is something wrong with our current system and want to discover more about what this is and what can be done to put it right.
Mason Gaffney is professor of economics at the University of California (Riverside). He is a foremost authority on the economics of natural resources and has published extensively on urban economics and public finance. Fred Harrison is Research Director of Land Research Trust, London. After a career as a Fleet Street investigative journalist, he was advisor to a number of Russian academic and political bodies, including the Duma (parliament), in their efforts to implement a more equitable transition to a market economy. Recently he has turned his attention to the failure of economic analysis and public policies in the market economies.