The Strange World of Institutional Economics

On Wednesday, I tuned into Professor Holden’s (UNSW), a scion of the Academic Economic Establishment, at the National Press Club on what the mainstream economics professionhas to offer us about visions for the future. For those of us in the trenches of the cost-of-living crisis, where our weekly rent or mortgage repayment for a home to live in is more than 50% of our income, and where we are reeling from a future being shaped by climate change, increasing geo-political conflict, and corruption of our information ecosystem, Holden’s prognostications point to the glaring cognitive dissonance that separates many offering ‘expert opinion’, fully embedded in capitalism and its ideology of growth, productivity and improved living standards, from the lived experience of most Australians.

The reality is that many political and business leaders, media commentators, and ‘experts’ live in a world that is vastly different to those they seek to lead and understand, and in Professor Holden’s case, educate as our future leaders.  So what does Professor Holden have to tell us about how Australia’s political-economic class should ‘manage’ our collective future?


Like most economic and business commentators, Holden claims productivity is key. Holden links productivity (getting more for less) as the key to delivering improved standards of living, declaring that: “If we grow productivity at 2.5 per cent a year, then we will double our living standards every 28 years.”

Holden rightly points out that the great improvement in living standards in the West can be traced to the impact of electrification and the personal computer revolution on labour productivity as part of the continuing waves of technological innovation from the 19th century that have re-shaped Western civilisation, and which the West exported to the world via colonialism and globalised capitalism.

This birthed a middle class of employees with legislatively controlled working conditions, able to own their own houses, own and drive personal motor vehicles, enjoy a range of labour-saving domestic appliances, and lately all able to send their sons and daughters to university (well at least in Australia thanks to HECS) to ensure continued upward social mobility. And now we triumphantly point to the rise and rise of such a middle class in India and China—offering more opportunities to promote consumerism driven by advertising, fashion and celebrity culture. But in the West, the fortunes of this middle class have stagnated, competing in the labour productivity stakes with the cheap labour of Asia where regulations are weak and scarce. That’s the rub.

Professor Holden also rightly points out that it is not possible to divorce economics from politics, despite its claims to be a ‘science’ of universal formulas. Politics and economics are intimate bedfellows, from the early days of imperialism through to the free trade agreements, foreign aid and the financialisation of debt. By the 21st century, the influence of the business class on politics is seeing ‘liberal democracy’ with its ‘free markets’ morphing into oligarchic capitalism in all but name, and not just in Russia.

Holden thus fails to also note that the other factor behind this growth in living standards was the ability of the West to extract this ‘wealth’ by massively exploiting resources, land and labour in non-Western countries as a result of 19th century imperialism, and 20th century neo-imperialism via economic means—including militarised regime change in South America, the Middle East and Africa to protect Western economic interests.

This strategy Is now experiencing ‘blow-back’. Having sent their sons and daughters to the universities of the West, China and India have seized the same tools of technological innovation and business practices perfected in the West.

Meanwhile, the colonised are now seeking economic and political refuge from the effects of this regime of wealth extraction, as refugees and asylum seekers flooding into the US, Europe and to a lesser extent, Australia. The chickens have come home to roost.


Holden calls for reforms that encourage so-called “business dynamism”, by a better matching between workers and businesses, and investments in education and training to help lift productivity. And this brings Holden to examine Australia’s report card on education success, noting that Australia’s international performance on crucial PISA maths scores, which measure the capability of students to contextually reason and apply critical thinking skills to various unknown situations rather than just foundational skills, has dropped dramatically—especially against the rising economies of India and China.

With his eye firmly on education as the handmaiden of economic productivity in the modern corporatised university, rather than education’s role in culture and society, and dare I say the pursuit of wisdom, Professor Holden’s solution is “high-dose tutoring, managed professional development for teachers, frequent feedback for students, the use of data to guide instruction and reduced class size”.

This is already being delivered to Australia’s wealthy via privileged private schools, while the public system bleeds funding and resourcing. But of course we don’t talk about this, because it is from these private schools that we largely draw our business, professional and political class.

Climate Change

Holden’s only concession to the climate crisis of global warming, environment destruction and people displacement is the opportunities and challenges for Australia in switching its income earned from exporting fossil fuels to becoming a renewable energy superpower, and a miner of the new critical minerals as we decarbonise the economy. There is no mention of the impact of climate change on infrastructure and agriculture. No mention of the growing mental health crisis from our alienation from nature, which remains the great exploitable resource for human consumption. No mention of the absolute need to reduce the wasteful consumption that is a feature of ‘advanced standards of living’.  Not even a mention of technological innovation to deliver a circular economy!


Finally, Holden lands on the ageing of Australia’s society as the other great challenge in terms of the cost and quality of aged care and the burden on the young. He points to reforms in our superannuation system as one measure of addressing growing intergenerational wealth inequality, and the divide between the asset rich and their heirs and the rest of the population frozen out of this scramble for tax incentivised asset accumulation. But mostly it is a warning about cost.


I am a news junkie.  I listen in vain for the various talk shows on TV and Radio to adequately explore the cognitive dissonance evident in Holden’s national press club address, and which affects the high priests of the economic profession when it comes to insightful commentary on our lived experience. It is no wonder so many people no longer trust elites; no longer listen to their prognostications and instead go down the rabbit holes of conspiracy thinking, seething in impotent frustration and anger.

However, there are alternatives for our rage at this cognitive dissonance. There are voices exploring this dissonance and looking for new approaches. They can be found shouting from the margins through the growth of new global networks exploring a ‘new economics’ that can speak to the reality of our lives.  But these are not voices that leverage rage, and are thus largely ignored by the algorithms of platform capitalism in Facebook, Instagram, X and their Dark Cousins on which an increasingly polarised society rely on for their information.

It is why conferences such as the NENA conference in Canberra in November are so important, and why Think Tanks like the Australia Institute are vital to our national discourse.

Economics as Religion

From: David Loy, ‘A Buddhist History of the West’ 2002

Our present economic system should also be understood as our religion because it fulfils a religious function for us. The discipline of economics is less a science than the theology of this new religion and its god, the Market, has become a vicious circle of ever-increasing production and consumption by pretending to offer a secular salvation, based on three imperatives:

  1. Desire for profit is necessary to fuel the engine of the economic system
  2. The insatiable desire to consume ever more must be generated to create markets for what can be produced (thus in 1999, $435 billion was spent on advertising – UN Development Report)
  3. The promotion of the delusion that happiness is to be found by satisfying one’s greed

The religion of market capitalism constitutes the greatest effort in mental manipulation that humanity has ever experienced – all of it to no other end than creating consumerist needs for the sake of corporate profit.  Thus, shopping has become the great national pastime. Through the financialisation of a debt market, we now have a way to colonise and exploit the future, via the accumulation of debt to be paid back by future generations.

It is no coincidence that our time of economic globalisation and ecological catastrophe also happens to be a time of extraordinary challenge to more traditional religions. On the few occasions when organised religions are not in bed with the economic and political powers that be, they tend to be so preoccupied with past problems and outmoded perspectives or so trivialised (such as the moral panic about transgender), that are irrelevant to what is really happening.

Why do we acquiesce in social injustice? What rationalisation allows us to sleep peacefully at night?

The explanation lies largely in our embrace of a peculiar European or Western (now global) religion, an individualistic religion of economics and markets. Nature is merely a pool of resources for use in production. Intervention in the ongoing economic system is seen as a threat to the natural order of things, and hence to future human welfare.  The hegemony of the Market is achieved by this particular intellectual construct, which has become a dogma of almost universal application, the dominant religion of our time. Based on two counterintuitive but widely accepted propositions – that is the ‘natural law’ in the way that economics mirrors the natural physical laws of nature

With the increasing prostitution of the media and now universities to these same market forces, there seems to be no other moral perspective left from which to challenge them. Globalising capitalism is the ascendancy of one particular way of understanding and valuing the world, but far from being inevitable, it is one historically conditioned way of organising and reorganising the world – a worldview with a particular ontology and ethics in competition with other understandings of what the world is and how we should live it.

The process of producing an ever-expanding surplus is in itself our ‘God’. It is overwhelmingly proselytised through advertising and news commentary x print media, social media, TV and radio that continuously promote the message: ‘Buy me and you will be happy’ – yet demonstrably this has only led to continued unhappiness for ourselves and the planet.

A direct line runs from the commodification of land, life and patrimony during the 18th century to the ozone holes and global warming of today and the depletion of ‘moral’ capital, shared community values and trust.  The market shows that it does not accumulate moral capital but depletes it, and therefore depends on the community to regenerate it in the same way it depends on the biosphere to regenerate natural capital.  The economic support system (welfare) created to correct the failures of market capitalism is now blamed for its failures.  The degradation of the Earth and the degradation of our own societies are the results of the same market process of commodification which continues to rationalise its operation as natural and inevitable.

The Magic Pudding of Increasing Standards of Living

How then do the prognostications of our leading economic theorists talk to these issues? They do not.  Instead they talk from a world of abstracted macro statistics, largely divorced from the lived experience of the many, and deaf and blind to the growing zeitgeist that calls out that their economic theology and its promise of increased living standards through productivity and growth no longer holds purchase on our imagination.

What does increased living standards mean to the affluent ‘West’?  That we (the select few) can consume more and more, have bigger houses; renovate our bathrooms every year to keep up with fashion; all send our children to private schools with wonderful facilities; access the latest technological innovations to extend our lives; deliver an increased diet of pleasure and convenience through food, fashion, entertainment, travel the world and now outer space?

Meanwhile, while we celebrate some people living beyond 100 due to the marvels of medical science and an individual’s genes, our society is experiencing:

  • stressed health services systems
  • essential health shift-workers cannot afford to live in homes close to where they work
  • increasing chronic morbidity due to lifestyle
  • enduring pockets of extreme poverty
  • rising mental illness.

As Charles Massey noted in his ‘Call of the Reed Warbler”, we live longer but we are sicker, stalked by rising morbidity from the corruption of our food system in the name of profit and convenience.  We celebrate the ability of our medical science to defeat death as a mark of our cleverness and ‘humanity’ through acute interventions, while we warehouse our aged lost in the never world of dementia, and  bemoan the economic impact of an aging society. Go figure.

It is part of our delusory human exceptionalism.  Death is inexorably part of life, as is pain, suffering, and disappointment—along with pleasure, joy, frustration and satisfaction. Life is complex. Learning how to dance with life in all its shades is the path of wisdom.

To demand and expect only pleasure and convenience is narcissism. Far from being exceptional through our access to reasoning, the human ‘animal’ is a predatory and violent species. Taming our worst tendencies towards anger, jealousy and greed is difficult, particularly when it gets cloaked in religious righteousness and legal manipulation.

Just look at the play of forces between Israel and the Palestinians: the former seeking refuge from the horrors of the Holocaust within Europe, in the establishment of a Jewish State, that now verges on an apartheid regime in its treatment of its Palestinian citizens; the latter the dispossessed who have been asked to pay the price of this, condemned to live in refugee camps and the virtual prison of Gaza.

We talk about raising interest rates to defeat inflation, driving up poverty and stress in the population, while a significant section of the population continues to spend because they are immune to the cost of living crisis through their accumulation of wealth in assets combined with high incomes.

Meanwhile platform capitalism has released the information wars, opening up new vectors for international criminal enterprises and corruption of political discourse.

Disgruntled citizens, well aware that the fairy dust of ‘increased standards of living’ has slipped from their grasp and that the system is rigged against them in favour of the already wealthy and well connected, and finding they are unable to make sense of how this betrayal of the promise of a secure middle class life happened in their lifetime, have turned to the echo chambers of conspiracy theorists for answers.  After all, Hollywood, the great entertainment factory, is full of conspiracy thrillers and investigative journalists regularly report on the corrupt machinations of Big Business and political elites.

People intuitively know things are all connected. But they cannot make sense of the connections as platform capitalism’s algorithms, in search of the individual’s attention to deliver targeted advertising for business, leverages our human psychological susceptibility to rage and blame, directed at ‘the other’, whether defined by race, ethnicity, socio-economic class, religion or nationality.The NENA Conference 17-19 November at the University of Canberra.

Many of us understand that global capitalism, in all its manifestations has ‘cooked the planet’ as we look into the face of global warming, ecological destruction, population displacement, increasing wealth inequality (with destitution for the many, and obscene wealth for the very few), a growing mental health crisis in human populations, information pollution and geo political conflict and instability.

We therefore increasingly wonder what we mean by such concepts as ‘progress’, ‘increased living standards’, productivity’, and ‘free markets’.

I’ll be attending the NENA (New Economy Network Australia) Conference in Canberra with a focus on “Life after Capitalism’. Drawing on my 2023 book,  The Regenesis Journey,I will be giving one of the concurrent session presentations on the Three Pillars of Regenesis:

  • Caring for Country—linking Indigenous and Western knowledge systems
  • Multiculturalism—ethnicity, religious faiths, knowledge systems, gender diversity
  • A circular, zero-waste, wellbeing economy for people, community and our planetary home.

These three pillars provides a navigation through the many complexities of looking for solutions to ‘life after capitalism’. However, increasingly I have come to the conclusion that before we search for solutions and options, we have to drill down to the ontological level—to our habitual ways of being, knowing and doing. As First Nations Elders, post colonial scholars and creatives  have frequently explained to us, we have to overcome our entrenched sense of human exceptionalism from the rest of the natural world, the cultural cognitive dissonance of our separability that underpins our continued addiction to ‘improved living standards’ through the application of technological cleverness and brute exploitation of people, wherever we can get away with it in the name of ‘efficiency’.

The national rejection of the invitation extended through the Uluru Statement from the Heart to even provide Australia’s First Nations people the constitutional right to a Voice about their needs and interests, shaped by their own cultural knowledge systems, underpins how deeply entrenched our refusal to consider the validity of this cultural heritage as a vital knowledge system with much wisdom to offer us, underscores the challenge.

I’m looking forward to the conference and hearing the rich range of speakers, the opportunity to participate in workshops and plenary sessions and attend concurrent sessions, as well as delivering my own small offering. All the while I am guided by the voice of Bayo Akamolafe:

What I feel called do to along with others is to trace out theoretical breaks or “cracks” that allow us to extricate ourselves from the stranglehold of the familiar. . . The practice of creating the nurturing conditions for the imperceptible to blossom.

[For] the ruins of the familiar are all around us, rising in the dust of chaos. But lively worlds, unheard sounds, illegible futures, and new practices thrive liminally in the ruins, zigzagging with the breaks, crackling with potential, threatening to be actual…

Keynote speakers at the NENA Conference include:

  • Richard Denniss: What’s wrong with capitalism anyway?
  • Dr Mary Graham and Professor Yin Paradies: Societies before (and after) capitalism: Indigenous perspectives and ‘Relationist Economics’
  • Donnie Maclurcan: Strategies for life after capitalism
  • Rob Dietz & Jason Bradford: Post-carbon, post-capitalism and climate changed futures.

For details on the conference visit: