The Great Simplification with Nate Hagens The Myths Shaping Our Economies: The Disconnect between Economic Theory and Reality with Josh Farley
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Jul 16, 2025 Josh Farley, an ecological economist and professor at the University of Vermont, explores how mainstream economic theories often create a disconnect with reality. He challenges the notion that humans are solely self-interested and critiques GDP as a flawed measure of well-being. Farley emphasizes the need for a new economic framework prioritizing social cooperation and ecological health. The conversation navigates myths about money, market values, and the role of cultural evolution, calling for a shift toward values that nurture community and sustainability.
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Humans Are Deeply Social Beings
- Humans evolved as fundamentally social beings dependent on groups for survival and cooperation.
- Economic models ignoring our other-regarding nature miss critical dynamics influencing real human behavior.
Market Price vs True Value
- Price reflects ability to pay, not intrinsic value or true societal worth.
- Market prices fail to capture ecological and social externalities, leading to poor resource allocation.
Supply Curves Are Mostly Downward
- Most firms experience downward sloping supply curves, reflecting economies of scale.
- This reality favors monopolies, challenging the textbook narrative of many small competitive firms.
