The Myths Shaping Our Economies: The Disconnect between Economic Theory and Reality with Josh Farley
The Great Simplification with Nate Hagens
Nate Hagens
4.8 • 550 Ratings
🗓️ 16 July 2025
⏱️ 95 minutes
🧾️ Download transcript
Summary
Economic theory has come to wield outsized influence over our societal goals, decisions, and policies – often relying on models that claim to optimize how human systems function. Yet the outcomes of our modern economic structures tell a different story: accelerating ecological collapse, widening inequality, declining public health, and increasing social disconnection. What if the foundational principles of mainstream economics are actually built on false assumptions that obscure the realities of our world?
In this conversation, Nate is joined by ecological economist Josh Farley to explore the persistent myths taught in business schools, and the disconnect between economic theory and reality. Building on Nate's recent Frankly episode, they unpack topics like the misconception between value and price, how GDP is a flawed measure of well-being, the truth about debt, and the ripple effects these have across market dynamics. Ultimately, Josh emphasizes the need for a new economic framework that prioritizes cooperation, well-being, and ecological stewardship.
How could we change the incentives that are embedded in our economy to prioritize the well-being of people and the planet? What would happen to our economies if we rooted them in the science of psychology, ecology, and physics? Most of all, could prioritizing cooperation and community be the key to realigning our economic systems to be in service of life?
(Conversation recorded on June 10th, 2025)
About Josh Farley:
Josh Farley is an ecological economist and Professor in Community Development & Applied Economics and Public Administration and a Fellow in the Gund Institute for Environment at the University of Vermont. He was formerly President of the International Society for Ecological Economics and the point person for the Ecological Economics Network Strategy Center, as well as part of the Leadership for the Ecozoic Initiative with McGill University. He is also the co-author with Herman Daly of Ecological Economics: Principles and Applications, 2nd edition.
His broad research interests focus on the design of an economy capable of balancing what is biophysically possible with what is socially, psychologically, and ethically desirable. His current research focuses on the economics of essential resources, social dilemmas, agroecology, the democratization of monetary and financial systems, the evolution of cooperation, the economics of information, and The Commons.
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Transcript
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| 0:00.0 | We have an economy geared towards giving us in your language, these little micro-leaders of dopamine, |
| 0:05.0 | which creates cravings. It doesn't give you satisfaction. |
| 0:07.9 | Human interaction gives us a deep fulfillment of life. |
| 0:12.3 | And we have a crisis right now of loneliness and isolation as we all work longer and longer hours |
| 0:18.8 | to get more and more money to just buy more and more crap. |
| 0:22.7 | And there's an epidemic of anxiety and depression among the young generation that's consuming an average twice as much as we did at their age. |
| 0:29.4 | And they're less happy. So there's no empirical evidence that this pursuit of consumption actually does make us better off. |
| 0:38.8 | You're listening to The Great Simplification. I'm Nate Hagen's. On this show, we describe how |
| 0:44.7 | energy, the economy, the environment, and human behavior all fit together and what it might |
| 0:50.5 | mean for our future. By sharing insights from global thinkers, we hope to |
| 0:54.8 | inform and inspire more humans to play emergent roles in the coming great simplification. |
| 1:06.0 | A few weeks ago, I released to frankly the 10 myths still taught in business schools, which |
| 1:11.7 | covered some of the deepest held misconceptions underpinning economic theory. |
| 1:18.0 | Today, building off that episode, I am joined by a real economist, Josh Farley, to dig deeper |
| 1:25.0 | into these myths and share a few more of his own. |
| 1:29.3 | Josh Farley is a professor in community development and applied economics and public administration at the University of Vermont. |
| 1:37.1 | Additionally, he is a fellow in the Gund Institute for the Environment. |
| 1:42.8 | Additionally, he was the chairman of my PhD committee back in the day. |
| 1:48.7 | Josh's current research focuses on the economics of essential resources, the democratization |
| 1:55.2 | of monetary and financial systems, the evolution of cooperation, the economics of information, and the commons. |
| 2:03.6 | Every time I talk with Josh, I learned something new, and this time was no exception. |
| 2:09.1 | We covered everything from the faulty way economics accounts for human behavior to how complex |
... |
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