I assert in my book MEMEnomics; The Next Generation Economic System that we are in a middle of an economic paradigm shift that started in 2005-2006. Sometimes a dying system breathes life into its own values and metrics sending its most visible champions into a righteous frenzy. A dead cat's bounce, so to speak that tries to convince fewer and fewer people that everything with the old system is fine. When it comes to our economy, the symptoms of the old dying system are disguised in rosy financial reports, record stock prices and high home values. The pathologies are so deep, we often confuse the narrow-mindedness of what financial reporters, CEOs and CFOs tell us with real economic news. The type of news that matters most to average Americans who are experiencing record levels of poverty and a majority of the population that is one paycheck away from financial ruin. The old system has little empathy for the majority of Americans who have grown helpless and hopeless in their struggles against the current system. Wall Street and the world of finance have decoupled from Main Street and real productive output long ago, creating two vastly different Americas.
A system proves it's in the decay stage when small changes no longer move our economy forward. In worse cases, old remedies only add toxicity to the current mess. As proven by the financial bailout, instead of planting new seeds for a new economy, our government extended the pathology of the current system further widening the economic divide.
On the other hand, the emerging system is one that cares about the plight of the less fortunate. It disdains the pathologies of greed and resource manipulation and seeks to level the playing field in a more equitable and natural way. But, like the current system that took years to define and become the dominant narrative for American values, the new system will spend years in its embryonic phase before it reaches that critical tipping point.
We are in need of systemic change that requires deep structural reform to all of our institutions, and it is not happening fast enough. This is the primary reason why the division in our country is so great. This battle between new and old will get uglier before it gets better. We are living in precarious times that will define our future for decades to come. These have historically been the patterns of paradigm shifts and without the pain and division culture seizes to be an open system. Only open systems have the capacity to raise cultures to higher values.
While the new paradigm continues to be defined, the old paradigm continues to be a system of vacuous economic intuitions that are in crisis and becoming less relevant with every passing day. So while we wonder why the economic recovery has been so one-sided, here's a reminder from Thomas Kuhn, the Harvard educated philosopher who originally coined the phrase Paradigm Shift:
The transition from a paradigm in crisis to a new one from which a new tradition of normal science can emerge is far from a cumulative process, one achieved by an articulation or extension of the old paradigm. Rather, it is a reconstruction that changes some of the field's most elementary theoretical generalizations as well as many of its paradigm methods and applications. During the transition period, there will be a large but never complete overlap between the problems that can be solved by the old and by the new paradigm. But there will also be a decisive difference in the modes of solution. When the transition is complete, the profession would have changed its views of the field, its methods and its goals.
So, without the dynamic tension and the highly charged debates between old and new, open complex systems like scientific research, democracy and human emergence, will surely collapse and become closed systems ruled by elites, oligarchs and dictators where very few voices of descent are ever heard. Sadly, even with the most open of systems, no one can expedite the onset of a new paradigm, but we can all be witnesses to the damage the old one leaves behind.