The science is in and the answer is YES! I have used this phrase -- "economics as a form of brain damage" -- on why we need to overhaul economics and its financial and mathematical models for decades. Credit Suisse and complexity theorists at the Swiss Technical University in Zurich have also demonstrated the concentration of companies: of the 50 largest companies in the world, 45 are financial intermediaries (Read: Global Finance Lost in Cyberspace).
Science Disproves Economic Theory
Outdated economic theories, assumptions and financial models justified the current cruel austerity being imposed on citizens in Europe and the U.S. – now clearly failing. Research in physics, thermodynamics, anthropology and, recently, brain science, endocrinology and the behavioral sciences has now invalidated most economic models. Financial reforms bailed out bankers and made things worse.
Scientific knowledge of our planet's biosphere, its climate, geology and the behavior of our human species is finally trumping economics and 18th century political ideologies. Economics is not a science – as most economists will admit. Its core tenets and "principles" are mere semantics: "capital" (too many definitions); "investment" (in what?); "wealth" (money, above other forms of wealth); "consumption" (education, social services, candy?) and so on.
The new scientific findings expose financiers’ mystifications. Financiers do not provide capital; but are intermediaries between savers in the real economy and borrowers they favor, while depositors' money is sent overseas to speculate on credit default swaps.
Selling Fear, Not Reason
Our new knowledge of endocrinology, behavioral and brain sciences shows that economics – which holds that we are rational self-interested consumers -- is a form of brain damage!
Let's look at how marketing and advertising exploit human emotional susceptibility. Endocrinologists discovered key hormones affecting our moods: testosterone, associated with aggression and violence and oxytocin, mostly expressed in women, associated with empathy and nurturing and elevated during parenting by both sexes. Marketers use violence as an attention-grabber in many ads.
Brain science shows that we humans are of two minds: our amygdala governs emotions and our later-evolved forebrain, allows reason, reality-testing and foresight.
Most selling employs fear: for example ads for patent medicines – often aimed at minor or imaginary ailments. Others undermine our self-esteem: selling cosmetics, weight-loss or cars. Marketers know their ads bypass our forebrains, deliberately targeting our amygdalas, like those vacation ads, "you deserve a holiday – just charge it to your credit card." Neuro-marketing perversely uses MRIs and sophisticated psychology to see which products activate which parts of our brains.
Children are the easiest targets. Any U.S. attempt to regulate marketing and advertising invokes freedom of speech and the First Amendment. The U.S. is only one of two countries in the world permitting pharmaceutical companies to advertise proprietary drugs. Other democracies limit advertising to children.
Raising the ethical bar on advertising is important to prevent exploitation, particularly of children, but also because advertising funds our mass media and influences content.
Since the Supreme Court opened the floodgates to money in politics, billions is now spent on attack ads. Behavioral science helps us see our own cognitive biases, moral and ethical frailties and theory-induced blindness to faulty economics.
Economics needs de-frocking! Our surveys with Globescan show that wide majorities in many countries understand that economics must be replaced with more scientific approaches. Let's forget old dogmas and use all our new knowledge!