The summer of 26: a new direction for economics

Something strange is happening in economics.

Not in the markets—you won’t see it on a stock ticker. Not in central banks—you won’t hear it in a rate decision. But in the intellectual foundations of the economy itself, a quiet revolt is underway.

For decades, we’ve been told a simple story:

Manage the money supply, and you manage the economy.
Let markets self-organise, and society will benefit.
Pursue growth, and prosperity will trickle down.

That story is now being challenged—not by fringe activists, but by the UN, leading economists, and global research institutions. And in the summer of 2026, three major initiatives landed almost simultaneously, all pointing in the same direction: the economy needs rewriting.

1. The UN’s “Beyond Growth” Roadmap: Growth is Not the Solution

In June 2026, the UN Special Rapporteur on extreme poverty released a striking document: The Roadmap for Eradicating Poverty Beyond Growth.

Its core provocation?
Economic growth is no longer a reliable path out of poverty.

The report explicitly rejects the long-held assumption that “growth = progress,” arguing that this belief is now “neither realistic nor sustainable.” [ohchr.org ]

Instead, it lays out around 80 policy measures designed to:

reduce inequality,
strengthen public services,
and decouple poverty reduction from GDP growth. [ohchr.org ]

The roadmap calls for a“human rights economy”—one that puts well-being and planetary limits at the center, rather than production and consumption. [srpoverty.org ]

Even more radical: it argues that our current growth-driven model is actively fueling inequality, weakening democracy, and damaging the planet. [ohchr.org ]

This is not tinkering. It is a direct challenge to the idea that markets, left alone, will deliver broad prosperity.

2. The Global Justice Project: Equality First, Not Markets First

Just days earlier, economists associated with the World Inequality Lab launched the Global Justice Report.

If the UN report is a policy roadmap, this is a full-blown alternative economic vision.

Its starting point: We cannot solve climate change, inequality, or instability within the current economic framework.

The report proposes a radical reordering of priorities:

drastic reductions in global inequality,
shorter working hours,
massive redistribution through global wealth taxes,
and a shift towards what it calls“sufficiency”—less consumption, but higher well-being. [globaljust….wid.world]

Perhaps the most explosive claim:

A fair and sustainable world is possible—but only if inequality is reduced dramatically and systematically. [globaljust….wid.world]

The report also dismisses GDP as the primary measure of success, arguing that prosperity must be measured in terms of well-being within planetary limits. [newsline.com ]

This is a frontal assault on the idea that markets, driven by individual self-interest, will naturally converge on the best outcomes.

Instead, it suggests the opposite:
unchecked markets produce outcomes incompatible with both democracy and planetary survival.

3. Mariana Mazzucato’s “Common Good Economy”: Markets Must Be Shaped

At the same time, one of the world’s most influential economists, Mariana Mazzucato, is publishing The Common Good Economy (rolling out globally through 2026).

Her argument is as sharp as it is simple: Markets are not natural systems to be managed—they are tools to be designed.

For decades, governments have treated “the good” (public services, environmental protection) as a correction to markets.
Mazzucato calls this a trap.

Instead, she proposes:

designing markets around collective goals from the outset,
aligning business, finance, and public policy around shared missions,
and ensuring value is created and shared collectively. [marianamazzucato.com ]

She rejects the passive role of government in traditional economics:

The state should not just fix market failures—it should actively shape markets. [hachettebo…kgroup.com ]

Her “common good compass” reframes the economy as a purpose-driven system, not a spontaneous outcome of private incentives.

What’s Really Being Challenged

Taken together, these three initiatives form a pattern.

They all reject the same three pillars of old economic thinking:

1. The “invisible hand” is enough

The idea that markets self-organise into efficient and beneficial outcomes—dating back to Adam Smith—is now under heavy criticism.
Even modern research suggests markets can be fragile, unstable, and prone to cascading crises. [arxiv.org ]

2. Growth fixes everything

The “growth-first” model is being reframed as part of the problem:

it can increase inequality,
degrade ecosystems,
and fail to improve real living conditions for many. [ohchr.org ]

3. Managing money equals managing society

Macroeconomic policy—interest rates, inflation, fiscal deficits—has long been seen as the main lever of control.
But these new frameworks argue that structure matters more than flows:

Who owns what
Who decides what gets produced
And who benefits from it

A New Economic Imagination Is Emerging

What makes this moment remarkable is not just the ideas themselves, but their convergence.

A UN roadmap
A global inequality research coalition
And a mainstream bestselling economist

…are all saying versions of the same thing:

The economy is not a neutral system. It is a political and social construction—and it must be rebuilt.

The Provocation

Here’s the uncomfortable thought:

What if the traditional economic “common sense” we’ve relied on for 40 years was never neutral science—but a set of assumptions that fit a particular era?

And what if that era—of globalisation, cheap resources, and faith in markets—is ending?

Because if these summer 2026 interventions are right, then the real question is no longer:

“How do we grow the economy?”

But:

“What is the economy actually for?”

And that is a far more dangerous question.

Real Capital supports Modern Monetary Theory

Modern Monetary Theory (MMT) and Real Capital Frameworks both stress the importance of understanding the capacity of the economy to deliver, using real resources.

MMT demonstrates how the economic system works: a government budgets for a year at time, planning its expenditures and expected levels of tax returns. The expenditures are calculated on resources being available to purchase. Real Capital frameworks offer ways to measure production capability and capacity, and the status of the real capital that will be employed through the budget year. This article explores how MMT and real capital align.

A demand-side strategy for saving Swedish forests

Swedish forests are being clear-cut at such a rate that alarms bells are ringing about dramatic loss of biodiversity and old-growth forest. Once clear cut, it is unlikely that biodiversity and old-growth forest will return. Activists are calling for the preservation of the last remaining patches of bio-diverse forest. This must happen. However, we need to look at the demand side. What is driving this demand and are there demand-strategies available?

Modelling Supply Chains to inform Circular Economy policy

Short Communication

Stephen Hinton, Fellow, International Association of Advanced Materials

ABSTRACT

Supply chains are international. To be effective, it follows that actors should use a common language with the same vocabulary, metrics etc. in each country to be able to run, monitor and regulate them. They have a common grammar that embodies key generally accepted concepts. This grammar, however, still reflects the make-take-dispose mental models of the linear economy. This report presents a proposal for a description of supply chain grammar using the Swedish SNI categorisation of industries. The proposal models supply chains with sufficient granularity to allow identification of intervention points for the crafting of policy to stimulate the transition to circularity.

Each installed production device in the various types of the chain can be classified according to their capability for circularity, allowing for quantitative measures to help companies and countries craft policy and strategy.

Representing Real Capital in Asset Liability Equity tables

Applying ALE tables to the material world: an introduction.

You’ll need to be familiar with the concepts of real capital and systems dynamics from previous posts, if you are not already.

The Assets – Liabilities – Equity (ALE) accounting method is a fundamental approach used in financial accounting to record and report the financial position of an organization. It involves the classification and measurement of an organization’s resources (assets), obligations (liabilities), and owners’ interests (equity). This method is widely appreciated by businesses, non-profit organizations, and governmental entities as it provides a comprehensive and transparent overview of an organization’s financial health.

The approach therefore, is favoured by economists advising policy makers. However, not just money, but physical resources – their function, availability, capacity, etc. are vital to the workings of society. This dimension can be lost when looking through an economics-heavy lens. What is needed is the robustness of the ALE method applied to the material world. Let us present it here:

AI summarizes my circular economy work in 13 minutes

I’ve been at it a long time. Working on the circular economy. From advising the Swedish Circular Economy Delegation, to working on the circular region at the university in Gävle, Sweden, to creating an online education for county administrators. Thinking to put it all in a book, I started collecting fragments into Google’s experimental NotelbookLM. Of course, it offered to do a podcast summary of it all.

Experiments with prototyping a municipal dashboard.

Readers will recall we produced a proposal for indicators for municipalities. A dashboard would help local politicians understand how the built infrastructure was affecting the living environment and how the environment was affecting society. The first proposal is illustrated below.

Time for banks to join the sustainability transformation

When we think about buying a home, what’s the first thing that comes to mind? For most of us, it’s the price. How much does the house cost? How much can I afford? Will it be a good investment in the long run?

But what if we shifted our focus slightly? What if, instead of getting caught up in bidding wars and paying far above the asking price, we thought about how we could actually invest in the house itself? And we’re not talking about expensive countertops or high-end appliances. We’re talking about investing in the home’s environmental performance.

A deep dive into the Swedish transport system’s chances of defossilizing.

A look at the passenger miles produced in the Swedish transport system reveals some interesting statistics. When you add the CO2 emissions per transport type you get even more interesting insights.

The graph below comes from the transport statistics authority for transport within Sweden. And the nature protection agency.

In terms of CO2 emissions, the one transport type that dominates is the one that produces a greater proportion of emissions than the proportion of passenger miles. The reverse is true of rail transport. It produces the second largest number of passenger miles and a miniscule proportion of emissions.

What does this mean for policy? Just looking at the diagram, if you want to reduce CO2 fast, then policy must be aimed at the private combustion engine car. And using the advantage of rail. Where rail cannot be used, the bus is much better than the private car.

The sea results are interesting. Boat transport is very effective, but we are looking at the ferry system included in the figures. It may well be that we need to investigate further as ferries take cars as well.

The graph would have looked different for the 1950s. The chart below shows what has happened to transport in Sweden since then: it’s been automobiled! Swedes are using the same amount of rail and bus travel as they did in the 50s – and the population has grown from 7 million to 10.5 million!

Sweden went rapidly from a rail, bus and other transport method society (MC, moped, walking, cycling) to a nation whose transport method was predominantly by car.

Maybe there is clue to how Sweden can defossilize in this, and it will have to do with building a society where people don’t actually need to take the car. How did it work in the 1950’s? I can’t believe life was that harsh. This is definitely a line to investigate more.

Some things spring to mind: towns had a lot more local shops. And people did not work all hours, so they could use public transport with routes that coincided with work hours. Or, if they worked shift, they lived close to their work.

Of course, people will feel badly hurt if their car is taken away, this needs careful planning! What could you offer instead? How about a green transition basic income with a free electric taxi card topped up to say 10,000 kms a year?

Do put your ideas in the comments section.

Applying Real Capital to the Circular Firm

Several thinkers (including, for example, Boyd 2020 and Hazel Henderson) have suggested that the concept of real capital – or multi-capital – be introduced into the political economy to aid decision-making at policy level as well at corporate level. This may overcome one of the failings of standard economics: Policy makers often rely on economists to provide their decision bases. However, one of the failings of standard economics when preparing decision bases for policy makers, is that anything that cannot be valued in money is seen to have no value or little value. The Earth does not send a bill for the use of its atoms so the stewardship of the material world is left out. Without a comprehensive valuation framework, policy makers and strategists are likely to miss the full picture by just relying on monetary values and make decisions that could be detrimental to society, counter to the intentions of the policy.

This article gives a general explanation of the category of real capital that is built capital, and how to use its valuation in preparing decision bases. The Real Capital approach gives a more robust decision basis, helping identify long term investment needs and policy that steers investment and activities to avoid capital degeneration and promote capital regeneration.