Is Economic Equity Possible within the Contemporary Theory and Practice of Economics?

Robert Henman


Question: Does economics affect every citizen of every country in the Global society? Yes, would seem to be the appropriate answer. A further question might be: How or what form of affect does it have? There are lots of statistical data available that provide more than sufficient evidence that wealth distribution is hardly an efficient component of economic activity. One statistic presently available is that less than 1% of the human population control 50% of the world’s wealth. The other 50% of wealth is shared out amongst the other 99% of the population. What follows is a few comments on problems in economic theory and Bernard Lonergan’s solution to those problems.

What is the origin of such disparity? 

One is that the current objective of economic theory is maximization of profit. Yet, some economists hold that the objective of economic activity is to provide a standard of living for the human population. Can you have profit maximization as the goal of economic activity and provide a standard of living for all at the same time. It would seem not. It contributes to the disparity both locally and globally. 

Locally we witness an increase in homelessness and a rise in rents that more and more people cannot afford. Globally and historically, we witness the drive for profit over the past 500 years of colonialization in Australia, Africa, Far East and the Americas. These invasions exploited the earth’s resources and the indigenous people’s culture and heritage all for wealth. In doing so they have arrested the development of the people and today we experience efforts of renewal of indigenous cultures, languages, religions and spirituality. Due to these centuries of exploitation, many of these cultures lived in both spiritual and economic poverty making equity a huge challenge in these times. Transnational corporations have elevated exploitation to a level beyond that of colonization which is now further complicated by the ecological crisis and the rise of populism. 

Now, what is the failure in economic theory? Current establishment economic theory work with models that do not analyze the actual data of economic activity. In other words, it is not concrete or empirical. Models are imagined and applied to circumstances from which central bankers and governments develop policies that affect our lives. Currently central banks have increased the basic bank rate causing people’s debt load to increase. 

News programs offer stock market reports and Gross National Product (GNP) numbers daily. These do not provide an actual view of the economy as a standard of living. Stock markets are a place where gambling occurs and affects only the wealthy for the most. GNP provides an overview of how the wealthy are doing, not how each individual is doing. 

What is the problem with economic theory? Models do not help. That is not science and only scientific understanding is an appropriate basis for developing policy. So, to analyze economic activity is to take any business and notice that there are two types of firms in any economy. A surplus production circuit and a basic production circuit. These circuits operate in relationship to each other. Science would work out the function of each circuit and reveal that the two circuits need to be in balance all the time. When one circuit draws on the other circuit an imbalance occurs which may be inflation. If the imbalance is sustained, it can deepen towards recession and depression. If we understand how the circuits affect each other, policy can be developed to retain the balance.

An Example

You can take any small local business and work out how the two circuits function and relate. Take a local cafe in Malaga, Spain that sells café con leche and bolleria to its customers. This cafe first buys a coffee machine from a coffee machine producing company. The coffee machine does not enter into the standard of living. The coffee machine can be used to make numerous cups of café con leche. So, it is still part of the surplus production circuit. If coffee machines are produced to be sold for domestic use, they are part of the basic production circuit as they enter into the standard of living for use in a domestic household. The producing of coffee beans and their sale to a coffee shop are part of the basic production circuit as they are eventually sold to consumers. When the café con leche is sold to you or me, it is a final sale; the café con leche is consumed and becomes part of our standard of living. If we purchase a quantity of coffee beans from a grocery store for home use, they are still part of the basic production circuit as it is a final sale that enters our standard of living.

One might think of what occurred during the pandemic as an example of the relationship between intelligent science and policy. First, virologists found out how the virus spreads and recommended policies of wearing masks, restrict close gatherings, washing our hands frequently. At the same time virologists worked at developing a vaccine and when they had done so, they recommended dosage amounts and time periods for follow up vaccinations. Intelligence preceded policy. 

Because, economics is not yet a science, by its focus on imagined models, policy tends to be guesswork. Witness what occurred during the 2008 Wall Street crash. The y did not know whether to print more money, let the banks fail or bail them out. They decided to bail them out. And the casino mentality began all over. 

Communicating to economists about this problem is and has been difficult as economists do not study actual economic activity and subsequently, do not have any experience of what is science. I have experienced this in conversations with economists as have my colleagues who have worked in this field much longer than I.


Communicating with economists has not been helpful, so I offer this very brief description of the problem and solution and should you wish to converse with economists, journalists or politicians, it would be a most worthwhile effort. Also, discussions with friends within the context of this brief essay might also be worthwhile. This analysis was worked out by a Canadian philosopher, Bernard Lonergan, in the 1930s and 1940s. His works on this topic are published with the University of Toronto Press. I add below Lonergan’s texts as well as a few others that have been published on his economic theory for those who wish to go more in-depth into what would constitute a science of economics that would eventually provide a standard of living for all and ease the disparity of wealth in the global community. Lonergan states in his book that it is not greed that is the root of the problem, but ignorance on the part of current economic theory and theorists. Greed is easily possible when one believes that profit is the goal which is based on a mistaken theory of economics.

Robert Henman has been lecturing in Philosophy, Ethics, Peace Studies and Child Studies at Mount Saint Vincent University since 1984. He taught Medical Ethics at The Dalhousie Medical School from 1990-1994. He has published three academic textbooks, two co-authored text books and one novel. He has published articles in Neuroscience, Philosophy, Ethics, social science methodology and education in various academic journals. Over the past five years he has been performing research in economics and has provided lectures on economics in 2018 and 2023 in Malaga, Spain where he and his wife, Olive, have been spending their winters since 2007. He was born in Amherst NS and is married to Olive Dewan-Henman. They have two grown children and three grandchildren. They have spent their winters in Spain since 2007, where his wife sings with a choir and he carries out his research. 


Primary Sources

Bernard Lonergan, For a New Political Economy, CWL 21, ed. Philip McShane, University of Toronto Press, 1998. 

Bernard Lonergan, Macroeconomic Dynamics: An Essay in Circulation Analysis, CWL 15, University of Toronto Press, 1999. Edited by Frederick Lawrence, Patrick Byrne & Charles Hefling Jr.

Secondary Sources

Robert Henman (2024) (99+) A Brief Introduction to Bernard Lonergan’s Economics as a Science Current Economic Theory | Robert Henman –

Philip McShane, Economics for Everyone: Das Jus Kapital, Axial Publishing, Vancouver, BC, 3rd Edition, 2017.

Philip McShane, Piketty’s Plight and the Global Future: Economics for Dummies, Axial Pub., 2014.

Philip McShane, Sane Economics and Fusionism, Axial Pub., 2010.

Philip McShane, PastKeynes Pastmodern Economics: A Fresh Pragmatism, Axial Pub., 2002.

Philip McShane & Bruce Anderson, Beyond Establishment Economics: No Thank-you Mankiw, Axial Pub., 2002.

Philip McShane, James Duffy, Robert Henman & Terrance Quinn, Seeding the Positive Anthropocene, Edited by James Duffy, Sean McNelis & Terrance Quinn, Axial Pub., 2022.

Terrance Quinn & John Benton, Economics Actually: Today and Tomorrow Sustainable and Inclusive, Second Edition, Island House Press, Toronto, Canada, 2023.

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