There are two fundamental flaws of misplaced concreteness in economics. First, is the obfuscation of the Greek root word "oikonomia", which refers to study of the well-being and stewardship of the household, habitat or natural environment. Instead economics has become more aligned with "chrematistics" (a word almost forgotten in modern dictionaries) which refers to the study of wealth or a particular theory of wealth as measured by money. The second greatest error in economics is the confusion of wealth, which is a magnitude with an irreducible physical dimension, with debt (money), a purely mathematical or imaginary quantity (Daly, 1996). The shortcomings of measures of oikonomia, such as the GDP and national income accounts, have long ago been acknowledged by many. The emergence of new measures of economic, societal and ecological well-being is evidence that some of these shortcomings are finally being addressed.
Yet even these important reforms in national accounting towards a more honest assessment of the oikonomia of the nations will be meaningless without understanding the fundamental root of the economic growth paradox, that is the nature of money and how its creation (and destruction) affects the well-being of nations. Money is the lifeblood of all economies yet few understand how it is created and how this process leads to destruction of living capital (human, social, and natural) and the real wealth of nations. Only fundamental reform of monetary policy and the process of money creation will the chrematistic world of virtual wealth (stock markets, currency markets) become aligned with oikonomia — stewardship of the physical world and human experience of quality of life. This paper challenges both economics and business disciplines to explore not only the reform of national accounting systems to provide a more meaningful barometer of the oikonomia but also the reform of traditional financial and management accounting systems to measure social, environmental and financial performance. Most importantly, the paper calls for a fundamental reform of monetary policy, the elimination of fractional reserve banking, and the alignment of money creation to oikonomia objectives of improving or sustaining the real wealth of nations.
