John?s Economic Worldview

Calvin professor John Ludema has a knack for making economics more approachable to non-economists. His emphasis on “normative thinking,” or describing the way things ought to be, distinguishes him from many of his colleagues in the field, who focus more on explaining how economies work rather than predicting the consequences of policy changes. Find out

Ludema believes the world economy is fundamentally interdependent. For example, he argues that isolation of the automobile manufacturing process from its antecedents (mineral mining, petroleum production and workers) and its impacts on the environment and politics is flawed. He points to a Capital Institute report that warns that a tendency to compartmentalize economic processes is not only flawed but dangerous: it makes the global economy vulnerable to disasters like climate change.

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Ludema also counsels realism about the impact of government policy. He points out that financial indices can be misleading when used to predict general shifts in the purchasing power of currencies over time, and he questions the wisdom of relying on them as the primary tool for measuring inflation. Instead, he favors “real price indices” that more closely track real costs of living and he advocates a more holistic view of the economy. He cites nineteenth-century thinker John Ruskin, who pushed back against the code of competitive individualism that characterizes classical economic thinking and capitalism. As a result, Ruskin favored western tradition and values rooted in Scripture and the classics over classical economics.