Reposted from the blog of the Istanbul Innovation Days 2025 conference for archival purposes. The original post is here. 

Spring has arrived for economic alternatives

As I stood on the stage of the Istanbul Innovation Days 2025, I experienced a feeling like the beginning of spring, when you throw the windows wide open and let warm air fill the room. The economics winter was over, for good. It was March 26 – the beginning of spring indeed – and I had the honour of facilitating the plenary session on “Alternative Economic and Financial Models”. Our panel had come together to claim that bold, comprehensive economic transformation was both urgent and possible – in fact, it was already under way in many parts of the world.  

For economists such as myself, this is an extraordinary claim. Since the 1980s, the economics profession has been all but dominated by a paradigm known as neoclassical economics, vigorously promoted by many prestigious scholars associated with the University of Chicago. The Chicago school’s success was not limited to academia: it persuaded political leaders the world over that its brand of economics was the only sound, reasonable one, not only in existence, but possible. British Prime Minister Margaret Thatcher summarized it brilliantly in 1980: “there is no alternative”, no point looking for other ways. Two full generations of economists and policy makers complied, defining a half-a-century long winter of economics.  

Progress everywhere

And yet, there we were, in Istanbul, and spring had come. We were seeing robust policy innovation to equip economic decisions makers with new tools – job guarantees, universal basic income and services, carbon coins, community land trusts, local energy communities, tailor-made financial instruments, twenty minute cities, missions and moonshots, and more. We were seeing ambitious redesign of economic institutions to deploy these new tools effectively. And we were seeing rapid progress in devising indicators of economic performance to guide those deployments, indicators that move beyond GDP – with UNDP and the UN as a whole taking a leading role.  

The best part? None of this is only theoretical, and none of this is limited to a narrow club of best-in-class from affluent countries. Our panel was itself composed of doers, practitioners, with solid experience, hailing from all over the world. In Costa Rica, Eduard Müller and Costa Rica Regenerativa turned a previously extractive economic system into one that rewards the regeneration of soil and nature. In Indonesia, Natalia Arjomand and Second Muse Capital devised a highly successful financial instrument to deliver interest-free loans to small enterprises in the waste management and recycling sector. In South Africa, Miles Kubheka and Wakanda Food Accelerator build economic inclusivity around food, an economic good which also encodes conviviality and care. And in Sicily, Giacomo Pinaffo and the Messina Community Foundation have built a rich and diverse local economy in solidarity, with hundreds of businesses coordinating under a single strategic umbrella in sectors like landscaping services, bioplastics, energy production, social housing, beverages, and the arts. The anti-colonial movement played a large role in opening our eyes, letting us see these contributions (which started well ahead of, and independent from, progress in academia) not as “lagging economies”, but as viable alternatives in their own right. 

The power of local (and of science fiction) 

There is much to be learned from their stories, and the stories of practitioners like them. I, for one, am determined to continue learning for years to come. But three learnings in particular stood out for me.  

The first one is that economic transformation works, not always, obviously, but more often and better than conventional economic wisdom gives it credit for. And it stands to reason: thanks to the progress I mentioned above, reformers in this generation simply have more tools in their armory than the conservative thinkers that oppose them. Exaggerating a bit for the sake of clarity, the latter have spent half a century developing one single option, that of free markets that, once correctly liberalized, will automatically deliver the best possible outcome. If that option fails, they have nothing else to offer.  

The second one is that economic transformation tends to happen fastest and deepest at the local level. Economists invariably point out that this is non-optimal, because critical levers for economic policies are only available to states, not to regions or districts or cities. They are right: and yet this oddity tells us that collective institutions closest to the people feel the demand for economic transformation strongest. I predict that regions and cities will continue to lead in institutional and policy innovation when it comes to the economy – and also that small states might have large impacts if they get on board with the economic transformation agenda. 

The third one is that we can only build economies we can imagine. Fifty years of “there is no alternative” have weakened our ability to imagine economies more humane and egalitarian than the ones we inhabit now. We need to re-develop our economic imagination muscle if we are to design successful economic transformation. Economists are not of much help there, so Kate Beecroft and Özgür Can Özüdoğru – with remote support from complexity economist Joffa Applegate – demonstrated how science fiction (especially in its more economically inclined variants, like cli-fi, solarpunk and afrofuturism) can help us travel with our minds to alien economic systems, and try them on for size. They made this point by delivering a brilliant workshop they designed with the Science Fiction Economics Lab, that took us to a fictional future Istanbul that had seriously tackled some of the very real economic problems it is facing now, such as housing and water scarcity.  

Stories are, as ever, a potent catalyst of human transformation. People don’t abandon broken systems because they have seen graphs on inequality graphs or read critiques of GDP. They change when they see new models come to life. When Costa Rican farmers heal their lands, and see the butterflies return. When Indonesian small businesspeople are entrusted with the capital to build their vision of a circular economy. When South African “foodpreneurs” gain access to platforms where food becomes power, pride, and possibility. When Sicilian researchers, businesses and workers find ways to build a social economy from the ground up, for themselves and others.  

As we traded war stories with one another and the audience of the Istanbul Innovation Days, I believe it became clear to everyone that Margaret Thatcher was wrong. She was wrong in 1980; she is even more wrong now, in the face of all this progress and creativity. Let’s leave “there is no alternative” behind, and embrace, instead, the message of UNDP’s Human Development Report 2025: “it’s a matter of choice”. The report refers to Artificial Intelligence, but I believe it applies to economic institutions as well. Those we have, we chose. And we could, and should, choose others, if they serve us better.  

I look forward to a future where we do so, with everybody’s contribution. In fact, I am working on a draft concept note to develop a portfolio on economic transformation. Please reach out if you want to contribute, or simply know more.  

Heartfelt thanks to all panel- and workshop- participants for their suggestions in writing this blog post.