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... through arguing over resource allocation. According to "Conceptual Guerilla", mainstream economics is just mainly a mythological cover story to justify elites:
"The Mythology of Wealth"
http://www.conceptualguerilla.com/?q=node/402

Example:
http://www.responsiblefinance.ch/appeal/
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. This situation reflects the institutional power that the unconditional proponents of main-stream thought continue to exert on university teaching and research. This domination, propagated by the so-called top universities, dates back at least a quarter of a century and is effectively global. However, the very fact that this paradigm persists despite the current crisis, highlights the extent of its power and the dangerousness of its dogmatic character. Teachers and researchers, the signatories of the appeal, assert that this situation restricts the fecundity of research and teaching in economics, finance and management, diverting them as it does from issues critical to society."

Other ways to look at economics:
http://debunkingeconomics.com/

And also the similarly named:
http://www.amazon.com/Economics-Rest-Us-Debunking-Science/dp/1595581014
"Why do contemporary economists consider food subsidies in starving countries, rent control in rich cities, and health insurance everywhere "inefficient"? Why do they feel that corporate executives deserve no less than their multimillion-dollar "compensation" packages and workers no more than their meager wages? Here is a lively and accessible debunking of the two elements that make economics the "science" of the rich: the definition of what is efficient and the theory of how wages are determined. The first is used to justify the cruelest policies, the second grand larceny. Filled with lively examples--from food riots in Indonesia to eminent domain in Connecticut and everyone from Adam Smith to Jeremy Bentham to Larry Summers--Economics for the Rest of Us shows how today's dominant economic theories evolved, how they explicitly favor the rich over the poor, and why they're not the only or best options. Written for anyone with an interest in understanding contemporary economic thinking--and why it is dead wrong--Economics for the Rest of Us offers a foundation for a fundamentally more just economic system."

"I challenge you to repeat that post replacing your references to actual papers published in mainstream journals."

Consider:
http://www.disciplined-minds.com/
"Who are you going to be? That is the question.
In this riveting book about the world of professional work, Jeff Schmidt demonstrates that the workplace is a battleground for the very identity of the individual, as is graduate school, where professionals are trained. He shows that professional work is inherently political, and that professionals are hired to subordinate their own vision and maintain strict "ideological discipline."
The hidden root of much career dissatisfaction, argues Schmidt, is the professional's lack of control over the political component of his or her creative work. Many professionals set out to make a contribution to society and add meaning to their lives. Yet our system of professional education and employment abusively inculcates an acceptance of politically subordinate roles in which professionals typically do not make a significant difference, undermining the creative potential of individuals, organizations and even democracy."

And from a previous link:
http://www.responsiblefinance.ch/appeal/
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. This situation reflects the institutional power that the unconditional proponents of main-stream thought continue to exert on university teaching and research. This domination, propagated by the so-called top universities, dates back at least a quarter of a century and is effectively global. However, the very fact that this paradigm persists despite the current crisis, highlights the extent of its power and the dangerousness of its dogmatic character. Teachers and researchers, the signatories of the appeal, assert that this situation restricts the fecundity of research and teaching in economics, finance and management, diverting them as it does from issues critical to society."

So, that's why it's hard to find this stuff in mainstream "group think" economic journals edited by "disciplined minds" engaging in "group think" that is directly linked to their own paychecks as professors ("those who profess") of mainstream economic dogma.

However, if you actually looked at any of those links I previously supplied, you would find several of them actually lead to either journal publications (Luthar) or items that cite journal publications in other fields or even some books written by professional economists. A little bit of reality sometimes even seeps through past the group think and self-serving apologies of the current high priests of the mythology of wealth like in the links to the NY Time article. Again:
"Economists Who Did Their Homework (800 Years of It)"
http://www.nytimes.com/2010/07/04/business/economy/04econ.html
"But in the wake of the recent crisis, a few economists -- like Professors Reinhart and Rogoff, and other like-minded colleagues like Barry Eichengreen and Alan Taylor -- have been encouraging others in their field to look beyond hermetically sealed theoretical models and into the historical record. "There is so much inbredness in this profession," says Ms. Reinhart. "They all read the same sources. They all use the same data sets. They all talk to the same people. There is endless extrapolation on extrapolation on extrapolation, and for years that is what has been rewarded.""

Here is more on that mythology and the consequences:

Thanks for the reply, even if the ad hominen part probably just weakens your argument. :-)

I actually like economists like Julian Simon, even if he ignores externalities and equitable distribution:
http://www.juliansimon.com/writings/Ultimate_Resource/

The fact is, most mainstream economics is based neither on facts, history, or human nature. :-) Most of it is abstract theoretical model with little connection to populist ethics or reality. See, for example:
http://www.theatlantic.com/magazine/archive/1999/03/the-market-as-god/6397/
http://www.responsiblefinance.ch/appeal/
http://debunkingeconomics.com/
http://www.nytimes.com/2010/07/04/business/economy/04econ.html

Or:
"Economics for the Rest of Us: Debunking the Science that Makes Life Dismal"
http://www.amazon.com/Economics-Rest-Us-Debunking-Science/dp/1595581014

Here is another thing to think about, by the way:
http://en.wikipedia.org/wiki/Paradox_of_toil
"The paradox of toil is the economic hypothesis that total employment will shrink if everybody wants to work more when "the short-term nominal interest rate is zero and there are deflationary pressures and output contraction".[1] The idea is that total employment will fall when wages, and therefore consumption, are pushed down by the simultanious efforts of everyone to work more in situations where interest rates are against the zero bound so that rates cannot drop more to increase demand for goods. This is a limited example of the fallacy of composition.[1] where assuming that the increase in production that normally occurs when total labor increases applies in all situations. Put simply, when a recessionary economy is up against the zero bound, having more people seeking work - at lower wages if necessary - can actually reduce the number of jobs due to reduced demand from lower wages."

Even in your defense of the concept, you started introducing qualifiers. You "introduce" a new worker into a "closed" economy. You are carefully avoiding what it means when an economy already has 20% or higher real unemployment, or what it means if the economy is open to imports or innovation, or what happens when the owners of capital take advantage of the situation of too many workers chasing too few jobs and apply the law of supply and demand to lower wages.

But since so much of mainstream economics is theory devoid of facts, let me play along, and show how, just theoretically, the "lump of labor" fallacy assumes both linearity in a relation of labor to output and also increasing demand, given whoever becomes a worker in a modern society with unemployment like the USA must already have been consuming a lot of products.

Consider an economy with one hundred people who consume one generalized product called "A". Imagine forty-five members out of the hundred "work" to produce product 10000 units of product A per day. The production of A has been greatly optimized for maximum production, ignoring any joy the workers get from their jobs:
http://web.archive.org/web/20110425153540/http://www.smallisbeautiful.org/buddhist_economics/english.html

Assume people only need about 1 unit of A to get by, but more is nice, up to about 7 units of A, and then more doesn't make people much happier (and at some point, people even become sick from too much).

The product is distributed in some fashion to everyone in the society, party based on

"Your error is called the lump of labour fallacy"

That fallacy label is itself a fallacy. It assumes infinite demand for good and services to keep up with exponential productivity growth (in contrast to Malsow's Hierarchy of Need in healthy humans), as well as no existing unemployment (which shows demand has already been saturated to excess). How many goods and services does one person really need to be happy and healthy? At some point there is a law of diminishing or even negative returns.

Existing unemployment also invalidates the law of "comparative advantage" too, by the way.

There is a law of diminishing returns on more stuff and services, but no reason productivity should not continue to grow exponentially for quite a while longer through robotics and other automation.
http://en.wikipedia.org/wiki/Lump_of_labour_fallacy#Criticism

Related:
http://www.responsiblefinance.ch/appeal/
        "The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged."

We should actually be rejoicing so many are going away through increased productivity. But to move forward we need a mix of a basic income, a gift economy, improved subsistence, and better participatory government planning.

And we also need to rethink jobs so they are more playful and enjoyable. Why suffer eight hours to then vegetate another eight hours? Why not have more meaningful experiences all the time, integrating joy and useful production?

"I had to come back to this point because it was so intriguing, why would I want to do this?"

Because an older version of economic "efficiency" in an economy suggest equality leads to greater happiness; see for why "Pareto" efficiency is mostly bunk as far as good policy:
"Economics for the Rest of Us: Debunking the Science that Makes Life Dismal"
http://www.amazon.com/Economics-Rest-Us-Debunking-Science/dp/1595581014
"Why do contemporary economists consider food subsidies in starving countries, rent control in rich cities, and health insurance everywhere "inefficient"? Why do they feel that corporate executives deserve no less than their multimillion-dollar "compensation" packages and workers no more than their meager wages? Here is a lively and accessible debunking of the two elements that make economics the "science" of the rich: the definition of what is efficient and the theory of how wages are determined. The first is used to justify the cruelest policies, the second grand larceny. Filled with lively examples--from food riots in Indonesia to eminent domain in Connecticut and everyone from Adam Smith to Jeremy Bentham to Larry Summers--Economics for the Rest of Us shows how today's dominant economic theories evolved, how they explicitly favor the rich over the poor, and why they're not the only or best options. Written for anyone with an interest in understanding contemporary economic thinking--and why it is dead wrong--Economics for the Rest of Us offers a foundation for a fundamentally more just economic system."

Or:
http://science.slashdot.org/story/10/09/07/1519221/Researchers-Say-Happiness-Costs-75k

Or just google on the various justifications for a "basic income".

You have good points on refactoring. But a basic income, as well as the other changes (better subsistence, more gift giving, better planning) are indeed all just incremental changes to what we have now. We have social security and medicare and money for schooling (just only for the old and young, not everyone), we gardening and personal robotics, we have GNU/Linux and Wikipedia, we have government planning. We just can improve on all of them.

But, it is hard to improve things when people don't even admit the problems and systematically suppress discussion of improvements...
http://www.responsiblefinance.ch/appeal/
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. This situation reflects the institutional power that the unconditional proponents of main-stream thought continue to exert on university teaching and research. This domination, propagated by the so-called top universities, dates back at least a quarter of a century and is effectively global. However, the very fact that this paradigm persists despite the current crisis, highlights the extent of its power and the dangerousness of its dogmatic character. Teachers and researchers, the signatories of the appeal, assert that this situation restricts the fecundity of research and teaching in economics, finance and management, diverting them as it does from issues critical to society."

So, without an ability to incrementally improve, then we are more like to get occasional huge blowbacks and wars and such... And big failures. Which is your point.

You might like these links that support your first point:
http://en.wikipedia.org/wiki/Paradox_of_toil
http://www.capitalismhitsthefan.com/

Basically, GDP has doubled or tripled over the past four decades, but real wages have been flat for most workers (with all the benefits going to 1% or so of the population). Rather than give money to workers to buy stuff as wages, the money has been provided as loans.

Had there not been the housing bubble etc., there would have been a financial crisis a decade ago. But now people have reached the end of what they can borrow under current standards, and the whole system is in great distress. It will likely get worse without some major interventions and policy changes, but these are resisted because they go against the dominant political/economic ideology of the USA.

Another factor, that you began to get at with leverage, is that the real economy of people's needs (like food and frost avoidance) is dwarfed by the amount of money in the "casino economy" related to speculation and so on (as mentioned in the video series "Money as Debt"). So, the real economy can not function to correct itself for many people because price signals are effectively broken for many real goods for meeting the needs of real people.

See also:
http://www.responsiblefinance.ch/appeal/
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. This situation reflects the institutional power that the unconditional proponents of main-stream thought continue to exert on university teaching and research. This domination, propagated by the so-called top universities, dates back at least a quarter of a century and is effectively global. However, the very fact that this paradigm persists despite the current crisis, highlights the extent of its power and the dangerousness of its dogmatic character. Teachers and researchers, the signatories of the appeal, assert that this situation restricts the fecundity of research and teaching in economics, finance and management, diverting them as it does from issues critical to society."

That video by Albert Bartlett is misleading because it ignores how more people leads to more innovation -- like developing solar panels or fusion energy to replace fossil fuels, or developing space habitats to make more land for humans.

But I agree with you about the economic issues as far as our current financial system. Both the housing bubble and the college bubble helped push back a problem related to rising productivity but flat real wages related to wealth concentration.
http://www.capitalismhitsthefan.com/
http://www.globalresearch.ca/index.php?context=va&aid=5494

As I outline on my site ( http://www.pdfernhout.net/ ), mainstream economics assumes infinite demand (or at least, that demand will grow as fast or faster than productivity). But that assumption is becoming invalid, and so all of mainstream economics is suffering through a divide-by-zero error which most economists won't admit.

See also:
http://www.responsiblefinance.ch/appeal/

A fairly straight-forward solution is a "basic income", but there are other approaches and we will likely see a mix of them.

Productivity has been rising in US society, like when better software tools help, say, human medical insurance claims processors be 10% more productive, or when we get other productivity improvements via robotics and other automation, voluntary social networks, or better design including government streamlining. If productivity rises, then in the absence of increased demand, employment goes down. Your statement assumes demand will rise faster than productivity. Most mainstream economists take that as an article of faith (since otherwise their fancy elegant equations suffer divide by zero errors). But we are not seeing increasing demand in the USA.

There are several reasons for this over the past few decades. Here are some of them:

* Environmentalism with a "reduce, reuse, recycle" ethic has reduced demand for many new things.

* A voluntary simplicity movement has reduced people's desire for more stuff.

* As people get enough material goods, they tend to move up Maslow's Hierarchy of Needs towards things like self-expression and self-actualization, which generally (not always) don't require too many personal material goods.

* There is a law of diminishing, and then even negative, returns to more goods and services. Too much clutter in our life makes us unhappy. Too many choices makes us stressed.

* Real wages in the USA have been flat for the past three or more decades while wealth concentrates upward due to supply and demand (too much cheap labor, including as women entered the workforce in big numbers). There were zero net jobs produced in the USA during the last decade, even as the US population grew significantly. Consumption of all the goods produced was supported by the wealthy 1% loaning workers the money that otherwise might have come from wages, but that credit bubble, driven in part by home mortgage refinancing, has popped (and we are about to see the student loan bubble do the same).

* The top 1% are now so wealthy they do not need to buy much physical stuff with their wealth. So, they put much of their cash into the "casino economy" (see Money as Debt II) of currency speculation, stock and land speculation, and so on, that neither creates real wealth or really consumes much of it. This creates a de facto currency crisis in the physical economy, just the same as if the wealthy had just burned all their dollars. Mainstream economists ignore this when they look at the total money supply, assuming that cash on these financial casino tables is the same as cash in the pocket of a middle class person.

* There is the usual fear/greed cycle coinciding with all this (but made worse by 9/11).

* There has been a simple accumulation of infrastructure and high quality long-lasting good-enough goods in the USA (so, when do we have enough?).

(Offshoring is a factor in all this, but is generally a red herring overall, since these trends will affect other countries soon enough, and are in Europe already as the OP mentioned.)

I have collected numerous possible solutions on my website: http://www.pdfernhout.net/

But in brief, solutions include some mix of a basic income, improved local subsistence by advanced technology like 3D printing and solar panels, a stronger gift economy, and participatory democratic planning.

People are making desperate appeals to improve the teaching of economics, but so for the mainstream economists have a monopolistic stranglehold on the profession (which is ultimately choking to death our society as these academic economics knowledge workers desperately fight to keep their own paid positions as professors despite their increasing obsolete knowledge and world views, since economics is the science of the management of scarcity and creation of artificial scarcity, not the creation and management of true abundance):
http://www.responsiblefinance.ch/appeal/
"The authors of this appeal are deeply concerned that more than three

You're right. Here is a 12 minute YouTube video I made that talks about a balance between five interwoven economies that shifts with cultural change and technological change:
      http://www.youtube.com/watch?v=4vK-M_e0JoY
"This video presents a simplified education model about socioeconomics and technological change. It discusses five interwoven economies (subsistence, gift, exchange, planned, and theft) and how the balance will shift with cultural changes and technological changes. It suggests that things like a basic income, better planning, improved subsistence, and an expanded gift economy can compensate in part for an exchange economy that is having problems. "

A PDF file of the presentation is here:
      http://www.pdfernhout.net/media/FiveInterwovenEconomies.pdf

Other related stuff by me:
    http://knol.google.com/k/beyond-a-jobless-recovery

But right now, pretty much not one gets this. Mainstream economists are in denial. They just assume infinite demand (not limits from environmentalism, voluntary simplicity, or a law of diminishing or negative returns), that robots and AI and better design and voluntary social networks can't replace most paid human labor, that wealth be evenly distributed (not centralized to the owners of capital), that the mean on the bell curve on IQ will suddenly jump globally from 100 (remember, half below) to 200 to everyone can have great high technology creative jobs, and so on.

Some alternative economists have called for change, but are so far mostly ignored:
    http://www.responsiblefinance.ch/

Anyway, I've put all my resources into understanding these issues and telling peopel about solutions to the point of my own family's economic collapse. But for the most part no one cares; well, I should really say, many people care do about the problem, or say they care, (especially when it effects them personally or someone they care about), but most people just want a solution that does not entail any substantial change to the status quo. It seems our current political and economic leadership would rather drive our society off a cliff to collapse rather than consider things like a basic income, expanded gift economy, better democratic resource based planning, promoting local subsistence via 3D printing and organic gardnening robots, and so on.

Anyway, there are solutions if we can find the collective social will to put them in place. Already the US averages about US$700 per month per citizen in payments for social security, schooling, unemployment, and disability. We could bring that up to US$1000 or even $2000 a month. And we could get rid of or shorten patents and copyrights and do other things to promote a gift economy. And so on. Someday we will probably do all those things or similar ones if we are to survive and thrive. It's just a question of how much suffering will happen before then.

But, as Martin Ford said, while military planners are planning for and funding the development of robots that can do tasks in unstructured battlefields, economists continue to assume robots and AI will never take over most work in a highly structured factory or office.

See also, by Marshall Brain:
    http://www.marshallbrain.com/manna1.htm

http://slashdot.org/comments.pl?sid=2356864&cid=36936914

I've been trying to get Richard Stallman and the FSF to consider supporting a campaign (suggesting maybe run by me for pay, so I'm biased, but OK if it was someone else) for fostering the cataloging, creation, and discussion of free software that explores conventional and alternative heterodox economics for a 21st century of abundance for all, based on this appeal:
        http://www.responsiblefinance.ch/appeal/ [responsiblefinance.ch]
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. This situation reflects the institutional power that the unconditional proponents of main-stream thought continue to exert on university teaching and research. This domination, propagated by the so-called top universities, dates back at least a quarter of a century and is effectively global. However, the very fact that this paradigm persists despite the current crisis, highlights the extent of its power and the dangerousness of its dogmatic character. Teachers and researchers, the signatories of the appeal, assert that this situation restricts the fecundity of research and teaching in economics, finance and management, diverting them as it does from issues critical to society."

Thank you too, in return. I just used that point on fish and water writing to someone else today, coincidentally.

I've been trying to get Richard Stallman and the FSF to consider supporting a campaign (suggesting maybe run by me for pay, so I'm biased, but OK if it was someone else) for fostering the cataloging, creation, and discussion of free software that explores conventional and alternative heterodox economics for a 21st century of abundance for all, based on this appeal:
http://www.responsiblefinance.ch/appeal/
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. This situation reflects the institutional power that the unconditional proponents of main-stream thought continue to exert on university teaching and research. This domination, propagated by the so-called top universities, dates back at least a quarter of a century and is effectively global. However, the very fact that this paradigm persists despite the current crisis, highlights the extent of its power and the dangerousness of its dogmatic character. Teachers and researchers, the signatories of the appeal, assert that this situation restricts the fecundity of research and teaching in economics, finance and management, diverting them as it does from issues critical to society."

Also related indirectly:
"RSA Animate - 21st century enlightenment "
http://www.youtube.com/watch?v=AC7ANGMy0yo

So, it is more than a lack of visionaries. The world has no shortage of would-be visionaries, like Paul Hawken documents:
http://www.blessedunrest.com/
"Paul Hawken has spent over a decade researching organizations dedicated to restoring the environment and fostering social justice. From billion-dollar nonprofits to single-person dot.causes, these groups collectively comprise the largest movement on earth, a movement that has no name, leader, or location, and that has gone largely ignored by politicians and the media. Like nature itself, it is organizing from the bottom up, in every city, town, and culture. and is emerging to be an extraordinary and creative expression of people's needs worldwide."

The problem is more like visionaries are filtered out or bought off or changed or isolated or starved or turned into wage slaves doing unrelated stuff to survive. Example:
"The murdering of my years: artists & activists making ends meet"
http://books.google.com/books/about/The_murdering_of_my_years.html?id=iBA7vACOwngC

Related articles on how dissent in academia is systematically suppressed:
http://disciplinedminds.com/
http://www.chomsky.info/articles/199710--.htm
http://www.its.caltech.edu/~dg/crunch_art.html

Yet, things progres anyway, as a tribute to the better side of human nature. Here are examples of GPL'd software that could serve as a base for moving further into exploring alternative economics:
http://p.seppecher.free.fr/jamel/
http://freeciv.wikia.com/wiki/Main_Page
http://www.ryzom.com/en/

There is also a lot of other softwar

I liked it too...

One can question the whole issue of graduate / business schools in other ways too:
    http://www.disciplined-minds.com/

And this:
    http://www.responsiblefinance.ch/appeal/
    http://dublinopinion.com/2011/05/06/an-appeal-from-teachers-and-researchers-of-economics/
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. ... Professors, lecturers and researchers have been entrusted by society with the task of serving the society through their search for a better understanding of reality. Only in this context does academic freedom have a real meaning. ..."

The question is, how repeatable is it for everyone to be in on something at the right time in the right place? How about instead building a world that works for everyone?
    "RSA Animate - 21st century enlightenment "
    http://www.youtube.com/watch?v=AC7ANGMy0yo
    "RSA Animate - Drive: The surprising truth about what motivates us"
    http://www.youtube.com/watch?v=u6XAPnuFjJc