The 10 Core Myths Still Taught in Business Schools | Frankly 99

Podcast Notes Playlist: Business

The Great Simplification with Nate Hagens ✓ Claim

Key Takeaways

• Myth #10: Price equals value
  • Reality: Prices reflect ability to pay, not actual need or systemic importance
  • Implication: Markets inevitably prioritize luxuries and ignore essentials
• Myth #9: Humans are Rational
  • Reality: We act from emotion, status, and social cues – humans are not robots!
  • Implication: Models built for robots will fail real people
• Myth #8: Supply Curves Always Slope Upward
  • Reality: Scaling lowers costs
  • Implication: Scale concentrates social and economic power
• Myth #7: Energy is Just Another Input
  • Reality: Energy underpins everything, energy is not substitutable other than by other energy, and we are drawing down energy stocks millions of times faster than they were formed
  • Implication: Our entire economic recipe neglects the most important ingredient, which is energy
• Myth #6: Money Comes From Savings
  • Reality: Banks create money when they issue loans
  • Implication: We are piling up claims on a shrinking biophysical base
• Myth #5: Debt Is A Natural Tool
  • Reality: We can create more money (debt) but not more non-renewable inputs
  • Implication: Debt is mostly leverage that increases civilizational risks
• Myth #4: GDP Is The Correct Measure of Progress
  • Reality: GDP tracks spending, not well-being or ecosystem functionality
  • Implication: Our main cultural goal is focused on costs, not benefits
• Myth #3: Nature Is A Trivial Subset of the Human Economy
  • Reality: The economy is fully embedded in Earth’s systems
  • Implication: Undervaluing nature erodes our long-term foundation
• Myth #2: Markets Always Produce the Best Outcomes
  • Reality: Markets miss what cannot be priced
  • Implication: Without boundaries, the invisible hand destroys the commons
• Myth #1: Economic Laws Are Universal and Timeless
  • Reality: Economic theory was shaped by fossil abundance
  • Implication: Old models misled us in a world of systems and limits

Read the full notes @ podcastnotes.org

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Economics departments around the world teach a narrow boundary story of the way our world works. A narrative of infinite growth driven by consumption and money, which has dominated our culture and unknowingly shaped the way we live. But does this story really reflect our biophysical reality – or the full scope of humanity’s role within it?

In this week’s Frankly, Nate identifies 10 myths being taught in business schools today, and the massive implications these misconceptions hold for society. From the way we define value and the boundaries of success to the idolization of self-interest and human ingenuity, these so-called laws of economics were developed in a different world than the one we inhabit now. By exposing the unquestioned myths that are perpetuated in MBA education, Nate aims to sow the seeds of an economic system rooted in the real world – which may one day become a reality.

What would it take for the long-held “immutable truths” of economic theory to be questioned, and eventually changed to better reflect our material limits? How do we redefine "success" in a way that does not posit GDP as the main indicator of human or economic well being? Most importantly, if we shed ourselves of these delusions, how might we reimagine an economic system that centers the well-being of citizens, the health of the planet, and all of the species we share it with?

(Recorded June 9, 2025)

Show Notes and More

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