Summary: During the late Age of Separation, mainstream economics operated on the delusion that humanity existed apart from the living Earth, treating ecosystems as mere externalities in pursuit of infinite growth. This abstraction—rooted in a mechanistic worldview and reinforced by institutions, ideology, and short-term incentives—led to ecological collapse and deep social inequality. Despite clear evidence of its failures, the models remained largely unquestioned because they mirrored the dominant culture’s assumptions of control, separation, and linear progress. It was only after widespread breakdowns that a shift began, as people remembered that true economics must be grounded in relationship, reciprocity, and the living systems that make all life—and value—possible.
This is an article in the Long Journey Home project – a collection of writings from centuries in the future, at a time when humanity has gone through a great crisis and found a more life-centered way of life. It’s meant to inspire and encourage further exploration. See the index for the chapters and articles.
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Economics in the Late Age of Separation: When Insanity Passed for Rationality
by Naira Iztacual
The Great Delusion
Looking back, it’s difficult to comprehend how so many people, institutions, and nations once operated under economic models that treated nature as an externality—an optional backdrop to the real story of human progress. They had the science. They had the warnings. They even had the lived experience of ecological breakdown. And yet, the dominant economic systems of the late Age of Separation continued as if the biosphere was infinite, predictable, and expendable.
This wasn’t merely a technical mistake. It was a profound civilizational delusion—one that placed abstractions like “growth” and “efficiency” above the living systems that made any economy possible in the first place. It was, in the truest sense, ecocidal. And in retrospect, it was unmistakably suicidal.
Economics Without the Earth
The economic paradigms of the late separation period were forged in the fires of the Industrial Revolution and shaped by Enlightenment ideals of reason, objectivity, and mechanistic science. They inherited a worldview in which the world was seen not as a living whole, but as a collection of parts—resources to be extracted, land to be owned, labor to be priced, and markets to be optimized.
Nature, in these models, was not a co-participant. It was a backdrop. The forests were timber. The oceans were fisheries. The air was a dump site for emissions. The soil was a medium for chemical inputs. Life was converted into “resources,” then into capital, and finally into data points.
Mainstream economics—especially neoclassical and neoliberal variants—formalized this abstraction. The Earth became invisible in their equations. When it did appear, it was as an “externality,” a cost or benefit not captured in the market transaction and therefore considered marginal. Entire ecosystems were rendered economically irrelevant by this trick of language. Rivers could be polluted. Species could be driven extinct. Indigenous communities could be displaced. As long as GDP rose, these were considered acceptable trade-offs.
The models assumed infinite growth on a finite planet. They assumed perfect rationality from consumers and efficiency from markets. They assumed that technology would always come to the rescue. And when reality didn’t cooperate, they redefined the problem to fit the model rather than the other way around.
Why Wasn’t It Questioned More Deeply?
It’s tempting to imagine that this was all a grand conspiracy—that powerful people knowingly led humanity to the brink of collapse for personal gain. While there were certainly profiteers and opportunists, the deeper truth is more sobering: the system was self-reinforcing.
By the late Age of Separation, economic education was almost entirely colonized by neoclassical orthodoxy. University departments had little room for dissenting views. Students were trained not to question the model, but to master it. Policymakers drew their legitimacy from econometric projections. Financial institutions aligned incentives with short-term gains. Media reported success in terms of stock indices and quarterly earnings.
To question the economic system was to question civilization itself. Those who did—ecological economists, indigenous scholars, systems theorists—were often sidelined, their work dismissed as utopian, unscientific, or naïve.
Moreover, the ideology of separation—of humans as distinct from and superior to the rest of life—was deeply embedded. It had been reinforced by centuries of religious doctrine, colonial conquest, industrial extraction, and technological triumphalism. Economics was not just a science; it was a mirror of the culture’s deepest assumptions.
The Devastating Cost of Abstraction
The consequences were catastrophic.
Ecosystems around the world collapsed under the weight of extraction and pollution. The atmosphere warmed, ice caps melted, wildfires raged, and climate patterns became increasingly erratic. Oceans acidified. Biodiversity plummeted. Insects vanished. Soils eroded. Water tables dropped.
At the same time, economic inequality soared. Wealth accumulated in the hands of a few while billions lived in precarity. Vast swaths of the human population were rendered invisible by the same models that erased the living Earth. The economy grew, but well-being stagnated—or declined.
Even the stability of the economic system itself became increasingly fragile. Financial crises erupted with growing frequency. Debt ballooned. Supply chains fractured. The costs of ignoring the real world—the living systems, the social fabric, the planetary boundaries—finally came due.
And yet, well into this collapse, many economists and politicians still clung to the old models. They spoke of “decoupling” growth from emissions, of “green growth,” of “natural capital,” all while the basic logic of infinite extraction remained intact. The words changed, but the worldview did not.
Cracks in the Paradigm
There were, of course, those who saw through the madness.
Ecological economists like Herman Daly warned of the impossibility of infinite growth on a finite planet. Scholars like Donella Meadows modeled the limits to growth and the dangers of overshoot. Indigenous leaders reminded the world that Earth is not a machine but a relative. Feminist economists pointed to the unpaid labor and care work that undergirded all economies but was systematically erased. Activists, communities, and some governments began experimenting with alternative indicators—well-being, happiness, ecological health.
Ideas like the steady-state economy, doughnut economics, degrowth, bioregionalism, and commoning emerged as vital alternatives. But they were rarely integrated into mainstream economic thinking. They remained marginal, radical, or experimental.
Still, these ideas seeded the transition. They kept alive a thread of sanity, a memory of relationship, a glimpse of a different future.
Economics as Cultural Mirror
Economics was not the cause of the Age of Separation. It was its expression. The models made sense within a culture that viewed life as separate, hierarchies as natural, and domination as progress. Within that frame, abstracting nature was not seen as madness—it was seen as mastery.
But eventually, the model broke. The living systems it denied could not be denied forever. The real world reasserted itself with fire, flood, hunger, and collapse. And in that reckoning, the illusion of separateness began to dissolve.
A Turn Toward Sanity
Today, in the Age of Regeneration, we remember those centuries with a mixture of grief, awe, and caution. Grief for what was lost. Awe at the sheer momentum and creativity of a species so out of step with its own home. Caution, because the seeds of that separation still live in us, and must be met with humility and care.
Economics has been reborn—not as an ideology of domination, but as a practice of relationship. It is now rooted in living systems, informed by deep time, guided by the well-being of all. It draws not only from data and models, but from story, ceremony, observation, and the wisdom of those who never forgot their kinship with the Earth.
What we call “economics” today is no longer about the manipulation of markets to maximize growth. It is the art of stewarding flows of energy, matter, and care in ways that nourish life, balance, and beauty. It is not about extraction, but about reciprocity. Not about efficiency, but resilience. Not about competition, but cooperation.
In remembering how far we had strayed, we remember the cost of forgetting. And in that remembering, we cultivate the roots of belonging once more.
Naira Iztacual is a systems ecologist and cultural historian living in the Andean-Amazonian bioregion. Her work weaves ecological science with ancestral knowledge, helping communities reimagine economic life rooted in reciprocity and regeneration.