We’ve seen that the current economic system isn’t working, even to achieve its own goals, let alone better ones. Now, it’s time to come up with real solutions. This first post in the series is about the framework for those solutions. I don’t have all the answers and, as always, welcome your ideas:
It’s obvious that the current economic system is broken. It delivers enormous wealth to a tiny elite whose privilege is maintained by the economic and legal systems, and comes at the cost of unsustainable environmental damage that will come back to hurt us all. So, what do we put in its place?
It seems to me that the first question we need to ask is what do we want an economy to do?
That’s essentially all the current systems demands – that the economy grow. That is seen as an end in itself.
I would suggest that we want an economy that does much more, and that involves reassessing what the economy is.
Currently, we almost worship the economy. It’s referred to as if it has an existence separate from us, rather than being a purely artificial concept that exists only in our heads. A lot like a modern-day God. It even have its own priesthood with one dominant sect.
I think we need to see the economy as one branch of human endeavor that exists within society. It is something that we choose to do, as a society, to provide us, as a society, with benefits. And we need to recognise that our society exists because of and within a biological system, the global environment.
Our society is hurt when the environment is degraded. Therefore, we have a starting point:
the economy must serve the interests of society within the constraints necessary to protect the environment that supports us.
That’s a pretty obvious statement, I know, but it is the reverse of how we live right now.
Growth doesn’t feature directly, only if it accomplishes the goals of serving society while not damaging the environment. And if that means that the economy cannot grow anymore, that may not be a bad thing. This little country already produces $45,000 worth of wealth per person (including children) per year and has built up capital many times that much.
An end to growth forces us to reassess how that wealth is distributed. Until now, we have attempted to grow our way out of our problems, alleviating poverty and injustice and worsening environments by lifting everyone’s incomes. Without growth, we will have to build a fairer society. Because there are only two stable systems for an economy that is not growing – equality or authoritarianism where privilege is maintained by violent suppression.
Increasingly, I think that we are going to have to learn to live with a post-growth economy whether we like it or not. We’ve gone on too long with the other model – growing at an cost – to the point where we have fundamentally undermined the environment that supports the economy. Peak oil, peak metals, climate change, water shortages, peak food, and the loss of natural services from falling biodiversity are all making growth nigh on impossible and a long period of economic retrenchment likely.
We should have always treated the economy as a tool to serve our collective needs within the environment’s constraints. Instead, we elevated it to the status of a god. Now, environmental degradation and resource exhaustion will leave us with no choice but to live within those limits. We need to build a system with two goals: fairness and sustainability.
Next up in the series: ideas on how to do it.