Toward a New Sustainable Economy

[marmar]

via CommonDreams:



Published on Thursday, March 26, 2009 by Real World Economics Review

Toward a New Sustainable Economy
The fallacy that economic growth can lead to improved human welfare underpins the global financial crisis. Now, we need to move beyond 'growth at all costs' and reorganise the economy based on the quality of life rather than quantity of consumption

by Robert Costanza


The current financial meltdown is the result of under-regulated markets built on an ideology of free market capitalism and unlimited economic growth. The fundamental problem is that the underlying assumptions of this ideology are not consistent with what we now know about the real state of the world. The financial world is, in essence, a set of markers for goods, services, and risks in the real world and when those markers are allowed to deviate too far from reality, "adjustments" must ultimately follow and crisis and panic can ensue.

To solve this and future financial crisis requires that we reconnect the markers with reality. What are our real assets and how valuable are they? To do this requires both a new vision of what the economy is and what it is for, proper and comprehensive accounting of real assets, and new institutions that use the market in its proper role of servant rather than master.

The mainstream vision of the economy is based on a number of assumptions that were created during a period when the world was still relatively empty of humans and their built infrastructure. In this "empty world" context, built capital was the limiting factor, while natural capital and social capital were abundant. It made sense, in that context, not to worry too much about environmental and social "externalities" since they could be assumed to be relatively small and ultimately solvable.

It made sense to focus on the growth of the market economy, as measured by GDP, as a primary means to improve human welfare. It made sense, in that context, to think of the economy as only marketed goods and services and to think of the goal as increasing the amount of these goods and services produced and consumed.

But the world has changed dramatically. We now live in a world relatively full of humans and their built capital infrastructure. In this new context, we have to first remember that the goal of the economy is to sustainably improve human well-being and quality of life. .........(more)

The complete piece is at: http://www.commondreams.org/view/2009/03/26-10

[Demeter]

1. K&R and AMEN!