Friday, 17 June 2011

Why we need the New Economy

 We need a new economy because the current economy is fundamentally flawed. How many people would come to this realization when so few care to make an effort to understand the system?

Do you understand the intricacies and subtleties of Quantum Mechanics, the Theory of Relativity or Particle Physics? The answer is most likely not and do you really care? The general public will conclude that all of these esoteric subjects have little impact on our mundane lives and we would just as well leave the details to the experts in the field.

The difference with economics is that it not only directly affects us all daily but it also directs, steers, dominates and controls all of human society. So why should we leave it up to the experts and why should we assume that the experts have it all figured out correctly?

As the joke goes, if you took all the economists in the world and laid them all in a straight line they would still not reach a conclusion.

The current economic system is fundamentally flawed because money as we know it is a human fabrication created out of nothing. Money is created by our banking system as instruments of debt when consumer, corporate, institutional and government loans are needed. The interests on loans are siphoned off from the very same loans that are created. The only way this can be sustained is by creating more loans. Hence the amount of loans created and hence the debt outstanding has to keep on growing. Our economic system is based on perpetual growth and this is not sustainable on a finite planet.

Money is a debt on future workers and generations. The small group of people who have amassed the world's monetary wealth holds the remainder of the population and its future generation as hostages and slaves to their needs, demands and self interests. It is to their benefit that the current economic system should continue on its perpetual growth path with business as usual. This elite group has infiltrated and controlled our institutions, corporations, media, advertising, means of productivity, military-industrial complex, political system and government.

You must come to the realization that every day you head off to work, you are doing so to make someone else richer. We work to earn money to pay for the things we consume and to pay interest to the banks. Would it not be better if we all worked for the betterment and well-being of ourselves and fellow neighbours?

What are the alternatives?

We are witnessing the simultaneous collapse of three global systems that are closely intertwined, (1) the economic system, (2) the natural environment on which all life depends and (3) our global social structure.

No alternatives will be sought until all three systems inevitably collapse. Then the need for change becomes evident. Change will come about from our reaction to collapse rather that proactive mitigation.

The amount of debt outstanding and the interest incurred are of such astronomical figures in virtually every nation that the entire economic system will collapse because of its sheer weight.

The demand for growth in consumerism in order to fuel the economic growth will destroy the planet's ecosystem. We will witness extreme climatic changes, significant loss of biodiversity and human lives, water shortages, crop losses, starvation, mass migrations and war over resources.

The masses will revolt. Social unrest now occurring in the Middle East will be repeated in every nation when the unemployed and disenfranchised have lost all social dignity and all hope for a better future.

Will the new economy ever see the light of day? That remains to be seen.

What would the new economy look like if the world is willing to accept this fundamental change in our social economic model?

The new economy would embrace the gift economy where we exchange gifts-in-kind.

The new economy would be based on Co-operatives, Social Enterprises, Social Responsible Corporations, Employee Stock Ownership Plans, where the common good takes precedence over profit and where the salary of the CEO is no more than three times the average wage.

The new economy will banish usury and interest where sustainability replaces growth.

The new economy will provide a living wage where every citizen is granted dignity.

The new economy will adopt shorter working hours where employment is available for all and more time is available to spend with family, friends and building the community.

Are we ready for the New Economy?