The time has come to recognize that in the world the economy has collapsed and a new economy must be created.
The old economy was created after the great depression and World War 11 and was built on world reconstruction and an industrial model that spawned the greatest innovation, technological and social development in human history. Unfortunately, like all economies, they are creations of their time and eventually need replacing.
The decline in this old economy began in the 1970s -80s and culminated in the financial collapse of 2008 leaving behind the current depression and the most significant government and personal debt in history. In contrast, large corporations now have unprecedented evident and hidden cash.
The current economy only exists for those with vested interests who control and reap the most rewards without contributing to its foundations.
The institutions and instruments used to manage and evaluate the economy are fundamentally broken. This was evident by the recent apology by the International Monetary Fund (IMF) to the people of Greece for destroying its economy and damaging its society. Even with this admission they refuse to do anything different, because they obviously don’t know what to do.
The instruments for measuring economy, such as, the Gross Domestic Product (GDP) are obsolete reflecting only cash that flows out of economies (to outside interests and banks).
Newfoundland and Labrador, by example, is touted to have the largest GDB of all Canadian provinces in the next year, which is meaningless to the majority of people who live there. It has the country’s highest unemployment and debt load and the provincial government is making severe cutbacks citing austerity as the reason. The majority of skilled workers work elsewhere.
What is not said is that the GDB of this province is based on oil wealth, but the vast majority of its benefits go to offshore interests and to the Government of Canada. The provinces share is a mere pittance.
The most telling signs that the old economy no longer functions is the number of economies that exist that are uncontrolled and unregulated.
There is the illegal (black) economy which includes drugs, human trafficking, money and various other illicit activities; its value eclipses belief. There are the grey and informal economies from which the majority of the disadvantaged survive; some even prosper. Not to be negated is the hidden financial economy which now is estimated to be in the trillions of dollars. None of these contribute to the well being of society as a whole.
Also, there is the so called social economy; a nebulous concept around social support and charity. It appears that even supporting the poor is an industry with most of the proceeds going to the organizations that manage and control it, rather than those with the most need.
This picture demonstrates the dysfunction that abounds in our economy and society.
Creating a new economy will neither be easy nor without pain; even when people wake up to the fact that there is no real economy.
First, there must be the recognition that an economy is more than just money and its measurement. Secondly, there has to be the realization that unfettered and uncontrolled growth through consumerism is a flawed and destructive concept.
There has to be general agreement by the majority of what is of value and what is important. This will establish a moral basis from which an economy can work, for without this there can be no balance, control, nor real benefit for all.
A new economy predicated on what has value, must include peoples’ well being, their living conditions and food sustainability.
It must show respect for the natural environment, at least what is left of it.
Most important there must be the consideration of alleviating the growing unemployment and poverty in the world. Wealth distribution needs reinventing as “jobs” were the primary mechanism used in the old economy. A new mechanism is now required.
What will investing and investment mean in a new economy? Every person deserves an investment from society in education and personal development and they need to be able to invest with their labour and creativity.
“Growth” must relate to human development and capacity, rather than the destruction of the natural environment and the diminishment of people’s well being.
Changing “what is” will not be easy. But if we allow all of our systems and institutions to completely collapse; it will be much more challenging.
The time for starting this dialogue is long past. Chaos reigns throughout the world and uncertainty and despair are driving more and more to rebellion.
The engagement of people, at least as many as possible is an imperative. But, peoples’ views, thoughts and feelings must be taken seriously, if calm is to be restored.
This will be a difficult task, and not for the faint hearted, but will be less difficult and less destructive than a more severe depression and another world war.
Written by Bill Pardy
June 27th, 2013