A NEW ECONOMIC PARADIGM
Summary by James Robertson, of a workshop on alternative economics organised by the Canadian Council for International Cooperation - February 1992.
Envisaging economic alternatives is easier for people who are not professional economists. As the industrial age draws to a close, economists can be seen to be a product of that age, and will not outlive it. The concept that economics is a value-free science and that we must understand economic theory in order to make decisions about its content is a sinful heresy. We all have the right as well as the necessary knowledge to make informed decisions about economic issues.
Current economic strategy to promote growth while changing its character is wholly inadequate. There is a new acceptance from both governments and business that the current economic path is environmentally unsustainable. Yet the full implications of the proposed solutions are still feared.
Governments and big banks cannot grasp the extent of the current crisis. Very few people, even within the environment and development community, have really taken in the scale of change required. Grassroots organisations need to propose changes because their vision brings the necessary alternatives to the analyses by the "professionals" who are produced by our existing education system.
Part of the change will be the acceptance that it is time to move beyond the currently dominant Euro-American vision of the world. We need a unified world order to replace the collectivity of nation-states at the international level. The Euro-American model which now dominates the world systematically disables people, destroys the earth and creates dependency on wage-labour.
The mode of development is ending. It cannot continue. Population figures are expanding. The consumption of the North is sold as the only lifestyle worth having, when resources are already used up.
The New Economics Movement has grown rapidly over the last ten years. The Other Economic Summit (TOES) and the New Economics Foundation, based in London, are a part of this. The movement has crystallised the understanding of how the current economic model, based on the nation-state, is the seat of macroeconomic policy. It has looked at the way economics is divorced from ethics, making money values the only significant indicator for wealth. Money values are deeply rooted in European culture, and a profound shift in understanding will be necessary in the search for a new paradigm.
The new paradigm will have to recognise a one-world economy, organised on a multilevel system. It will need to reintroduce political and ethical values into economics. It will contain the dynamic principles of enabling people and conserving nature, because static principles such as social justice and equity, although crucial, are not enough. It will take the household and the community as its basic building block, rather than the business firm, which is what economics traditionally considers.
The new principles must be applied to both national and international economies. The GATT, IMF, and World Bank, controlled from the North and autonomous from the UN system, must be under the direct jurisdiction of that world body. Since the Group of 7 has declared the 1990s to be the decade of democracy, they should start practising that doctrine within their own institutions.
Current measures of economic growth are not relevant to human welfare. Current standard quantifiers like GDP measure such things as the need to continue producing more tobacco, in order to supply the doctors and hospitals with patients to cure. Our leaders argue that we need to increase economic growth in order to have the money to clean up the social and environmental damage which the growth itself is causing. Our economic growth system systematically marginalises women, deprives indigenous people of their livelihoods, creates poverty, and degrades the environment. The North's solution is to propose more growth!
Economists distinguish between quantitative and qualitative measures of growth. They know that the current measures ignore the many free exchanges undertaken voluntarily between people. Rejecting the principle of economic growth does not mean favouring zero growth. To assume this is to miss the whole point of the argument: growth itself is not a meaningful measurement. Growth was never a measure of progress but simply a tool for measuring income generation.
The North suffers from taking the approach which only looks at what is pouring out of the system's pipes, without addressing what is feeding into them. The debate is stuck on whether to put scrubbers on factory chimneys, rather than understanding that we need new kinds of energy altogether, as well as lower usage levels.
We now at least recognise the impact of this sort of concept in environmental terms, but we still tend to ignore its social terms, for example the systematic creation of unemployment. To solve unemployment, we must move away from an employer/employee model, as we moved away from slavery and serfdom, and towards a system of "ownwork", where people are responsible for their own livelihoods. They would work in a cooperative rather than an individualistic mode. This is a key element in the transition from an industrial age to a socially and environmentally sustainable future.
Production is the basic cause of environmental damage, not just overconsumption. Production is not even dependent on existing consumers, as the European butter mountains and wine lakes demonstrate. One centralised industrial system - that of Marxism - has gone; there is one to go!
We must be wary of calls for further research. The only complete medical diagnosis is an autopsy! We must instead take action. Immediate changes needed are:
Temporary workers are fast becoming a major factor in the American productive system, points out Progressive Temps (1095 Market St, Rm 216, San Fransisco CA 94103 USA). The system is being exploited both by the industries, which escape paying health insurance, retirement benefits or other perks for their workers, and by the middle capitalists, who take much of the labourer's profits in fees. Progressive Temps is the union office for the Temporary Worker's Union, which is striving to make temporary work as secure and profitable as fulltime work.
Tranet #83, July 1993