1804. New economics needed for a new kind of economy.

In thinking about modifying the economy and the economics which tries to understand it,   we need to start with the clear idea  that the economy  has the productive capacity to meet all current needs for all people. The problem is that

  1. The distribution is terrible

2.  We are producing too much of the wrong things – consumer stuff and war stuff rather than what people need and desire. Desire is broader and more interesting than mere consumerism.

Producing the stuff that meets a better mix of needs and desires may require less production than the current consumption catalogue has to offer. Such a possibility scares many people. those with investments and those with jobs,  but something like it is necessary to prevent  climate catastrophe and dealing seriously with inequality.

We are currently producing in the closed circle of  investing – hiring – makeing – selling plus the importation into the circle  of externals. such as energy, land, free PR (The Trump approach to media). This circle creates money for the one percent more than it meets a serious assessment of human needs and desires. In fact people are being forced out of the circle because they are too expensive – wages – and not buying. Can we help create  a world with a better match between real needs, desires  and production?

Can we imagine an economics that supports the economy needed for a  transition to such a world? Can we do it?

We need an economics that helps create an economy that move toward  “The wealth of Nations” , recognizing  that Adam Smith knew what he was doing when he  though of the wealth of the whole nation, not just a class, and when he  made it plural recognizing the interdependence of opportunity and achievement across borders, and included in his book lots of advice on education as a state  supported activity, and against any form of monopolization.

We need  to admit that new economic thinking cannot occur without adding some serious political modeling and ideas. This is because the economics we have is part of a political regime that favors the one percent, creates inequality, ruins the environment and furthered the division of the country in ways that create voting  out of anger and despair and potential violence. The result is a dysfunctional  government that ignores the serious issues and governs through  the theater of hyping the wrong issues.  Our current  economics supports a dysfunctional government and does not model the dysfunctions. We read very little political history. For example, the rise of Mussolini, the fall of Rome, the wars that led to the Treaty of Westphalia. We know much more about how to make an iPhone than a government.

In political history this is classic. Elites make choices for their benefit and are blind to the impact of their policies on most of the population. Broadly acceptable  views of society serve the narrow interests of the elite. The bad results add up until violent regime change. Some of that violence bottom up and some  top down. The top down usually wins.

We must recognize that the task governance is very difficult in a crowded world with an overworked economy. We need leaders, but how are they chosen and how rewarded? The complexity of the world and its interdependence with technology makes the task for leaders  almost impossible. Part of the problem is that the goal of the system is simple inequality and extending production is used to continually achieve that inequality. If the goal was meeting real needs rather than just consumerism,  elites would have a meaningful alternative and would recognize the value of democracy and serious education for all – not for jobs but for community imagination in the shared task of making sliceable and happier world. Economics could work to achieve such a world.

We need an economics which helps people meet real needs of family, science, communities, interdependence, education, health and quality of life in all its richness. The current model of proves the middle class a standard of living defined by consumerism rather than by livability of community.   We have  a lower class defined by their invisibility and whose work needs, when they have work,  for computer and cell phone are treated as discretionary consumer items rather than as school and work necessities. We have created a society with a great deal of pain and fear.

Economics as a guide to the wealth of nations would be a different economics. It would discuss values, political arrangements, quality of life, and be fundamentally  interested in what is good for humans in their private and community life in a more democracy tending society. Instead of dismissing most of these issues new economics would above all find them interesting – as reality can tend to be.

This will be very hard work, in part because it means redistributing careers,  power and assets, redesigning institutions and communities, and because we have not been educated for it. Elites must understand that they must give up the goal of ending up with more than they started. They imagine that the more that they accumulate comes out of the ether,  or the banks, not out of the living conditions of real people.

We need to get past the idea that a green economy can make this happen. Under current conditions a green economy would still continue the concentration of wealth. We need to get past the idea that as farm to factory so industrial to digital will maintain job parity. The new factor is that increasing demand for labor increases the incentive to automate. We need to understand that third world development is destroying village life and subsistence farming and replacing it with urban high rises  and much higher prices. We need to get past the idea that per capita GDP is a measure of anything other than concentration of wealth masked by averages.

A green and happy economy is possible and will require different goals, high cooperation and compassion, more values, more aesthetics, and lots of caring.

Such an economy breaks down into four major categories of ”employment”.

  • Greening the whole environment for food and quality of life)
  • Taking care of people hurt in the transition (perhaps half the population as it is redeployed)
  • Managing these two (seeing distribution as a core output of society)
  • Art and education. (what is humanity, what is nature, how do we think)

There is lots to do.




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