Synergised Economics

Chris Hart, Spring 2002

Abstract:

This essay provides a brief overview of the history and reasons for the development of the New Economics movement, considers the major issues to be addressed in any reform of the present system and highlights the urgency of this task. The issues addressed include the social and ecological underpinnings of reform, basic tenets of new economics, transcendence and consciousness change, the role of money and comparisons of alternative views. The aim is to outline a broad platform for argument and an outline for areas to be more fully explored in my masters dissertation.

Introduction:

The predominance of monetarised trade has evolved over the last 400 hundred years in response to a need for a more flexible method of exchange in a world of increasing human movement, communications and complexity. Prior to this time, much trading was carried out within local and regional communities through barter or serf/master relationships. International trade was often conducted by exchange of goods, precious metals and minerals or by conquest - without the conduit of a recognisable tradable currency. This is not to say that coins or other forms of money did not exist; rather that the main means of exchange were more rooted in social relations rather than more impersonal forms of monetary transaction.

The change to money transactions coincided with the shift in values of the enlightenment. This development of self interest over community ethic supported the development of commoditised values, particularly of land.

Since this time, quality of life has improved for many as the industrial revolution and technology innovation have galloped forward. The economic laws and theory such as supply and demand and competitive advantage developed through the 18th and 19th century have provided some basic and useful feedback loops for evaluation and efficiency of production. The ability for easily available credit and investment has led to great innovation in manufacturing and design.

As time has progressed though, major flaws in this body of economic theory have become increasingly obvious. The benefits of development have clearly proved not to be equal for all and they have not been ecologically sustainable. Further, it has become clear from various surveys and statistics that even in wealthier countries, where life expectancy has increased and living conditions have become easier, that depression, anxiety, crime and cancers have not been eradicated because of increased financial prosperity. The Index of Sustainable Economic Welfare (ISEW) (1, Page 97) shows that while incomes have continued to rise in wealthy countries, more qualitative statistics show that quality of living has started to fall back. If ecological measurements were also included in the ISEW the decreased level of life quality would be even more marked. Similarly the United Nations Quality of Life Index has shown how important is even distribution in the overall well-being of a nation.

It is impossible to de-link the present wealth of the one-third world from the poverty of the two-thirds world, a two-thirds world which has been very much used as a base for resource-extraction and cheap labour to propel first world growth and hegemonic values. From the townships of Soweto to the street dwellers of Calcutta, the war-torn lives of the Tutsi and Hutu in Rwanda and the forest people of the Amazon, neo-liberal economics� dark side has cut an ugly swathe that has prioritised one section of society while exploiting others to meet its goals and objectives. The degradation of soils, atmospheric pollutants, diminishing of seas and watercourses are just a few of the externalities not fully costed by classical, neo-classical or free-trade economics.

These observations of the failings of the present economic system have been the stimulus for much of the development of the ideas in New Economics. Indeed, for there not to have been a response to some of the facts and figures would have been to abdicate our privilege and responsibility as rich world citizens and propagated the cold rationality that pervades much western science and thinking. Any system where war is profitable and accidents are measured on the credit side provides easy criticism.

While uncomfortable and easy to ignore from our generally privileged position, a holistic global perspective must remain central and essential in the reformulation of any new economic paradigm. This in itself presents a difficulty for new economics which is often centrally based on regionalism and localism. The term Glocalisation has been used by Green MEP Caroline Lucas to address this awareness.

Principles of New Economics.

New Economics fundamentally comes from a value base that sees the problems set out above and seeks to address them. James Robertson, in the introduction to Wealth Beyond Measure says;-

�The new economics must enable people to develop their own sustainable ways of living, in the context of their cultures. It must value and cherish the resources and blessings bestowed by nature. It must recognise that the wealth-of-nations era is passing, and that today�s one-world human community now has a one-world economy to manage and understand. It must bring back ethical and spiritual values into economic life and thought, from which they have been excluded by conventional pseudo-scientific economics.�(2)

New Economics suggests the need to broaden our meanings of wealth and values. Manfred Max Neef suggests