The new OECD report "Looking to 2060: long-term growth prospects for the world" predicts that in fifty years the combined GDP of China and India will surpass the entire OECD area. Growth will continue to be anemic in most Western countries and global inequality will remain high. (Source: OECD)
This pessimistic report completely neglects the issue of resource constraints to growth which was the subject of a recent IMF report. If you would add the predictions of the IMF study to the outcome of this one, it is clear that we are on track for a zero-growth world. Time to start rethinking our way of life if we want to remain relatively prosperous and have a good life.
Read also New York Times: “Slower growth seen in a graying world”
"…what is emerging fast is the alternative of a commons based economy. Peer to peer, social sharing, collaborative consumption, commons, economic democracy are all terms that cover economic activity that moves beyond the market and the state, based on cooperation and harnessing human creativity." (Source: Energy Bulletin)
Excellent analysis by Derek Wall on the need to move to an economy of sharing, an economy of the commons as an alternative to failed socialism (state) and failed capitalism (market).
"The current crisis of global capitalism provides a unique opportunity to chart an alternative to the complicit collusion of central states and free markets that characterise liberal political economy. From this perspective, the proposed shift of focus from a self-interested pursuit of power or wealth (or both at once) to the quest for the common good opens the way for transforming modern economics. The alternative that this essay has outlined is a ‘civil economy’ whereby markets and states are embedded in the social relations and civic bonds that constitute society." (Source: OpenDemocracy)
At OpenDemocracy, Adrian Pabst sketches the contours of an alternative economy beyond free market and state, beyond austerity and neo-Keynesianism.
“The notion of ‘civil economy’ raises fundamental questions about the complex links between markets, states and civil society. Worldwide protests since 2011 reflect an implicit, inchoate awareness that ‘big government’ and ‘big business’ have colluded at the expense of the people. Both central bureaucratic states and unbridled free markets are largely disembodied from the mediating institutions of civil society, which in turn are subordinated to the global ‘market-state’.”
"Since the financial crisis of the late 2000s, most analyses have placed the failure of markets on a lack of information: traders lacked the skills to interpret complex algorithms; regulators lacked awareness of the risks banks were taking with capital reserves. Few analyses have explored the usefulness of those limits to stakeholders who had something to gain from purporting the crisis was unperceivable or understandable until it happened – or even after it happened." (Source: Open Democracy)
Very interesting analysis of the financial crisis from a different perspective based on the work of great French writer George Bataille. Worth a read.
“Many of the growth strategies tried around the world have turned out to have built-in limitations or decelerators – what one might call elements of unsustainability.”
Absolute must-read article in Project Syndicate by 2001 Economics Nobel laureate Michael Spence. He seems to be one of the few economists able to think beyond the unfruitful austerity versus growth debate and link the crisis of the economy and economics with the sustainability crisis.
Two interesting quotes from this brilliant analysis:
“Perhaps the largest long-run sustainability issue concerns the adequacy of the global economy’s natural-resource base: output will more than triple over the coming two or three decades, as high-growth developing economies’ four billion people converge toward advanced-country income levels and consumption patterns. Existing economic-development strategies will require significant adaption to accommodate this kind of growth.”
“Contrary to the prevailing wisdom nowadays, some degree of Keynesian demand management in the transition to a more sustainable growth pattern is not in conflict with restoring fiscal balance over a sensible time period. On the contrary, applied both individually and together, fiscal stimulus and consolidation are necessary parts of the adjustment process.
But they are not sufficient. The crucial missing pieces are a shift in the structure of accessible aggregate demand and restoration of those parts of the economy’s asset base that have been run down, implying the need for structural change and investment.”
"… environmental sustainability will not be served by introducing or extending market instruments and norms to various areas of society, but quite the reverse. It would be better served by expanding and supporting the public sphere – both procedurally and substantively."
Another must-read article from the OpenDemocracy web site explaining why sustainability cannot be attained by putting a market value on natural capital and the economic "commons".
“market instruments and norms need to be removed from areas for which they are simply not appropriate. In essence, the social project for sustainability is part of that, as Karl Polanyi ↑ recognised, to arrest all manner of social ills produced by unfettered markets. It is part of the social project of (re)subjecting markets, in particular, key resource use, to social and democratic control. Subjecting markets and key resource use to genuine democratic control means that markets may be made to serve people and planet rather than the other way around.”
Global plutocracy and the financial Fourth Reich are preparing their battle plans against a François Hollande win in the second tour of the French presidential elections. See this Interesting video on the French blog rue89.com.
Read also this week’s Economist (“The rather dangerous Monsieur Hollande”) to understand how the 1% is preparing for new class war.
I guess it is not really “Mr. Nice” Hollande they are worried about (social-democratic parties will remain part of the establishment) but the increasing backlash in Europe against neoliberal capitalism.
“The fact that economists were at the podium questioning the equivalence of happiness and GDP is a hopeful sign, a sign of a deep crack in the foundation of the economics discipline. But it is one thing to say there is more to happiness than economic growth; it is quite another to propose that economic growth is inimical to generalized happiness.” (Source: Shareable.net)
Great article on the recent UN happiness conference organised by Bhutan. The author questions GDP but is also critical of some of the Beyond GDP ideas.
"In this extract from his forthcoming book, Never Let a Dire Crisis Go to Waste (Verso), the philosopher and historian of economics Philip Mirowski seeks to explain how the American economics profession has successfully avoided culpability for the economic crisis."
Another must-read contribution in Open Democracy’s great series Uneconomics.
One particular quote is worth extra highlighting as it explains more than the financial crisis:
“Whether it be in the context of global warming, oil depletion, ‘fracking’ for natural gas, denial of Darwinism, disparagement of vaccination, or derangement of the conceptual content of Keynesianism, one unprecedented outcome of the Great Recession has been the redoubled efforts to pump massive amounts of noise into the mass media in order to discombobulate an already angry and restive populace. The techniques range from alignment of artificial echo chambers and special Potemkin research units, to co-opting the names of the famous for semi-submerged political agendas; from setting up astroturfed organizations, to misrepresenting the shape and character of orthodox discourse within various academic disciplines.”