“The economic problems in the U.S. and Eurozone are mostly structural, not monetary. Unfortunately ideologues and politicians on both sides of the spectrum are interested in quick fixes rather than the real groundwork of economic progress.” (Source: Huffington Post)
Very good analysis by Jeffrey Sachs of the global economic crisis and why austerity policies and a return to classical Keynesianism will not work.
‘And all countries rich and poor will need to plug two more structural holes. The first is the explosion of tax havens, the kind where Mr. Romney reportedly keeps his savings. Without adequate taxation of corporate and high-end income, there is no way to close budget gaps in the U.S. and Europe. The second is ecological. No economic trick, no amount of education and training, will suffice, if we do ourselves in by human-induced droughts, heat waves, famines, and floods. It’s time, in short, to put away the gimmicks and to start thinking about the sustainable economic prosperity, built on education, skills, social inclusion, and environmental responsibility.’
"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’.”
“John Maynard Keynes thought that most people by now would have to work only 15 hours a week to produce all that they needed for subsistence and comfort.” (Source: Project Syndicate)
Robert Skidelsky’s great analysis of why the big productivity revolution and the civilization of "always more" have led to the current global depression and social inequality.
“Aristotle knew of insatiability only as a personal vice; he had no inkling of the collective, politically orchestrated insatiability that we call economic growth. The civilization of “always more” would have struck him as moral and political madness.
And, beyond a certain point, it is also economic madness. This is not just or mainly because we will soon enough run up against the natural limits to growth. It is because we cannot go on for much longer economizing on labor faster than we can find new uses for it. That road leads to a division of society into a minority of producers, professionals, supervisors, and financial speculators on one side, and a majority of drones and unemployables on the other.”
"To propose any concrete alternative economic model at this juncture would smack of hubris. Right now no-one has the answers and that is precisely what characterizes a crisis. But one thing is certain: by embracing the underconsumptionist critique and the Keynesian solutions of those such as Skidelsky, Baran and Krugman, we will not only be failing to think outside the box, we will be reaching for a branch that simply isn’t there anymore."
This absolutely must-read analysis in Open Democracy explains why neither Keynes nor neo-liberal austerity will lead us to the exit of the economic collapse.
A few remarkable quotes from this brilliant article:
“… the ‘left’ will over time adopt an underconsumptionist position. For those passionate about ecological sustainability and not simply reducing human beings to units capable of economic maximisation this is of grave concern”
“While it may be tempting for the left to champion a Krugman-like Keynesianism and ‘go for growth’ ↑ , given contemporary levels of abundance, combined with unprecedented levels of education, technical knowledge and new forms of non-state, non-market production, we should not be looking at the period of 1945-73 as an idyll to be repeated. It is not possible, neither is it – I would argue – desirable.”
“There will be no second act for Roosevelt’s New Deal. Instead we must answer the question that Keynes posed in his 1930 essay: how, after growth, can we ‘live wisely, agreeably and well’?”