Wednesday, May 9, 2012

The End of Growth

I am presently reading "The End of Growth: Adapting to Our New Economic Reality" by Richard Heinberg (2011). The book points out the many absurdities of currently accepted Economic Theories and how such unquestioning acceptance has brought us to the brink of catastrophic disaster.

Below is an excerpt which seems to me to be as clear, understandable, and true as anything I can think of but apparently seems to others as ludicrous. Perhaps the difficulty of agreeing on the probability of future events comes down to understanding that our views of the world and our place in it are so widely divergent that for many, there is simply no common experience and no common language with which we can communicate.

"Which brings us to the global [financial] crisis that began in 2007 - 2008. By this time the two remaining mainstream economics camps - the Keynesians and the neoliberals - had come to assume that perpetual growth is the rational and achievable goal of national economies. The discussion was only about how to maintain it: through government intervention [Keynesian] or a laissez-faire approach that assumes the Market always know best [neoliberal] . . . . .

. . . . .  The ideological clash between Keynesians and neoliberals (represented to a certain degree in the escalating all-out warfare between the US Democratic and Republican political parties) will no doubt continue and even intensify. But the ensuing heat of battle will yield little light if both philosophies conceal the same fundamental errors. One such error is the belief that economies can and should perpetually grow. 

But that error rests on another that is deeper and subtler. The subsuming of land within the category of capital by nearly all post-classical economists had amounted to a declaration that Nature is merely a subset of the human economy - an endless pile of resources to be transformed into wealth. It also meant that natural resources could always be substituted with some other form of capital - money or technology. The reality, of course, is that the human economy exists within and entirely depends on Nature, and many natural resources have no realistic substitutes. This fundamental logical and philosophical mistake, embedded at the very core of modern mainstream economic philosophies, set society directly on a course toward the current era of climate change and resource depletion, and its persistence makes conventional economic theories - of both Keynesian and neoliberal varieties - utterly incapable of dealing with the economic and environmental survival threats to civilization in the 21st century."

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1 comment:

Richard said...

Yup, Heinberg is great stuff. Glad to see his work getting around.

Once people figure out what's actually causing the "financial crisis", we can actually work on solving it. Until then, its austerity/gowth/austerity/growth while the "big boys" deperately look for a way out that keeps them close to the sources of inflation.