Monday, October 19, 2009

It's not working. We must keep doing it.

“The world has witnessed a proliferation of financial bubbles and extreme economic instability that cannot be explained by any of the established macroeconomic models. Minsky is about all we have.”
Financial Times

Above yet another example of the degree to which economic orthodoxy fails to be able either to explain or accurately predict events. After decades of preening self-confidence bordering on insanity, we have a state of affairs described by increasing numbers of well-versed commentators as “out of control” and highly unstable.

“Minsky is about all we have.” To paraphrase Minsky; capitalism is doomed to self-destruct, and yet it’s the only way open to us, the only system that “works.”

Even now, with the previously faithful scratching their heads or wringing their hands, there seems no willingness to look at the cumulatively corrupting influence of money and its insoluble link with scarcity, nor at the effects of technological unemployment. Instead of studying these things over two decades or so, we need to be parsing centuries of data to determine the relevant patterns. Why is nobody doing this?

“For all we know, there may not be a safe way down.”

There is, but the vast majority of people see it as preposterous even to contemplate producing an abundance, to draw up plans to get us off our systemic addiction to economic scarcity. A resource-based economy offers the only lasting and comprehensive solution to the quandary we are in. Not only has money become too powerful an influence in our global cultural development (a cyclical occurrence), but the economic value of human labour has sunk to an unsustainable low. Our labour is simply too replaceable, too unwanted by the economy, and this situation is only going to get worse. There’s no stopping technological development; it’s what humans do. As highly intelligent and highly social animals we seem compelled to tinker and improve, to experiment and develop. It therefore makes perfect sense to construct a socioeconomic model capable of using this aspect of our nature to maximise benefit to all, not just a few. Technology, which is nothing more than human ingenuity made real, needs a new harness: a resource-based economy.

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