BOB DOUGLAS: Is our current economic model fit for the purpose of human survival?

Dec 29, 2019

If we humans are to survive the catastrophic threats that now confront us, we must urgently rethink the way we live and care for our planetary home. In turn, that demands that we examine the role that economic theory and practice play in the way modern societies operate. There is a case for moving outside the economics profession for a frank discussion of the way the current economic model affects us all.

Geoff Davies, a prize winning ANU geoscientist has been researching the economy-for about 20 years and has written a series of books about the way economics impacts on the way we live. His most recent contribution, “THE LITTLE GREEN I’m afraid of ECONOMICS, but I want save the world, BOOK” summarises his conclusions and I think they require broad discussion and debate.

Davies claims that the theory of neoliberalism, with its unconstrained markets, that continues to dominate public policy around the world, is an “irrelevant fabrication.” He points out that the Australian government creates money; it doesn’t borrow it and that the so-called budget deficit problem is a “misunderstanding and a beat up.” He says that the actual performance of the economy has been well short of official claims for it and that it has led to citizens carrying huge debts, while the productive part of the economy has been hollowed out. He argues that there are far more sensible ideas available, which would allow us to “stop trashing the land and stop ruining the planet before it is too late”.

Davies vigorously rejects growth in GDP as an appropriate measure of human progress. He claims that it is a measure of the quantity of “stuff” we consume, as well as all the money we spend on trying to fix things that have gone wrong: that it is seriously muddled and doesn’t really qualify as accounting.

I have carefully reviewed four of Davies’ economics books and am firmly attracted to his ideas and conclusions. And of course, he is not alone in his rejection of the centrality of neoliberalism as the driving force for the global economy and its contribution to the way we live.

Canberra science writer, Julian Cribb, has documented the range of threats to human civilisation and argued in his book, “Surviving the 21st Century” for drastic rethinking of the central assumptions for managing the human world. Cribb has played the leading role in the development of a website, and has argued in John Menadue’s Pearls and Irritations blog , for the development of a new Earth Standard Currency, which would be pegged to the real value to humans of the planet’s resources. To quote Cribb: “It is self-evident that, if you use an infinite commodity, money, to exploit a finite Planet, you will run out of planet long before you run out of money.That is the greatest flaw in the present global monetary system. It looks only to the present need for ‘wealth’ and makes no investment in the long-term need for human and biotic survival. In economic terms, it treats life itself as an externality. In other words, through our monetary system, humanity currently prizes ‘wealth’ above its own survival. That is a worry.”

The bushfire crisis that is now dominating Australian thinking has given many Australians pause to think about the nature of the climate change threat and how we can address climate change. But dealing with climate change will not be enough. We must simultaneously confront the other threats that we humans have now crafted, which threaten the survival of our descendants.

Now is surely the time for us to rethink the central assumptions that dominate the way we live. It is time for us to reconsider the ideas that underpin economic policy and to question, as do both Davies and Cribb the appropriateness of current economic orthodoxy.

Bob Douglas is a retired public health academic and a Director of Australia21 for which he leads a project entitled “Survival Matters”.

Share and Enjoy !

Subscribe to John Menadue's Newsletter
Subscribe to John Menadue's Newsletter


Thank you for subscribing!