Sunday, November 18, 2012

A warning to mainstream economists.





Hey Professor Gregory Mankiw!

After the crash of 1929, most of the natural wealth of the planet was still intact: the salmon runs came in on time; cod fish swarmed in the Atlantic; old growth forests stood tall all over the world . . . and oil flowed out of the ground as if from an infinite source. Though the financial markets reeled, jobs were scarce and people suffered mightily for many years, we were able to fall back on our planet’s natural wealth, pull ourselves out of the slump, and get the economy – and our lives – moving again.

Today most of the fish, the forests and the oil is gone. For the better part of a century we’ve been violating one of the core principles of basic economics: we’ve been selling off our planet’s natural capital and calling it income. The global economy grew 50-fold over the past 100 years, with not even a hint of slowing down. Now we’re finally seeing clearly . . . for 100 years the global economy was an elaborate Ponzi scheme in which living generations ripped off whatever they could from generations yet unborn.

Now the externalities are starting to swamp us . . . dead seas, melting ice caps, polluting aquifers, bleached soils, expanding deserts, lost cultures, fractured communities, emptier lives . . . we’ve painted ourselves into a corner, and all the derivatives, credit swaps and financial pyrotechnics of neoclassical economics won’t save us this time around. These escalating externalities are the X-factor that will trigger a global crash bigger, longer and more traumatic than anything we’ve ever seen before.

To avert catastrophe, we need a new language of the liquidity of fresh water, the leverage of rising seas, the stimulus of intact forests, the stability of global temperatures… hey, ask your professors to explain why the BP oil spill made the GDP go up and how they measure economic progress. With capitalism’s negligence of ecology, which currently borders on a totalizing death warrant, only an economic paradigm shift can help us revitalize the crucial lifeline that runs through economics and ecology (eco=oikos=home). Only a total paradigm shift in the theoretical foundations of economic science can save us now.



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