At the end of 2006, the journal of world economic affairs, The Economist,
produced a banner issue on Happiness and Economics. The lead article unwittingly
revealed an Achilles heel of Economics. It has no way of telling the universal
needs of human beings from junk commodities for the masses, or gold toilet-seats
for the rich.
Happiness Not
In fact, not even consumers in the developed world are happier by ever more
market commodities. When scientific studies like Robert Lane's The Loss of
Happiness in Market Democracies (Yale, 2000) show that population satisfaction
does not increase, but neatly reflects the law of diminishing returns as income
and commodity consumption rise above a certain level, the message does not
compute to economists or policy makers. The reason for this is that neoclassical
economics is based on the first premise that market growth produces more
happiness the more commodities are bought - so-called marginal utilities that
correspond to prices paid.
If this baseline assumption is false, the paradigm collapses. So the ground is
shifted to other claims. The Economist explains that many goods can be only
enjoyed if others don't [have them]. The falsehood of the first principle is
diverted from by a shift to the nasty fact that some can only enjoy what they
get if it is at others' expense. In the end, all that matters is willingness to
pay a market price if one can afford it, the only measure of human welfare that
exists in market and neoclassical doctrine.
Efficient , No
A logical person might think that the equation of paid prices to happiness is
inane. But the problem is ignored. Instead, another shift of ground is relied on
- how productive and efficient the global market is. This assumption does not
hold up any better. The global market system produces many times more wastes
than any economic order in history. In his world-renowned text, Economics Paul
Samuelson defines economic efficiency as absence of waste. But like all
economists of the dominant paradigm, Samuelson includes only wastes that cost
private enterprises money. So as long as pollution and damages to others can be
externalized, it is more efficient - even if it is supremely wasteful. That is
why global depredation of the most basic means of human life - breathable air,
water aquifers, ocean life-systems, and people's capacities to produce - are
ignored in the economic models which governments use. These externalities are
kept off the books by public as well as private accounts.
Economic Goods, or Bads?
Such an economic calculus is fatal in the long term, but not questioned. That is
why no principle of business or economics has been developed to distinguish
commodities that cause disease from goods that enable people=s lives. With 25
years of market de-regulation, disease epidemics like cancer that are traceable
to commercial carcinogens grow. But these too are ignored by government
food-and-drug oveseers, cancer institutes and economists, as Samuel Epstein has
argued since 1981. With the recently emerging obesity epidemic, an initiative by
the UN Food and Agriculture Organization to inform consumers about healthy
versus unhealthy foods was mounted in 2002, but was repressed. A 2004 warning by
the U.S. Surgeon-General that the obesity epidemic is a bigger world problem
than terrorism was also ignored. In Britain in 2007, public policy for color-coded
warnings on cereals laden with sugar, salt and fat is now campaigned against by
the war-chests of corporate food.
A tragic macro-spiral unfolds. The more the global market system produces and
consumes, the more it cumulatively despoils and destroys human and ecological
life systems. But preventative laws are repudiated as too costly or interference
in the free market.
Even the eminent U.N. Scientific Panel on Climate Change does not connect
climate destabilization to the causal mechanism producing the industrial gases.
So new markets in carbon trading are prescribed, and the life-blind market
mechanism causing the problem is extended further. The global spiral downwards
continues as long as the public accepts it.
Global Market Growth = Life-System Collapse
Turning market money-stocks into ever more money-stocks does not work unless
regulated by life-standards. But de-regulation of the market has been an
economic panacea since the Thatcher-Reagan era. A pattern of world-wide collapse
of life-capital bases is thus increasingly structured into the globalizing
system. From pseudo foods and consumables that cause most cancers, heart
failures, and organic disorders to commercial pollutants and resource wastes
that cause climate destabilization to species extinction spasms, exhaustions of
fishstocks and arable soil, the same for-profit drivers are at work, but assumed
as having no alternative. Since corporations are bound by law to maximize
profits for stockholders, they maximize all externalities they can onto others
as necessary to compete. With governments declining into the best democracies
that money can buy, there is no public authority left to protect the common life
interest. Instead, party leaders call for more market growth, and thus more
life-system depredation. The causal link is taboo to mention.
Even long-standing precautionary standards are abolished as governments hand
over hazardous product testing to private-sector clients. Corporate PR campaigns
hold the course. We must compete in the global market and business is doing all
it can to give consumers what they want. Neoclassical economists tell us the
market's invisible hand of competition ensures the Asocial optimum, and this is
the grand narrative of our age. Locked into mathematical chain-mail, this great
myth appears rigorous and scientific until the collapse is right beside us with
climate destabilization.
Not Science, but System Worship
The street level of the great myth is that all commodities are goods, never bads.
The rest is simple. Just add up the sales of the goods, and you have the sum of
society's happiness and well-being. Throwaway junkfoods, mass violence
entertainments, fossil-fuel leisure machines all count as much in National
Accounts as organic foods, community water filters and home electricity.
Together with profitable mass-kill mechanisms to make war and clearcut ocean
floors and forests, means of life destruction come to be invested in more than
means of life. No economic school or business roundtable observes the
macro-pattern.
When the question finally arises, how do we steer out of global meltdown? the
idea that market controls are required finally dawns as an economic imperative.
Yet the universal life necessities all peoples need before stockmarket returns
are not defined. Professional economics sees only market demand, while
economists (and postmodernists) equate needs to wants. If market demand for a
private weekend-jet counts more than a billion impoverished children=s need for
clean water, then the weekend jet gets produced not the wells - with government
subsidies for the jets while children die from dysentry. The truth is what
sells.
Capital Destroyed, Not Developed
The deepest confusion is the equation of private money stocks to capital. Real
capital is wealth that produces more wealth - from ecological services and
social infrastructures to scientific knowledge and technologies that produce
life goods. All have been subjugated to private money-capital which produces
nothing. Few recognize that money-capital is not real capital, but demand on
real capital by private money-stocks seeking to be more. So every form of life
capital is sacrificed to the growth of money capital - which is concentrated in
the possession of about 2% of the population who invariably have more than the
bottom 90%. This is waggishly called wealth creation. In fact it is not even an
economic order. It is a system of predatory waste.
Anthropologists talk of Acultural insanity, but avoid the ruling form of it.
Jared Diamond's famous book, Collapse (2005) is a case in point. He studiously
blinkers out the money-capital drivers selecting for the emerging ecological and
well-being meltdown. From stable hydrological cycles and a non-toxic sunlight
supply to vocations for the young, every form of life capital is now factored
out of for-profit decisions. Nourishing foods, public health-care and thriving
biodiverse environments are selected against whenever it is more privately
profitable to do so. The most basic life-capital formations - a sustainable
topsoil mantle, the phytoplankton base of marine life, the biodiverse habitats
of species reproduction, the biosphere itself - are all off the radar of the
global market paradigm.
Life Capital and Real Economics
A sane economic order protects and develops its life-capital bases, and selects
for means of life provision through time. All the life-needs to be provided for
are recognized by one principle. Whatever our life capacities are reduced
without is a life necessity, and nothing else is - breathable air, sense-open
space and daily light, clean water, nourishing foods and self-waste disposal,
shelter space from the elements, an environment whose elements and contours
sustain and contribute to the surrounding life-host, safety and healthcare when
ill or infirm, activities of language-logos/art-play to choose and learn from,
meaningful work to perform for society's reproduction and diversification, and
self-governing choice in each enjoyment consistent with each provision. We
conserve the conditions which make these possible - from stable water cycles and
reproducing protein stocks to available energy sources - or we die one step at a
time.
Past civilizations like the Sumerians, Khmers, Aztecs and - most dramatically -
the recent 1000-year Reich went extinct through life-blind worship of their own
systems. We travel the same path. The difference is that we know what they did
not. We have the economic instruments to apply across borders like public
infrastructures, life-protective laws and standards, green and social taxes, and
binding trade regulators. Above all, we have the world itself to lose. The
problem is to recognize the myths of the global market before the collapse of
the biosphere by its drivers.
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