The Economy is destroying society (and the planet)
Since the industrial revolution, Western societies have been growing at an exponential rate. Whether we look at population size, GDP, fuel consumption, or any other common metric, we find the ever-increasing curve of exponential growth.
The dominant economic theory of the past 100 years teaches us to see this curve as a positive, especially when it comes to GDP or any market-related metric.
In order to sustain this sort of economic growth we have, over the last 50 years, been following the neoliberal agenda established by likes of Thatcher and Reagan. Policies implemented during or after this period have all promoted the idea that free market capitalism is the way to ensure that societal resources are distributed efficiently and justly.
Today, Western economic policy assumes that faith in the free market is not the result of ideas proposed by a few influential people in the 70s but a fact that society depends upon, despite Margaret Thatcher’s famous 1980 assertion that “There is no such thing as society”. She meant to say that what we think of as society is just millions of individual people and households connected by the market.
This notion of the market as separate from people, a stand-alone entity that benefits everyone regardless of their wealth or status and which should be left alone at all costs, is now leading us dangerously close to the unravelling of the very society it supposedly serves.
These beliefs and policies have led us to the world we live in today.
A world where the market does not serve the people but where the people (and the state) serve the market.
How did we get here?
Neoliberal politicians based their policy on the ideas of the reverred and often misquoted 18th century economist Adam Smith.
They specifically focused on Adam Smith’s ideas about letting the market act freely without intervention on the assumption that the “invisible hand of the market” will always lead to a fair economy.
While Adam Smith did postulate the “invisible hand of the market” as a mechanism to esure that supply and demand match so that the market reaches perfect equilibrium treating all players fairly, he also said:
“[the interest of manufacturers and merchants] in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public … The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.”
What this suggests is that far from supporting a policy of deregulated market economy, Adam Smith was perfectly aware of the dangers of giving too much power to the market and turning the state into a secondary actor, or worse into a puppet of the market.
The important point here is that the market does not have the interest of society at heart. At its head are the most influential (and richest) people, whose interests are not those of society in general.
Why do we now live in a world where people and state are the servants of the market?
As Nobel prize winning economist Joseph E. Stiglitz puts it:
“ Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.”
The free-market policies of the past 50 years have not been implemented to better the lives of us all but to defend the interests of those who are already rich at the expense of everyone else.
Where are we today?
Fifty years down the line, we live in a system that pushes these ideas harder than ever and has managed to embed them into our thinking as the way things are and the way they should be.
All we hear during every election and any time we turn on the news, is more noise about how the economy is doing, as if this economy - which does not serve the interest of the public - should be our single most important concern.
I’ll bet my life’s savings that if you turn on the news tomorrow, one of the anchors will ask how Wall Street is doing then another will say whether it is going up or down and what that means for the economy, as if Wall Street’s tantrums had any bearing on the real economy and people’s lives!
This year saw some of the highest returns ever recorded on the stock market in September, October and November while economies worldwide shrank by an average of 8%. So much for the 2% growth target we all aim for each year!
Obviously Wall Street has very little to do with the economy while its huge uniterrupted profits accumulate in the offshore accounts of its top players.
Upshot from this? Show off these results as further proof of market success and continue putting “the economy” first and people second in every imaginable policy.
Political discourse focuses year-on-year on the country’s GDP and how much it has grown, telling us that trickle down economics mean that every percent rise in GDP makes the whole country better off and that a flourishing stock market is the best news for all of us.
The truth is that trickle down economics benefit only the wealthy by encouraging policies that cut their taxes and improve their bottom line. Tax Justice Network research has shown that the super rich do not plough their wealth back into the economy but amass it in tax havens with revenue loss for the home country. Even the IMF declared that trickle down economics do not exist.
On the other hand, we have world class research showing that trickle up economics (where the poor and middle income earners get more money) improves the economic health of a nation.
So, yes the economy is important but only if it serves society and the people, not the other way round.
So what now?
If we fall for deliberately confusing definitions of the economy and for the empty promises of the past 50 years of market capitalism, we will all lose. The only winners will be those who own capital and therefore have an interest in continuing with this charade.
We have walked this path too long and have seen that it leads to more inequality, more poverty, more violence and more war. It leads to people moving away from each other, forgetting what truly matters and giving up on human solidarity. It leads to toxic political discourse, of the kind used by Trump, Johnson and Bolsonaro to further the aims of the already wealthy, with the complete support of those who have nothing.
Populist rhetoric deflects the attention from the fact that the economy is being put before society and profit before people. Yes, society is unfair and many of us are suffering, but migrants are suffering too - the only one who is not is the owner of that private jet who just got another tax cut!
This is the economy we keep on supporting and talking about on the news, it is not an economy for the people but an economy whose purpose is to generate more money for those who already have more than enough.
Economic policies that fail to emphasise human welfare and merely target goods and services are only concerned with growth, whether or not people’s lives improve.
The time has come to put the economy in its rightful place: as a servant of human development. The name of the game shouldn’t be the next percentage point of GDP, but the next level of care we can provide to people.
We need to move away from economic growth as the most important societal issue and begin to talk about human wellbeing as the cornerstone of public policy.
Only by breaking the spell of market-led economic theory can we move forward, end poverty, reduce inequality and tackle climate change.
We are all individually responsible for the poor governance we continuously complain about. We elect people whose talking point is the economy and how they will be the ones to boost it, because that is exactly what we want to hear.
They feed us the lie that we choose to believe in.
We want to hear how our leaders will improve the economy, thinking that we will all be the better for it. They promise us what we want and we put them in power. Unconscious of the fact that we are dancing to the music of those who profit from this deeply unfair system.
We need to shift expectations away from the betterment of the economy to a betterment of society. Corporate interests will keep selling us the lie and benefit from it if we do not collectively ask for something new.
The winners of this obsession with the economy are the champions of capitalism and they keep us in the loop in order to keep winning. They pass off the state as a meddler while making sure that it continues to support their own interests.
We make the state untrustworthy by electing untrustworthy people whose focus is the economy and how to make more money for themselves and their friends.
Billionaires will not save the planet, they have already begun planning for the end and building luxury bunkers whilst 9 million people, mostly women and children, still die of hunger every year.
Our system is wrong because its focus is wrong, we all need to stop worshipping the economy or we will witness the unravelling of society, increased inequality and catastrophic climate change.
Conclusion
The movie Elysium may not have been too far from the truth when it depicted a desolate future Earth where the poor live in shacks while the wealthy enjoy unimaginable riches in an orbital ring around the planet. In a sense, this is already the world we live in, the inequality simply ins’t visible to all of us yet.
Every single one of us needs to start asking more from our state in terms of wellbeing NOT economic growth. If the economy grows as a result, good, if it doesn’t that must also be seen as good.
There is an upper limit to what our planet can provide and if we keep focusing on the economy, “efficient” markets will strip it of its resources and we will all pay the price.
The truth is, none of us want to destroy the planet, we all want to see it thrive but we also want a good life. The good news is that it is possible! A good life for everyone within the bounds of what our planet can provide is acheivable but only if we start focusing at what truly matters to us as human beings and stop obsessing over the economy.
We already produce enough food and wealth globally to end world hunger and poverty. But we haven’t. That is a choice. The choice made by us all when we focus on economic growth instead of human wellbeing.
Let’s stop obsessing with the economy!
- Make this topic secondary for those in power
- Force them to find answers to issues of human wellbeing
- Start a societal push for a system putting people before profits
See through free market policy lies and share your insights with those who need to be made aware of what is happening.
None of us is powerful enough to make things change on our own: our only chance is to create a movement that’s big enough to move society in the right direction.
Found this interesting? I am writing a series looking at all of the world’s biggest environmental and social issues and how we may be able to tackle them as a global community, IF we are willing to change. Follow me to be part of the conversation and share your opinion.
