Category Archives: Ending Neoliberalism

Out Of The Wreckage – George Monbiot. A story of our times, ‘The Politics of Belonging’.

We possess an unparalleled sensitivity to the needs of others, a unique level of concern about their welfare, and a peerless ability to create moral norms that generalise and enforce these tendencies.

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Our astonishing tendencies emerge so early in our lives that they seem to be innate. In other words, we appear to have evolved to be this way.

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We survived despite being weaker and slower than both our potential predators and most of our prey. We did so through developing, to an extraordinary degree, a capacity for mutual aid. As it was essential to our survival, this urge to cooperate was hard-wired into our brains through natural selection. It has not been lost.

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The emotional pain caused by isolation from other members of our group drove us to return to them, so that we did not get picked off by predators or die of starvation. Social pain and physical pain are processed in our brains by the same neural circuits (emotional pain, at some point in the evolution of social mammals, seems to have hijacked the physical pain network).

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Social contact reduces physical pain. This is why we hug our children when they hurt themselves: affection is a powerful analgesic. Opioids relieve both physical agony and the distress of separation, which might explain the link between social isolation and drug addiction.

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Social pain can be harder to bear than physical pain, which could be why some people self-harm in response to emotional distress: it could be interpreted as an attempt to replace emotional injury with physical injury. As the prison system knows too well, one of the most effective forms of torture is solitary confinement. We, the supremely social mammal, cannot cope alone: we need connection – togetherness – just as we need food and shelter.

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Our extraordinary capacity for altruism and our remarkably social nature are the central, crucial facts about humankind. Yet we remain, to an astonishing degree, unaware of them. This is partly because our minds – which are always on the lookout for signs of danger – emphasise the rare but spectacular acts of violence a small proportion of the population inflicts on others, but not the daily acts of kindness and cooperation the rest of us perform, often unconsciously. This tendency is reinforced today by news reports.

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We remember, for example, the two terrorists who murdered twelve people in Paris in January 2015, and our recollection of that horror persuades us that evil is a central feature of the human condition. Less prominent in our minds are the 3 million people in France and the millions elsewhere who gathered, lit candles and marched in public places in solidarity with the victims. These people, not the two terrorists, represent the human norm. Our innate tendency is to stand together against threats to our well-being, to treat an attack on one as an attack on all.

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This is what we are. But something has gone horribly wrong.

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An epidemic of loneliness is sweeping the world. Once considered an affliction of older people, it is now tormenting people of other generations. Our time is distinguished from previous eras by atomisation: the rupturing of social bonds, the collapse of shared ambitions and civic life, our unbearable isolation from each other. There are over 7 billion souls on Earth, but many people are unable to find anyone with whom they can connect.

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We live in an era of astonishing material wealth – albeit poorly distributed. But the great general advance in material conditions has not been accompanied, as our forebears might have expected, by general happiness. Instead, this age of atomisation breeds anxiety, discontent and dissatisfaction – conditions that afflict even the wealthiest classes.

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Craving contentment and a sense of connection, we succumb to compulsions that often find expression in a frenzy of consumption. We chase brief spikes of satisfaction, which soon subside, to be replaced by the urge for another hit.

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Consumerism – ever restless, never sated – threatens us with climate breakdown, helps catalyse a sixth great extinction, imperils global water supplies, and reduces the many wonders of the living world to the same grey waste. We rip the Earth’s living systems apart to fill the gap in our lives, yet the gap remains. This compulsive, joyless hedonism consumes not only the wonders of nature, but also ourselves.

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Society, the world’s living systems, our happiness, our self-control, our sense of belonging: all are falling apart. Why has this happened?

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The pursuit of material satisfactions dulls our concern for other people and for the living planet. It blinds us to our place in the world and the damage we impose on others. It propels us down a narrow corridor of self-interest, self-enhancement and immediate gratification.

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These tendencies are reinforced by an economic system that puts a price on everything and a value on nothing; a political system that promotes economic growth above all other aims, regardless of whether it enhances human welfare or damages it; and organisational and technological changes that could scarcely have been better designed to drive us apart. We were once brought together by work, travel and entertainment. Now these activities tend to estrange us.

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Globalisation has weakened our connections with our neighbours and neighbourhoods. Jobs are outsourced to cheaper workforces, causing, in some cases, the collapse of local economies and the communities that depended on them. Power is outsourced to global institutions we cannot influence, undermining our sense of self-ownership and political community. A globalised media creates the impression that, wherever we might be, life is elsewhere.

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But above all, I believe, the trend towards social breakdown is driven by the dominant political narrative of our times. This narrative is a reiteration of the story told by the philosopher Thomas Hobbes in 1651. He asserted that the default state of human relations is a war of everyone against everyone else. Life in the state of nature, he famously observed, was ‘solitary, poore, nasty, brutish, and short’.

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Competition and individualism are the values at the heart of the twenty-first century’s secular religion. Everywhere we are encouraged to fight for wealth and social position like stray dogs over a dustbin: competition, we are told, brutal as it may be, will enhance our lives to a greater extent than any other instrument. This story is supported by a rich mythology of rugged individualism, and advanced through an inspiring lexicon of lone rangers, sole traders, self-starters, self-made men and women, going it alone. The word ‘people’ has been widely replaced in the media by ‘individuals’. The most cutting insult we can throw at someone is ‘loser’.

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Seeing some people grab vast wealth while others go hungry (at the time of writing, the world’s eight richest people have the same net worth as the poorest half of its population) reinforces the sense that this is a dog-eat-dog world. We either join the fight in the hope of triumphing over others or face destitution.

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Many economists insist that we are typically selfish and self-maximising. They use a term to describe this perception of humanity that sounds serious and scientific: Homo economicus. Most of them seem to be unaware that the concept was formulated, by J. S. Mill and others, as a thought experiment. Soon it became a modelling tool. Then it became an ideal. Then it evolved into a description of who we really are.

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We have heard the story of our competitive, self-maximising nature so often, and it is told with such panache and persuasive power, that we have accepted it as an account of who we really are. It has changed our perception of ourselves. Our perceptions, in turn, change the way we behave.

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One result of this mistaken belief is the loss of common purpose. Our tendency is to stop seeing ourselves as people striving together to overcome our common problems, and to view ourselves instead as people striving against each other to overcome our individual problems. Never mind that these problems are often much bigger than we are, and arise from structural forces that no person acting alone can tackle. As individualism is the religion of our times, it must be the solution to whatever crisis we face.

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Everywhere we seem to hear the same low, insistent whisper: ‘You are on your own.’ Neither the state nor society will save us. They will not solve our problems, even if these problems – such as climate change or economic crises or public health disasters – cannot be addressed by other means. No solutions are proposed for insecurity, precarity and desperation. Indeed, as the cruel eighteenth-century doctrines of Thomas Malthus and Joseph Townsend – ‘it is only hunger which can spur and goad them on to labour’ – are disinterred, precarity and desperation are recast as the necessary incentives to encourage the poor to work harder.

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The loss of common purpose leads in turn to a loss of belief in ourselves as a force for change. Many, in recent years, lost their belief in the promise of democracy: that, through voting, mobilising and campaigning, we can make our political systems work for all of us, rather than just a select few. We have tended to face our crises with passivity and resignation. Faith in democratic norms is collapsing. A study published in the Journal of Democracy revealed that, while 72 per cent of those born before the Second World War in the United States believed it was essential to live in a democracy, this figure fell to just 30 per cent of those born in 1980. One in six of the people surveyed asserted that army rule would be a good or very good development – a proportion that has more than doubled in twenty years. A similar slump in political faith has taken place in other countries.

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If politics as usual no longer delivers, people look elsewhere for answers. This ‘elsewhere’ often means demagoguery: movements characterised by the extreme simplification of political choices, the abandonment of reasoned argument, and scapegoating. The reaction against democratic failure has licensed a clutch of suppressed hatreds – of women, immigrants, racial and religious minorities, difference of all kinds. We witness the resurgence of the kind of politics that until recently seemed to be everywhere in retreat.

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The potential consequences are grave. Governments founded on lies and exaggerations are making promises they cannot possibly keep, and blaming an ever wider array of scapegoats when they fail to materialise. If jobs are destroyed en masse by automation, this will enhance the need for distraction. As people become angrier and more alienated, the net of blame will be cast wider.

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Eventually the anger that cannot be answered through policy will be turned outwards, towards other nations. Lacking other means of disguising their failures or establishing legitimacy, governments will discover the potential of foreign aggression. Terrorism provides ample opportunities for justification. Major war, which seemed until recently a distant prospect, begins to look like a plausible threat.

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We are better than we are told we are, better than we are induced to be. By recognising our good nature and coming together to express it, we can overcome the multiple crises we face that cannot be solved alone. By reconnecting with each other we can conquer loneliness, unhappiness and the loss of our sense of meaning and purpose.

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Though we still need it, we can no longer rely only on the state. Nor can we rely on the workplace to supply either social connection or economic security. But we can find some of the help we seek in community. By reviving community, built around the places in which we live, and by anchoring ourselves, our politics and parts of our economy in the life of this community, we can recover the best aspects of our humanity. We can mobilise our remarkable nature for our own good and the good of our neighbours.

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We will no longer walk alone. We will no longer work alone. We will no longer feel alone. We will restore our sense of belonging: belonging to ourselves, belonging to our communities, belonging to our localities, belonging to the world. In turn, we will develop a politics and an economy that belong to us. By rebuilding community, we will renew democracy and the hope we invest in it. We will develop political systems that are not so big that they cannot respond to us but not so small that they cannot meet the problems we face. We will achieve something that, paradoxically, we cannot realise alone: self-reliance. By helping each other, we help ourselves.

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The strong, embedded cultures we develop will be robust enough to accommodate social diversity of all kinds: a diversity of people, of origins, of life experiences, of ideas and ways of living. We will no longer need to fear people who differ from ourselves; we will have the strength and confidence to reject attempts to channel hatred towards them.

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By rebuilding community, we become proud of our society, proud of our institutions, proud of our nations, proud of ourselves. By coming together we discover who we are. We ignite our capacity for empathy and altruism. Togetherness and belonging allow us to become the heroes of the story.

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We are astonishing creatures, blessed with an amazing capacity for kindness and care towards others. But this good nature has been thwarted by a mistaken view of our own humanity. We have been induced by certain politicians, economists and commentators to accept a vicious ideology of extreme competition and individualism that pits us against each other, encourages us to fear and mistrust each other, and weakens the social bonds that make our lives worth living.

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Though it is not the only factor, this has helped to usher in an age of loneliness, in which, on this crowded planet, we are disconnected from each other as never before. The result is an epidemic of unhappiness and of psychological and physical illness. The atomisation we suffer has eroded our sense of common purpose and sapped our belief that, by working together, we can change life for the better. It has undermined democracy, and allowed intolerant and violent forces to fill the political vacuum. We are trapped in a vicious circle of alienation and reaction.

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By coming together to revive community life, we, the heroes of this story, can break the vicious circle. Through invoking the two great healing forces – togetherness and belonging – we can rediscover the central facts of our humanity: our altruism and mutual aid.
Where there is atomisation, we will create a thriving civic life. Where there is alienation, we will forge a new sense of belonging: to neighbours, neighbourhood and society. Where we find ourselves crushed between market and state, we will develop a new economics that treats both people and planet with respect. Where we are ignored and exploited, we will revive democracy and retrieve politics from those who have captured it.

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In doing so, we can reclaim our happiness, reclaim our self-reliance, reclaim our pride, and reclaim our place. We will belong once more both to society and to ourselves.

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I propose a name for this story: ‘The Politics of Belonging’.

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Community, togetherness and belonging are values invoked across the political spectrum. Thomas Paine and Edmund Burke might have agreed on little else, but in this respect they seemed to be as one. Paine wrote: ‘The mutual dependence and reciprocal interest which man has upon man, and all the parts of civilised community upon each other, create that great chain of connection which holds it together.’ Burke famously insisted: ‘To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections. It is the first link in the series by which we proceed towards a love to our country, and to mankind.’ Few people would disagree with either writer on this point.

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Many of those who have voted for demagogues and extremists have stumbled into this choice through disillusionment, alienation and the absence of stories that make sense of their lives. Most are not ill-intentioned. When they heard someone calling through the political void – someone who, instead of speaking in robotic platitudes, named their problems and promised solutions, however crude and unlikely those solutions were – they responded. A few years previously, they might have voted for parties that emphasised entirely different values.

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The task of effective politics today is to reach across the divides and find common ground.
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I have sketched out the basic components of a new story. But if it is to help to catalyse change, we need to know more. We need a deeper understanding of the problems we confront.

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The central task of this book is to show how community can be rebuilt and how the politics of belonging might develop.

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I see this book as just one of the many building blocks required to construct a new politics. It sits upon the foundational work of many inspiring people, and I hope it will encourage others to contribute to a new political architecture. Like all the best things in life, this is something we should build together.
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Out Of The Wreckage: A New Politics for an Age of Crisis
by George Monbiot

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get it from

Amazon.com

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Out Of The Wreckage, A New Politics for an Age of Crisis – George Monbiot.

Nations and peoples are largely the stories they feed themselves. If they tell themselves stories that are lies, they will suffer the future consequences of those lies. If they tell themselves stories that face their own truths, they will free their histories for future flowerings.
Ben Okri, A Way of Being Free
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You cannot take away someone’s story without giving them a new one. It is not enough to challenge an old narrative, however outdated and discredited it may be. Change happens only when you replace it with another. When we develop the right story, and learn how to tell it, it will infect the minds of people across the political spectrum.

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Those who tell the stories run the world. The old world, which once looked stable, even immutable, is collapsing. A new era has begun, loaded with hazard if we fail to respond, charged with promise if we seize the moment. Whether the systems that emerge from this rupture are better or worse than the current dispensation depends on our ability to tell a new story, a story that learns from the past, places us in the present and guides the future.

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Stories perform a fundamental cognitive function: they are the means by which the Emotional Brain makes sense of the information collected by the Rational Brain.

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A string of facts, however well attested, has no power to correct or dislodge a powerful story. The only response it is likely to provoke is indignation: people often angrily deny facts that clash with the narrative ‘truth’ established in their minds. The only thing that can displace a story is a story.

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Effective stories tend to possess a number of common elements. They are easy to understand. They can be briefly summarised and quickly memorised. They are internally consistent. They concern particular characters or groups. There is a direct connection between cause and effect. They describe progress – from a beginning through a middle to an end. The end resolves the situation encountered at the beginning, with a conclusion that is positive and inspiring.

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Our minds appear to be attuned not only to stories in general, but to particular stories that follow consistent patterns.

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In politics, there is a recurring story that captures our attention. It goes like this:

Disorder afflicts the land, caused by powerful and nefarious forces working against the interests of humanity. The hero – who might be one person or a group of people – revolts against this disorder, fights the nefarious forces, overcomes them despite great odds and restores order.

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Stories that follow this pattern can be so powerful that they sweep all before them: even our fundamental values.

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The two most successful political stories of the twentieth century – both of which have survived into the twenty-first – are diametrically opposed to each other, but follow the same narrative pattern.

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The social-democratic story explains that the world fell into disorder – characterised by the Great Depression – because of the self-seeking behaviour of an unrestrained elite. The elite’s capture of both the world’s wealth and the political system resulted in the impoverishment and insecurity of working people. By uniting to defend their common interests, the world’s people could throw down the power of this elite, strip it of its ill-gotten gains and pool the resulting wealth for the good of all. Order and security would be restored in the form of a protective, paternalistic state, investing in public projects for the public good, generating the wealth that would guarantee a prosperous future for everyone. The ordinary people of the land – the heroes of the story – would triumph over those who had oppressed them.

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The neoliberal story explains that the world fell into disorder as a result of the collectivising tendencies of the over-mighty state, exemplified by the monstrosities of Stalinism and Nazism, but evident in all forms of state planning and all attempts to engineer social outcomes. Collectivism crushes freedom, individualism and opportunity. Heroic entrepreneurs, mobilising the redeeming power of the market, would fight this enforced conformity, freeing society from the enslavement of the state. Order would be restored in the form of free markets, delivering wealth and opportunity, guaranteeing a prosperous future for everyone. The ordinary people of the land, released by the heroes of the story (the freedom-seeking entrepreneurs) would triumph over those who had oppressed them.

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Because of their narrative power and a disastrous failure to develop effective countervailing stories, they have yet to be replaced. The facts changed, but our minds did not. If the rupture is to be resolved for good rather than for ill, we need a new story. Our challenge is to produce one that is faithful to the facts, faithful to our values, and faithful to the narrative patterns to which we respond.

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Like many people who seek a generous, inclusive politics, I have been listening for such a story, waiting for its bugle call to resound, so that we can rally in the expectation of a better future. The wait continues. Most mainstream parties seek only to tweak existing narratives.

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Despair is the state we fall into when our imagination fails. When we have no stories that describe the present and guide the future, hope evaporates. Political failure is, in essence, a failure of imagination. Without a new story, a story that is positive and propositional rather than reactive and oppositional, nothing changes. With such a story, everything changes.

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In seeking to develop a restorative political story around which we can gather and mobilise, we should first identify the values and principles we want to champion. This is because the stories we tell propagate the beliefs around which they are built.

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When stories are designed for a political purpose and circulated to advance this purpose, they have the power to change or strengthen our values. The most grotesque doctrines can look like common sense when embedded in a compelling narrative, as Lenin, Hitler, Georges Sorel, Gabriele D’Annunzio and Ayn Rand discovered. The failure to tell a new story has been matched by an equally remarkable omission: the failure to discern and describe the values and principles that might inform our politics.

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Values are the bedrock of effective politics. They represent the importance we place on fundamental ways of being, offering a guide to what we consider to be good and worthwhile.

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Our values tend to cluster around certain poles. Social psychologists sometimes describe these poles as intrinsic and extrinsic. Intrinsic values, in their purest form, are expressed as compassion, connectedness and kindness towards all living beings, including oneself. Extrinsic values are expressed as a desire for self-enhancement, through gaining, for example, status or power.

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People with a strong set of intrinsic values and a weaker set of extrinsic values have high levels of self-acceptance, strong bonds of intimacy and a powerful desire to help other people. They are strongly inclined towards empathy, understanding, and independent thought and action. Research across seventy nations suggests that intrinsically motivated people are more open to change, have a stronger interest in universal rights and equality, and a stronger desire to protect and cherish both human beings and the natural world than more extrinsically motivated people.

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Surveys of both children and adults reveal that the value which tends to be favoured above all others is what psychologists call ‘benevolence’, by which they mean protecting or advancing the welfare of people we know.

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The smaller number of people at the extrinsic end of the spectrum are more attracted to prestige, status, image, fame, power and wealth. They are strongly motivated by the prospect of individual reward and praise. They have little interest in cooperation or community. People who emphasise these values tend to report higher levels of stress, anxiety, anger, envy, dissatisfaction and depression than those at the intrinsic end.

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We are not born with these values. They are strongly shaped by our social environment, by the cues and responses we receive from other people, and by the stories we tell ourselves and each other. They are also shaped by the political environment. If people live under a cruel and grasping political system, they tend to normalise and internalise it, absorbing its dominant trends and translating them into extrinsic values. This, in turn, permits an even crueller and more grasping political system to emerge. If, by contrast, people live in a country in which no one is allowed to fall out of the boat, in which social norms are characterised by kindness, empathy, community and freedom from want and fear, their values are likely to shift towards the intrinsic end. This process is known as policy feedback, or the Values Ratchet.

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If our purpose is to create a kinder world, we should embed within the political story we tell the intrinsic values that promote this aim: empathy, understanding, connectedness with other people, self-acceptance, independent thought and action.

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Those who promote this story should know what their values are and be able to name them without hesitation or embarrassment. In doing so, they help to develop a social environment that fosters their aspirations, turning the Values Ratchet in the right direction.

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Principles could be seen as the soil that derives from the bedrock of values. Political principles are the fundamental propositions at the heart of a political philosophy. In other words, they are a description of the world as we would like it to be. Again, they need to be expressed clearly and overtly, so that they can be explained and spread with pride and conviction.

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A Statement of Principles

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1.We want to live in a place guided by empathy, respect, justice, generosity, courage, fun and love.
2.We want to live in a place governed by judgements that are honestly made, supported by evidence, accountable and transparent.
3.We want to live in a place in which everyone’s needs are met, without harming the living world or the prosperity of future generations.
4.We want to live in a place in which the fruits of the work we do and the resources we use are fairly and widely distributed, in which shared prosperity is a general project, and the purpose of economic life is to enable universal well-being.
5.We want to live in a place in which all people have equal rights, in practice as well as in theory.
6.We want to live in a place in which all people can feel secure, confident, safe and cared for.
7.We want to live in a place in which, regardless of where they were born, everyone has a neighbourhood of which they feel proud, where they can freely participate in the life of the community.
8.We want to live in a place which, proudly and consistently, supports people in need of help, including those fleeing from danger and persecution abroad.
9.We want to live in a place in which a thriving natural world provides a refuge both for rich and abundant wildlife and for people seeking relief from the clamour of daily life.
10.We want to live in a place whose political system is fair and fully representative, in which everyone has a voice and every vote counts, and whose outcomes can neither be bought nor otherwise engineered.
11.We want to live in a place in which decisions are taken at the most appropriate level, to enhance democratic participation and connection.
12.We want to live in a place in which everyone has access to the information needed to make meaningful democratic choices, and in which political debate is honest, accessible and inclusive.
13.We want to live in a place in which education is a joyful process, encouraging children of all abilities to engage with enthusiasm, and adults to continue learning throughout their lives.
14.We want to live in a place in which good housing, fast and effective healthcare and a healthy, sufficient diet are available to everyone.
15.We want to live in a place that helps to build a safe, prosperous and resilient community of nations.
16.We want to live in a place that is open to new ideas and information, and that values creativity, research and discovery.

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A set of principles, important as it is, does not constitute a story. Nor can all the principles I have listed be incorporated into a story – they cover too much ground to create a coherent or satisfying narrative. But in seeking to develop one, we should be constantly aware of what we are trying to achieve. If the story succeeds, is it likely to advance these principles or clash with them? Is the political environment it creates likely to nurture the society they describe?

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Out Of The Wreckage: A New Politics for an Age of Crisis
by George Monbiot

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get it from

Amazon.com

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Don’t let the rich get even richer on the assets we all share – George Monbiot.

Are you a statist or a free marketeer? Do you believe that intervention should be minimised or that state ownership and regulation should be expanded? This is our central political debate. But it is based on a mistaken premise.

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Both sides seem to agree that state and market are the only sectors worth discussing: politics should move one way or the other along this linear scale. In fact, there are four major economic sectors: the market, the state, the household and the commons. The neglect of the last two by both neoliberals and social democrats has created many of the monstrosities of our times.

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Both market and state receive a massive subsidy from the household: the unpaid labour of parents and other carers, still provided mostly by women. If children were not looked after – fed, taught basic skills at home and taken to school – there would be no economy. And if people who are ill, elderly or have disabilities were not helped and supported by others, the public care bill would break the state.

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There’s another great subsidy, which all of us have granted. I’m talking about the vast wealth the economic elite has accumulated at our expense, through its seizure of the fourth sector of the economy: the commons.

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That it is necessary to explain the commons testifies to their neglect (despite the best efforts of political scientists such as the late Elinor Ostrom). A commons is neither state nor market. It has three main elements. First a resource, such as land, water, minerals, scientific research, hardware or software. Second a community of people who have shared and equal rights to this resource, and organise themselves to manage it. Third the rules, systems and negotiations they develop to sustain it and allocate the benefits.

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A true commons is managed not for the accumulation of capital or profit, but for the steady production of prosperity or wellbeing. It belongs to a particular group, who might live in or beside it, or who created and sustain it. It is inalienable, which means that it should not be sold or given away. Where it is based on a living resource, such as a forest or a coral reef, the commoners have an interest in its long-term protection, rather than the short-term gain that could be made from its destruction.

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The commons have been attacked by both state power and capitalism for centuries. Resources that no one invented or created, or that a large number of people created together, are stolen by those who sniff an opportunity for profit. The saying, attributed to Balzac, that “behind every great fortune lies a great crime” is generally true. “Business acumen” often amounts to discovering novel ways of grabbing other people’s work and assets.

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The theft of value by people or companies who did not create it is called enclosure. Originally, it meant the seizure – supported by violence – of common land. The current model was pioneered in England, spread to Scotland, then to Ireland and the other colonies, and from there to the rest of the world. It is still happening, through the great global land grab.

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Enclosure creates inequality. It produces a rentier economy: those who capture essential resources force everyone else to pay for access. It shatters communities and alienates people from their labour and their surroundings. The ecosystems commoners sustained are liquidated for cash. Inequality, rent, atomisation, alienation, environmental destruction: the loss of the commons has caused or exacerbated many of the afflictions of our age.

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You can see enclosure at work in the Trump administration’s attempt to destroy net neutrality. Internet service providers want to turn salience on the internet – now provided freely by a system created through the work of millions – into something you have to pay for. To ensure there is no choice, they have also sought to shut down a genuine internet commons, by lobbying states to prohibit community broadband. In the crazy plutocracy the US has become, four states have made this form of self-reliance a criminal offence, while others have introduced partial bans.

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Communities should be allowed to take back control of resources on which their prosperity depends
Another example is the extension of intellectual property through trade agreements, allowing biotech companies to grab exclusive rights to genetic material, plant varieties and natural compounds. Another is the way in which academic publishers capture the research freely provided by communities of scientists, then charge vast fees for access to it.

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I’m not proposing we abandon either market or state, but that we balance them by defending and expanding the two neglected sectors. I believe there should be wages for carers, through which the state and private enterprise repay part of the subsidy they receive. And communities should be allowed to take back control of resources on which their prosperity depends. For example, anyone who owns valuable land should pay a local community land contribution (a form of land value tax): compensation for the wealth created by others. Part of this can be harvested by local and national government, to pay for services and to distribute money from richer communities to poorer ones. But the residue should belong to a commons trust formed by the local community. One use to which this money might be put it is to buy back land, creating a genuine commons and regaining and sharing the revenue. I expand on this idea and others in my recently published book Out of the Wreckage.

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A commons, unlike state spending, obliges people to work together, to sustain their resources and decide how the income should be used. It gives community life a clear focus. It depends on democracy in its truest form. It destroys inequality. It provides an incentive to protect the living world. It creates, in sum, a politics of belonging.

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To judge by the speeches at this week’s Labour conference, the party could be receptive to this vision. The emphasis on community and cooperatives (which in some cases qualify as commons), the interest in broadening ownership and fighting oppressive trade agreements, point towards this destination.

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I hope such parties can take the obvious step, and recognise that the economy has four sectors, not two. That’s the point at which it can begin: the social and environmental transformation for which so many of us have been waiting.

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The Guardian

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New Zealand Election. “It’s the Economy, Stupid!” – Bryan Gould. 

It was Bill Clinton who identified the main issue in his election campaign as “It’s the economy, stupid”.

And so it almost always is, and New Zealand’s 2017 election campaign will be no different.

Of course other issues will matter too, but it is the economy, and the impact its fortunes will have on individual voters, that will usually have the greatest impact on the greatest number.

That is not usually seen as a plus for parties of the left. It is usually thought to the extent that it is almost an article of faith for some voters, notwithstanding the evidence of their own experience, that parties of the right are best equipped to manage the economy, and that other contenders for power necessarily start therefore at a disadvantage in that regard.

So Jacinda Ardern showed commendable courage when she devoted part of the time she had available in the first leaders’ debate to an economic issue.  That issue was productivity, or the lack of it.

Many experts, whether on the left or right, will agree that productivity growth is the essential factor in a successful economy. And most will say that our record in this regard is not good enough.

Why does it matter? Because it measures how much each individual worker across the whole economy produces on average. If our productivity gains are sluggish, as they have been, and fall behind those of other countries, we slip further down the international ladder in terms of living standards and prosperity.

We have been able to increase national output over recent years, but that is almost all down to taking in more immigrants. That produces a larger cake overall, but it does nothing to raise individual living standards, indeed, the reverse, since there are more slices to be cut from only a slightly bigger cake and we have to share our existing capital equipment with that greater number.

So, if productivity growth is the only sure way of raising living standards and providing more resources to spend on essentials, like housing, health and the environment, why have we failed to produce a better performance?

Because, as Jacinda Ardern pointed out, we have failed to invest in the new skills, new techniques, and new equipment and technology needed to increase the productive capacity of each member of the workforce.

We have failed to provide young people as they join the workforce with the skills, the training and apprenticeships, that are needed in a modern and competitive economy. We have handicapped our workforce by saddling large numbers with poverty (engendered by inequality) so that they have to contend with poor housing, health care and educational opportunities.

We have failed to provide incentives so that the necessary investment in new productive capacity, especially in research and development, and new equipment, is made.

And we have refused, for ideological reasons, to use the power of government to make good all these deficiencies.

Perhaps less obviously, we have failed to do what more successful economies do as a matter of course, move resources to the growth points in the economy. Where are those growth points? They should be, and almost invariably are, in the export sector, which is where the biggest markets are and where economies of scale, and therefore productivity gains, can most easily be achieved.

So, has our focus been, as it should, on improving our export performance and improving our export returns?  No, quite the contrary. We have insisted on running an economic policy characterised by high interest rates (in international terms at least) and an overvalued dollar.

As a result, our exporters face a constant head wind, because they have to charge a premium on everything they sell. And that makes it difficult both to compete for sales and  to earn a proper return on what they do sell. Just ask the dairy farmers or the Manufacturers and Exporters Association what the high dollar has done to them. Little wonder that the return on investment is so low that there is little to spend on raising productivity.

These failures are the government’s Achilles heel in managing the economy.  It seems Jacinda Ardern picked the right issue to focus on.

Bryan Gould, 1 September 2017


If you think Basic Income is “free money” or Socialism, think again – Scott Santens. 

First, saying basic income is socialism is as absurd as saying money is socialism. It’s money. It’s all it is. What do people do with money? They use it in markets. In other words, basic income is fuel for markets. Markets are a wonderful invention that serve to calculate via a massively distributed computer comprised of people, what goods and services should be made, using what, going where, by whom, of what quantity, etc. It’s an incredible act of decentralization built upon supply and demand signaling.

When someone has money and wants to buy something, that is a demand signal. Businesses meet this signal with supply. Basically, buying is like voting. We vote on what we want using money as our ballots, and we do this over and over and over again, every day. Now imagine someone has no money in a system built around markets. How do they vote? They can’t. The market thus confuses this lack of a vote as a “no” vote. These two signals are of course very different. One is zero and one is null, but markets don’t know that. They can’t differentiate between them. This means markets containing people who don’t have enough money to signal their demand can’t function properly.

continued at ScottSantens.com

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Jacinda tsunami is looking very hard to halt – Richard Prebble. 

Occasionally New Zealand elections produce a tidal wave. I witnessed the tidal wave that swept the Lange government to power. The pre-conditions are in place.

It is very hard for any government to win four elections in a row. Replacing Prime Ministers, Bolger to Shipley, Lange to Palmer has led to defeat in the next election. The signs are it will be a tidal wave.

First the tide goes out for the minor parties as it has for the Greens, United Future and Maori Party. New Zealand First is also losing votes to Labour.

Then the wave sweeps in. Anecdotal evidence is urban “John Key” women voters are switching to Jacinda Ardern.

Each poll shows the wave is gaining momentum. When Labour’s support crosses National’s it is all over.

The wave started when the Greens defended benefit fraud. Peters repaying his overpayment reminds us that Metiria Turia, who is still a Green candidate, has not.

Conditions were ideal for Labour. They just had the problem of their leader, until he fell on his sword.

In Jacinda, Labour have the ideal candidate for a five week campaign. Her regular Breakfast TV appearances have made her an accomplished TV performer.

The Maori Party is leaking votes to Labour too. Instead of campaigning on Maori water rights the party is campaigning for an amnesty for overstayers. They have lost the plot.

The only way to stop a tidal wave is to prevent it starting. Bill English and National’s strategist Steven Joyce are just too cautious. National also underestimated Ardern. In Parliament she has been ineffective. In six years she has not landed a single attack on Paula Bennett. But none of this matters.

This is the age of celebrity politics. It is image not substance. Macron in France, Trudeau in Canada, Trump in America and now Ardern in New Zealand. The camera loves Jacinda.

The red T-shirt crowd we first saw on TV may have been Matt McCarten’s “rent-a-mob” imported from overseas but mania when it gets going is infectious. Now the crowds are real.

I saw the Lange tidal wave. People came into my electorate office and took away handfuls of enrolment cards. On election day people lined up to vote in record numbers. Big enrolment and high voter turnout benefits Labour. As of June, the Electoral Commission estimated 445,234 voters (nearly all young and overwhelmingly Labour) had not registered. Last election just 76.77 per cent of those who did register voted. Labour strategists believe if they can lift enrolment and turn out, the party has 600,000 extra votes, enough to win.

Labour could be elected to govern alone. If the Greens, United Future, Maori and TOP all fail to reach the threshold then with the votes redistributed, Labour could govern alone on as little as 45 per cent. Winston Peters, confident he would be kingmaker, pulled New Zealand First out of the minor party debates. Now he finds himself in the middle of a benefit overpayment and is railing against “dirty politics”. What is worse, when Labour does not need him Peters becomes irrelevant.

What could stop the Jacinda tidal wave? A major failure in the leaders’ debates. Not likely. The Opposition Leader usually wins the leaders’ debate.

Labour is doing its best to lose. The party is rolling out Andrew Little’s ill-thought manifesto of promises the party never thought it would have to implement. In any other election promising to tax water, fuel, capital and tourism would be fatal.

All of Labour’s new taxes are extra. Many of Labour’s promises are just silly, such as trams up Dominion Rd. Others are reckless. “Nationalising” Maori water rights will prove very divisive.

If Labour continues to issue massive tax and spend promises for the next four weeks it may alarm the voters, though it seems nothing will turn the media against their love affair with Jacinda.

Elections are won by the party that sets the agenda. National wanted to make the management of the economy the issue. National has lost confidence in its strategy. It feels it must match Labour’s spending promises with its own. If the election is not fought on who can best manage the economy but on Labour’s agenda of housing, health and education, nothing will stop the Jacinda tidal wave. Five weeks is not long enough to discover whether Jacinda is too inexperienced and three years is going to be three years too long to learn the answer.

NZ Herald 

Stealing From Our Children. The real dilemma of growth and the need for New Economics – Kamal K. Kothari & Chitra Chandrasekhar. 

“In a very rapidly changing scenario, with a burgeoning population, fast-changing demographic profile, and growth aspirations of people around the world putting pressure on natural resources, our economic thoughts and practices have to change.”

***

RE-THINKING ECONOMICS

In the beginning there was nothing, no human beings, no animals, no trees, no oceans, no earth, no sun, no stars, not even space or time. A quantum fluctuation leading to the Big Bang almost 14 billion years ago sowed the seeds of the Universe and space and time, as we know it. In the initial phase, stars, black holes, and galaxies were formed. The Earth, our home planet, was born almost 10 billion years later, about 4 billion years ago. It was then a fiery ball and took almost 1 billion years to cool down. Seeds of life sprouted about 3 billion years ago, some say spontaneously, while others hold a view through panspermia, no one knows for sure.

While the earth was cooling, life forms were evolving and the planet was undergoing cataclysmic changes. Continents were shifting and breaking apart, ocean floors were rising and sinking, volcanoes were erupting. Forests, animals, fishes, amphibians came and disappeared, so much so that according to some, 99.9% of the species in existence since beginning of life on Earth have ceased to exist. These changes, over a period of hundreds of millions of years, left us the legacy of natural resources—coal, crude oil, natural gas— and minerals so necessary for industrial processes and evolution of a technological civilisation.

Life forms continued to evolve. Humans came on the scene. No one is sure, but it is said that human sub-species evolved about half a million years ago in the African Savannah. With human civilisations, human aspiration too continued to develop and grow, perhaps slowly, if we were to compare it with the developments in the last 100 years.

The advent of the Industrial Revolution, which started in Europe around 1760, brought in its wake a transformation. Progress brought about by technology encouraged a shift from primarily an agricultural world to an industrial one. Rapid shifts took place in many parts of the world, mainly Europe and North America, and in the earlier part of the last century, in Japan. Such shifts are now taking place in parts of Asia, mainly India and China, Latin America, and Africa. These changes, by themselves great achievements for mankind, have led to a burgeoning population and major demographic changes. An off-shoot of this technological progress has been that more intensive and concentrated methods of food production are required for supporting technological societies and longer human life spans, stemming from better healthcare. 

About the time of the birth of Jesus Christ, the planet supported a population of about 200 million human beings, which, by the early 19th century i.e. in a period of about 1,830 years touched a billion people. In another 185 years, we have expanded 7-fold to over 7.2 billion people and we are still continuing to expand. The advent of technological changes and exploitation of natural resources has improved the living conditions of human beings, and on an average a human being lives better, is better fed, and better educated than any other time in the history of mankind.

All this has been brought about by scientific advances in different fields such as Quantum Physics, Relativity, Material Sciences, Chemistry, Agricultural Sciences, and so on and so forth.

The list is endless.

However, a large population and better living standards have created their own challenges in fields as diverse as economics, social sciences, ecology, and environment. At the heart of these is the rapid exploitation of natural resources, be it in the form of energy-generating resources like coal or crude oil, mineral resources like ores, or environmental resources, which are being degraded in the pursuit of economic growth.

These issues are well known, and have been discussed in various fora for decades now. The first Club of Rome report, Limits to Growth, which was published in 1972, raises many issues pertinent to these changes. That landmark report and subsequent Club of Rome reports, which generated extensive debates in the 1970s, now lie peacefully buried in the archives of libraries around the world. While these issues are still relevant, it is not the intent of this book to reiterate them. 

Along with technological progress, economic theories evolved as well. A key aspect of economic theories was better and more efficient utilisation of resources, be it capital, land or labour. These concepts and theories optimized utilisation of resources and went a long way in improving the living standards of mankind across the world.

These economic theories, which have served us well for many decades now, need a relook, particularly from the point of view of sustainability. If we lived in a world where resources were infinite or virtually limitless in relation to our consumption, we would have had no issues. But that is indeed not the case, more so, as our population and resource consumption have been expanding exponentially. Using current methods of economic analysis, capital allocation really promotes gross long-term inefficiencies in our resource utilisation. If we continue with these approaches, our societies would become unsustainable.

The authors have long held the view that not only do our economic theories lead to unsustainable development, but really amount to stealing from our future generations. We compare our society to a rich man who sells his family silver to sustain his lifestyle and in the end leaves practically nothing for his children. What is worse in our case is that we would leave our children a huge debt, which they would have to pay. This book will provide enough evidence that our economic and capital allocation models do the same thing: promote current consumption at the cost of future generations. The problem is further compounded by the short-sightedness of the political class in most nations of the world where the focus seems to be the next year, the next election, or in non-democratic societies, growth in personal wealth or stature. Similarly, the corporate world around us generally thinks of the next quarter, the next shareholders’ meet, and the bonuses, which the top managers can persuade the Boards and shareholders to pay them. Few think of the long-term strategies for the company, and fewer still about long-term sustainability issues.

Most businesses use capital allocation models to optimise their working. Similar concepts are, at least theoretically, used by countries (where their leaders are not driven by political considerations, which is not often) to utilise national resources. Few realise the pitfalls of such models.  So wide is the use of these models that working of all banks would come to a standstill if somehow these formulae were to be erased from their computers.

Capital allocation models are generally skewed in favour of current consumption. They place a premium on current consumption and earlier use of the resources vis-à-vis saving them for the future generations. For example, if we can pump a barrel of oil now and its price is US$100, our benefit (less the pumping out cost, which we for the sake of simplicity assume to be zero) is US$100. But if we leave the same barrel of oil underground so that someone else can use it 50 years later at a 10% cost of capital, the value of the same barrel of oil today is 85 cents. If we were more farsighted and do not use it for 100 years, the present value falls to 0.7 cents. So our incentive is in using the resource as fast as possible. Of course, in doing this analysis we conveniently forget that nature took several hundred million years to generate the same barrel of oil.

Another way of looking at the same situation is, if, for the sake of argument, through some technological breakthrough it is possible to extract 100 barrels of oil after 50 years, but if the field were to be exploited now, only 1 barrel could be extracted and the remaining 99 barrels are lost forever. Managers would still find it desirable to extract that one barrel of oil now, notwithstanding the fact that future generations would lose 99 barrels of oil. This example may sound extreme, but analogous decisions are routinely taken globally. As a result, the rate of consumption of natural resources is so high that the world reserves of many key resources would be exhausted in a couple of generations. As these resources get exhausted, their availability would decline, although this fall would be generally gradual. But a fall in resource availability would impact industrial production as well as all the consequences that would inevitably result from it.

Everybody would be impacted. No one would be spared. But youngsters in their twenties and thirties, with 30 to 40 years of working life remaining, would be most affected. Their hopes, aspiration and dreams of a comfortable and peaceful retirement after years and years of hard work would stand shattered as money, not backed by availability of goods and services, would lose value as its purchasing power falls.

The aim of this book is to bring out the deep lacunae in our economic thought and practices. The existing economic practices were developed when natural resources were plentiful, the global population small, and natural resource consumption minuscule in relation to the reserves. But in a very rapidly changing scenario, with a burgeoning population, fast-changing demographic profile, and growth aspirations of people around the world putting pressure on natural resources, our economic thoughts and practices have to change.

No change is without associated pain. We are all comfortable with the present thought processes, which predict steady and sustained growth based on the implicit assumption that resources are unlimited. But the reality is that we live in a finite world with limited resources, and after that reality is factored in, none of these projections hold true. And the sooner we realise this, the better it is and perhaps less painful too.

This book is divided into two sections. The first section, The Context, highlights the world we live in and how fast we are consuming our resources and impacting the environment. Some readers may find The Context grim and depressing, but we have painted the picture as we see it based on the best available information. We would request such readers bear with us or simply move on to the next part, The New Economic Paradigm, and then come back to The Context. In the second part, The New Economic Paradigm, we have suggested a new approach to our economic theories, which would lead to a more sustainable world.

***

“Humans are extremely intelligent and yet extremely foolish. They have failed to perceive the inter-linkages in the Web of Life; remove a few links and the Web could collapse, threatening their own existence.”

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Stealing From Our Children. The real dilemma of growth and the need for New Economics – Kamal K. Kothari and Chitra Chandrasekhar. 

get it from Amazon.com