Global Sustainability Newsletter

Issue 2 - April 2007

IS MODERN ECONOMIC LIFE A REALITY OR AN ILLUSION?

Recently I attended a workshop on modern economic life presented by Christopher Houghton Budd, renown British economist and economic historian, and co-founder of Associative Economics Association*. One of the comments he made was: "We never pay true price for anything in today's economic life." If what Christopher Budd said is true, we all live in a world of illusion.

We do not pay the right price for water, petrol, food, electricity, coal, metals and wheat. What about price of land and housing? All prices are skewed for different reasons, starting with the fundamental problem we have always faced in establishing prices for natural resources, which we do not produce-resources which we are given to us by Nature as a present. On top of these imaginative inventions (prices for natural resources) there come other intervening factors on all products such as government subsidies, incentives schemes, government taxes, world price fluctuations, wars, climate factors, and even retailers' 'price wars.' In such a climate of confusion, who can tell what really is the value of a product?

The 'sky-rocketing' of financial markets is another proof of the illusion many shareholders and their corporate managers live in. Yes, they perhaps have been reaping the rewards up until now, but the days of their blind profiteering satisfaction are coming to an end. Instead of continuing acting as magicians, pulling rabbits out their hats, and convincing shareholders that this is a stock worthy investing in, corporations will fold one after another, because the majority of them trade in illusion; they trade in speculations, they profit from people's fear and they create people's misery in the world.

Where are those responsible corporate citizens who deserve their place in a civilised society? Where are those enlightened CEOs who understand the concept of humility and acting properly on the public good scene? Every board of corporation should have imbedded in their mission statements how, through their activities, they will prove to be useful to the society as a whole, and not only to shareholders. Individual greed and never ending desire for increasing profits should have never been given a chance to take over a collective instinct for survival. Planetary survival and the needs of humanity as a whole have their place on a higher level of organisation of life than any individual pursuit of conscious or unconscious greediness. And if individual persons or corporations do not understand this concept, their activities should be embedded in an appropriate legal framework, so they can be prevented from harming the collective wellbeing.

Whether intuitively or through hard pragmatic calculating, we can tell that a lot is wrong with the current global economy. Although some more astute economists accepted the fact that global economy, which depends on Earth's finite resources, cannot grow indefinitely, for the less astute-the business continues as usual. Solutions of the blind abound and no brave economic model has emerged yet, while the economic fraternity indulges in docile slumber and the 'she'll be right, mate' inertia.

How should we account for the needs of future generations? The planet does not belong to this current generation only. If we fully comprehend this, we will accept the fact that there is a need for the creation of an empowered global organisation which would represent future generations and future global humanity in economic considerations of today.

Danuta Nowak

  • * Definition of Associative Economics from:

    http://www.arthuredwards.net/associative_economics/

    "Associative economics constitutes a new paradigm in economic thinking. It stems largely from the insight of Rudolf Steiner's 1922 course in economics, but now is translated into the language of finance. Practical in essence, it provides a means to economics to reground itself in business through the language of accounting and to pay heed to the modern circumstance of global economy, which calls for a wider awareness of the true nature of economic relationships"

    Find out more about Associative Economics at: http://www.associative-economics.com