Twenty-first Century Economics
Today as we stand amidst the global economic and ecological
crisis, it is evident that twentieth century mainstream economics needs
to be transcended by a new economics for the twenty first century. This
economics would contribute to achieving a new relationship between human
beings, nature and growth. Such a relationship would be sought in a world
where nations struggle to achieve a decentralized democracy within states,
local communities are empowered, and global cooperation is undertaken
to preserve the ecology of our planet, to maintain peace and to overcome
poverty.
Human Community as the Focus
The focus of economics must shift from mere resource
allocation and higher GNP as the end product. Economics will need to focus
on the problems of fulfillment of the human potential, within the context
of culture, social organization and environmental conservation. The emphasis
would therefore shift away from short term profit maximization at the
micro level and value indices of GNP at the macro level. Instead the new
performance criteria would be the quality of life within an inter-generational
perspective. What is needed is a wide ranging measure that takes account
of specific features of the quality of life and the mechanisms of change.
For example, how many more people have been provided with clean drinking
water, what is the state of housing, transport and education, what new
forms of production organization and cultural norms have emerged that
unleash the creative possibilities of the individual and which enable
control by the local community over its economic, social and ecological
environment?
Interlocking Crises and the need for New Finance Concepts
The new economics must come to grips at the global
level with the interlocking crises of economy and ecology. Mechanisms
of finance, production and distribution must be found, which can enable
nation states to achieve a selective delinking from the current centralized
processes of finance and accumulation. At the same time forms of international
finance must be developed that ease the capital constraint of Third Wold
countries without locking them into a crippling debt trap. The debt write
off scheme for HIPCS (Highly Indebted Poor Countries), devised by the
advanced industrial countries is a recognition of market failure for such
countries. Yet the scheme itself only provides in effect a one time grant.
It addresses neither the structure of international finance and capital
flows, nor the economic structure of developing countries, which reproduces
the problem of intolerable debt burdens. International financial relations
must reflect our awareness that the systematic transfer of non-renewable
resources from the Third World to the First World and the endemic poverty
crisis will have adverse repercussions at a global level for the preservation
of peace and ecology.
|