In the first of a series of articles at AtlerNet, writer Joseph Romm says that the global economy is a global ponzi scheme. The article, Why the Global Economy Is a Ponzi Scheme and We Are All Bernie Madoffs argues that the current generation and those of the recent past have used up so much of the planet’s resources, especially it’s pollution carrying capacity, that we have stolen a decent future from our grand children for our own current comforts.
Romm is certainly not the first to make this argument. Indeed, when combating polluting industries it is now common strategy to point to lost future opportunities to generate more economic growth with a certain amount of pollution. If, for example, an area is very close to being unable to meet EPA air pollution guidelines they must carefully balance each economic opportunity against those which might employ more people or generate more tax dollars than another, more polluting and hence limiting enterprise.
In a reply to this first article, oregoncharles responded
Romm doesn’t quite say so, but this is the real reason the economy has become so unstable. The REAL economy that provides our living can’t grow any more as one stock (resource) after another collapses, but our system requires it to grow or collapse. Rather than admit that it’s reached the wall, it pretends to grow by blowing one bubble after another. The rich get richer while the rest of us decline; it’s become a zero-sum game. And bubbles, by nature, burst.
Dean Baker just pointed out that it didn’t do that before the 80’s. There was a business cycle, but never that severe, and overall, everyone benefitted. Economists have a hard time admitting that growth is a problem, so he points to the more equal distribution of wealth in those days as the cause. True enough, but the real economy was growing then. The stocks weren’t collapsing then, although the signs were there to be seen.
Now the economy is doing what it has to do: shrinking to fit the real world. That isn’t fun, especially in an economy designed to grow or die. People are going to suffer during this transition; our biggest challenge will be to minimize that suffering without prolonging it.
The bright side is that globalization, neoliberalism, and most economists have been discredited by the collapse. Dean Baker, in his book “Blunder and Plunder,” goes on at some length about his colleagues’ remarkable self-delusion in the face of the bubble economy and its inevitable collapse. The honor roll of those who saw it coming is pretty short.
But even Baker seems to think we can “grow” our way out of this one. Most economists failed to take physics and don’t understand, or rather deny, that there are physical limits to our world and therefore to the economy. One thing I like about Romm’s article is that he is a physicist doing economics. We need more of those. In fact, we need a whole new economics, and new economists. One starting place, which I owe to another commenter, is: www.steadystate.org/.
Unfortunately, our new administration, despite all the rhetoric about “Change,” is proving very conservative about our financial crisis. They’re willing to throw vast amounts of our grandchildren’s money at it, but so far most of it is going to the same zombie banks that helped build the crisis. That’s what happens when you hire their minions to run the economy.
The only political party that’s built around sustainability is the Green Party (www.gp.org). When we’re ready for some real “Change,” they’re standing by.
Good luck, everybody: it’s going to be a very wild ride.