Understanding economics & new economicsMay 31st, 2012 0 Comments
In a culture of sound-bites and short attention spans, there’s little patience for understanding the complexities of how economic systems work. Yet without such understanding, it is difficult to know how to make changes. This section provides the basics about our current economic system, and what’s different about new economics.
We know that learning about economics isn’t everyone’s cup of tea, and we aren’t saying that it should be. But at the same time, if we are going to make changes in our local economies, it can really help to have an understanding of the territory in which we’re working.
Some of the REconomy team have run local economy workshops where people complain of a lack of economic literacy in our general culture, and even amongst those wanting to transform local economies. This includes things like:
The unquestioning acceptance of basic assumptions such as ‘economic growth is essential and inevitable’.
Simplistic ideas about a free market global capitalist economy being the only option for how we organise our means of exchange with each other. The story goes that ‘well, it may not be very good, but it’s all we’ve got since Communism failed’.
How the free market global capitalist economy is the best thing for everyone, because the trickle down effect of wealth means that the poorest people get lifted out of poverty by all the improvements in society brought by the industrialised growth system.
However, when we really think about any of these assumptions or ideas, it’s clear that they are too simple and not very accurate. A planet with finite resources cannot sustain indefinite economic growth, where the growth requires the consumption of natural resources. There are examples of successful economies which use models other than the free market global capitalist model, so there may be other options for us too. And there is evidence to show that the gap between rich and poor has widened rather than narrowed thanks to our current economic model, and that social problems are increasing as a result.
This section has been written to provide some understanding of how economies work, so that we can talk about them to each other. It also looks at how it’s possible to organise our economies in different, more resilient and sustainable ways.
This takes us into new territory, for example, thinking about new methods of cycling resources, new forms of exchange, and new business models, which weave together to form a new kind of local economy.
RESOURCES IN THIS SECTION
Credits : Image Source : Increasing and Decreasing Arrow in 3D by jscreationzs
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