Monday, December 22, 2008

Shaping Tomorrow

I just re-read a post that I made on a online group that I belong to called Shaping Tomorrow which is a group of futurists. I thought it spoke to my passion and the overall image that I am getting of our economy and the points at which I think we need to put some pressure in the hope of effecting change.

I think the fundamental question is why is the system rewarding excessive consumption, massive flows of money and huge deficits and debts? How did this come about and what drove this process? American's are certainly the "largest" consumers but there are many other consumers in the world. I know I was shocked when I went to Asia and saw the massive malls and the huge desire to consume and posses stuff - it is not only an American phenomenon we are just the leaders.

The economy rewards the creation of useless products - trinkets, environmentally destructive extraction and production technologies, and "over-spending". Why?

Our economy grows when we "consume" and shrinks when we don't. It is what drives us - it is like having a constant carrot and stick scenario in our collective conscience. The reality is the economy is not something that operates without humans - however it can create and incentivize certain human behaviours leading often to problematic outcomes. This is why Stiglitz is one of my favorite economists because he realizes that the economy is actually part of us - rather then us as part of the economy.

We need to seriously reevaluate the values and behaviours our economic system incentivizes and work at changing that. I think it is pretty simple - value abundant clean resources, value industries and products that are zero waste and zero negative environmental costs, value human sustenance through cooperation, remove scarcity as the central driving factor of the pricing mechanism and create a pricing system that assigns increased value to increased abundance of life sustaining resources.

Just some thoughts!!


Jedimike "MNM" said...

Hey Saul,

"...scarcity as the only driving factor of the pricing mechanism"

How is scarcity the only driving factor on pricing?

Saul said...

Hey Mike,

You are right. That is badly phrased. What I am trying to say is that price is driven by a concept of relative scarcity. There are certainly other inputs that affect price (taxes, subsidies etc) but as something gets closer to abundance (say an infinite or near infinite supply) the price goes to closer and closer to zero. This is not what we necessarily want - what about public goods? they are abundant and priced at close to zero.