Economics
Economics may be thought of as the process by
which resources are removed from the environment, converted to
goods and waste products, and then circulated among people to
meet their needs. Service transactions between people with no
exchange of goods is also economic activity. Economics is an interaction
and transaction between people and the environment or people and
people. The most pressing needs of people in the world to be met
by economics are food security, adequate shelter, clothing, health
care and education. The lack of these is true deprivation. While
the basic resources and capacity to achieve these things are to
be found in almost every country, those who control resources
do not always make them a priority.
We are currently at a crossroads of economic thinking. The guiding
pattern of our Era of Economics is termed 'neo-classical' economics
with its center in the World Bank and the world's universities.
This theory discounts the natural environment, natural resources
and pollution as significant factors in the economic formula.
It treats them as 'externalities.' It views growth as inherently
good, the corporate good as the public good, and the gross national
product (GNP) as an adequate measure of progress. Neo-classical
economics works from a set of "logical implications they
have taken to calling the canonical assumptions." (Herman
Daly in Development at the Crossroads article by Karl Hansen)
Unfortunately, these fundamental assumptions pretty much ignore
all notions of social or ecological community. While economists
have had notable success in improving efficiency and productivity,
the world's poor still get poorer and environmental degradation
continues to worsen.
A new economic paradigm is represented by the International Society
for Ecological Economics (ISEE), the Sweden-based Beijer Institute,
and authors such as Herman Daly, John Cobb, Paul Ekins and others.
Della Meadows of the Club of Rome states, "the economics
they are inventing values nature, people, communities and the
future. It is very different from the short-term, money-centered
economics that devalues and devours all of these things."
The major shift in thinking is that ecological economics puts
national economies into the wider context of natural ecosystems.
It concerns total throughput -- the total flow of resources from
nature's larder to society's
wastebasket. It accepts the natural limits set by environment
to produce raw materials and absorb waste. This has been termed
'steady-state' economics based on zero, not rising, economic growth;
it subtracts the downside costs of growth from the GNP, not adding
it in as does the traditional approach.
A stable economic system is based on democratic pluralism and
a balance of forces among civil society, government and markets.
At the base is the civil society force of representational and
volunteer organizations making their needs known and forming governments
to carry out their collective will. Civic sector alliances act
to demand rights and fulfill responsibilities, supplement political
parties, educate the public and serve as watchdogs. Government
is assumed to exist to pursue collective aspirations of society
and assure conditions of fair competition, moral capital, public
infrastructure, full-cost pricing, just distribution, and ecological
sustainability. The market, made up of small scale, locally capitalized
and owned providers who internalize production costs are assumed
to operate within the constraints of local, state and national
civic and governmental bodies. This system is being thrown out
of adjustment by transnational corporations in their pursuit of
profit maximization without accountability.
Economics is frequently thought of as money, whereas, in reality,
there are two economies. The money economy is the one we are most
familiar with. We are 'paid' in money and we in turn use it as
a medium of exchange for goods and services. In traditional societies,
and increasingly in monied societies, the social economy is an
important factor of the economic life of the community. In the
social economy men and women carry out most of "the productive
and reproductive activities through which people meet their basic
needs for food, shelter, clothing, child care, health care, care
of the elderly, housekeeping, education, physical security and
entertainment. Social economies are by nature local, nonwaged,
nonmonetized and nonmarket. They are energized more by love than
money." (David Korten, 1995. When Corporations Rule the World.
Kumarian & Berrett-Koehler, pg. 44-45) The direct exchange
of services and goods by people and the growth of Local Exchange
Trading Systems (LETS), Community Assisted Agriculture (CSA) and
shopping CO-OP's are indicative of a revival of the social economy.
Permaculture demands economic approaches that are environmentally
responsible while meeting human needs.
