Theoretically, we should be able to provide for everyone's needs and reasonable wants with in a static economy. The only reason why endless growth is necessary in the capitalist system is simply that it is the mechanism by which the system works. Without growth, capitalism deteriorates. But growth imperative causes serious side effects, one of which is the tendency to confuse both money and debt with wealth.
We have far more oil, coal and gas than we can safely burn without global warming. Coal is the dirtiest of fossil fuels produces least amount of energy and the greatest amount of pollution and threatens clean water to drink, clean air to breathe, and a safe climate. In the name of globalization human consumption & wastage has crossed ecologically sustainable limits and piles of waste has proven disastrous to environment. Pollution haunts every city in the world. Enormous burning of oil & gas adds to the woes. While over population is the fundamental cause, other aspects of over consumption and wastage and elimination of unnecessary and dangerous items is in our hands.
- If we don't consume or use up real wealth, it perishes on its own. We can't store enough of it to satisfy our lifelong needs. The only way we can make today's wealth fulfill tomorrow's needs is to lend it to others, put them in our debt, and persuade them to pay us back over time, with interest. While debt tends to expand regularly and indefinitely, the wealth it symbolizes cannot.
- The ruling passion of individuals in a modern economy is to convert wealth into debt in order to derive permanent future income from it. That is the heart of the capitalism. But the idea that all people can live off the interest of their mutual indebtedness is a vulgar delusion on a grand scale.
- In reality, only the minority earns significant interest and the majority pays it. But the difference between what the majority owes and what it is able to pay steadily widens. Debt grows exponentially, but new real wealth which common laborers must repeatedly create new real wealth to pay the interest on their borrowings does not. We can never produce enough actual growth in wealth to keep up the exponential growth of our debts. We just roll them over and end up borrowing to pay up interest on them which is nothing more than a giant, legalized Ponzi scheme.
- The solution to debt crisis is a further dose of growth. The way to grow is to invest, and the way to invest is to borrow. The solution to debt is to increase the debt! How it is believed that new debt will be used productively than the older debt is never explained.
- The resultant explosion of debt will lead to defensive actions by borrowers include inflation, bankruptcy, confiscatory taxation, fraud, or outright theft. These are socially and economically destructive actions and yet they are also the inevitable fruit of compound interest which we deem normal and acceptable.
- Growth in the money supply is the “leading edge” fueling productivity and economic expansion through debt. The logical solution to this dilemma is simple. Since exponential growth of real wealth is impossible, we must tie the money supply more closely to wealth to keep it from expanding needlessly.
- Exponential growth of money and debt creates unrealistic expectations for similar growth in real wealth which in turn puts immense pressure on short term profits and return on investment. Thus to attract capital, businesses must offer competitive return which often means they search the world over lowest-cost production opportunity. Thus manufacturing gets relocated to countries with lowest labour wages and returns greater.
- Free trade between nations brings only unrestricted capital. But labour stays put which results not in mutual benefit to both the nations but significantly lower wages to the nation that loses capital.
- Balance of trade and capital mobility is the way country borrows in real terms is to import more than it exports. In the last few decades, US has run up staggering trade debt means that immense amount of capital has moved out to other countries. No economist would maintain that this large trade imbalance can continue to expand forever. At some point capital will have to start flowing in opposite direction to bring the account back into balance. For this to happen wages and benefits of US workers have to fall to globally competitive levels. The living standards of US workers will drop significantly. Americans must somehow change course to a limited growth economy—and even accept a no-growth paradigm—or the whole system will explode.
- An economical economy is inherently conservative (not wasteful) in both its production and consumption. In the restorative economy products will require more labour, use less energy and produce less waste. Productivity will go down but employment and profits will go up. This runs contrary to conventional economic logic. Taxation and fees must discourage frivolous, dangerous and dirty products and encourage useful, safe and clean products.
- Such a system will remove incentives for unlimited growth, discourage or deterr formation of enormous, impersonal and capital driven corporations and encourage small, employee-owned, service oriented and environment-sensitive businesses.
There is a sufficiency in the world for man's need
but not for man's greed ... Mahatma Gandhi
We have far more oil, coal and gas than we can safely burn without global warming. Coal is the dirtiest of fossil fuels produces least amount of energy and the greatest amount of pollution and threatens clean water to drink, clean air to breathe, and a safe climate. In the name of globalization human consumption & wastage has crossed ecologically sustainable limits and piles of waste has proven disastrous to environment. Pollution haunts every city in the world. Enormous burning of oil & gas adds to the woes. While over population is the fundamental cause, other aspects of over consumption and wastage and elimination of unnecessary and dangerous items is in our hands.
