Vol.2 No.12, 22 May 2002

New Economics for a New Future

Herewith you will find views on the future of New Economics in the light of some inexorable global trends. The essential messages of several recent and yet unpublished books are provided. You may want to explore this further with the authors. I therefore provide here e-mail addresses of the authors.

Richard Heinberg [email protected] David Fleming: [email protected] Cecil Cook [email protected] Heather Couzyn [email protected] Ronnie Lessem [email protected] Colin Hall [email protected]

If you do write to any of them I would appreciate receiving a copy ([email protected]). You may also consider posting your mailing to the SANE Forum ([email protected]). Your thoughts and questions will then be shared by a wider group who may be interested in the issues you are raising or enquiring about and who may wish to engage in a discussion on them.

Aart R de Lange
Editor, SANE Views
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NEW ECONOMICS FOR A NEW FUTURE

Aart Roukens de Lange
May 2002

It is obvious to all with eyes to see and hearts to hear that the South African economy is not working. SANE does not just offer opinions on what is not working but offers practical alternatives. These alternatives are based on the identification of key determinants and philosophical underpinnings for the economy of the future.

Some key determinants of the economic future are:

1. Labour saving technological innovation
2. Transition to an information age
3. Limits to growth and sustainability
4. Shift in material and philosophical underpinnings of economic policy.

How do these key determinants manifest themselves?

1. Jobless growth (GDP expands but employment contracts).
2. Income redistribution, from the poor to the rich
3. Environmental collapse and the imminent decline of the petroleum era.
4. 'Global economic warfare' in which rich nations are the winners.

What adaptations will we have to make?

1. Accept the evidence that free-market economics will not provide the answers for the future of the world - just as socialism and central planning have failed; this does not mean that there is no validity or merit in these ideologies, but rather that they must be applied and understood in a larger and more open-minded context
2. Recognise that, although markets are powerful self-organising systems, without appropriate constraints and limitations global and individual needs will be adversely affected
3. Come to terms with real limits to growth, climatic change and destruction of the natural environment
4. Change our life-styles, expectations and world-views.

NEW BOOKS FOR A NEW FUTURE

The above observations are made in the context of a vast amount of readily available literature and information which has not yet impacted effectively on our lives. Some important publications that have come our way in recent times are pointed to below. All deal with the dilemma of the future of society, the individual and the natural environment.

1. Richard Heinberg (2002). The Party's Over: Oil, War, and the fate of Industrial Societies

Richard Heinberg writes monthly 'Mewsletters' and is the author of various books at the interface of physics and metaphysics. He is currently writing a book on the impact of the inevitable decline in the world's oil supply. He points out that in recent years four barrels of oil have been burnt for every one new barrel of global resources being discovered. In Museletter #110, March 2001, he describes a scenario from the perspective of a 100 year old man in the year 2101. From this letter we quote: "In the era when I was born, commentators used to liken the global economy to a casino. A few folks were making trillions of dollars, euros, and yen trading in currencies, companies and commodity futures. None of these people were actually doing anything useful; they were just laying down their bets and, in many cases, raking in colossal winnings. If you followed the economic chain, you'd see that all that money was coming out of ordinary people's pockets . .....All of that economic activity depended on energy, on global transportation and communication, and on faith in currencies. Early in the 21st century, the global casino went bankrupt. Gradually a new metaphor became operational. We went from global casino to village flea market." [In the light of this scenario it is instructive to read SANE's Guinea Fowl Scenario on the SANE website].

2. David Fleming (2002). The Lean Economy

The main thesis of Fleming's book (which he sent to us for our comment) is that the market economy will inevitably crash causing unemployment and economic atrophy, because of:

• the decline in the oil and gas supply
• the deficit in the food supply
• collapse of natural systems stabilising the climate
• the internal stresses of the market economy itself.

He puts forward a solution:- the development of a lean economy characterised by lean production, lean systems and lean culture*This must develop alongside the collapsing economy and then be there as its sequel*The principle of this solution is a new domestication, since economic atrophy will end the world's ability to obtain the primaries - food, water, energy and materials, except on a domestic scale.

3. Cecil Cook (2001). Making and Unmaking Poverty in South Africa: Adapting urban industrial illusions to rural socio-economic realities

Cecil Cook is the founder of the Eastern Cape (formerly Transkei) Appropriate Technology Unit (ECATU)*His views are not so much based on a vision for the future as on his practical and contemporary experiences of life and economic activity in the Eastern Cape (see SANE Views vol2,#10). Nevertheless his observations are clearly in line with the projections described by the above two authors*In his book-length paper he argues that the massive poverty which has accumulated in the rural areas of the Eastern Cape is a direct result of the imposition of inappropriate (and ultimately unsustainable) first world standards and approaches from the over-developed urban industrial centers of the country upon rural communities. Cook asserts that low-tech/low-cost approaches to the development of rural and peri-rural communities can deliver 5 to 10 times more benefits per unit of investment than is possible in the urban industrial zones of the country.

4. Heather Couzyn, Ronnie Lessem, Colin Hall (2001). Principles of Natural
Economics.

The authors of this yet unpublished book are South Africans with very different backgrounds but who share a common vision

• Colin Hall is the non-executive chairman of the Wooltru Group, Ronnie Lessem is the programme co-ordinator of Transformation Management at the business school of the University of Buckingham in the UK
• Heather Couzyn, the principal author, is a South African housewife, now in her eighties
• Her passion is for understanding Man's ecological and spiritual role in a 'living, evolving, self-organising Earth'.

The vision of the authors is for an economy based not on materialism and money, but on the principles of Nature and eco-systems

• This vision is very similar to that of Adam Smith's Invisible Hand of the Market, but with its materialistic motivation replaced by one based on the "spontaneous activity of every human being's happiest interest." This is a driving force akin to that which drives natural eco-systems and which will allow an economy in harmony with Nature to emerge
• It requires that human beings evolve so that they will act out of their 'bliss' rather than their greed
• This, for the authors, is what economics is all about.

© South African New Economics Network 2006. Page generated at 17:08; 24 September 2006