Insane economic system takes precedence over humanity

One of the historic measures of insanity is repeating over and over whatever fails to work the first time in anticipation of a different outcome. As we enter the 21st century, we have a contemporary measure of insanity: participating in an economic system that assumes infinite growth on a planet with only finite resources.

Our current economic model has as its principal goal the continuous growth of the Gross National Product. It measures only the use of Earth’s resources, not their depletion or degradation. Whatever harm occurs to the natural world in the process of extraction, refining and transforming these resources into products for human consumption is categorized as an “externality,” not to be taken into account on profit and loss statements.

The emphasis of our current economic model on growth at any cost has given rise to the greatest disparities of wealth ever measured. The global relief organization, OXFAM, made a presentation at the 2015 annual meeting of the Global Economic Forum in Davos, Switzerland, where the Lords of the corporate and financial worlds meet to plan how they will manage planetary affairs over the next 12 months. OXFAM’s spokesperson had as a backdrop a PowerPoint image of one of the old red double-decker London buses. She pointed out that this bus could carry 80 passengers and the 80 people she could put on board, most of them American, would have greater combined wealth than the 3.5 billion humans comprising the poorer half of the world’s population.

In the United States, the millions of Americans working full time for the minimum wage are estimated to have made a total of $14 billion in 2014. Wall Street bonuses in 2014 totaled $28.5 billion. Bonus recipients included commodity traders at Goldman Sachs whose speculation on global grain markets worsened the plight of the world’s destitute. One third of the 100 best paid U.S. CEOs earn more annually than their corporations pay in federal taxes. American CEOs’ average annual compensation is 331 times that of an average worker and 774 times that of a minimum wage worker. Wealth disparity in the United States is now greater than it has ever been. The top 0.1 percent have received 95 percent of income gains during the recent economic recovery and now their share of the wealth is almost the same as the bottom 90 percent.

The advocates of unfettered free market capitalism appear to have as their premise, “If you feed the horse enough oats, something will pass through for the sparrows.” Obviously their capitalist horse has acute constipation.

The GNP of the United States, at $17 trillion, is the world’s largest. It is also the only GNP composed of 70 percent personal consumption, a proportion that is greater than the GNPs of most other nations. For the U.S. economy to grow, citizens must become consumers. With ownership or control of 90 percent of principal television channels exercised by six major corporations, such stimulus is provided 24/7.

A study by the World Wildlife Fund based on satellite data across the world reveals more than one-third of the natural world has been destroyed by humans plundering the planet during the past four decades. If the high consumption levels continue, another two planet Earths will be required by 2050 to provide the resources needed. Unfortunately, the recent Kepler space probe did not discover any similar planets in our cosmic neighborhood.

The “Invisible Hand” that Adam Smith created for his village enterprises over two centuries ago has been suspended by the “Heavy Hands” of corporate dominance created during the 20th century, which now determine humanity’s fate to a degree never anticipated. Decisions made in corporate boardrooms affect the lives of individuals more than those made by their governments. Indeed, much of the legislation presented on the floor of the U.S. Congress and in state legislatures is drafted by thousands of corporate lobbyists and delivered to legislative staffers and often appears unmodified.

The preeminent economist of the 20th century, John Maynard Keynes, who designed the pillars of the post-World War II global economy (the International Monetary Fund and World Bank) believed present day capitalism is decadent, not just and unsustainable. He and other prominent economists, most recently Thomas Piketty, devised more comprehensive economic models. These are innovations outside the confines of static socialism or savage capitalism that could better realize the needs and aspirations of the global community. But as Keynes noted, “The difficulty is not so much in developing new ideas as in escaping from old ones.”

Harry Petrequin is a veteran of two wars and former faculty member at the National War College. He lives in Black Mountain.