What’s the Economy for Anyway?

January 7th, 2016

Whats the Economy for anyway?  The news is saturated with coverage and commentary about the economy.   Is it recovering? Is it growing? Where’s it heading? But, rarely, rarely does anyone ask the most important question – what’s the economy for anyway? What is it supposed to do for us?

In a very important and readable book titled exactly that, What’s the Economy for Anyway?, my colleagues John de Graaf and David Batker do an excellent job leading readers through some truly important questions.

Is the current economic system making most of us more secure? Just consider that the top 3 percent of uber-wealthy Americans now hold over double the wealth of America’s poorest 90 percent of families. Middle class household wealth has been mostly stagnant for thirty years, comparable today to early 1990 levels.

Is the current system making us healthier? Well, Americans spend significantly more per capita on health care than any other industrialized country but our overall levels of health are only very slightly better than people living in high poverty Cuba. The US spends over $9,000 per person each year on health care. Cuba spends around $500.  And yet Cuba has a lower infant mortality rate and a slightly longer life expectancy than the United States.

Is the current system setting our kids up for opportunity and wellbeing? The current form of global capitalism requires continuous growth in consumption of natural resources. As a result we are currently using up clean air, clean water, soil, fish and wild animals about 50% faster than the Earth can replenish itself. It’s going to be hard to be prosperous and well on a depleted, unhealthy planet.

These questions aren’t just about future conditions. Ask yourself, “Is the current economy making you happy?” This may seem a trivial question but it’s pretty fundamental to our human existence. Time and again Americans report working too much, struggling with debt, and lacking enough time for leisure and family. Time and again, we report being highly stressed by and dissatisfied with the daily grind.

And yet, we are bombarded with the message that for the good of the economy we need to buy, buy, buy, spend, spend, spend. In this scenario is the economy working for you or are you just working for the economy?

Poll and focus group results show that most Americans believe the economy is something “out there” beyond our control. The tendency is to think of it as a machine that churns forward under its own power. But actually, it’s more like a garden. Humans planted its seeds and we prune and shape it all the time. We do this through policies like subsidies, the tax code, regulations or lack thereof and many other mechanisms. These various prunings dramatically shape how the economy functions and which products and investments are available to us.

I find this incredibly empowering.

The economy is not a self-created machine. It is a set of human made systems, policies and decisions. Since we created it and constantly shape it, we have it within our power to recreate and reshape it.

The very good news is, even though you won’t hear much about it in mainstream media, a whole lot of people, organizations and businesses are working to do just that.  There is in fact a growing global New Economy Movement.

Last month 3EStrategies participated in annual New Economy Week by co-hosting a screening of Naomi Klein’s new movie, This Changes Everything. The film highlights how issues like global climate change and poverty are leading to burgeoning efforts to design a healthier, saner economic system.

We’re at a point where we need to fundamentally evolve our economy, to adapt it to the current environmental and demographic conditions.   Though we may at times forget it, such bold innovation and reinvention is in our American cultural DNA.  We did it when we harnessed the power of oil in 1859.  We did it during the Industrial Revolution when we created mass production. We did it after the Great Depression when we built the Hoover Dam and the Golden Gate Bridge.   And we did it when we tapped the creativity of the space race to develop myriad new products and companies. 
It is time to do it again, to lean into creating an economy that will simultaneously increase prosperity for our people and restore the environment.  This is the greatest challenge and opportunity of our lifetime.

What’s the economy for anyway? It should be to serve us, give us opportunities to improve our health, our wealth and our wellbeing. It should function in a way that restores, rather than destroys, our planet. After all, the root of both words — economy and ecology — comes from the greek “oikos” which means “home”.

Actions you can take:

By Cylvia Hayes

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