“It seems to me that the purpose of an economy should be to serve life, not money.”
During our three days at sea, news would trickle in over the radio about the rapidly deteriorating U.S. economy. Persistent unemployment and underemployment was triggering a reduction in consumer demand, which was leading to more unemployment, which caused a further drop in demand resulting in a vicious downward economic cycle. With less tax revenues, public services were dropping and governments were going into greater debt. Perhaps this was the unintended consequence of too much ‘progress’ from automation, off-shoring, deregulated trade, market instability from excessive financial speculation, and a cheap-labor immigration policy.
As we have been led to believe, in our growth-oriented economy, any reduction in consumer demand is always temporary and demand always picks up again and debts get repaid — until they don't. But it is sobering to note that Western nations took over half a century to pay off public debts accumulated through WWII; and the UK’s debt overhang from the financial crisis of 2008 could last into the 2030s!
And consumer uncertainty can have negative ramifications for the financial system and for the economy as well — ramifications that are reinforcing rather than self-correcting. For example, once the economy starts to falter, the same positive feedback mechanisms that worked during expansion now work in the opposite direction, pushing the economy further into recession. Add to the mix a growing and aging population, and the dangers of a downward economic spiral are exacerbated as higher levels of growth are required to maintain the same average income levels and provide sufficient revenues for increased health and social costs.
The news from the mainland also told of riots that were breaking out in some cities to protest police brutality and systemic racism. Fires were raging in several dry, drought-stricken southwestern and western states. Economic hardship was replacing boom-town economies as expensive, debt-heavy, junk-bond-fueled fracking was being squeezed by sustained low oil prices on the world market. And a volatile stock market with too many unexplainable and unpredictable downward spikes was unnerving investors.
Bob, Lua, and I were sipping coffee and tea on deck one morning before any of the passengers were up and about. Hearing all this bad news brought to mind a book I had read several years ago. In the movie version of that book, Into the Wild, Eddie Vedder of Pearl Jam was on the soundtrack singing, ‘Society, you’re a crazy breed, I hope you’re not lonely, without me.’ It made me think about how comforting it was to be out here right now, away from the stresses and economic turmoil brewing on the mainland.
I commented to Lua,
“Isn’t it crazy that we Americans now think of ourselves as consumers first and citizens second? After 9/11, when our ‘freedom’ was threatened, we were told to courageously and defiantly respond to those evil-doers by — are you ready for this — going shopping. Now I do understand that a strong consumer culture is what helped propel our economy to top ranking in the world. We are a rich country because we’ve been conditioned to always want more, bigger, better, faster, sooner. Economists argue that growing economies can avoid the political difficulties of redistribution by making everyone better off — a rising tide lifting all boats, and all that jazz. This argument is also used to increase the rate of growth even in countries that are already rich and heavily in debt. So there is never a reason to challenge growth. But who has really benefited the most from this excessive consumption and the rising class of debt slaves? Why are so many people now on food stamps or burdened with crushing debt? And all this is happening while the environment is getting more and more stressed and starting to respond in freakish ways. It really worries me sometimes. It's madness on the mainland!”
“I can understand your concern, Mister Rico. It seems to me that the purpose of an economy should be to serve life, not money. And an economy that serves life must learn from Nature to live as she lives, organize as she organizes, and learn as she learns. Your economy serves corporations at the expense of the health and well-being of individuals, families, communities, and ecosystems. Why do global profit-seeking corporations take center stage in your economy over happiness-seeking households and over small local businesses that serve a genuine community need and offer their owners a valued form of self-expression? Doesn’t a corporation strive to hire as few workers as possible and at the lowest wages to maximize its profits, while households want good jobs with high wages? And aren’t those completely opposite goals? That simply does not make sense to me.”
“On my island we value a healthy local forest as a source of economic resources, sure, but also as a place of beauty, a place to hike and camp, a source of freshwater from its streams, roots that stabilize the soils of a steep hillside and as a filter that cleanses the air of dust and impurities. For a timber company, however, all that value would be reduced to a simple commodity to be harvested and sold for a one-time profit, then on to the next community and its stock of natural resources. And the timber company would prefer to hire as few workers as possible, for as short a time as possible and at the lowest possible pay. Who benefits the most from all this? On our island, economic power stays local, with households and communities. It would be absurd to hand over our economy to outside corporations that are only interested in maximizing returns to distant shareholders that have no stake in the health and well-being of our people and our communities.”
Hearing Lua’s account of her fellow islanders’ low regard for outside corporations, it occurred to me that today’s product-producing, profit-seeking, power-hungry corporations are the principal actors on the world stage. Yet they are not internally constrained, by design, to avoid damaging any public goods; nor are they required to produce any public benefits beyond the products they offer. How did we get here?