A Terminal Tailspin (Why We Need a New Economic Order)


Even as the world economy falters, its champions are already predicting that the disease which afflicts it, though malign, is not terminal. They predict an ‘up turn’ within a few years of what is a very expected and ‘natural’ ‘down-turn’. The truth, though, is that the symptoms of the current ‘global recession’ are without precedent and point to a far more malignant diagnosis: the world economy (as we know it) is dying… and it is dying quickly.

The reason, once one strips away the economese, is relatively simple: the world economy feeds off itself. Like a cancerous growth, the world economy is slowly killing off its host. Humanity and all natural systems the world over are in a state of impoverishment and mistreatment on a scale never before seen. More than this, in the cruelest twist of all, the two victims of the present economic logic; nature and the poor, are now being pitted against one another in a new battle over who gets to benefit from edible crops. Bio-fuels have created a global food crisis because rich nations are trying to squeeze the last drop out of the world’s resources to power their enfeebled economies. And things only seem to be getting worse.

‘Growth for the sake of growth is the ideology of the cancer cell’, shout the protest posters. Unfortunately, this is a very apt description of our current economic situation. National economies which do not grow, or do not grow as quickly as they once did are said to be in a recession. This is because populations grow, demand grows – inflation then causes prices to grow. All of which requires the economy to grow. But for all of this growth, in a closed system like ours, something must die. Our resources are finite and simply cannot support a system which demands infinite inputs.

The disparity between rich and poor widens by the day, with the poorest of the poor bearing the brunt of the accumulation of wealth required for ‘growth’. They face starvation, disease and a host of ills. And of course the state of the environment is fast approaching outright collapse. We’ve all heard the facts: half the world — nearly three billion people — live on less than two dollars a day… every day, more than 16,000 children die from hunger-related causes… the planet is on the brink of environmental collapse… and so on. This is not news to most of us. It is a necessary evil.

What other choice is there?

It is exactly this myopic outlook which has allowed things to get so bad in the first place. We have been conditioned by the economic system we live under to try and get as much as we can while we can, and bang the rest. It has become a life-style…a culture almost the world over. Everything, from nature to human beings, is a commodity to be traded away. This kind of cruel, short-sighted and greed-ridden outlook is called ‘free-market capitalism’. But it is only on the surface that it is in any way ‘free’.

Superficially, markets involve the disembodied forces of supply and demand. Simple, unbound exchanges between those who have various forms of capital and those who will pay for it. In reality, though, it is a system that encourages the accumulation of more and more by fewer and fewer. This sublimates increasing amounts of influence and hence ‘policy-making’ in the hands of those countries and corporations who wish to perpetuate the status quo. Hence cartels and monopolies form to determine the supply-side pricing; quotas, tariffs and subsidies are paid to unfairly load the dynamics of ‘free trade’; profiteers create supply imbalances; and finally, military might is used to secure supplies at ‘reasonable’ prices. There is not a single conflict around the world today that is not in some way based around the attainment of scarce resources from the less potent by the more powerful. So much for the ‘free-market’.

The very word ‘capitalism’ shows where the emphasis lies: on goods and commodities. People are ‘human capital’ and nature is ‘natural capital’. But what about alternative systems that prioritize society and communities? Is socialism / communism the solution? Most hard-nosed capitalists will scoff at such ideas – and rightly so. They will point to the fact that communism failed spectacularly in Russia and is being slowly supplanted even in China. They will point out the massive human rights abuses and lack of environmental conscience under Stalin and Mao. All of this is an entirely justifiable response.

The next logical leap, though, is not. That capitalism is therefore the best option because it clearly ‘works’ is not true. Capitalism does not work. It may have worked in the past, when the planet’s bounty seemed infinite. But it is not working now. And it is not working for exactly the same reasons socialism did not work: it is a cruel, blinkered and self-consuming system. It only happens to have outlasted its cold-war opponent.

But not by much.

The reason capitalism is about to fail spectacularly is that it is ridden with logical inconsistencies and basic economic flaws.


Simple enough. So what’s the problem? Actually, there are several:

  • Economic growth is not an end in itself. A growing economy is supposed to improve living standards. Even on the individual level, we have become so obsessed with making money that we forget to enjoy it. Even in many of the very richest countries, profits come before people. Only the Scandinavian countries seem to be an exception to this rule. But it is true in the US where millions lack even basic services and it is true in much of Europe. In South Africa, the emphasis on economic growth has become an obsession – through the Growth Employment and Reconstruction Programme and now ASGISA (and soon the NDP). We have lost sight of the real reason for economic growth (as enshrined in the principles of the now long lost Reconstruction and Development Programme): the upliftment and empowerment of the poorest sectors of South African society.
  • The reliance on non-renewable resources is what some call a ‘death-based cycle’. These resources cannot be replenished. Even renewables, such as soil, water, the atmosphere and the oceans are being treated as if they will run out any second and must thus be exploited while they can. Obviously this untenable. What happens when resources run out? What happens when the topsoil, the atmosphere and the oceans can no longer support life? Most present-day capitalist apologists say that when the time comes, alternatives will be sought. And what then? The cycle will begin again. To see how illogical this process is, consider China: If the whole of the world’s fastest growing economy suddenly behaved like consumers in the West, the planet would be striped clean of its natural resources in just a few decades.
  • If the world’s economy is based on resources (which it is) then countries which supply these ought to be the most wealthy of all. It is a simple case of supply and demand. With the possible exception of the oil producers, this is clearly not the case, though. The reason is a complex combination of neocolonial exploitation and the creation of dependent economies first by individual nations and then by organisations such as the IMF and the World Bank. Moreover, the resources bought from poorer nations (after being processed into finished products) end up back in many of the nations who provided the raw material needed to make these goods in the first place…always at vastly increased prices. The argument thus exists that it is the ability to manufacture finished products that creates wealth. Again, not true. It is the ability of the west to create markets for these goods that creates wealth. Take away ego-based advertising and what rational person would actually want a ‘Hummer’, a dish-washing machine, a Coke or a pair of designer sneakers?
  • On their own, these products are worth less than the sum of their parts. Many are planned to become redundant and designed to be replaced / updated. How can they then have anything like the lasting (recyclable) value of the raw materials from which they are composed?
  • Markets for manufactured goods, beleaguered as they are by brilliantly marketed ‘wants’ steadily become poorer and begin to fail as markets. What to do but to extend lines of credit? Enter the IMF with its ‘Structural Adjustments’ (designed far more to serve the interests of the West than those of the local people or the environment which sustains them.) Enter loans with enormous interest rates to be paid back before money can be budgeted for education or health care. And like good consumers, poor nations who are extended these lines of credit, spend this money on more useless goods they don’t really want as they aspire to live the western lifestyle. Soon enough countries – even those with enormous mineral wealth – become destitute and bankrupt. Desperate people develop desperate tactics. Often civil war, military coups de etat, and even terrorism take root.
  • On a more personal level, people become increasingly numbed from their own existence. Unless they are prepared to get their hands dirty, in some way or another, they live a depressed, anesthetized existence in a world slowly imploding around them.

In all of this you will see that there is absolutely no growth whatsoever (at least in any meaningful sense of the word) much less an improvement in the quality of life for the majority who so need it. The word economy plays with a loaded deck and the poor get a dud hand every time. The environment doesn’t even get to play.

By the looks of things, this will spiral ever downwards (with the odd upwards hiccup) until something gives. It is a terminal tail-spin that we don’t see because we have learnt to see only the immediate future. And the ‘something’ that collapses is very likely to be free-market capitalism itself. In the last days, we are likely to observe artificially and internally manufactured ‘solutions’ – none of which is likely to last very long. We will see the rise of dictatorships and war-mongerers as those in power try to battle until the very end (both against their own people and against those with whom they are in competition) – perhaps nations will even close their borders and adopt isolationist policies. Very certainly, many will die.

Somewhere something has to change. We need a revolution. Enough of the like-minded and the victimized must come to realize that there must be another way. And they must develop the courage to band together to change things.

Imagine an economic system called ‘Eco-humanism’, or something similar. An economic policy based on care, friendship and respect – both towards nature and towards one another. Surely this is not just a latter-day hippie dream? In fact, it is what most people want. Imagine an economic system that has at its core one simple rule: if it isn’t good for the long term prospects of humanity at large, it isn’t allowed.

That is all.





About Sean Hampton-Cole

Fascinated by thinking & why it goes wrong➫ (Un)teacher ➫iPadologist ➫Humanist ➫Stirrer ➫Edupunk ➫Synthesist ➫Introvert ➫Blogger ➫Null Hypothesist.
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