The grand unified theory of economics..... well at least I've been thinking.....
Why is western economics so aggressive? Why in Tom Lehrer's words does everyone hate the Jews?
The history of the Western banking system goes something like:
the Law of Moses forbids usury - so Jews, Christians and Muslims didn't practice it amongst their own people. But where there is a law someone will find a loophole..... so lending money for interest was possible between people of different religions.... and became an option because Jews in Europe were forbidden to carry on other forms of business. So a banking system evolved that was independent of both the dominant Church and State. And borrowing for investment became the norm. And money became an object in itself rather than merely representing the goods and services that could be traded for it. So far as I can see a huge amount of social evil can arise from these things: boom/bust cycles and investment bubbles, dangerously deregulated markets and the need for endless growth.
Growth is a two edged sword – it's brought us really cool stuff – including hospitals and railways and clean water and mobile phones and the Internet.... and International travel and yummy foreign cuisine. But on a finite planet you can't maintain population growth and material-consumption-per-capita growth indefinitely. So is it growth we are after or evolution? Evolution allows for altruism, ethics, culture and non material trade and consumption.
How can we break the growth dependency? How do we stop Western economics being so predatory?
I think there's two things we can do that can trigger a paradigm shift towards social and economic evolution:
- borrowing and lending interest rates should be set at the inflation rate – so if you are saving for something then your money doesn't lose while you are accumulating – if you borrow you don't end up owing more than you own unless things go really pear shaped.
- The value of shares in enterprise should be set by a quarterly audit so that we don't have this testosterone fuelled auction mentality driving trading to ridiculous levels.
Can you imagine the pain if we actually implemented this? The end of the profitable banking system as we know it, the calming of the stock exchange to a mill pond of tranquillity.... and you couldn't pay tax on interest then – it's only keeping pace of the real value of goods and services. It needs a paradigm shift to make it work. Would we try it?? My mum said communism, like Christianity may be a pretty good system – we don't know because neither of them have been tried.
But if we want evolution rather than uncontrollable growth then it's worth thinking about how to achieve it and how we value it.