For a World Economy of Parsimony

by on Wednesday, 11 March 2009 Comments

The American-German political theorist Hannah Arendt had already diagnosed it in the fifties: modern economy is an economy of waste. Things must be consumed or thrown away as soon as possible if we do not want the economic process to experience a catastrophic halt. As a matter of fact, today, our governments put their hope in a rise in consumption for overcoming the current economic crisis. Articles lament the fact that only 25 per cent of young Japanese want to buy a car – which seems to make perfect sense for anyone who has experienced what is means to own a car in a big Japanese city and knows the quality of Japan’s public transportation. Still, the big question seems to be: how to make Japanese consumers (and people around the world) buy more cars, electronic gadgets and LV bags? All items which are perfectly wasteful, harmful to the environment and unrelated to our overall level of happiness... Is there not something basically wrong in our economic logic – and should not the most urgent question be: how do we escape from this madness?

The globalization of markets has certainly reduced production costs and increased consumers’ choice, but it also has been particularly detrimental to the environment. As toys or machine tools are less costly to produce in China, they cross the oceans towards Europe, America or Africa, without any consideration paid to ecological costs and consequences on local economies. Market, as an economic tool of production and distribution, now meets with a basic limitation due to its incapacity to deliver per itself a just estimate of environmental costs. Besides, a globalized market knows an accrued instability of prices, as can be seen by the ups and downs of oil prices during these last years. This volatility makes any long-term investment a very risky operation. In other words, globalized markets are becoming incompatible with the very durability of our planet.

So, what is to be done? Four principles might help us to reinvent our economic model:

-We should encourage an economy of parsimony. This means for instance that growth is to be based on public investment in water management, access to water for all, green buildings, health and education rather than on individual and wasteful consumption. An economy of parsimony is one that does not arbitrate among goods only on the basis of their monetary value but which dares to discriminate according to value judgments.

-An economy of parsimony is also an economy that tries to reduce inequalities. For instance, social packages (such as vouchers), if they truly have to be used by governments, should go to the poorer sectors of society rather than being indiscriminately distributed. And they should be reserved for goods of obvious necessity, such as food and social services.

-We have to build up an “economy of proximity”, trying first to revive the economic vitality and diversity of our regions, rather than continuing on the road of over specialization. This might include some transitory protectionist measures, provided these measure apply to industries that are socially and ecologically beneficial to their surroundings.

-We do have to strive towards a globalized economic system, but such a system is not akin to a single globalized free market. It includes ecological and commercial regulations that protect natural and social environments that are particularly fragile.
Such is the challenge now met by the world community. What will be happening this year will show whether we are able to make the choices that, on the long-term, will prove to be the right ones.

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