Week with “The Economist”
by Chandrakant Sampat and Niti Sampat-Patel
  
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This is what we found interesting from the current issue of the “The Economist” (August 25th-August 31st 2012)

 

“Growing Disbelief” (page 31):

 

A time has come to read the contents of the above column in a different context. When I was in my first year of college, I learned about economics as Lionel Robbins described it, that ‘resources are limited but the ends are unlimited’. I still have the same amount of faith in this definition, and to that extent, I am not an economic atheist.  However, today, non- believers in this basic idea about the science of economics (“limited resources and unlimited ends”) have changed the way in which modern economics functions.

 

Politicians, central bankers and elites now use instruments like credit growth, volume of money, money velocity and interest rates to achieve an equilibrium economy. The basics of economics are being ignored. In other words, new economic atheists (non- believers in basic economics) have kept aside the “new atheism” of Richard Dawkins and the late Christopher Hitchens that appeals solely to logic and science.

 

This year Richard Dawkins spoke at the “Reason Rally” where he advocated ‘reason’ as the prime instrument to achieve and arrive at any faith. Let me ask the ‘economic atheists’ of today what kind of economic paradigm they can propose for the survival of society if:

 

  1. The present global population expands from the present 7.5 billion to 9.5 billion in a few decades

 

  1. Economists have injected in us the notion that it is only through a ‘growth economy’ that our expectations can be fulfilled. Today the prime growth movers are eight hundred trillion dollars of debt and three hundred trillion dollars a day of capital flows. These instruments care little that Nature has limited resources, and the expectations of a growing population far surpass the dictum of “one family home and two cars”. To fulfill these surmounting needs, humanity will need resources equivalent to what is produced by 5 earths!

 

  1. Again we are making futile attempts to achieve an accelerated growth by ignoring Nature. “Humans are not a single organism, but a super organism made up of many smaller organisms working together”. Today’s global civil society is fractured. Each nation is only concerned about itself. Cooperation amongst them all is missing and the global economy is similar to the non-cooperating ‘microbes’ in our body.

 

It is time to give up our faith in growth economics.

 

 

Your feedback is welcomed at nitisp@gmail.com and sampat@capitalideasonline.com