economic musings (a fragment)

Been thinking about economics.

The current prevailing economic/political paradigm is one of growth/surplus. The equations go something like this. Economically, sustained growth is the Holy Grail. A healthy economy is a growing economy. You know you’re doing well if you have a higher level of economic activity, productivity, profit, and so on, this year or this month than in the previous period. This idea drives all the talk that we hear about the markets, stock prices, employment, goods and services, international trade, the whole ball of wax.

Now, if you overlay this underlying presumption about the virtue of growth, which is really a corollary of the notion that profit is good, therefore a lot of profit must be very good, with another basic economic assumption that has driven Western thinking since at least the days of Adam Smith and Thomas Malthus, namely that the economy as a whole is also a zero-sum game, then something else comes into play. The pursuit of a surplus economy against a backdrop of limited resources leads to the virtue of deficits. Simple accounting: where there is a profit, somewhere there must be a loss. So the vision of sustained surpluses cannot be extrapolated to a global economy, because somewhere there has to be a loser: other nations, the working class, future taxpayers. You can only keep this thing going as long as all the balls stay in the air. It all crashes down the day the last payment comes due. So the name of the game becomes to put off that day of reckoning, or see that it falls on someone else. This drives trade policy, and inevitably, military policy. One of the great benefits of a huge military in the service of unlimited expansion is that the military is a great way to generate a huge amount of totally non-productive economic activity. That keeps the balls in the air, and also keeps those in the game that might get tired and want to get out.

But what I’m interested in is whether there might be other possible models for an economy. When a surplus economy collides with limited resources, you get a zero-sum situation with all the attendant evils: wars and rumours of wars, a widening gap between rich and poor. Profit is good, living wages diminish profits and are therefore bad. Is there another way?

Historically, other ways have occurred. What I’d like to explore is what I want to call a sufficiency economy. Here the goal is not surplus, not profit, but sufficiency, and of course here I will be talking about sufficiency for, in the first instance, living breathing humans. But even if we could think about sufficiency for those non-human (not to say inhuman) artificial persons, that is, corporations, whose profits are today thought to be the only real moral good in the universe, this would not be such a bad idea either.

In a sufficiency economy, the goal would be to have enough economic activity for the purpose of making sure that all participants are fed, clothed, adequately housed, and allowed to enjoy their life as well as they can. There is actually a biblical precedent for this, and several attendant mandates.

The precedent is found in the story of the manna in the wilderness: every morning, when the manna would appear on the ground, the people would go out, household by household, to gather food for the day, and “he who gathered much had nothing over, and he that gathered little had no lack.” Those who tried to hoard a surplus found that it putrefied overnight. Sustained activity was assured, because new food had to be acquired each day; but there was no chance of anyone garnering a profit from the needs of others.

The mandates that support this way of thinking are many, but I’ll mention only two to begin with. One was the prohibition against any one person acquiring large tracts of land, enforced in part by the second, which was the release of debts every seventh year. One of the major driving forces behind a profit/suplus/deficit/debt-driven economy, the creation of a permanent debtor class, or a situation of permanent indebtedness, was anticipated and cut off at the knees by these provisions of the law of Moses. The goal was not to create an unattainable Utopia by the elimination of poverty (“the poor you will always have with you”) but to provide for its continued mitigation and relief by both structural and social means (therefore you shall be openhanded and not close your heart against your brother).