4-29-09, 8:43 am
The present global financial crisis is more than an “economic downturn” or an economic depression. It signals the coming of a new age. Astounding technological advances in production, communication and transportation have driven the capitalist system to the verge of moral and financial bankruptcy. The levels and kinds of resource consumption threaten ecological calamity. These forces have accelerated the conflict between individual profit and the social good, between short-term economic gains and long-term social and ecological sustainability. Derivatives and debt swaps are mere symptoms of a deeper existential crisis. A global crisis of this magnitude requires a new paradigm, a new way of envisioning our future. Without it economic and social disintegration are probable, if not inevitable.
The market economy depends on continuous economic growth. Yet this growth is neither equitably shared nor ecological sustainable. Billions of people live on less than a few dollars a day. At the same time, populations in North America and Europe – less than one-sixth of the world’s 6.5 billion people – consume sixty percent of the world’s resources. While this material affluence has brought prosperity to a relative few, the global economic system has sharpened disparities, destabilizing entire countries and regions as people seek to feed, clothe, shelter and educate their families with limited access to basic amenities and opportunities. The failure of national and international governments and institutions to address the global economy’s profound injustice guarantees civil strife and the recruiting success of nihilistic millenarian movements promising divine justice.
We can begin today the process of building a greener, fairer national and global society. It will require governments to establish policy priorities based on sustainable economic development and to determine and manage the levels of social investment and regulation. Citizens will have to be actively engaged in this process. Participatory democracy and greener production and consumption are dynamically connected. Investment in conservation, recycling and new technologies based on renewable resources compel everyone to be more conscious of his or her role in society. At this historic moment, we must bring into public office voices outside of the mainstream, voices that articulate fundamental change and greater popular participation in the way economic health and stability are conceived.
We must retrain workers and professionals as we retool industry. We can formulate regulations that require new environmental standards in construction and engineering that fuel environmentally safer industries. The financial system will restructure and recover most quickly if these new industries and jobs are supported by public investment. Pouring trillions of dollars into the financial system, though, will not lead us in this direction. Doing so only strengthens the very values, practices and institutions that are committed to the old corrupted regime of production and consumption. Bloated financial institutions will do little, moreover, to stabilize the immediate housing crisis threatening so many families or create the greener economy we need.
In addition to using the stimulus package to jumpstart a greener economy at the grassroots, a significant portion of this money could be lent directly to at-risk homeowners at low-interest rates. Another portion could be made available to buyers of first homes at similar interest rates. All homeowners, old and new, could be given tax incentives to meet the new environmental standards of residential construction and improvement. This reverses the hackneyed “trick-down” theory to a “trickle-up” theory that, in the well-worn words of political conservatives who may oppose this idea, will create jobs and wealth and eventually more tax income for governments. Moreover, the volume of toxic mortgage-related assets in the US and other countries would be systematically reduced, as average citizens retain more of their income and stimulate the economy through direct purchases of basic goods and services they habitually require.
An economic blueprint for sustainability should be financed in three ways. First, a truly progressive tax structure that applies to wealth as well as income would shift resources from those who benefit most from the old and new economy to those who benefit least. This would provide significant public funds for day-care, healthcare, education from kindergarten to universities, and vocational retraining, all measures that would ease the transition to a greener economy. Second, a national healthcare plan will save hundreds of billions of dollars in healthcare expenditures that now consume 17 percent of our gross domestic product and produce national healthcare results that are inferior to Great Britain where a national healthcare program exists. Here, too, savings would be available for other forms of investment. Third, systematic cuts in the military budget over a series of years would make hundreds of billions more dollars available without sacrificing national security. In the next national budget we will spend approximately $600 billion on our military complex. That is more than the next ten military powers. Russia, for example, will spend less than a $100 billion in 2009. Moreover, we would reduce potential and actual military conflict thereby spending less on military debt and veterans medial care in the long run.
The conversion to a greener economy must be financed with the long-term goals of greater social equity and ecological sustainability foremost in our minds. The private sector will obviously still have a significant role to play in this new economy but it will have to function within a matrix of public regulation designed to encourage social goals as well as individual advancement. If we begin this economic conversion now, in five years we will have a more vibrant economy, a less degraded natural environment, and a generation of young people who are more committed to social and ecological goals and who will pursue their individual careers in a healthier, more just, and more sustainable world.
--John Ripton teaches history at Rutgers University.
