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Merce Cardus

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The Manifesto: The Economics of Enough

in Behavioral Economics on 04/11/14

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In 2008, financial markets around the world plunged. Back then, I was living in the USA and I still remember people talking everywhere about the Great Depression.

This crisis has proven a catalyst for many people to ask questions about the economy and the multiple changes the leading industrial economy are facing. There are challenges like the erosion of trust, and obstacles since there’s any response from the political framework and institutions. Even though economic growth doesn’t increase happiness, people wish the economy to grow, without sacrificing a decent future for their children. And as Diane Coyle says, that is because:

Poor countries need to continue growing to reduce poverty and satisfy natural aspirations to reach the living standards of the leading economies. Rich countries need economic growth because otherwise it won’t be possible to avoid the debt trap and create the political conditions for a less unequal and higher trust society.

The author of The Economics of Enough gives some specific proposals for governments to help get started on the challenges of enough:

1. Launch a measuring progress exercise, where none is yet carried out. Undertake extensive public consultation about what indicators the government should use to supplement GDP statistics.

2. Ensure official statistical agencies have the resources and make the commitment to developing and publishing statistics on intergenerational accounts, so the extent of the true government debt burden is known and published.

3. Introduce policy measures to encourage increased savings by individuals.

4. Ensure that tax systems encourage businesses to invest, and to do so over a longer time period than the two-year payback period that characterizes much current business planning.

5. Governments should address the extremes of income inequality.

6. We need experiments in the use of Internet to engage citizens more directly in public policy.

7. Governments should consider also introducing or making greater use of institutions with an explicit duty to take account of the long-term and future generations.

(…)

Meanwhile, Dan O’neils also talks about the economics of enough in the video below. He questioned himself if economical growth was such a great idea in wealthy nations, so he studied three reasons: first, an environmental reason; second,a  social reason; third a practical reason.

Should we give up on growth?

One thing is certain, and as the author of The Economics of Enough says, is that our success in the future depends on education.

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