Do we need more industry regulations in the future? The answer to this question involves thinking outside the box. For thinking inside the box will destroy our planet’s ability to support higher forms of life within the next 50 years. It has been 232 years since Adam Smith described the modern economic system – a system based on unlimited productive and capital expansion with private accumulation of vast wealth in a “free market” supposedly providing an “invisible hand” beneficial to the great majority. Adam Smith had not the faintest idea of our fragile, finite, planetary ecosystem with its inherent limits, nor of weapons of mass destruction, nor a global population of 6.3 billion.
Dr. Glen T. Martin
President, Institute on World Problems (IOWP)
Professor, Radford University, Virginia, USA
Today, 60% of the world’s people live in poverty, 1.5 billion of them in “absolute poverty,” the complete nightmare of life visible everywhere in India. Worldwatch Institute’s State of the World series has for years documented the facts that arable land is disappearing at astonishing rates, global fisheries are collapsing, polar caps melting, and the oceans dying. The disastrous modern economic system for the welfare of people and the environment (which is what economics should be about) is documented in book after book: from Michel Chossudovsky’s Globalization of Poverty (1999), Herman E. Daly’s Beyond Growth: The Economics of Sustainable Development (1999), Ellen Brown’s Web of Debt: The Shocking Truth about Our Money System (2007) to Naomi Kline’s The Shock Doctrine: The Rise of Disaster Capitalism (2008).
These and other astute observers noted the Emperor’s stark nakedness even before the global meltdown. You cannot institutionalize the lowest human qualities – greed and naked self-interest at the expense of people and nature – and expect disaster not to happen. By “institutionalized greed,” I mean an investment structure that institutionally mandates short term profit seeking, excluding all other values such as the welfare of people and the planet. In a recent article, Sir Nicholas Stern, former Chief Economist of the World Bank, estimates that “the direct economic consequences of climate change – leaving aside the social and environmental effects – will be a depression greater than the Great Depression of the 1930s and a financial cost higher than the Depression and the two world wars combined.”
The financial system of private banking runs amok in a frenzy of speculative gambling primarily in the form of hedge funds and derivatives. The Bank of International Settlements last year estimated the total face value of derivative bets at $596 trillion, dozens of times the assets of even the largest banks. Profit-directed banking dominates the planet and its production, making the welfare of people and nature impossible. Meanwhile, the world’s weapons industry pours a trillion dollars a year into a coming, suicidal, third world war. The interdependency of our planet and its lethal problems makes clear that we must move out of this economic disaster paradigm. We don’t need more regulations – we need to rise to a creative and unifying political and economic vision. The only reasonable solution is to federate the nations and peoples of Earth under a democratic constitution with an economic mandate to create real sustainable prosperity and real restore our collapsing environment.
The international lawyers, economists, and thinkers who wrote the Constitution for the Federation of Earth (www.worldproblems.net) understood the disaster of private, for profit banking based on institutionalized greed. The Earth Constitution creates a single currency for the world and an economic powerhouse called the Earth Federation, placing money and banking in the service of the people of Earth. Credit for sustainable development goes to individuals, businesses, and governments for only an accounting fee (without interest) – for the goal is prosperity for all, not satisfying the greed of the 10 percent of the planet’s population who today control 85 percent of its wealth. Credit for sustainable development projects (including restoring our global environment) is premised on productive promise, not on past savings.
The democratic Earth Federation government issues debt-free money (a power of any government) based on the wealth produced through these investments. The amazing fact is that India alone, with its 35 internal states and territories and immense population, could satisfy the requirements under Article 17 of the Constitution for initiating a truly decent world order based on universal sustainable prosperity and protection of our global ecosystem. We do not need more regulation. We need to establish our economics for the first time in history on democratic principles premised on the real common good of the Earth and its people. The meltdown provides a genuine opportunity for creative vision. We must wake up to the deeper foundations of a sane and healthy global economic system.