Sunday, December 8, 2013

Sustainable Economic Calculation

The blind spot of our time is that we take mainstream economic thought for granted, as if it were a natural law. But in reality, all so-called economic laws begin to melt and morph into something else the moment you begin to change the most important variable: the quality of awareness of the participants in a system. ~ Dr. C. Otto Scharmer, MIT Senior Lecturer

When we take a trip to the grocery store, the mall or peruse wares online from the comfort of our homes (assuming we have one) we are presented with a variety of goods that all share one common attribute – that of price. As we know all too well if we wish to acquire the goods we need and desire we must engage in various calculations – whether emotionally driven or by careful analysis – to arrive at the balance between the monetary credits we happen to possess and the prices of those goods.

However in our ongoing contention between need, wants and price, rarely do we stop and ask ourselves why are the prices of our goods what they are. What are the myriad of relationships that underly and interconnect and finally sum together into this singular metric? What precisely are we paying for or just as importantly what does that price not include in the greater scope of our lives and the world around us?

How much of the price is directed to marketing & advertising budgets, legal fees, packaging, executive bonuses, taxes, tariffs, wages, monopolistic dominance, corruption, trade secrets, copyright, patents, regulation and numerous other factors?

Today where the majority of the goods that arrive at our doorstep follow complex production chains – quite often spanning the globe – often between competing entities whose methods are shrouded from each other in layers of proprietary secrecy, and by consequence opaque to society as a whole, it can be said in all but the most simple of cases we simply have little idea what constitutes the prices we pay. More importantly, these siloed & obfuscatory methods of production by their very nature generate a cacophony of social & environmental ills – as each player in their narrow pursuit of profit maximization seek to externalize all else which may negatively impact their bottom lines.

Though Classically trained economists, and others similarly aligned, have and continue to believe that this individualized pursuit of profit somehow translates into the best possible state for society (an "invisible guiding hand"), given the large & growing body of evidence to the contrary (chronic inequality, environmental decline, mass starvation, etc.) it is becoming clear that humanity has yet to fully discover & implement the economic solutions necessary to come into harmony with the delicate life systems of the Earth and to efficiently & justly allocate resources to maximize our collective wellbeing.

Today we as a species are faced with a confluence of planetary-wide crises and at a critical juncture that will require each of us to deeply reexamine many of the beliefs we currently hold as well as necessitate the opening of our minds to new & evolving frames of reference. Whether it be the reasons behind the prices we pay, to the sensibility of markets or even money itself our ability to survive is now directly dependent on our coming to a correct understanding – and alignment with – the mechanisms which truly undergird our existence...

Economic Calculation in a Natural Law / RBE, Peter Joseph