Wednesday, March 11, 2020

Can We Move Past a Materialistic, Consumption-Driven Economy?

One important question that arises, during this difficult time, is, can we move past a materialistic, consumption-driven economy?

Most present economic models result in rising inequality, impacting income, wealth, education, health, and social perceptions.

"... [a] materialistic social contract rests on philosopher and economist Adam Smith’s principle of the invisible hand, whereby people pursuing their own self-interest in free markets are led—as if by an invisible hand—to make everyone in society as well off as possible. The popular appeal of capitalist economies relies heavily on this principle, since people usually support capitalism because it is alleged to deliver higher living standards and more economic freedom than alternative economic systems."

The underlying assumption is that human needs can be satisfied through material prosperity and that decentralized, self-interested market decisions tend to generate such material prosperity more efficiently than more centralized, coordinated approaches. Too often, assessments of capitalism aim to focus on so-called "triumph" over socialism. Be real -- there is no such thing as a pure capitalist system. Humans embrace many different forms of capitalist economies; since money was invented about 5,000 years ago, people understand that trading improves both parties' position.

The current institutional capitalism and corporatism represents one of many different versions. And, around the globe, there are many iterations of capitalism right now. Singapore, for example, is the fourth richest country in the world in terms of per-capita GDP with an unemployment rate of 2.2 percent or lower since 2009. Who doesn't regard this city-state as one of the most free and open, pro-business economies in the world? Yet the government in Singapore routinely guides investment policy, and government-linked firms dominate telecommunications, media, and finance. Such intertwining would be unthinkable in America, Norway, Japan, or Canada. Like Singapore, many countries’ form of capitalism is steered not by that unseen hand — but by defined policy.

Human-centered capitalism: Utilizing market forces (capitalism) to benefit society, measured in gross national well-being instead of domestic product (human-centered)

What activities add up what might be considered a "normal life," one that is well-rounded? Could our model for consumption and interaction be more accommodating to a lifestyle where care of each other, of personal character development, can be fostered? We all benefit from lifestyles influencing community in a positive way, infused with personal creativity and work-life balance.Economics enables us to explore why people sometimes make irrational decisions, and why and how their behavior does not follow the predictions of so-called experts. Humans are emotional, oft times making decisions that are not in their self-interest. We should aspire to get away from viewing capitalism as some cold, numbers-only thing or a zero sum game that pits business profits against government taxes or capitalist bosses vs socialist workers.

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