John Hollins, Chair CACOR Board of Directors Book Review.
Reinventing Prosperity by Graeme Maxton and Jurgen Randers
Greystone / David Suzuki Foundation, 2016
“For most of the last thirty years, unemployment has been rising in the rich world, while the gap between rich and poor has been widening. This is not what conventional economists said should happen.”
This book identifies a broad range of current and emerging issues for humankind. The authors tie the issues — including climate change, poverty, unemployment, social friction leading to extreme political ideas, and migration — to the political direction of the rich world’s economic system since Ronald Reagan and Margaret Thatcher put it on the treadmill of extreme free-market thinking. The treadmill requires ever increasing throughput of raw materials in pursuit of never-ending growth in GDP, a route to a dead end with inevitable consequences for the welfare of the planet and its inhabitants.
The authors point out that this is not an accident. After the crash of 1929, economists and governments focused on full employment, not on economic growth. Following World War II, the focus was on job creation, trade balance, and currencies, not on economic growth. The change in focus in the 1970’s was the result of the adoption by politicians of the economic theories of the Mont Pelerin Society, a group of economists who successfully promoted their ideology: minimize the role of governments, the welfare state, and trade unions.
“… the message is brutal and simple: Governments and individuals should not give money to the needy, because poor people do not spend it properly. It is better to give money to the rich, who will invest it on everyone’s behalf, boosting overall output and prosperity. “
This approach no longer works. The notion of trickle-down is an illusion.
The authors propose a thirteen-point approach to redistribute income and work to reduce the collective ecological footprint of humankind. They recognize that there will be opposition from business and conventional economic thinkers, but point out that in democracies policies that provide benefits for the majority can succeed.
The authors’ thirteen proposals begin:
- Shorten the length of the work year to give everyone more leisure time*.
- Redefine “paid work” to cover those who care for others at home.
- Increase the taxation of corporations and the rich to redistribute profits, especially from robotization.
- Introduce a guaranteed liveable income for those who need it most and give everyone peace of mind.
For the other proposals, and an assessment of their prospects, read the book!
* In Norway, the number of hours worked a year in a full-time job has decreased from 1,800 in the 1970’s to 1,400 now. Yet labour productivity has increased and incomes could have increased. Today, few Norwegians believe that they would be happier if they had less leisure time and more money.
2017 August 2