Alternative Perspectives on the Global Financial Crisis
Edited by Steven Kates
Chapter 3: Toward a New Sustainable Economy
3. Toward a new sustainable economy Robert Costanza The 2008 financial meltdown was the result of underregulated markets built on an ideology of free market capitalism and unlimited economic growth. The fundamental problem is that the underlying assumptions of this ideology are not consistent with what we now know about the real state of the world. The financial world is, in essence, a set of markers for goods, services and risks in the real world, and when those markers are allowed to deviate too far from reality, ‘adjustments’ must ultimately follow and crisis and panic can ensue. This problem was identified as far back as the work of Frederick Soddy in the 1930s (Soddy, 1933). To solve this and future financial crises requires that we reconnect the markers with reality. What are our real assets and how valuable are they? To do this requires both a new vision of what the economy is and what it is for, proper and comprehensive accounting of real assets, and new institutions that use the market in its proper role of servant rather than as master. The mainstream vision of the economy and model of development (also known as the ‘Washington Consensus’) is based on a number of assumptions about the way the world works, what the economy is, and what the economy is for (see Table 3.1). These assumptions were created during a period when the world was still relatively empty of human beings and their built infrastructure. In this ‘empty world’ context,...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.