Umair tries ju-jitsu on the debate between Demand Siders and Supply Siders and the inexorable slide toward austerity instead of stimulus:
Umair Haque, Real Prosperity Doesn’t Come From Stimulus — Or Austerity
Yet, a great schism divides them [economists]. Each side’s answers seem incomplete to the other. On one side, Keynesians. On the other, “austerians.” The former argue: spend, spend, spend, for the real problem in the economy’s a lack of demand — not enough buying power to create jobs and trade. The latter argue: cut, cut, cut, for the real problem’s a lack of supply — a shortage of financial capital, to fuel ever-growing debt.
I’d like to propose a third position in this great debate. Call it “prosperianism.” Prosperians believe the economy’s central problem isn’t a lack of demand, or a lack of supply — but a lack of purpose. Prosperianism’s foundation can be summed up in a single sentence: 21st century economies can, should, and must have a higher purpose than product.
Prosperians believe that the real challenge of the 21st century isn’t kickstarting “growth” and churning out more “product” — but reconceiving what is growing, how it grows, and why it grows. The prosperian agenda is redefining prosperity, so it’s more meaningful, authentic, and durable. It’s not about just restarting the same old industrial-age engine of GDP, but building a better one.
Who might be said to be a prosperian? The economist Richard Florida, whose work discusses the central role of creativity in prosperity; the eminent Peter Senge, whose The Necessary Revolution fleshes out a wholer prosperity; John Hagel, whose The Power of Pull explains how to redraw the boundaries of industrial age business as usual; Gary Hamel, whose The Future of Management is an ode to higher purpose; and a raft of visionary CEOs including Timberland’s Jeff Swartz, Interface Carpet’s Ray Anderson, and Nike’s Mark Parker. Not all prosperians agree on exactly what the “right” higher purpose should be, but what they do agree on is the need to move past yesterday’s tired debates about product, and begin having a better one, about purpose.
Without a higher purpose for the economy, the door to creating the industries, companies, jobs — and advantages — of the 21st century will remain closed.
Hmmm. I am all for finding meaning, but I don’t think prosperianism is diametrically opposite the underlying motives of Supply and Demand Siders. It seems like Umair is stepping out of the frame of reference that seems to trap traditional economist, but I don’t think it does, really.
Stepping out of the framework requires questioning growth itself.
All our efforts — either Supply or Demand Side, or even Prosperian — are about growth: getting the economy growing again. Getting people to buy, businesses to make, and cash to flow.
We may have reached an era when any growth — based on higher yields of food, increased production of durable goods, and finding and exploiting new reserves of raw materials — involves more negatives that the benefits it creates.
If we move to an inclusive sort of economics, where the full costs of growth are calculated — from the environmental and societal, not just financial — we may be in a period where growth itself is the prime cause of our economic troubles.
Bruce Sterling said that the ‘frontier of the future will be the ruins of the unsustainable.’
Our political and economic frontier is meeting a time in which many of the fundamental premises of industrialism need to be reconsidered, especially growth.The systems we have created have led to overpopulation of the Earth, because the cost of people has dropped and their potential to produce and consume good and services have increased. So long as the world affords us abundant materials, cheap energy, and low cost waste disposal, we’re golden. As soon as these are less available, the whole system becomes unsupportable.
So, I pose it back to Umair: is there a real alternative to the Supply Side/Demand Side dialectic? What sort of economics do we need for a no-growth economy, presuming that we are headed there? What sorts of motivations are needed to slow population growth, depredation of the world’s resources, and the side effects of industrialism?