4.1. Is the Economy Truly Unstable and Unsustainable?

4 .1 YES, IT IS UNSTABLE AND UNSUSTAINABLE

Since the economy is still under dispute, and since the purpose of this document is to incite arguments pertinent to a needed discussion regarding sustainability, we encourage readers to have patience for perceived errors and inaccuracies, to which we encourage constructive responses.

4.1a The economy is a human construct. 

The basic social purpose of an economy has1 answers. One suitable for this document is one that can distribute goods and services in a manner that minimizes their waste, optimises their accessibility, and insures a tolerable distribution of wealth and prosperity for human societies. In modern times, its structure has varied and taken on different versions. Historically most of its forms have failed society in one way or another, primarily because they fail to provide prosperity for all, and are eventually rejected. The current controversy is mostly whether to have a supply-side or a demand-side version of capitalism. This urgent question should go beyond this squabble and focus how can we restructure our existing version to be a sustainable economy that could most suitably assist us with managing our complex modern societies into the 21st century.

4.1b Brief History.

In the post-war period, 1945 to 1975, the US imposed Keynesian regulations to create a mixed-economy or Keynesian ‘wage-led’ growth model with the goal of encouraging the demand cycle (demand-side). The reasoning was to increase economic demand by focusing on reducing unemployment and on improving infrastructure, such that productivity could increase to a level that would sustain more wage growth and spur further demand. This succeeded in creating a healthy economic growth at all income levels until the growth began to slow and politicians decided to pass more responsibility to the financial sector and support a transition to a neoliberal approach . With the change from a trickle-up (demand-side) to a trickle-4 down (supply-side) approach, the financial sector began to dominate the economy with new policies such as: financial deregulation, a focus on inflation instead of full employment, corporate globalization, international capital mobility, privatization, smaller government, regressive taxes, minimizing unions and labor benefits, minimizing environmental regulation; and expanded credit flexibility on loans.

Proposing that the resultant, current economy is not a suitable candidate for this job of ‘achieving ‘prosperity for all’ may seem sacrilegious to many, but not for the lack of evidence that the present economy is incapable to do so, nor for a lack economists having already proposed viable alternatives to our failing societal structure from of capitalism, , A well-functioning economy is essential for the stability and preservation of our societies, so if it is a human construct, why can’t we redesign an updated sustainable economy for this century?

4.1C.WHAT IS WRONG WITH THE NEOLIBERAL APPROACH ?

The economic sector is part of our overall governance as is our legislative sector to which it is subservient. The legislative sector has a constitution as a framework to govern our society with as set of laws to protect the human rights and security of our citizens. The economic sector is guided, instead, by a set of controversial practices, originating from theory of capitalism with the intent of furthering the prosperity of our citizens. During the approximately 250 years that these two sectors have functioned, our social system has changed enormously in its composition, its scale, its norms, its means of livelihood, its limits, and its mode of human interactions.

Despite these changes, the legislative sector has maintained its constitutional framework and extended it through a self-correcting process of amendments and a set of precedent judicial decisions all referenced to the original constitutional goals. In contrast, the economy has also kept its capitalistic base and experimented with different practices without converging on a version that is stable and that sufficiently satisfies the goal of tolerable prosperity for all. In fact, the US experimentation of Neoliberal Approaches implemented since the 1970s are proving to be seriously destabilizing for the US and the world.

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