Alternative Economics

(Second of three parts)

Conventional economics teaches us that a nation's wealth lies upon its productive capacity and that this approach holds the promise of providing the most opportunity for prosperity and a virtuous society. This physiocratic view further morphed to cover manufacturing as the enabling industry that is said to churn the machinery of wealth to its continued and consistent growth or what is touted as growth-oriented economy.  

Further, heterodox economists agree that while conventional economics has proved its greatness in the language of output, it has proven as well its achievements in offering the best possible products and lifestyle that humans can possibly take in the language of constant innovation.

To the heterodox and orthodox, conventional economics undoubtedly establishes itself as the "meeter" or "satisfyer" of man's rising need for material happiness. While heteredox economics recognize that material happiness is an inalienable right which can be subsumed under the right to pursue one's happiness - it doesn't think, however, that the right to material happiness comes with it the right to overindulge. 

Alternative economics comes in to regulate the excesses of orthodoxy. It presents itself as the vigilant and receptive side of economics where conventional economics fail to address or recognize. Alternative economics is a heterodox position that seeks to challenge the prevailing norm that has been structured in most economies for centuries.

The heterodox position directs its criticism on the failure of the orthodox view in providing the promised prosperity and virtuous society. Advocates of heterodoxy also decry “perpetual growth” as mere outcomes of an artificially-created need than real needs of the population.

Hence, conventional economics thrives upon “pushed” or false demand in order to drive production. And by doing so, it creates consumption so as to obtain growth. Tobacco, soft drinks, fine jewelry, cosmetics are some of the best examples of artificially created industries that are enabled by the growth system. Although these industries undoubtedly generate jobs but they come without risks -- to health and to the environment.

The consumption of tobacco alone has cost the lives of a billion people in the 21st century according to the World Health Organization. Gold mining is one of the world's most pressing global pollution problems, according to the Blacksmith Institute and in which the United Nations Industrial Development Organization (UNIDO) estimates that some 15 million miners, their families and neighbors (including 4.5 million women and 600,000 children) are affected by the fumes, which are known to cause brain damage and even death. These are but just some of the harsh drawbacks of artificial industries pushed by the growth notion.

The heterodox view likewise exposes the irony of the growth notion that "it is perhaps a paradox that higher economic growth can cause an increase in relative poverty. This is because those who benefit from growth are often the highly educated and those who own wealth." says Gary Burtless a senior fellow of the Economic Studies Program of The Brookings Institution.

“Ecological economics” and “steady state” economics (see column October 31) are just only two of the most popular and stronger alternatives being floated by heterodox economists. What ties these two schools of thought is not the contrarian view they hold against mainstream economics, it is their cogent belief that natural assets are foundational to guiding the principles of consumption, economic sustainability and well being of populations which to my humble judgment fall within the purview of behavioral economics.

But what is ecological economics and what is steady state economics? What differentiates the two? What do they propound? How reasonable are their postulations? Do both theories offer a reasonable amount of empirical evidence to support the feasibility of their individual positions?    

(To be continued…)

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