On January 8, the Toronto Star featured on its editorial page a [1] commentary by Joseph Stiglitz. The former chief economist of the World Bank is vaguely predicting stagflation - stagnation plus inflation - and expressing his concern about how this will affect workers and consumers. He also worries that government and central bank policies will exacerbate the pain experienced by these people. Stiglitz has frequently been lauded by those on the left as a more sensible economist than the outright corporate apologists who generally represent the breed. He has defended some of the positions held by anti-globalization activists, particularly their criticisms of the World Bank for failing to live up to its promises to raise the living standards of the poor. His ‘humanity’ is again on display in this commentary.

Stiglitz begins the piece with the following line: “The world economy has had several good years.” This, he claims, is evidenced by the growth in global GDP, led by India and China. It is in his reliance upon bare GDP to judge global economic well-being where Stiglitz betrays his grounding in standard economic theory.

The past few years of growing global output have been matched by relentless resource consumption and waste production. It is not a coincidence that environmental concern has increased over the same years. We are consuming well beyond the planet’s carrying capacity. Thankfully, more and more people are recognizing this reality and trying to do something about it. Furthermore, the increase in output has not ‘trickled-down,’ and global inequality has likely worsened. But, for the likes of Stiglitz, the economy is viewed in isolation. The complex qualitative meaning beyond the numbers are obscured and largely ignored. Lip-service concern is paid to ‘workers’ and ‘consumers.’ The larger context, however, remains out-of-sight, even though stories of poverty and pollution fill the pages of the same papers that publish Stiglitz’s words. The concern expressed for the well-being of workers and consumers is frequently used to criticize environmental activists, as though jobs and the environment were entirely separate issues - with the former trumping the latter.

Stiglitz’s celebration of China and India is indicative of his narrow, economist’s vision. China’s increasing contribution to global production has come at the cost of severe environmental destruction. It has been suggested that the country’s [2] air pollution has caused hundreds of thousands of premature deaths. [3] High levels of water use and pollution by the growing industrial sector leave a large portion of the population without access to clean drinking water. India may be an emerging high-tech powerhouse, but it is also a model of inequality. Last year, the country passed Japan for [4] the most billionaires in Asia with 36 members in the ten digit wealth club. At the same time, [5] food insecurity is the reality for more than a third of the country’s population.

Stagflation is worrisome. Many people will lose their jobs, their savings and their homes. However, global production needs to be reduced if we are to avoid environmental collapse. It is the residents of the economic North who should bear the majority of the costs, as they are largely responsible for the planet’s current environmental predicament. Most of the burden should fall on the shoulders of the rich (millions of dollars), the very rich (tens of millions of dollars), the über-rich (hundreds of millions of dollars) and the obscenely über-rich (billions of dollars). Yet, these people will be the last to feel the effects of the economic and environmental crisis of their making. Certainly some fortunes will be lost, but many will also be entrenched and augmented. The wealthy will be best placed to protect themselves from the environmental consequences, while the poor will see their meager resources further depleted.

Few would deny the intimate and necessary relationship between the environment, production and consumption. Yet, the isolation of the ‘economic’ is the starting point for mainstream economists. If there was ever a time for ‘Big Picture’ analysis, this is it. That means the myopic economists need to be displaced from their perch atop the policy-advising hierarchy. The fiction that informs their world-view has contributed to the present situation and can play no part in rescuing us, except in showing us the wrong way.

4 Comments To "It’s time to stop listening"

#1 Comment By Lamont On January 15, 2008 @ 10:53 am

#2 Comment By D. T. Cochrane On January 16, 2008 @ 6:42 am

#3 Comment By Abdul Mongid Indonesia On January 17, 2008 @ 11:52 pm

#4 Comment By D. T. Cochrane On January 18, 2008 @ 11:54 pm

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