ENVISIONING THE FUTURE
Doughnut Economics , Environmental Economics, and Modern Monetary Theory
Although Macroeconomics has not been a focus of PCRG's activities, as we've stepped back from working on a citizen initiative county charter, some of us have been investigating the failures of the current economic system. If you share our curiosity, you can join us. We'd be delighted to create virtual discussions of these ideas. We may take some of those up in future News blogs.
The problem of Economic Injustice we've listed under Old Normal continues to grow worse. We must change how we think about economics. Traditional economic theory assumes the economy is healthy only if it grows. Further, that the environment is merely a resource to be exploited, and damage by pollution are externalities, not to be taken into account; while family care-giving and a friend repairing your washing machine don't exist in traditional economic theory.
Increasingly, these ideas are being revised in the face of the realization of climate disruption and the limits of the planet.
Doughnut Economics is based on the idea that "A healthy economy should be designed to thrive, not grow."
"Humanity’s 21st century challenge is to meet the needs of all within the means of the planet. In other words, to ensure that no one falls short on life’s essentials (from food and housing to healthcare and political voice), while ensuring that collectively we do not overshoot our pressure on Earth’s life-supporting systems, on which we fundamentally depend – such as a stable climate, fertile soils, and a protective ozone layer. " Kate Raworth (author of Doughnut Economics ) and her team are creating the Doughnut Economics Action Lab (DEAL) to put these ideas into practice. "Our start-up team is currently working on building a collaborative online platform so that this emerging community of changemakers can connect, share, inspire and get inspired, with all the different ways that people are putting the ideas of Doughnut Economics into action. We hope to launch the community platform soon."
Environmental Economics: "Central to environmental economics is the concept of market failure. Market failure means that markets fail to allocate resources efficiently. As stated by Hanley, Shogren, and White (2007): "A market failure occurs when the market does not allocate scarce resources to generate the greatest social welfare. A wedge exists between what a private person does given market prices and what society might want him or her to do to protect the environment."
Modern Monetary Theory: "MMT argues that governments create new money by using fiscal policy. According to advocates, the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce purchasing power."