The What Of The Economy
The first topic that we cover is the economy, as it is arguably the most important and most complex topic for the functioning of human society. The economy affects (and, in turn, is affected by) almost every aspect of social life, including politics, culture, education, technology, health, law, the environment, etc. The previously mentioned political scientist Francis Fukuyama may be right when he says that the economic system has been evolving and that capitalism presents a stage in that process, but there does not seem to be strong support or evidence for his notion that it is the very last stage. On the contrary, as discussed in the part I, capitalism needs to be seen in a historical context as a system that appeared in a particular historical period, reached its peak, and is now in decline. This last phase is likely to be increasingly traumatic, as transition periods usually are, but we can still make a difference: to borrow from psychological terminology, we may be able to avoid collective post-traumatic stress and turn it into post-traumatic growth. For that, we need a new economic system that could offer constructive ways forward.
It is natural to think that if we want to talk about the economy we should turn to economists. The trouble is that mainstream economics is a product of the existing system (as much as it has shaped the system) and therefore not conducive to creating something new. Reductionism, questionable assumptions and ideological bias are the major issues in this respect and are worth elaborating on.
In recent decades, we have been led to believe that the capitalist economy is the best and even the only viable option, as encapsulated in TINA (There Is No Alternative). The main goal of this chapter is to demonstrate that TINA is nothing more than window dressing, that there can be an alternative, and that we can make it work. To do so, we need to bear in mind two sets of conditions: one that encapsulate pre-crisis (where we are now) and possible crisis, and the other one of the post-crisis period.
In this part, we examine the pros and cons of several possible options: bottom-up approach (it is left to the market forces to run the economy); top-down approach (or planned economy); the even-level approach (people themselves run the economy); mixed economy (a mix of the above). We then describe the synthesis perspective which is a mixed model based on cooperation between the top-down and the bottom-up approaches, individual and common interests and theory and practice.
So far we proposed some basic principles that could help the existing economic system to evolve. We also argued that economy works best if it is predicated on cooperation between the state, businesses, and people, and suggested some checks and balances to secure a good balance between them. It is fortunate that we do not need to wait for a crisis or revolution to bring this to life – in fact, changes in this direction are already happening in various parts of the world.