Friday, November 04, 2011

here's why we're utterly fucked

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No, not this. Well. Yes, that too, but also this:

@Nouriel
Greece, Portugal, Ireland, Cyprus, Italy, Spain will all be insolvent unless growth is rapidly restored. Risk of Breakup http://bit.ly/udQ5uE

What you've got there is groupthink from someone who is lauded across the internets for his objective vision. This is a classic example of why economics as practised by the great majority of self-declared economists is pseudoscience (there are exceptions, of course). In the words of Professor Steve Keen “here’s a simple guide for the public: Anything the vast majority of economists believe is likely to be wrong.”

The crime committed here is abject failure to acknowledge that the endless pursuit of growth as a solution to all economic ills is as much a part of our economic woes as deregulation, regulatory capture, the bonus culture and tax havens. Alternatives theories exist but are almost uniformly ignored, even by "progressives". Roubini isn't alone in committing this crime against reason. Far from it: Here's Stiglitz doing the same thing last year.

Let me explain the implications. If your society isn't stable when the economy is stable then your economy is fucked. If you can't achieve a productive economy that can support a vibrant, fair and peaceful society without continually requiring it to grow then your model is unsustainable and you're heading straight up shit creek without a paddle. There's no arguing with this, you're up against the laws of thermodynamics. Its not just an issue of engaging with reality, however. There are decisions that affect the wellbeing of millions, maybe billions of people, taken every day that are based around this blind pursuit of growth. The refusal to consider alternatives means that these decisions are often made appallingly badly. As the super-awesome Andrew Simms of NEF has observed:
"The obsession with growth can lead to very bad decisions being taken, such as that to go ahead with a third runway at Heathrow. Almost anything can be justified if all you have to do is demonstrate that it contributes to economic growth, regardless of whether it might be the nudge that pushes us over an ecological precipice."
When almost the entire popular economic commentary refuses to consider the genuine issues it faces what hope is there of progress out of the current fuckyounomic mire. That's why we're fucked. 

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