We must transform or perish

A lot is being said and speculated about the financial crisis the world currently finds itself in. The United States is struggling with an enormous budget deficit. The euro zone is finding it increasingly difficult to maintain its single currency. Many analysts have pointed out the similarities between last week’s panic in the markets and the fear that overtook the financial system after the collapse of the US investment bank Lehman brothers in September 2008.
It is not just the western states, the world in general is pretty gloomy these days and if there is one thing everyone seems to be complaining about, it is that governments no longer work. But perhaps the crisis affecting our economy is a crisis of our civilisation. It has less to do with numbers and more to do with the values we hold dear. If so, do we really believe economists can get us out of this? Images from TS Eliot’s Wasteland come rushing to mind when one looks at the world today. An American brand of consumerism is taking over the world, one that not only places emphasis on technology but also on having it right now. To cater to this demand economies have started industrialising, which has caused numerous problems in itself.
However, what is unique about the current crisis is that it has pralysed Europe, America and Japan at the same time. And the problem that confronts these leading industrialised nations is calling in to question the western model of ‘success.’ This is because an invisible mesh links economies and cultures across the world to the great military and economic centers. So US debt woes can drive up inflation not just in the US but across the world. Today the world measures success in terms of economic indicators such as GDP per capita. The bigger the number the more successful you are. But these indicators are not a true measure of success. Such indicators are based on false accounting. If we destroyed an economy and rebuilt it from scratch the GDP would still show an increase.
A survey by Organisation for Economic Co-operation and Development (OECD) showed that happiness and life-satisfaction across OECD countries are only weakly related to levels of GDP per capita. Research on these subjective measures suggests that there are several distinct domains — such as joblessness, family and community ties — that contribute to overall life-satisfaction and that their influence cannot be reduced to a single dimension of economic resources.
The people to whom we have delegated responsibility in economic matters cannot be unaware of this fact. Yet numbers like GDP are often flaunted by these decision makers. Economic decisions relate to the wider world now and not just the sphere of economics. People around the world are getting restless. At some point or anther this agitation breaks down. In our homes, on facebook, on television, in public squares; everyone starts talking abut bringing down those at the helm of affairs. Political leaders across the world seem out of their depth in trying to handle the prevailing economic crisis.
Alber O. Hirschman, an influential economist who has authored several books on political economy and development economics, had an interesting theory about how people respond to a decline of firms and states. He concluded that in such a scenario people have two options: “exit – stop shopping at the store, quit your job, leave your country”; and “voice – speak to the manager, complain to your boss or join the political opposition”. The latter option is gaining popularity quickly around the world. The recent riots in London are a testament to that.
We need a new vision for our world. Perhaps a new social consciousness first for this new vision cannot be based on necessity. Our greed for more has done much to harm our society and our planet. Consumerism has increased the demand for fuel immensely and we are blowing off mountain tops, chopping off entire eco systems and plunging to the depths of the ocean to meet this demand. Necessity cannot drive our economies any longer. According to one estimate if all the nations of the world were to industrialise we would use up the world’s resources in less than 10 years, massive famines and chaos will follow.
Our vision must orient us towards the future. The poor and hungry need to be the focus of our economic and social responsibility. As Ben Okri wrote in an essay, “The more society has succeeded the more its heart has failed. We must bring back into society a deeper sense of the purpose of living. Unhappiness in so many lives ought to tell us that success alone is not enough.”

The writer is News Editor, Profit