The End of Progress: How Modern Economics Has Failed Us by Graeme Maxton
This isn’t a post-apocalyptic thriller. It’s not a horror story. It’s far scarier. Published in 2011, the author warns of events to come…the rise of religious extremism and right-wing nationalism, the increasing disparity between the rich and everyone else, the exploitation of people and the depletion of natural resources, unmanageable debt and economic collapse…. The cause, he claims (on page 209) is that “Modern economics has twisted the ideas of classical economics. Economics was a subject that originally stemmed from moral philosophy. Its theories were based on concepts of equality, fairness and value, not undeserved profit and selfishness.”
The author suggests that we in Western society, the beneficiaries of the Enlightenment, have forgotten, or are simply ignoring, the aspect of social responsibility inherent in Adam Smith’s theories about the ‘free market’. The enlightened self-interest necessary to guide Smith’s invisible hand is now operating in a very unenlightened manner. We’re still all on board with the self-interest part, though. We’ve come to equate ‘progress’ with ‘profit’, as if money is the only proper way to measure the value of things. We’ve allowed speculators, financiers, and profit-seeking corporations to shape public policy with little or no regard for anything beyond their next quarterly earnings, and we’ve crippled governments from being able to provide a counterbalance to their selfish interests. After all, functional, responsible governments might insist that banks and businesses consider the effects of what they are doing on people other than their shareholders, and that might cut into their short-term profits. We can’t have that!
The author’s observations and predictions are disturbingly accurate, in my opinion, although he tends toward alarmism. He briefly mentions nations such as Germany, which has not allowed the quest for profit to run as badly out of control as the US and UK. But rather than seeing this as a hopeful sign, he suggests that the problems we’ve created are so great that all nations are endangered, regardless of their national policies. He also discounts the efforts of entrepreneurs. He acknowledges that they exist, but he questions their motives. He may be right in this, but when I see people like Elon Musk using his wealth to advance space exploration (Space X); develop new, more efficient transportation (hyperloop and Tesla electric cars); and develop improved solar technology (Solar City roof shingles, etc.), I think that all might not be lost. Yes, governments have weakened. They don’t regulate or tax to the extent they perhaps should. They invest too little in education, scientific research, national infrastructure, and other things of long-term benefit. And there is no doubt that the financial sector is skimming billions of dollars from the economy and providing nothing of true value in return. And many corporations, so concerned with keeping their stock prices and dividends high, are cutting back on R&D and labor. But I have to believe, or at least I want to believe, that there will always be someone, a nation or an individual, who has the right combination of wisdom, assets, and drive, to keep the dream of the Enlightenment alive. In order for humanity to continue to progress, we need that.
The final section of the book is devoted primarily to suggestions of what needs to be done to get us out of the jam we’ve gotten ourselves into. We need to stop consuming so much. We need to be more skeptical. We need to be more optimistic. We need to tax more. We need to develop a new economic model. We need to ask ourselves what life is truly about…. Maybe, but we won’t; at least not before things fall apart. After about two hundred pages convincingly relating how shortsighted and selfish interests have taken over the economy, he tells us it’s possible to turn it around. Who’s going to do that? The same shortsighted selfish people who got us here? They’re the ones in charge now! I wish we could suddenly get a lot wiser, but I’m doubtful. When anticipating collective human behavior, I’ve found it’s normally best not to assume too much. Individually, we can be rational, responsible, and insightful, but as a whole, we tend to behave like an impulsive six-year-old. We’ve dug ourselves a deep hole. For the last thirty-plus years we drank the Kool-Aid that said we could buy on credit, consume, and waste as if the bill would never come due, as if today was all that mattered because tomorrow would take care of itself. Well, we’re fast approaching tomorrow. It looks like it’s going to be pretty dark and cloudy.