Friday, June 26, 2015

A People’s Economic Alternative: Lord, Won't You Buy Me A Mercedes-Benz?

I had a friend who wanted to drive a Mercedes-Benz. His reasoning was that rich people drove Mercedes, so if he drove one, people would think he was rich and would make deals with him to make him rich. I am sure there are examples of this strategy succeeding. And many, many more examples of it failing.

John Quiggin has posted a draft statement of principles for a People's Economic Alternative, endorsed by around 20 Australian unions and community groups. Principle number one is "Economic growth is not an end in itself, but is a means to better the lives of the Australian people, including future generations." Who could object to that?

Is economic growth a means to better the lives of people? Show me the evidence. And, no, I don't mean correlations. Correlation does not imply causality. Just because living standards have improved (from a particular perspective) in an era where there has been economic growth doesn't mean the growth has caused the improvement in living standards.

There appears to be a rule in economics that if you ignore a refutation long enough, it goes away. If that doesn't work, knock down a straw man caricature of the critique and that'll proves your point. A logical fallacy becomes a self-evident truth if repeated stubbornly enough.

Principle number one takes an imaginary step forward in acknowledging that economic growth ought not to be an end in itself. But you know what? NOBODY says economic growth is an end in itself. Nobody markets their beer on the promise that if you drink lots of it you'll get drunk. I've seen the ads. Growth puts smiles on the faces of young children. It makes the sun shine brighter.

In short, principle number one of the People's Economic Alternative affirms the conventional dogma as a self-evident truth. What is alternative about that?

Instead of the conservative slogan, “Economic growth is a means to better the lives of the Australian people, including future generations…” a people’s movement should inscribe on their banner the revolutionary watchword: “Abolition of the growth imperative!

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