The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear. (Antonio Gramsci)
by Jayati Ghosh
Part 8 - New Demand and Production
This requires new patterns of demand and production. It is why the present focus on developing new means of measuring genuine progress, well-being and quality of life are so important. Quantitative GDP growth targets, which still dominate the thinking of policy-makers, are not simply distracting from these more important goals but can be counterproductive.
For example, a chaotic, polluting and unpleasant system of privatised urban transport involving many vehicles and over-congested roads generates more GDP than a safe, efficient and affordable system of public transport that reduces congestion and provides a pleasant living and working environment.
It is not enough to talk about ‘cleaner, greener technologies’ to produce goods that are based on the old and now discredited pattern of consumption. Instead, we must think creatively about consumption itself, and work out which goods and services are more necessary and desirable for our societies.
This cannot be left to market forces, since the international demonstration effect and the power of advertising will continue to create undesirable wants and unsustainable consumption and production.
But public intervention in the market cannot be knee-jerk responses to constantly changing short-term conditions. Instead, planning – not in the sense of the detailed planning that destroyed the reputation of command regimes, but strategic thinking about the social requirements and goals for the future – is absolutely essential. Fiscal and monetary policies, as well as other forms of intervention, will have to be used to redirect consumption and production towards these social goals, to bring about such shifts in socially-created aspirations and material wants, and to reorganise economic life to be less rapacious and more sustainable.
Since state involvement in economic activity is now an imperative, we should be thinking of ways to make involvement more democratic and accountable within our countries and internationally. Large amounts of public money will be used for financial bailouts and to provide fiscal stimuli. How this is done will have huge implications for distribution, access to resources and living conditions of the ordinary people whose taxes will be paying for this.
So it is essential that we design the global economic architecture to function more democratically. And it is even more important that states across the world, when formulating and implementing economic policies, are more open and responsive to the needs of the majority of their citizens.