The New Economy Won't Be Like the Last One

Despite the best efforts of the Obama administration, the economy is a long ways from recovery. The speculative system that created the mess remains intact, and foreclosures and unemployment continue to rise. But at the same time, a new economy is taking form. It’s built on a recognition that the only thing too big to fail is the Earth itself. It is designed to build sustainable wealth for families, communities, and ecosystems, and it’s our best chance to improve prospects for future generations, instead of leaving them with ever-growing debt, conflict, and environmental destruction.

Politicians, pundits, and financiers defend deepening our national debt to bail out the institutions of a failed Wall Street system. But this system, built on speculation and the rule of money, is undermining the health of the planet and the well-being of all but the wealthiest few.

It’s time to let it go.

The new economy is built on new forms of money, and on democratic finance and business. In the summer 2009 issue of YES!, we report on worker-owned cooperatives that distribute the benefits of hard work to employee-owners who call the shots in democratic workplaces. These co-ops spend locally and are rooted locally, so they are long-term boons to their local economies. And they don't close down in favor of sweat shops in low-wage regions.

Money, though hidden in plain sight, is another critical piece of the puzzle. As currently created, it destabilizes our economy and concentrates wealth. Many communities are developing new means of exchange that work even when there is a global shortage of credit. And the issuing of money could be a public service, rather than a profit center for private banks.

We’re told we need Wall Street in order to finance business. But Wall Street has quit serving the real economy and, with the continued blessing of the Obama administration, is acting as a global casino, creating exotic and toxic packages of “assets” that have no function but to make money for the already wealthy.

In the new economy, credit is provided through local banks rooted in the communities they serve. Credit unions, community development banks, and other democratic institutions also serve, rather than cannibalize, the real economy.

Americans know we’ve been living beyond our means, and we’re cutting back. That means the segment of the old economy centered on encouraging wasteful consumption will continue shrinking.

The new economy—sometimes with the aid of President Obama’s stimulus spending—is moving in to meet needs unmet by a system centered on mega-profits. New jobs are being created to install renewable energy and weatherize homes, raise food through more labor-intensive and less damaging means, build public transit systems and inter-city rail, and rebuild schools, bridges, water systems and neighborhoods. We can no longer defer these vital investments as we did when we oriented our economy around the desires of the ultra-rich.

The new economy is about increasing quality of life, improving health, and restoring the environment. The resources to pay for this will be the resources that previously went into multi-million-dollar CEO pay packages and oversized returns on speculation.

With reduced consumption, we’ll no longer need to fight for an excess share of the world’s resources, so we can slim down our bloated military budget. We can save on prisons and police, since people with access to good education and jobs less often turn to crime.

An Earth- and human-centered economy is not inevitable. We could revert to a winner-take-all system in which a few benefit and everyone else fights over the scraps. The current economic downturn, though, offers an exceptional opportunity to rebuild and, this time, to make it an economy that works for all.