Category: Economy

Economy

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Is A 20 Hour Work Week The Solution To Unemployment?

Are we just living to work, and working to earn, and earning to consume?”

Anna Coote, analyst and writer, member of the New Economics Foundation (NEF)

The Problem

Britain is struggling to shrug off the credit crisis:

  • Overworked parents are stricken with guilt about barely seeing their offspring,
  • Carbon dioxide is belching into the atmosphere from Britain’s offices and homes,
  • The UK has the longest working week of any major European economy,
  • There’s a great disequilibrium between people who have got too much paid work, and those who have got too little or none.”

A Solution Proposed By The New Economics Foundation

If everyone worked fewer hours – say, 20 or so a week – there would be:

  • More jobs to go around,
  • Employees could spend more time with their families, and
  • Energy-hungry excess consumption would be curbed.”

What Do You Think?

Is, as the NEF proposes, “work-sharing” and a “government legislated maximum working week” the solution to unemployment?

Source for all the above quotations: The Guardian: Cut The Working Week To A Maximum Of 20 Hours, Urge Top Economists

Image: “Tough Times” by Renee Silverman

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Crash Course In The 3 Interconnected E’s: Economy, Energy, Environment

The future is going to be about moving from an ‘I’ to a ‘we’ culture … back to a bygone era, where neighbors weren’t just nice to each other, but relied on each other. As an informed person, it is now your responsibility to help others as best you can.”

Chris Martensen, PhD, a post-doctorate neurotoxicologist-turned-economist, presents a 45 minute Crash Course on the economic crisis & describes the changes humanity faces.

In the course, Martenson presents an analysis of economy, energy, and the environment (the 3 E’s, as he calls them) and the ways in which they are interlinked.

He specifically outlines a “substantial mismatch between an economic model that must grow and a physical world of peaking oil and depleting resources,” and explains why the problems presented cannot be solved individually, but only by macro-cultural change.

What Role Do You Want To Play?

… in this dramatic turning point in our species’ history?

Shall your life be filled with fear or a resolute sense of purpose?

The only way these challenges can become insurmountable is if we let them, by ignoring them for too long.”

–Chris Martensen introducing his Crash Course

The 3 Interconnected E’s & The Problems They Pose

Economy:

…the banking system must continually expand – not necessarily because it is the right (or wrong) thing to do, but, rather, simply because that is how it was designed …the extremely wealthy are saving incredible amounts of money, while at the lower ends the savings rate is deeply negative. Why is this important? Because as the Greek philosopher Plutarch once stated, ‘An imbalance between rich and poor is the oldest and most fatal ailment of all republics.'”

Energy:

Energy is the lifeblood of any economy. But when an economy is based on an exponential debt-based money system, and that is based on exponentially increasing energy supplies, the supply of that energy therefore deserves our very highest attention…. Peak Oil is simply a fact. World production of conventional crude has been flat for the past four years, even as prices have increased by 140%.”

Environment:

Multiple essential resources are being depleted at ever faster rates. Our money system requires continual economic growth, but energy depletion will run headlong into dwindling resource returns to limit future growth options …So the question is this: What happens when a human-contrived money system that must expand, by its very design, runs headlong into the physical limits of a spherical planet?”

Watch Chris Martensen’s 45 Minute Crash Course (UK Version)

       

 

 

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Meaningful Labor Explained By Prof. Dan Ariely

Merriam-Webster dictionary defines “labor” as:

a : expenditure of physical or mental effort especially when difficult or compulsory.
b (1) :human activity that provides the goods or services in an economy
(2) : the services performed by workers for wages as distinguished from those rendered by entrepreneurs for profits.”

But, says Prof. of Behavioral Economics, Dan Ariely,

On an intuitive level most of us understand the deep interconnection between identity and labor… ‘What do you do?’ has become as common a component of an introduction as the anachronistic ‘How do you do?’ once was—suggesting that our jobs are an integral part of our identity, not merely a way to make money…”

Here is Ariely describing the psychology behind how we view labor:

Like Rats In A Maze?

As mentioned in a previous post, behavioral economics differs from standard economics because it doesn’t assume that people are strictly rational. Ariely describes this difference in the perception of labor:

… the basic economic model of labor generally treats working men and women as rats in a maze… all the rat (person) wants to do is to get to the food with as little effort as possible. But if work also gives us meaning, what does this tell us about why people want to work?”

Blogging As An Example

In his book, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home, Ariely looks into what motivates so many people to write blogs:

… blogs have two features that distinguish them from other forms of writing.  First, they provide the hope or the illusion that someone else will read one’s writing… Blogs also provide readers with the ability to leave their reactions and comments–gratifying for both the blogger, who now has a verifiable audience, and the reader-cum-writer. Most blogs have very low readership… but even writing for one person, compared to writing for nobody, seems to be enough to compel millions of people to blog.”

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Dan Ariely, Prof. of Behavioral Economics, Seeks To Account For Human Nature

From a rational perspective, we should make only decisions that are in our best interest (“should” is the operative word here)… and choose the option that maximizes our best interests… Unfortunately, we’re not.”

This is where behavioral economics enters the picture. In this field, we don’t assume that people are perfectly sensible, calculating machines. Instead, we observe how people actually behave, and quite often our observations lead us to the conclusion that human beings are irrational.”

The above and subsequent quotes are taken from Dan Ariely’s book, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home. Ariely is a Professor of Psychology and Behavioral Economics at Duke University and author of other works on behavioral economics.

Standard Economics Vs. Behavioral Economics: A Matter Of Perspective?

… there is a great deal to be learned from rational economics,” he says, “but some of its assumptions—that people always make the best decisions, that mistakes are less likely when the decisions involve a lot of money, and that the market is self correcting—can clearly lead to disastrous consequences.”

Social And Market Forces

The Financial Crisis

… think about the implosion of Wall Street in 2008 and its attendant impact on the economy. Given our human foibles, why on earth would we think we don’t need to take any external measures to try to prevent or deal with systematic errors of judgment in the man-made financial markets?”

This is where behavioral economics veers far from standard economics, because it seeks to look at human evolution and psychology in addition to standard economics, in order for social and market forces to be able to exist in balance:

Essentially the mechanisms we developed during our early evolutionary years might have made perfect sense in our distant past. But given the mismatch between the speed of technological development and human evolution, the same instincts and abilities that once helped us now often stand in our way. Bad decision-making behaviors that manifested themselves as mere nuisances in earlier centuries can now severely affect our lives in crucial ways.”

The Need To Address Human Nature

Ariely argues that this dichotomy between social and market forces, and some of our technological developments existing in discordance with our evolutionary development/nature, holds ramifications far beyond the credit industry:

When the designers of modern technologies don’t understand our fallibility, they design new and improved systems for stock markets, insurance, education, agriculture, or health care that don’t take our limitations into account (I like the term “human-incompatible technologies,” and they are everywhere).”

Behavioral economists want to understand human frailty and to find more compassionate, realistic, and effective ways for people to avoid temptation, exert more self-control, and ultimately reach their long-term goals. As a society, it’s extremely beneficial to understand how and when we fail and to design/invent/create new ways to overcome our mistakes.”

All quotes taken from Prof. Ariely’s book, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home.

Image of Prof. Ariely courtesy of his most recent Pop Tech Talk on Adaptive Responses [21 min.]

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Inside Job [Film]

Inside Job presents how a chain of actions and decisions underpinned by increasing self-interest in the U.S. financial sector over the past 50 years has brought the U.S. to its current worsening socio-economic state.

Maximized Self-Interest – The Financial Crisis Time-Bomb Ticker

The key point that Inside Job presents is how the “securitization food chain” developed – borrowers, lenders, investment banks, investors, ratings agencies – governed by the commonly held value of maximized self-interest at every rung of the chain. It shows how precisely this chain was the ticking financial crisis time-bomb that exploded in September 2008, the effects of which are felt worldwide until today.

Here’s how maximized self-interest worked at every level of this chain:

  • Borrowers wanted loans for buying homes or other high-cost assets (and since it was in the financial interest of people in the higher parts of the chain for as many people as possible to get loans, then loans were highly promoted during the first years of the 2000s)
  • Lenders wanted the extra money they could make from any loans they provided, no matter how risky, since they sold all the loans to investments banks
  • Investment banks wanted the extra money they could derive by collating all the loans they bought into complex derivatives called CDOs (Collateralized Debt Obligations), and selling those CDOs to investors
  • Investors wanted the extra money they would get from the borrowers paying back the loans (the CDOs)
  • Ratings agencies, which were hired by investment banks to evaluate the CDOs, wanted the extra money they would get from giving high ratings to the CDOs (since people in the ratings agencies would get paid more for giving CDOs high ratings, regardless of the actual value of the CDO)

This setup presents how the financial crisis of 2008 hit, showing one bankruptcy after another of major firms as the securitization food chain imploded:

  • Lenders could no longer sell their loans to the investment banks
  • As loans went bad, dozens of lenders failed
  • The CDO market collapsed
  • Investment banks held onto billions of dollars in loans, CDOs and real estate that they could not sell

Who Is Accountable For The Financial Crisis? A Few People Or Commonly-Held Values That Frame Society?

As the film follows the effects of the 2008 economic meltdown, it searches for a voice to be held accountable among the major players of the financial sector, finding none. No person or group of people could be found responsible, but speaker after speaker, what becomes clarified is that everyone in this chain was simply subjected to the commonly held value of “maximize your profit at any expense.”

As long as everyone in the chain was getting what they wanted, everything seemed fine. However, when the system imploded, resulting in bankers having to lose those profits, and millions of people losing their homes and jobs, it shows how the commonly held value at every layer – “maximize your profit” – is in dire need of a revision.

Watch Inside Job Trailer

Buy Inside Job full version on DVD

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Meltdown: The Secret History Of The Global Financial Collapse [Film]

Meltdown: The Secret History Of The Global Financial Collapse [Movie]

Meltdown: The Secret History Of The Global Financial Collapse [Movie]Meltdown: The Secret History of the Global Financial Collapse paints a picture of the 2008-to-2010 global socio-economic sphere. It follows the banking bubble’s burst in September 2008, and the worldwide domino effect of troubles and uprisings that followed.

The Financial Crisis Forced People To Recognize Global Interconnectedness

Most notably, Meltdown: The Secret History of the Global Financial Collapse presents how the 2008-to-2010 financial crash and its effects stamped an imprint of global interconnectedness into people’s worldviews, especially those of bankers, economists and politicians, forcing a revision on issues of global-scale responsibility and interdependence.

Meltdown: The Secret History of the Global Financial Collapse takes the viewer through the times before the 2008 financial crash, when there was little acknowledgement or concern about the vast reaching implications of global interconnectedness, as New York Times’ Andrew Ross Sorkin points out in the first part of the movie, about how people in New York did not take the English bank Northern Rock’s crash as a warning sign:

People in New York saw the crash of the Northern Rock bank in England as ‘that’s happening over there, that’s not happening here.’ The sense of interconnectedness was not realized until the very last moment.”

… to 2010, a time when the change in people’s sensitivities to globally connected relationships became felt, as IMF Managing Director Christine Lagarde mentions in the film’s final part:

Everyone has changed in this crisis. When the real estate and financial bubbles burst, it caused an examination of conscience about the creation of wealth, how resources should be allocated, the sharing of wealth, how countries relate to each other, what defined well-being. On those issues, we have all evolved, the President included.”

Watch Meltdown: The Secret History Of The Global Financial Collapse

[myyoutubeplaylist ZWU65Zbka4E, pqBlVBhv0ag, JBhAvUTW5ZE, bZwMIIJLWOw]

  1. Episode One: The Men Who Crashed The World
  2. Episode Two: A Global Tsunami
  3. Episode Three: Paying The Price
  4. Episode Four: After The Fall
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Is The Global Economic Crisis An Example Of The Prisoner’s Dilemma?

When I think about the world I would like to leave to my daughter and the grandchildren I hope to have, it is a world that moves away from unequal, unstable, unsustainable interdependence to integrated communities – locally, nationally and globally – that share the characteristics of all successful communities.”

Bill Clinton, former President of the United States.

The Prisoner’s Dilemma

Although it is a simple mathematical idea, it turns out to be an enchanted trap that has ensnared some of the brightest minds for decades.”

The above and following quotes on the Prisoner’s Dilemma are taken from, Super Cooperators: Altruism, Evolution, and Why We Need Each Other to Succeed, by Martin Nowak and Roger Highfield.

Imagine that you and your accomplice are both held prisoner, having been captured by the police and charged with a serious crime. The prosecutor interrogates you separately and offers each of you a deal. This offer lies at the heart of the Dilemma and goes as follows:

  • If one of you, the defector, incriminates the other, while the partner remains silent, then the defector will be convicted of a lesser crime and his sentence cut to one year for providing enough information to jail his partner. Meanwhile, his silent confederate will be convicted of a more serious crime and burdened with a four-year sentence.
  • If you both remain silent, and thus cooperate with each other, there will be insufficient evidence to convict either of you of the more serious crime, and you will each receive a sentence of two years for a lesser offense. If, on the other hand, you both defect by incriminating each other, you will both be convicted of the more serious crime, but given reduced sentences of three years for at least being willing to provide information.
  • … there is a simple central idea that can be represented by a table of options, known as a payoff matrix. This can sum up all four possible outcomes of the game, written down as two entries on each of the two lines of the matrix.”

The image at the top details this payoff matrix. It varies from the above description slightly: If one of the prisoners incriminates his fellow prisoner, and the incriminated prisoner does not likewise reciprocate this defection, then the incriminated prisoner will receive a five year sentence instead of a four year one.

The Global Economic Crisis

In the face of this tension between increasing interdependence and uncoordinated actions, we need shared visions of the future. These visions can motivate leading decision makers to contribute voluntarily to the global good, out of a sense of shared responsibility and enlightened self-interest.”

–  Global Economic Symposium

The Prisoner’s Dilemma works on the basis that two parties are interdependent. In economics the global economy is interconnected and thus interdependent. The global economic crisis can therefore be viewed as a form of the Prisoner’s Dilemma, where many participants are each charged with a serious crime (the crisis) and each must then choose how to conduct themselves to exit it, with each player’s decisions affecting all the other participants.

However, unlike the classic example above, one market cannot simply defect from the rest of the global economy. Regardless of the decisions the players make, they still remain interconnected and interdependent.

The Eurozone debt crisis has fallen into a classic prisoner’s dilemma. One party does not cooperate because it would expose itself to the potential non cooperative decision of the other party, the latter of which would be able to extract a greater payoff than the cooperative solution would yield in the short-term.

Fear of losing control over the political decisions taken by the euro area is triggering a series of rational (but sub-optimal) choices incapable of dealing with the core issues of the crisis and so leading to an outcome/equilibrium that no one really wants (and everyone will regret ex post), i.e. the total or partial break-up of the euro area.”

– ECMI Commentaries

The following video gives an example of the Prisoner’s Dilemma with arms proliferation between nations:

What Do You Think?

Is the global economic crisis an example of the Prisoner’s Dilemma? And if so, how can the best outcome (sustainable equilibrium) be achieved?

Image: gametheory by Student Computing Support.

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Human Economics

Throughout all of history, humanity has never lived in an era of such intimate globalization, as we do today… Never has any one country’s economy been so dependent upon the economy of other countries, and never has the fate of people in any one country been so dependent upon the fate of people in other countries. Indeed, the current crisis is affecting everyone, everywhere.

It is with good reason that journalist, Thomas Friedman, argued in the midst of the crisis that it was “Time to Reboot America.” The laws that define relationships among individuals in society have changed dramatically, hence economy—which reflects those interconnections—must follow suit.

Yet, this cannot happen by means of restrictions and regulations, since it is evident that our desire to enjoy is only growing through the years. Therefore, even if we truly want it, we will never be able to turn back time. As we develop, we constantly devise new ways to “beat the system.” Instead of wasting taxpayers’ money trying to reverse an irreversible situation, we must change our approach toward economy and business from the root level.

The solution is to start from the place where the crisis began—the lost trust in human relationships. What has become clear is that we no longer trust one another: people don’t trust banks; banks don’t trust the rating firms, who don’t trust company shareholders, who have no trust in financial advisors, who have no trust in traders, who have zero trust in governments, who simply trust no one. Period. Nevertheless, despite the mistrust, we find that we are still dependent upon each other. And the more aware of it we become, the less we will want to harm one another. Many people already realize it; now we must turn this realization into action.

 

Step One: Restore Trust

Alongside the offering of aid to ailing economies, countries must explain to their citizens that we are now living in a new world. Thus, the first step in the bailout plan is to make people understand and feel how interdependent we are. When people realize that their personal well-being depends on their relation to others, they will become the natural regulators that policy makers are looking for.

In fact, when a strong enough public opinion promotes values of collaboration, it will affect even those who initially want to continue living by the old self-centered rules. An illustration of this principle was shown when a week after it became known that AIG, which received hundreds of billions in bailout money, gave out fat bonuses to its executives, the majority of them gave it back. They couldn’t face the mounting public criticism. Hence, awareness of the detrimental nature of our egotistical approach will naturally make us want to restrict our self-centered attitudes, and this will facilitate the beginning of a crisis-free era.

 

Step Two: Rethinking Consumption

Consumerism causes us to want products we have no real need for, simply to improve social status. Conveying information about the rules of the new world will help us understand which values should prevail in our society, so that we can create a more balanced way of life. As a result, products that will remain on the shelves will be the ones that are truly necessary, and the advertising of product causing us to make yet another redundant purchase will be condemned. Applying this necessary shift in priorities will greatly free resources and time, and will allow us to invest in the currently neglected realms of our lives, such as friends and family, thereby significantly enhancing the overall quality of our lives.

 

Step Three: Social-Capitalism

In the January–February 2011 edition of Harvard Business Review, Profs. Michael Porter and Mark Kramer published a revolutionary concept. Traditional capitalism belongs to history, they wrote. Now is the moment for “a new conception of capitalism,” such that will move “social responsibility from the periphery to the core of the companies’ mind-set.”

Companies should still endeavor to produce profit and create economic value, yet not for the shareholders and their owners, but rather for the good of society “by addressing its needs and challenges. Businesses must reconnect company success with social progress,” otherwise, conclude Porter and Kramer, businesses will never escape the vicious cycle in which they are trapped today and their situation will only worsen over time.

Indeed, there is much truth to the words of Porter and Kramer. Today, when a company releases a new product to the market, it wishes to “broaden its market share,” or in simpler words “to steal” clients from other companies in the marketplace. But this is exactly the approach that led to the financial crisis to begin with! Rather than trying to gain profit at the expense of others, companies should compete to create the greatest benefit to the whole of society.

When signing a contract, a company owner should ponder: “Does everyone gain from the deal I am closing now?” If the contract truly benefits everyone, then everyone, including the owner of the company, will gain from it. After all, in today’s world, we are all interconnected, and each individual action makes an impact on us all.

Step Four: The New Kind of Companies and Businesses

It’s time to redefine business and financial success. A successful firm should be one that sells products to customers, pays decent wages to its employees (including pension, insurance, and vacations), and is founded on a balanced operation. A balanced operation means that the profits of a business cover all of its investments and expenses, but it does not profit beyond that.

In this way, the owners of such companies could afford to reduce the prices of their products to make the product affordable to many more people. If some profit still remains, it could be donated to a fund that helps guarantee that all people in the world have a good basic standard of living. To be sure, we are not talking about abstention or austerity. Quite the opposite, if all of the players change their financial mindset from maximum profit for themselves regardless of consequences, to earning as much as is required to live respectably, we will discover that the planet has many more resources to offer than we can actually use, and together all of us will prosper.

 

Much More Motivation and Satisfaction

How will owners of companies and their employees draw motivation to wake up in the morning and excel when no financial stimulus is involved? The answer is simple: The stimulus will stem from the new social standard—people and companies are appreciated according to their contribution to society. In this case, our natural urge to compete—with the benefit of society as our goal—will cause us to create a more just and equal society.

Let us clarify. Try to answer the following question: What do company owners gain by having additional zeros in their bank accounts? Do they actually use all the millions they have? Do they truly enjoy those added “zeros”? The satisfaction they draw from the zeros is purely conditional, dependent upon the sense of power and mainly respect that comes with wealth.

But what if company owners were to sense the same satisfaction they derive from excessive wealth, out of actions to benefit society? If society respected people who contribute to society and condemned people who exploited it, powerful people would naturally use their power to contribute to society, because we are all social beings and all of us, including company owners, are influenced by society. While this proposal may seem utopian, it can materialize if our environment begins to appreciate pro-social values.

The bottom line is that capitalism should remain capitalism, but instead of trampling each other, we should compete in contributing the most to society and creating the best and most qualitative products for the best price, so that as many people as possible can enjoy them. Sir Richard Layard’s article titled “Now is the time for a less selfish capitalism,” published March 11, 2009 in The Financial Times, summed up quite well the new approach we have suggested here, where he writes, “We do need a more humane brand of capitalism, based not only on better regulation but on better value. We do not need a society based on Darwinian competition between individuals. Beyond subsistence, the best experience any society can provide is the feeling that other people are on your side. That is the kind of capitalism we want.”

 

 

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Game Over

Imagine you turn on your TV and hear a news man say: “Congratulations, fellow Americans: the era of rampant consumption has come to an end!”  The comments would probably be diverse: “No way, we are getting back in the game!”, “I didn’t expect it to be today…”, “Somebody finally said it straight!” But if I were you, I’d stop watching TV altogether.

So, is the game over? Yes, it is.  Why is the truth always so daunting? Why is it so difficult for us to acknowledge something that has been staring us in the face for a while now? We may be legally blind, but even they can see elephants.

The World Wildlife Fund scientists, who work with governments, businesses and communities around the world, based on their practical experience, knowledge and credibility, claim that today humans are consuming over 25% more natural resources on a global scale than the earth can support and that this rampant consumption is stretching ecological boundaries, leading to unsustainable living.

WWF-UK’s Head of Research, Stuart Bond, said humanity has been living off its “ecological credit card” and “liquidating the planet’s natural resources. While this can be done for a short while, ecological debt ultimately leads to the depletion of resources, such as forests, oceans and agricultural land, upon which our economy depends.”

The economy is in crisis and is worsening as I type. The media is making a desperate attempt to convince us that everything is under control and things are getting better. While they are carrying out their orders, we faithfully “eat” their feed and remain loyal to our so-called life styles. We browse the malls, dine in fine restaurants, pay high bucks to watch a new movie, lease luxury cars, sweat in spas and casinos, and look forward to the gilded age that they tell us is coming soon.

The “relentless search for novelty and status locks us into an iron cage of consumerism,” writes Tim Jackson, the author of Prosperity without Growth. Consumerism is a game we can’t seem to stop playing: TiVo says buy, and we happily comply!  Wide-eyed, we run to the store and start a chain reaction that swallows us in the end.  So we are building a heap that will eventually bury us under.

For thousands of years humanity has developed grounded on the basic necessities.  The majority always has and continues to live without luxuries.  Even clothes used to be passed down from generation to generation, as they still are.  But just a century old feast of highly evolved “cockroaches”—the phenomenon of the modern era— has practically ruined the planet.  Like it or not, we will have to put an end to it.

Kalle Lasn, the co-founder of Adbusters Media Foundation, agrees: “Our headlong plunge into ecological collapse requires a profound shift in the way we see things. Driving hybrid cars and limiting industrial emissions is great, but they are band-aid solutions if we don’t address the core problem: we have to consume less.”

Industry was previously based on the “money-commodity-money” paradigm.  But today, this model has lost the commodity element:  we sell and buy money.  That is what our “trade” has become:  we exchange paper.  The two remaining valuable commodities lie in the area of basic necessity.  We need shelter and sustenance, and a certainty that they won’t be taken from us today or tomorrow.  But one thing we need to understand is that luxuries are being cancelled.

Modern manufacturing hardly produces anything valuable anymore while still continuing to drain natural resources.  We buy and exchange meaningless things that are passing from hands to hands until they reach their ultimate destination – the omnivorous trashcan, and the wastelands are ever expanding. Except for a few staples that we all need, everything else is merely toys. Are we willing to ruin the Earth for them?

The money-printing machine never sleeps, since the owners do not wish consumption to stop. Yet, reality follows its own, specific agenda, and it could care less for what we think we want. Once it hits, it does so with absolute clarity – to get the point across. Remarkably, when we see the hammer raised over our head, we don’t try to catch it – instead, we think how to bribe it and avoid the pain. As if it is something to bargain with.

In fact, we are practicing an “ostrich strategy” – when in fear, stick your head in the sand. It won’t work this time. The problem is not going away, no matter how “ostrich” we get.

We know that most of the existing industry and all legislative and financial institutions are driven by the illusion of ultimate prosperity.  These parasites sustain themselves by sucking the consumer’s  income and claiming ownership to natural resources that are being rapidly drained. And we readily offer our wallets, because we have been trained to believe that wealth equals happiness and material things bring satisfaction. We are addicted to new products, services, brands – more and more stuff.

The planet is on the edge, and it’s is time to ask ourselves – what on earth are we thinking?

Tomas L. Friedman, of the New York Times, agrees:  “You really do have to wonder whether a few years from now we’ll look back at the first decade of the 21st century — when food prices spiked, energy prices soared, world population surged, tornadoes plowed through cities, floods and droughts set records, populations were displaced and governments were threatened by the confluence of it all — and ask ourselves: What were we thinking? How is it that we did we not panic when the evidence was so obvious that we had crossed some growth, climate, natural resource, population redlines all at once?”

The economic-ecological crisis we are living in today is here to demonstrate that we cannot keep taking more than we actually need.  We may not wish to accept this truth, but Nature is forcing us to, and we will, whether we like it or not. “What is certain is that, as a species, we have reached a point at which we no longer have a choice between being radical and being realistic; the two attributes have become one and the same.” (Victor Wallis, Economic/Ecological Crisis and Conversion)

No matter how difficult it is, it’s time to change our view of life. We are destroying vital reserves, consuming our own future.  We exploit natural resources and pollute the earth with our waste to an extent that exceeds the planet’s capacity for self-restoration.

Since we are unable to change ourselves at will and growth of awareness takes time, we will most likely be reformed by the crisis – quickly and radically.  Over the course of the next few decades, we will have completely reformed economy, power and transportation industries.  The vital difference in how we are going to accomplish it lies in whether we’ll do it by conscious choice or forced into consciousness by Nature.

To avoid the latter, we should use all our mental power to make an effort to realize that the “happiness” paradigm aimed at consumption is corrupted and will never fulfill our desires, and that it is time to move on to the paradigm aimed at true happiness, where people will spend less time working and striving for accumulation of things and instead, use that time for something really meaningful—the fulfillment of their inner capacities.

We are facing a choice that the crisis dictates:  we will either end in a total collapse or create a new, stable model of economy.  And we will definitely choose the second, for we may be slow starters, but we are not idiots.