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is a "sustainable economy" an oxymoron?
Just wondering is a "sustainable economy" an oxymoron? The reason I ask is because last night I watched a program on Frontline, about one woman who warned financial derivates many years back
http://www.pbs.org/wgbh/pages/frontline/warning/
And it got me thinking is it possible to design an economic system that is sustainable.
We know that people once exposed to a consumer economy have every growing economic expectations which means public revenues, or government spending always grows; yet "Sustainability" implies avoiding depletion or excluding constant growth.
If you watch the frontline program, what shocked me is dogmatic view of greenspan who believed in free markets (aka efficient market hypothesis ), and did pretty much everything in his power to prevent regulators from enforcing any government rules (including any government regulations to prevent fraud).
So if you were to design an economic system from the ground on up, what would features would you want included in your ideal economy? Would you want no rules so human ingenuity and Darwinism (i.e. survival of the fittest), make the rules. Or the other extreme would would want to micro manage every detail!
So care to share a list of ideas to create a "sustainable economy" for example one idea I think would help an economy become stable over the long run, is to condition people to invest for the long run and discourage short term speculation. I'd do this is by taxing any short term capital gains for any investment like stocks, commodities or real estate held a year or less at 50%, anything held between 1 and 10 years would have a cap gains tax rate rate of 30%, and anything held longer than 10 years would have a cap gains tax rate rate of 22%. Like everyone else I dislike paying taxes, but I acknowledge that some government is needed to set and enforce basic rules, and install basic infrastructure such as transportaion systems, and educate citizens so that people have the skill set needed along with confidence and certainity to participate in an economy.
http://www.pbs.org/wgbh/pages/frontline/warning/
And it got me thinking is it possible to design an economic system that is sustainable.
We know that people once exposed to a consumer economy have every growing economic expectations which means public revenues, or government spending always grows; yet "Sustainability" implies avoiding depletion or excluding constant growth.
If you watch the frontline program, what shocked me is dogmatic view of greenspan who believed in free markets (aka efficient market hypothesis ), and did pretty much everything in his power to prevent regulators from enforcing any government rules (including any government regulations to prevent fraud).
So if you were to design an economic system from the ground on up, what would features would you want included in your ideal economy? Would you want no rules so human ingenuity and Darwinism (i.e. survival of the fittest), make the rules. Or the other extreme would would want to micro manage every detail!
So care to share a list of ideas to create a "sustainable economy" for example one idea I think would help an economy become stable over the long run, is to condition people to invest for the long run and discourage short term speculation. I'd do this is by taxing any short term capital gains for any investment like stocks, commodities or real estate held a year or less at 50%, anything held between 1 and 10 years would have a cap gains tax rate rate of 30%, and anything held longer than 10 years would have a cap gains tax rate rate of 22%. Like everyone else I dislike paying taxes, but I acknowledge that some government is needed to set and enforce basic rules, and install basic infrastructure such as transportaion systems, and educate citizens so that people have the skill set needed along with confidence and certainity to participate in an economy.
Replies to This Discussion
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Permalink Reply by Barry Voeten on -
Dear Ben,
This question you've asked is, as far as I'm concerned, the most powerful question you could ever ask :
So if you were to design an economic system from the ground on up, what would features would you want included in your ideal economy?
I still wonder why so few economists responded to this question. For myself: I'm not really an economist. I'm a designer.
I answered the very question many years ago and - by the way - came up with a full-blown redesign of the complete system as well.
The very requirements are rather simple: it should provoke sustainable behavior. Maximum recycling and minimal use of energy. All other requirements can be reduced to these. Even social values, for sure.
As a consequence, we need a value that really makes sense. Scientific units of value have been defined by scientists since the age of Napoleon. Economic units of value, such as the Euro and Dollar, lack such a definition. Hence all the uncertainties in the market. Economists measure by money, but can never tell its value.
To make a long story short, I summarized everything in this article.pdf. Or please visit the website http://rgbtrade.org/
Thanks!
Barry
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