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10 Economic Myths from the New Internationalist

The December 2015 edition of the New Internationalist discussed 10 Economic Myths that need to be addressed especially after the GFC. Below is the list and the NI goes through each in detail – click here to go to the NI website.

Myth 1: Austerity will lead to ‘jobs and growth – ‘
It’s wrong to sell austerity as a cure for economic woes
Myth 2: Deficit reduction is the only way out of a slump 
- Don’t rely on those who caused the crash to resolve it
Myth 3: Taxing the rich scares off investors and stalls economic performance
 – Taxation creates prosperity just as much as private enterprise
Myth 4: Economic migrants are a drain on rich world economies
 – Migration follows a demand for labour and benefits the receiving country
Myth 5: The private sector is more efficient than the public sector
 – There is no evidence of greater efficiency
Myth 6: Fossil fuels are more economically viable than renewables
 – Not if you look at the environmental costs
Myth 7: Financial regulation will destroy a profitable banking sector
 – Why should financial markets be accountable only to themselves?
Myth 8: Organized labour is regressive – 
It can be argued that the opposite is actually true.
Myth 9: Everyone has to pay their debts
 – We need debt management not reduction
Myth 10: Growth is the only way
 – why we need to find another way, fast.

Although it is repetitive in places especially when they talk of debt and austerity it does provide some valid arguments. I think that the last myth ‘Growth is the only way’ is of particular importance in that GDP growth at all costs has led to wasteful resource use, particularly by the wealthier countries, on an unparalleled scale and without a backward glance. It is often noted that the economy is a subset of the ecological system, but equally there seems to be a belief that nature can cope with anything we throw at it. However, an assessment by the Global Footprint Network indicates we are running a dangerous ecological debt. Currently the global use of resources and amounts of waste generated per year would require one and a half planet Earths to be sustainable (see graph below). The price to be paid for this overshoot is ecological crises (think forests, fisheries, freshwater and the climatic system), a price that is again paid disproportionately by the poor.

ecological footprint

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