Work vs Wall Street 

So we’re going into a recession again. More people out of jobs.

Generally, the stock market is a frothy mess sitting on top of the rest of the economy, taking advantage of whatever’s making money. First it used to be joint stock companies, but it evolved into financial services and instruments superimposed on top of the companies that were actually manufacturing something.

Over the years, creative schemes of fooling around with other people’s money became a more important part of the action on the stock market. The amount of capital exchanged grew out of all proportion to the amount of actual money supporting it. In other the words, the manipulators were investing less and less of their own money but profiting from imaginative ways of mining others’ money.

In all of this frenzy, something important was forgotten. Money is a stand in for something else. Somewhere down the line people are making cars and clothing, building houses, and growing and processing food. People can’t eat money or live in houses made of it. For the most part, people use money to buy stuff, but it is undeniable that in the last few years people have been spending more than they have. This is where much of the money involved in the present debacle has come from.

By now the gap between the amount of money involved in making and growing stuff and the amount of placeless capital circling the world in search of profitable investments has become huge. We are, as the economist Hazel Henderson pointed out years ago, an over-capitalized society. Most of us don’t have enough money ourselves, but much of what we do spend has been recruited to investment “instruments” that multiply it many times over.

Now, all of this is connected to climate change and other environmental disasters in the making.

If we are going to back away from the ecological crisis we have been creating, our economy has to give us the right messages. For instance, we need to be reminded that money doesn’t build houses or grow food – people do. It’s called work. Up until a century ago most of us built our own houses and grew our own food, with the help of neighbours and friends. Work is important. Successful businessman and environmentalist Paul Hawken pointed out in his book Growing a Business that small new businesses fail because they have too much startup capital, not too little. People forget, he says, that the most important resource in starting a successful business is hard work.

Another crucial message from our economic system must be that cooperation works. Years ago researchers found that businessmen who were more competitive did not succeed as well as cooperative ones. Besides, competition has only produced the huge monopolies we have, and they certainly aren’t doing anything creative to prop up our tanking economy.

Third, our measures of economic growth have to mean something. Indices such as the Gross Domestic Product count all the money that’s made on goods and services. The GDP does not include a measure of how much of our so-called natural resources – water, trees, fossil fuels – are being depleted. But otherwise the GDP includes everything, absolutely everything. It includes money made by traders on Wall Street. It includes profits made when huge firms merge and the millions in bonuses made by CEOs. It includes the costs of oil spills, Hummers, funerals, automobile crashes, and sickness care – hospitals, drugs, and doctors’ bills. It is definitely not a measure of our wellbeing.

Alternative measures such as the Human Development Index and the Living Planet Index have been around for years. It’s time we started using them, because they give us useful information.

We need resilience in the years ahead, and a local, greener economy will provide it. We have the skills and ability to grow our own food, build our own houses, and even make our own cars here in southern Ontario without chasing down placeless capital from somewhere else. Such money will only be withdrawn when the return isn’t good enough. Good hard work must replace at least some of our inefficient use of energy.

Our last canning factory was closed this year because it wasn’t making enough money for its Wall Street investors. It will cost both us and the environment more to rely on China or Thailand for our canned fruit and vegetables. And the supply isn’t reliable, either in terms of its availability or its nutrition. This is stupid economics.

Intelligent government policy should focus on not losing canning factories to foreign capital or farmland to sprawl and nourish small, local firms and the talented men and women who run them. This would produce an economy that could withstand better the follies of international capital.

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