One of the most commonly preached mantras about the current economic system is that it will “bring wealth to everyone”. This, put politely, is a huge steaming pile of horse manure.

Wealth isn’t an absolute measure which will, say, always be three feet long. It’s a comparative measure which is defined by being over a certain percentage above the average.

So “wealth for all” is a contradiction in terms. We can’t all be wealthy because then we’d all be average, which by definition isn’t wealthy.

The mechanism which is supposed to bring this miraculous wealth to everyone is equally suspect: an ever upward spiral in the value of assets.

Value is only meaningful to two parties: a buyer and a seller. If a buyer values something more than a seller then a trade is completed. The flipside of this is that the asset has to have somehow declined in value in the seller’s estimation otherwise they would never have bought it in the first place.

Assets do not permanently increase in value, they go up and down according to personal circumstance and fashion (and not a lot else). So an economy which is based on the premise that everyone’s a winner is doomed to fail.

Don’t get me wrong, I’m all in favour of the market, recognise the need to trade and understand the creation and delivery of goods and services. However, as Joe Sibilia, President of CSRwire, recently observed:

“Private property is accepted as being a self evident right. Economic activity that benefits all the stakeholders affected (social and environmental) is a self evident right.”

If we’re going to create a sustainable economic architecture we need to be realistic about wealth and value, not live in some cloud-cuckoo land where everyone drives the most expensive car and only owns shares in the most profitable company.

To achieve this we must have courage and scrutinise the one thing which underpins capitalism: Money. More on that next week.

In the meantime, feel free to post your comments below or start a thread on the Green Options Discussion Forum. It’s a pleasure to hear from you and I always look forward to hearing views other than my own!

Related posts:

To Bailout or Not to Bailout: Is Free Market Economics Sustainable?

Green Books – “Common Wealth” by Jeffrey Sachs

Ending Global Poverty? Seriously?

Picture Credit: “Avantage comparatif” by Aliesin from Wikimedia Commons under Creative Commons Attribution Sharealike Licence.

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