The Real and Financial Economies

A century ago saw the aftermath of the WAR-TO-END-ALL-WARS which did nothing of the sort. The First World War merely paved the way for a century of senseless manufacture of armaments for profitable export to potential and actual war zones. Equally, it led to the growth of Big Pharm, agribusiness, ecological devastation and general malaise across the spectrum of politics, economics and education. The question now is - if this is 'progress' - scientific, economic or technical - do we really want it? And if not, what are we going to do about it?

Fortunately, in the quest for sanity, we already have a great deal of expertise to draw upon. At a series of international conferences in the first decade of the 21st century women economists drew up pictures of the practical realities of the human economy. They drew attention to the fact that human survival is not dependent upon the financial system. On the contrary, it depends on the Household and the Cultivation economies. Yet these lie outside the accounting systems of neoclassical economics. When academics, politicians and journalists debate the state of the economy, they merely add up what is being produced for profitable sale by the arms manufacturers, Big Pharm and the infrastructures that supply the labour, raw materials and expertise necessary to operate global corporate capitalism.

In our daily lives we work for, invest in, and are utterly dependent upon, the industrial/financial economy. We may be employed by the arms and Big Pharm companies directly, or as employees of suppliers. We may be educating the workers, or supplying them with health care. Or we may be working within the vast infrastructures that supply foods, fuels, clothing, transport, packaging and the other necessities of life. Now that the system is, by all accounts, on the brink of collapse, a fundamental re-think is essential if humanity is to survive.

In 2002 a paper entitled Basic Elements of Human Economy was presented to the International Household and Family Research Conference in Helsinki, Finland, by Hilkka Pietila. It contained the following passage:

"The major blind spots in the prevailing economic thinking seem to be:

- the household economy, which is used here for the non-market, unpaid work and production by a family or a group of people having a household together for the management of their daily life, irrespective of whether they are kindred or not; or even a group of small households living close enough to create a joint economic unit, and

- the cultivation economy, i.e. the production based on the living potential of nature, which is the interface between economy and ecology, human culture facing the ecological laws.

"These constituents of human economy are either misconceived or ignored. The doctrines of economics seem to be derived from physics and mathematics, the sciences dealing with non-living objects and material in the universe (refs). Thus, economics does not take account of biology, the science of living creatures and processes in nature; and that explains why economists seem to be blind to the logic of living nature.

"Both of these economies are very basic from the point of view of a sustainable way of living, and thus for human survival and people's ability to control their own lives. A particular feature of the households is the extent and significance of non-market labour of people without pay for direct production of welfare, and thus as an essential contribution for human livelihood. A particularity of the cultivation economy is its profoundly unique nature by being based on living potential of nature.

"Human beings are not considered in this paper merely as part of living nature - as many ecologists do - but as the only rational and responsible species in the universe, which is accountable for its behaviour and its management of the only planet suitable for its existence and welfare. Neither does this paper take a human being as mere "Homo Economicus", whose only motivation is the pursuit of self-interest and maximized satisfaction of needs on lowest possible costs and efforts."

That is, we have two economies: the real economy of Households and Cultivation on the one hand, and the Industrial/Financial Economy on the other. Since the latter is operating like a wild, untrained horse, the task ahead is to bring it under the control of humanity.