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Myths in the 2008 financial crisis

Economics, which used “forward and upward” as a metaphor for progress, still trots out the GDP figure as a measure of economic output, even though it has put us in a dangerous situation.

GDP (Gross Domestic Product) is a calculation of the market price of goods and services produced in a country in a year. The same applies to Gross National Product (GNP), which is based on the income generated by a country’s citizens, both at home and abroad.

Now the definition of progress needs to be changed from “progress and upward mobility is good” to “equilibrium is good”. In other words, we need to move towards a balanced prosperity. Without it, humanity has no chance of survival. (From Doughnut Economics by Kate Raworth)

Economics has starting with Adam Smith and Rickard through to Keynes and Samuelson, said that the state should leave everything to the market, except protection of borders and private property rights of its citizens.

That idea is dead. It was only relevant when the energy and material flows of the world economy were smaller than the capacity of the earth’s “sources” and “sinks”.

Nowadays, the creative role that national governments are given in the economy is both broad and vital.

Incompetent politicians must not be elected. Incompetent politicians need to learn the Socratic wisdom of ignorance and break with the bad habits of the new intellectual age.

The threat of powerful states such as China and Russia is very real, but so is the danger of market forces. The US at times, behaved this way too. And Japan sometimes follows suit and sends troops (see the interview with Nakamura Tetsu on Afghanistan in his sight vol 10, January 2002).

Democratic politics is essential to avoid the tyranny of the state and the market. Therefore, Kate Raworth asserts, we need to build a society in which every individual is an active participant in society and politics, and where citizens can take responsibility.

(Published in the Nikkan Hitoyoshi Shimbun on 9 September ,3rd year of the Reiwa era)　　

Minoru Hirota, 17th year student of Hitoyoshi High School