Economic Sustainability

As a followup to my post on sustainability I'd like to talk about economic sustainability, both on a macro level and on an individual level.  (Disclaimer: I'm not an economist, but I do read a fair bit).  Over the past few years I've learned how susceptible we are to our fragile global financial system.    Our globalization push has tightly linked our economy to others, making an inter-dependent network susceptible to a cascading failure.  It's playing out right now. The US, Canadian and several European countries are deeply in dept, some are literally on the brink (Greece).

Continuous Growth Is Not Possible

Why are we witnessing such turbulent times?  Could it be the basis of our commerce and banking systems are flawed?  Our current economic model is predicated on consistent growth, quarter after quarter, on a planet with finite resources.  Not only that, but, the basic mindset we have been fed is that growth is good - it's the goal.  The bottom line is what matters and the invisible hand of the market will benefit all.  In reality we have a few very large and powerful companies controlling most of the wealth in the world.  Corporations, "banksters", and politicians act in concert to make sure the rich get richer.

What we need is a steady state economic model, [steadystate.org], one focused on improved quality of life, rather than accumulation of stuff.  There is a great TED video on a "happy planet index" suggested by Nic Marks as a substitute for GDP. It's inspiring and it just makes sense!

Bailouts galore

Part of supporting the rich is making sure certain industries don't fail.  Watch "Overdose - the next financial crisis"[Youtube].   It outlines a history of bubbles and bailouts starting with the dot-com bust, to the automakers bust and bailout, and the banking industry bailout.  The taxpayer really has been fleeced over the years.  It's one reason the poor can't get ahead.  In the film they postulate that the next financial collapse will involve many countries around the world and rival all previous crashes.

Another great resource is Chris Martensen's "Crash Course" - a series of short instructional videos on everything from fiat currency to fractional reserve banking, peak oil and climate change.  The "Three E's" of Economy, Environment and Energy - highly recommended as a layperson's intro to these intersecting topics.

Personal Economic Resilience

I've only peeked behind the curtain and got a glimpse of what is really going on in the world.  It's not pretty.  To prepare for the inevitable next economic crisis one can only become more self-reliant.  It's a good idea to take some precautions and Build a Lifeboat, as Stoneleigh describes at The Automatic Earth. Key to that are reducing debt and growing savings, eliminating needless expenses, keeping some cash on hand and increasing liquidity.  Friends, family and community are important, especially in tough times, so position yourself geographically close to your support circles.  Find a few sources of food other than the supermarkets.  Membership to a CSA is one option.  You'll be healthier and better off for it.

All of these things are better done well before the collapse.  Like a good boyscout, be prepared. Consider how you might handle a job loss or market crash.  Could you get by, at least for a little while?  Add some sustainability to your own economic situation. I've been pondering these questions myself and I feel better knowing that we're making changes in our lives to become more financially resilient.  We're in the process of downsizing.  We're saving more, and reducing household expenses.  After spending some time tracking expenses, we were able to see where our money was going each month, and where we could focus on reduction.  But we don't deprive ourselves - for example we visited a spa the other week for some much-needed relaxation.

Like so many other aspects of our lives, becoming financially resilient is a work in progress.