New realities require new economic thinking

Brian Cowen has apologised “as Gaeilge” and just like most of the things he did regarding the present economic situation, he has got it wrong.

Mr Cowen did not cause the crisis; he together with banks and economists and the rest of the usual subjects simply reacted irrationally to a unique and unprecedented development in economic activity. The world was suddenly producing more than it could consume so producing more which is what economic growth is, became a no-no and will remain impossible into the future. This “Economics of Enough” was achieved by technologically reducing reliance on human labour (work) to produce in abundance all the world can consume. This in turn reduces reliance on employment which adds surging unemployment to the crisis. These conditions are the reality of modern economic activity; in fact they become more acute as technology advances. Policies being enacted take no account of the dramatic developments in production and employment.

New economic realities require new economic thinking. The 21st century is entirely different to any other period in history. The economic challenge is to manage and restrain an enormous production capacity in the world and create more employment from less work. Until such policies are adopted all we can look forward to are apologies for failure.