Economics as it is studied today is “flat world economics.” Fifteenth century geographers perceived the world to be flat, economists in 2012 perceive the properties of economics to be different than they obviously are. Using flat maps, early people were severely restricted in their capabilities because they were educated to ignore the curvature of the earth. Today’s economists have been trained to ignore the human tragedy unfolding beyond the economic horizon.
Economics is a social science that should analyze “total effects” of human service and compensation for that service in order to learn, both, how to enhance wellbeing and to avoid tragedy. The total effects include environmental effects, effects on wellbeing, and the durability of the system. Often, the study of economics is hijacked by special interests that misuse sometimes factual information for disproportionate power, influence, and wealth. This is about as effective as putting foxes in charge of the henhouse as a solution for improving the environment for both. If you are a fox, this seems like an ideal system. What if you are a hen? If GDP toxicity is not controlled, the economic system is unsustainable.
Pseudo facts are generated by the misuse of “gross domestic product” in economic calculations/decisions. In these calculations more GDP and more growth in GDP are generally considered positive attributes. What isn’t measured or even publicly considered is the toxicity of the GDP. On a toxicity scale, that runs from most beneficial to most detrimental, any ill effects of business activity should be steadily decreasing. The purpose of economic activity is the betterment of service to mankind. If there are financial incentives, people should be rewarded for doing beneficial things, not the opposite. They also need to accept responsibility for doing detrimental things. They need to identify their mistakes and use them to quickly learn and eventually make positive changes to their economic behavior.
GDP rises when workers have to work harder, longer, and smarter to fill their needs. Restricting the supply and raising the price of necessities such as homes, food, clothing, transportation and healthcare have the tendency to raise GDP. Producing and selling harmful addictive substances and products also raise it. Manufacturing without protecting the environment raises the GDP in two ways. One way is through increased sales of a more affordable product. The other reason GDP goes up is the result of business activity necessary to clean up the toxicity, and caring for those poisoned by it. A rise in GDP can be a terrible thing if economic toxicity is not controlled. There are multiple cliffs of economic disaster. The most vulnerable are pushed over first, but there is a point where everyone goes. What will the foxes eat when the henhouse is empty?
Toxicity in the economic environment sickens the service cells. A service cell provides goods or services, and it has three components a financial component, a managerial labor component, and a consumer citizen component. Toxicity in any one of the three parts can cause degradation of service, inflation of price, and injury to populations.
Government and business have a symbiotic, but sometimes toxic relationship. Compensation commensurate with service is an indicator of a healthy economic environment. Free enterprise is only economic when toxicity is controlled. When it is not controlled, the rewards for irresponsibility exceed those for service, and the irresponsibility comes with a huge cost for society. Government wants citizens to have jobs that pay well so they can pay taxes, and reelect the status-quo. Businesses increase their profit by shirking their responsibilities, and mankind pays the price for that irresponsibility. People ultimately are left with three choices. 1) Work hard to become fuel for the profit machines whose toxicity is degrading civilization. 2) Work at jobs whose rewards are insufficient to cover their most basic needs. 3) Give up, or succumb to the counter culture that actively or passively disrupts the economic system.
Toxicity in the economic environment cannot be effectively controlled from the top. Toxicity is most appropriately avoided at the point it is introduced and as early as possible. There are two tools that can control GDP toxicity if they are used simultaneously, and if we want to keep the foxes out of the henhouse they need to be used in both business and government.
The two necessary tools are ethics and clear service cells. A moral compass to reduce toxicity is necessary, but when they are faced with a choice between moral high ground, and immediate gratification or food for their children, few people take the high ground. In fact they/we often make the wrong choice when deciding between greasy fast food and a more nutritional less tasty meal. We make better choices if we are on a team that values good choices. That is what the clear service cell is, a team that values responsible choices.
The clear service cell is responsible to its money source, its workers, and the rest of the world. The purpose of the cell is to protect itself and provide service while minimizing toxicity. The cell is responsible to identify, rank and avoid toxins in the proximity where they work. This does not involve any bureaucracy. It is an “on the site” common sense decision to do the right thing. The clear service cell and its cousin the clear business cell are designed to replicate, change, or disappear depending on the need for the service and the success in its delivery. We have the ability to control our destiny, but we have to make the choice to do so. If the foxes stay in the henhouse they will kill the hens, eat well, then starve.