Sunday, July 15, 2012

The poverty of affluence

The TEAR Australia monthly magazine has an interesting article Do we have enough? by Ross Gittins [long-time Economics Editor for the Sydney Morning Herald newspaper].

He points out that traditional economic theory is concerned with the problem of scarcity: there are only a finite amount of resources while we have infinite wants.

However, the real problem now in Western countries is one of abundance, which is associated with three important problems:

1. the huge expansion of economic activity is having a terrible effect on the environment.
It is no longer an infinite and "free" resource but finite one and there are significant economic costs associated with its degradation and depletion.

2. abundance exacerbates humankinds problem with self-control: diet, exercise, drug and alcohol abuse, and debt.

3. abundance leads to significant "resources being devoted to the socially pointless pursuit of social status through consumption."

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