The economy is a self-organizing
system that needs continuous growth and a constant inflow of energy and
materials in order to maintain itself.
Absence of growth will make the system fragile, and economic contraction
could lead very quickly to its collapse. These are characteristics of dissipative
systems that apply to the free market economy. Another characteristic is that
economic activity will unavoidably lead to the generation of waste heat,
greenhouse gases and waste materials that the system must expel into its
environment, making the system unviable in the present context of global
warming and increasing oil prices.
The simplified graphic
representation of the economy shows how it is basically profits that generate the
funds for the resources needed to guarantee that the system can continue to
grow. Loans do not fulfil this function, since loans must be repaid from profit
and credit institutions will be reluctant to extend loans if they fear their
profits are endangered by the inability of creditors to generate enough income
to meet interest payments. So the system depends on private companies and blind
market forces. However, society can no longer rely on a system that is blindly
guided by the profit motive and that is to a large degree responsible for much
of the environmental problems that now afflict us. The system cannot continue in
its present self-reinforcing growth mode. Governments can and must step in to
fulfil their responsibility and fundamentally reform a system that has become harmful
and that is driven exclusively by profit.
