Clinton St. Quarterly, Vol. 8 No. 4 | Winter 1986 (Seattle) /// Issue 18 of 24 /// Master# 66 of 73

1V1 ost people view the growing economic crisis as evidence of something gone wrong. Depending on ones ecothe nomic philosophy, one can put the blame on various groups and institutions. Conservatives point to the government, monetarists blame the Federal Reserve Bank, Marxists blame the capitalist system, politicians blame their predecessors, consumers blame big business and OPEC, crisis, it at least expresses the trauma that can accompany rapid change when proper understanding is lacking. The reason it is difficult to step back and see an underlying pattern is that many things are wrong. We have gone from double-digit inflation and recession under President Carter to double-digit unemployment and recession under President Reagan. Unquestionably, we are witnessing the relative decline of what I call the mass economy, the economy of the industrial age, a period during which nations amassed enormous manufacturing capabilities that depended on the large-scale extraction of resources, particularly fossil fuels. The mass economy yvas a formative economy in which virtually all of the work that human beings once did by hand or with the assistance of animals became mechanized through the use of machinery, technology, and energy. This mechanization included the development of the automobile, steel, rubber, chemical, electrical, heavy equipment, and machine tool industries, as well as the thousands of businesses required to support them. Infusing the mass economy was what economist Robert Heilbroner calls the ‘thrusting, restive search of the participants.. for their material advancement.' The success of the mass economy in producing a profligate amount of goods has in turn changed the formula for success. Energy, the resource that accomplishes most of the work in an industrial economy, is more expensive than it was ten, twenty, even one hundred years ago. Because it costs more to get things done, industrial countries face a choice. They can consume more energy and drive its price higher, making goods more expensive and causing inflation and declining wages; or they can make the economy more informative by developing methods of production and patterns of consumption that use less energy and capital resources and more knowledge. Inevitably, we have chosen and will choose the latter. It is this transition from a mass economy to an informative economy that is causing world economic crisis. The crisis of the developed nations is concentrated at the top of the economy, not at the bottom. Historian Fernand Braudel divides the economy of capitalist nations into three distinct segments, the top one of which encompasses the large governing institutions: international banks, multinationals, and centralized and big business has blamed consumers, OPEC, and government. Like a losing team, we see only our failure, and as a result, we have turned on one another. Economic opinion has diverged because the economic events of the past decade do not fit into any economic theory. We are bewildered by an economy in which some suffer while others grow rich, in which some towns are worse off than they were during the Depression while others are booming. The economy defies not only prognostication but categorization. Some things are working, while others clearly are not. In 1981 and 1982, more businesses started up than at any other time in history. In 1982, more businesses failed than at any time since the Depression. There is another way to look at present economic events. We have entered a period between economies, or, to be more precise, between economic structures, and the troubled economy reflects the passage from one structure to the next. Current economic problems are no more a sign of failure than adolescence is the failure of childhood. While coming of age may not be the most apt metaphor for our By Paul Hawken political administration. Under this segment is the market economy, the making and selling of goods: businesses, stores, shops, and farms. Submerged further, but just as important, is what Braudel calls ‘material life,’ the constant and undefined activity of sharing and barter, the giving and taking and making of objects and services between people in local areas. This most basic level—a ‘rich zone, like a layer covering the earth’— and the market economy above it have changed dramatically in the past decade in response to higher prices for energy, higher costs for capital, and declining wages. We are changing our behavior, and as we do, the top of the economy, whose existence depends on its ability to control and manipulate the lower levels, is in crisis. Big businesses are threatened, banks face insolvency, and governments are rapidly turned over as successive economic failures destroy the confidence of voters. While governments and politicians debate their course of action, consumers, householders, and businessmen are already adapting. AX I daptation to the rising cost of energy is creating the informative economy. Industry is inventing more efficient manufacturing processes and redesigning products so that they use lighter, more durable materials and require smaller 36 Clinton St. Quarterly

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