Have we learned something from the crisis in 2008?

Have we learned something from the crisis in 2008?

All I can say as an answer to the question in the title: OBVIOUSLY NOT.

Governments saved financial sector (banks, insurance companies) which caused the crisis in the first place. However, the financial sector hasn't changed anything, all the causes of the crisis remained intact.  As it may seem that this is again the time of prosperity which will last, it is an illusion. The next crisis is waiting just behind the corner. Without changes, it will be even more devastating than the crisis in 2008.

Although everything has also a moral point of view, I will focus here only on facts, which has nothing to do with morality and that without any doubt shows that the current economic system is not sustainable.

Let's examine these facts.

  • Profit from capital is fundamental for capitalism.
  • Constant economic growth is required for capital to yield a profit.
  • Economic growth must be at least 2% per year for the system to function normally.
  • At 2% growth, everything (economic output as well as consumption) doubles in 35 years.
  • This is an exponential function which raises very fast. In 70 years the growth factor is 4 in 105 years 8 and so on. In 350 years the factor already become 1,024 and in 700 years 1, 048,576.

On the other side of the story,  the natural resources are limited, the pollution has already reached the critical level and the consumption cannot grow much more. Markets of developed countries are already saturated: almost every person already possess a mobile phone, almost every family has at least one car, about 30% food is thrown away every day, etc.

Now, think of it. Even if we disregard the lack of resources and the increased pollution -- how much more can we consume? Two times more than now (35 years) or four times more than now (70 years)? Definitely not million times more than now (700 years). We thus can be sure that the growth cannot last for the next 700 years. However, can it last for the next 35 years? Can we double our consumption? Are there enough natural resources for that? Can we withstand doubling the increased pollution?

These are the questions that everybody should ask himself. And also, what we can do to prevent the crises in the future.

If you are interested you can read more in my book: Imagine Non-Profit Society: Utopia or Necessity


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