The word “economy” can be traced back to the Greek word oikos, “house” or specifically, “managing of a household”. Today’s economy, as the most wildly optimistic eye can see, has become everything else but managing of a household. Household originally meant a place where family lives and thrives. In old times that place was supposed to be a foundation of mutual happiness and prosperity. A family concern, sustaining all its members equally and the whole of the household including fields and gardens, livestock, water, trees, birds and animals that live in and around it so all can prosper. Quite an idyllic, balanced life. Does today’s economy resemble that?
The economy that isn’t one
Quite the opposite. Today’s economy looks more like a constant struggle, governed from the high towers of political power and measured through numerous abstract indexes and buzzwords ordinary people don’t grasp. Major motivator in today’s economy, and in many centuries ago, is profit. From profit everything else is calculated, valued and derived. If unprofitable, factories are closed, fertile fields abandoned, workers laid off and sent home. Wars, poverty, crisis and economy go always hand in hand because they’re next of kin. Why it has to be like that?
The reason for it is the major flaw in the concept of wealth and prosperity. Namely, to achieve profit, something inside every economy needs to be sacrificed or devalued, and to something else value must be added, and that “law” must be universally accepted between different parties in order to work. What makes one thing devalued and another increase in value? An opportunity to exploit. However, opportunities to exploit change daily. And that’s becoming of a marketplace driven for (and by) profit.
Instead of idealised balance inside the household where economy really takes place, a marketplace (supposedly claiming a fair play) now advocates a balance of a different kind: it claims demand and supply between households create a balance. (Households we had in old times, but in modern times we have businesses). It says some goods or services will be in demand, and someone will meet that demand. However, the argument that market balances itself in such a way is an illusion, and majority of economists have fallen prey to an obvious lapse of logic in it: there’s no such balance between demand and supply, because true market motivator is profit, not balance.
Profit as an absolute measure of life
Profit is difference between total revenue and its opportunity costs. If everything is in balance, there’s no articulated difference between supply and demand and therefore no profit. In a manner of speaking, profit despises balance because if supply perfectly satisfies demand, profit cannot take place: if someone perfectly satisfies someone else’s demand, how can there be more “satisfaction” left in supplier’s pockets? Either demand was not fully satisfied, or someone was fooled and someone cheated, or someone missed out a major flaw in this equation?
Hence we’re not talking about supply meeting demand, but about unreal (or artificially created) demand creating unreal supply. The whole process is set in motion to produce profit — a factor that constantly creates imbalance and turns the scale of economy from one side to another. As a consequence we have crises. Crises create anxiety, a drive to catch the profit at all expense because that’s the only way to float solvent, and stay in the game. A game of economy becomes a struggle, a matter of life and death. How often we read in the newspapers that farmers, for example, or business owners commit a suicide because they cannot defeat debt, which is nothing else but accumulated lack of profit.
To achieve profit, natural balance of the economy needs to be disturbed and something must be sacrificed, or exploited. What’s best to sacrifice? Usually two things, and that’s human labour and natural resources. They’re the weakest links in the chain. World history shows there’s no low enough measure that can describe how invaluable and depreciated human life and labour can be in hands of those who want to maximise profit. Similarly, same history shows there’s no limit of human exploitation of natural resources, which are taken for granted and for free.
Thus the word economy — the managing of a household — in an oxymoron. Makes no sense because the idea of profit denies it. Plus economy today is run by businesses, not households, and society tries to separate business from family matters. But can they be separated despite overwhelming evidence that business affects not only family life but all life on Earth? Profitonomy, exploitation or over-consumption is a much better word for the economy as we know it.
GDP (Gross Domestic Product) is a measure that describes how successfully one big household — say a nation — creates profit in the global marketplace, under a common denominator of the US dollar. Thus so far happiness of nations could’ve been estimated by measuring how much their happiness relates to happiness of the US economy and its people. (That’s another oxymoron, for today’s economy presupposes a US citizen an ideal Earth’s citizen and American way of life a desired one.)
Let’s examine figures from 2003/04; a citizen from Luxembourg is some 1.45 times happier than a US citizen, but one US citizen is as happy as a basketball team from Iran. Or, it takes a combined happiness of a whole soccer team from Syria to match the happiness of one goalkeeper from the US. Many people today would agree it’s true.
Some countries and institutions propose world economies to go after GNH (Gross National Happiness) index, which is indeed interesting. GNH attempts to sum up and define quality of life in a more holistic terms including economical, environmental, physical, mental, social wellness. Nevertheless, it’s nothing entirely new and is still infected with two diseases: firstly, economical wellness is a significant part of it and is not redefined yet, and secondly, what can be used to describe, to measure happiness? What’s the common denominator of happiness everyone can relate to?
For many happiness is still money, and money justifies profit and is derived from it. Even revered prof. Joseph Stiglitz, a Nobel prize laureate in economy, had stiff lips when trying to dismiss it altogether. But few will wholeheartedly admit that to fix world economies and broad negative social and environmental consequences would mean this: kill the very idea of profit, and start from square one: restore balance in our lives, in our families, between people and their environment.
— Zvonimir Tosic
[…] and independence. Oikos, or the household — a place where family lives and thrives — was a core of the society and was much more important than it is today. Word ‘economy’ comes from it; the manage of a […]