BY SOFO ARCHON
Our economic system — call it “capitalism,” “market economics” or what you will — sucks.
Why?
Because it’s causing tremendous harm, both to our society and the planet.
How exactly?
Well, here are the four main ways:
1. It leads to poverty
Although we possess the technical know-how to provide food, clean water, and shelter for each and every human on Earth, our economic system structurally prevents us from doing so.
That’s because, in this system, money — the means through which we meet our needs — is scarce, forcing us to compete against each other in order to “earn” a living, a situation that inevitably results in wealth disparities.
In fact, according to statistical reports, about 50% of the global wealth is owned by the richest 1%, while over a billion people are starving on this planet, which is unbelievable, considering that the world provides enough food to nourish every man, woman and child alive.
But other than those living in extreme poverty, about half of the global population is living in relative poverty, struggling daily to make ends meet, which, as we will see, is causing immense suffering and conflict.
2. It creates disease
Most people don’t realize it, but our economic system is greatly affecting our health, and in a tremendously negative way.
For example, due to the wealth inequality caused by the global economic system, it’s estimated that about 10 million people are dying unnecessarily from hunger each year, with about 500,000 children under age 5 dying from diarrheal diseases which could be easily prevented and treated.
Studies have repeatedly shown that people living in poverty are way more likely to develop all sorts of physical health conditions, such as heart disease and obesity. The primary reason for that is the poor health habits that occur in lower income environments, due to the lack of funds for better nutrition, medical attention and education. In addition, the poor are significantly more likely to suffer from mental illnesses, such as depression and anxiety, due to high levels of stress caused by the harsh environment they live in.
3. It triggers violence
In a world where there is an enormous wealth gap between the higher and lower economic classes, violence is unavoidable. That’s especially true when both rich and poor people live close to each other, showing how deeply the sense of injustice affects our psyche.
There’s a lot of research suggesting that poverty is a breeding ground for violence. For example, studies show again and again that an increase in unemployment, and hence poverty, is usually followed by an increase in violence. Studies also show that child abuse and chronic stress are significantly more likely to be experienced by the poor, and have a direct correlation to both premeditated and impulsive acts of violence.
4. It destroys nature
Lastly, the way our economic system works is causing tremendous harm to the planet, primarily because of the need for consumption.
To understand why, consider this:
If people stopped buying as much stuff as they currently do, fewer sales would be made, which means that fewer jobs would be needed, and hence that more unemployment would be created.
Now, assuming that consumption slowed down significantly and for long enough, the economy would shrink dramatically and eventually collapse, resulting in hunger, disease and violence.
Therefore, our economic system is based on consumption — and the more of it, the better.
But here’s the problem:
The more we consume, the more natural resources we use up. Yet our planet has limited resources, and to keep our economy going in this consumption-based system, we are forced to extract resources way faster than Earth can replenish them, causing deforestation, soil erosion, biodiversity loss and a multitude of other environmental issues.
In other words, our economy is inherently unsustainable.
Further reading:
I hope that this article helped you to better understand what’s wrong with our economic system, as well as why we urgently need to change it.
To dive deeper into the topic, check out this article where I shed light on the core destructive mechanism of our economic system, as well as what we can do to create a socially and environmentally-sustainable economy.