As our climate destabilises, floods inundate cities, wildfires burn forests, droughts kill our crops and manmade radioactive isotopes leach into our soil and water, many accountants and policy analysts are waking up.
They are joined by NGOs, civic leaders, whistle-blowers and a few public-minded politicians. The big message is that the deep but false philosophy of economism and its narrow, outdated dogmas are the hidden virus spreading financialisation and its social and ecological destruction.
This malfunctioning source code spread worldwide, commandeered public and private decision-making, overriding scientific research in other disciplines which clearly demonstrate the real conditions of our 7.5 billion member human family on this planet.
Change is difficult, especially in many human minds, as my late friend Thomas Kuhn wrote in his Structure of Scientific Revolutions in 1993. New paradigms are introduced in social systems one funeral at a time. Mahatma Gandhi reminded us that: First they ignore you, then they ridicule you, then they fight you and then you win. Polls in the US find some 40 per cent of the public do not believe in evolution while many politicians still deny science and climate change.
Primitive emotions
Brain and behavioural scientists demonstrate how our brains lock in habits of thought, often amplifying our fear of change and the other, those primitive emotions seated in the amygdala in our brains. This constrains both personal development and public policy as we hear politicians intoning there is no alternative to old ideas or the financial bubble-created status quo: austerity and cuts in public services, jobs, education, health and environmental protection. Others blame God for human-made environmental pollution and climate disruption.
Many observers, including myself, predicted the 2008 financial crisis and the continuing misery imposed on so many around the world. Wall Street morphed from small firms, partnerships and petty manipulators into ever-larger corporations and trusts, capturing hungry politicians and regulators.
These financial firms capitalised on public infrastructure, unprotected common resources and newer communications technologies, computers, the internet and satellites funded by taxpayers. Compliant politicians helped finance go global after the big bang deregulation and privatisation of Ronald Reagan and Margaret Thatcher in the 1980s. Money was moved offshore into tax havens as detailed by Nicholas Shaxson.
This culminated in today’s global financial bubble, with over four trillion dollars of currencies traded daily, quadrillions of derivatives generated by mega banks and flighty traders. High-frequency trading firms place and cancel billions of orders every second, phishing for trends ahead of other investors all on shaky computer platforms and programmed by algorithms that regularly malfunction. This misuse of publicly funded IT infrastructure led to the mini-crashes which occurred frequently since the ominous flash crash of May 2010 and continue in the latest three-hour crash of NASDAQ on Aug. 22, 2013.
All efforts to regulate and downsize this destructive financial bubble and restore finance to its boring, modest role supporting real and local economies are fiercely opposed by lobbyists from Wall Street, in London, Washington, Davos and among their privately funded think tanks and revolving-door intellectual mercenaries in governments.
Only in 1995 did the pioneering group at the United Nations Development Programme (UNDP) publish in their Human Development Report an estimation of the global value of unpaid productive work: 11 trillion dollars of work by women and five trillion dollars by men simply missing from the official 24 trillion dollars of global GDP reported that year.
Pricking the global financial bubble and preventing its further exploitation of citizens and ecosystems requires facing down both the underlying false philosophies of economism and their adherents in government, business, academia as well as their operators in financial markets.
Once economism is defrocked as obsolete and a failed ideology, with its derived financial �innovations exposed as mathematical abstractions, we will not be flying blind. Accounting is a more realistic profession than macroeconomics. The growth of new more realistic accounting protocols is providing new wheels for social change toward healthier, more inclusive, equitable, greener and more knowledge-rich societies.