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From the ashes of the crash. 20 first steps from new economics to rebuild a better economy

October 2008

To download : PDF (360 KiB)

Summary :

In the ashes of the predictable crisis in the global system lie important signs that a new economics is emerging. The tragedy is that the financial system has long since failed to do the basic job required of it – to underpin the productive economy and the fundamental operating systems upon which we all depend. These have been variously neglected, taken for granted or cannibalised by finance. They include the core economy of family, neighbourhood, community, and society, and the natural economy of the biosphere, our oceans, forests, and fields.

Worse, even when the financial system is working at full throttle, it corrodes the real economy – by its sheer profitability and faulty measuring – and it dominates the policy priorities of politicians.

If nothing else, the crisis provides an opportunity to rebuild a financial infrastructure which does the job, which means – not just bailing out failed banks – but investing in loan facilities supporting an interdependent network of productive local economies, that genuinely underpin life and that work within the tolerance levels of the natural environment. And this doesn’t mean starting from scratch. Just beneath the surface is the sleeping architecture of a new, diverse and resilient local financial system. The same is true of Britain’s neglected and undermined network of small shops and local enterprises who contribute disproportionately to job creation and help create the social glue that holds communities together during hard times. As the fissures in the old system threaten to crack open with potentially devastating consequences, the good news is that those living on the economic frontline have been developing, and building alternative methods of saving, exchanging and lending – that we can learn from, and multiply to create a thriving, resilient network able fill the gaps left by the collapse of the old order.

We make a number of proposals that include measures both for immediate

stabilisation of the economy and for the long-term restructuring that will support a new economy that serves a vibrant and dynamic society, not the other way around. Here are several short-to-long-term steps that, in the midst of the crisis we believe will breathe life into a phoenix-like new economy. They are not intended to be utterly comprehensive or exclusive, but we believe they represent a solid and necessary start.