Posted by: Tony Shannon | December 17, 2010

Economic Splits and Steady States

This year has seen further change across the world.

As the decade closes, the unfolding 2007-2010 global financial crisis continues to highlight that economics is not just complicated, it is a complex science, verging on the chaotic at times.

During this year some economies have continued to grow, others have contracted.
As the Economist recently reports there now seems emerging across the globe, with splits in progress between European, US and Emerging Economies.
In my homeland of Ireland, aftering the soaring heights of the Celtic Tiger years, unfortunately things have not gone well lately and the increasing gap between national income and expenditure has recently required outside assistance to support the economy.

Is there an inevitable cycle in that all economies aim to boom, to then be followed by busts? Perhaps inequality is simply an inevitable by-product of “the market”?

You may be interested in this great view of the progress of 200 countries over the most recent 200 years (in just over 4 minutes! from the “Joy of Stats” on the BBC).  It is inspiring to see that amid the booms and busts the real progress that mankind has made in that time.  There is a reassuring conclusion that all countries can end up “healthy and wealthy”.

Within this exploration is a finding that inequalities are common within countries as much as between them.
The Spirit Level: Why Equality is Better for Everyone is an interesting book. It claims that for each of eleven different health and social problems: physical health, mental health, drug abuse, education, imprisonment,obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being, outcomes are substantially worse in more unequal rich countries.

The Spirit Level promotes a concept named steady state economics, which is taken further in another interesting report, named “Enough is Enough : Ideas for a Sustainable Economy in a World of Finite Resource“. This report asks the deep question of any society, “How much is enough?”.
While some of the recommendations may be somewhat controversial, others raise interesting challenges .. limit resource use and waste, change the way we measure progress, improve global cooperation.

It is that concept of improving global cooperation that strikes a chord. As so many health systems are working under pressure and need to work smarter, lets hope that the most recent financial pressures encourages greater international collaboration between those involved in the challenges of health system improvement.

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Responses

  1. Interesting blog. Have you looked into Herman Daly? I’m working on a piece that would tie his writings to Keynes.

    • Thanks, not come across Daly before but I should have, thanks for the education. I’d be interested in your piece on Daly & Keynes, so thanks for letting me know when its out.


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