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Myths of the Global Market
Date: Tuesday, February 27 2007

McMurtry : Myths of the Global Market
by John McMurtry

February 26, 2007

John McMurtry is an internationally recognized scholar and University professor emeritus-elect who has made outstanding contributions in the discipline of philosophy. A Fellow of the Royal Society of Canada and a President's Distinguished Professor, McMurtry is known for being engaged both in the classroom and the community. He studies the philosophies of politics, economics, education, literature, history and the environment, and his work has been published in more than 150 books and journals. Most recently, he has focused his research on the value structure of economic theory and its consequences for global civil and environmental life. McMurtry was selected by the United Nations as organizing author and editor of Philosophy and World Problems, which will be included in the Encyclopedia of Life Support Systems.

At the end of 2006, the journal of world economic affairs, The Economist, produced a banner issue on "Happiness and Economics". The lead article unwittingly revealed an Achilles heel of Economics. It has no way of telling the universal needs of human beings from junk commodities for the masses, or gold toilet-seats for the rich.


In fact, not even consumers in the developed world are happier by ever more market commodities. When scientific studies like Robert Lane's The Loss of Happiness in Market Societies (Yale, 2000) show that population satisfaction declines across the first world as income and commodity consumption rise above a certain level, the message does not compute to economists or policy makers. The reason for this is that neoclassical economics is based on the first premise that market growth produces more happiness the more commodities are bought - so-called "marginal utilities" that correspond to prices paid.

If this baseline assumption is false, the paradigm collapses. So the ground is shifted to other claims. The Economist explains that many "goods" can be "only enjoyed if others don't". The falsehood of the first principle is diverted from by a nudge-nudge that some can only enjoy at others' expense. All that well-being means in economics is willingness to pay a market price if one can afford it, the only measure of welfare that exists in the doctrine.


A logical person might think that the equation of paid prices to happiness is inane. But the problem is ignored. Instead, another shift of ground is relied on - how "productive and efficient" the global market is. This assumption does not hold up any better. The global market system produces many times more wastes than any economic order in history. In his world-renowned text, Economics Paul Samuelson defines economic efficiency as "absence of waste". But like all economists of the dominant paradigm, Samuelson includes only wastes that cost private enterprises money. So as long as pollution and damages to others can be externalized, it is "more efficient" - even if it is supremely wasteful. That is why global depredation of the most basic means of human life - breathable air, water aquifers, ocean life-systems, and people's capacities to produce - are ignored in the economic models which governments use. These "externalities" are kept off the books by public as well as private accounts.

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