A debt-based economy cannot survive if it does not keep growing, writes David Ashton. While Maurice Vassie says that the UK should follow the Swedish model and learn to repair our possessions instead of discarding them
Caroline Lucas (Letters, 2 December), is right about the need to have a more sustainable and people-friendly measure of our wellbeing. However, it is vital to understand why there is the fixation on GDP and economic growth in the first place. Ninety-seven per cent of all money circulating is borrowed and a debt-based economy cannot survive if it does not keep growing in order to service the interest on the debt. The economists at Positive Money among others have been working hard to raise awareness of how our money is created, the consequences of its creation by private banks and what the alternatives are. Coming from a similar perspective, the economist Joseph Huber has just written a new book entitled Sovereign Money: beyond reserve banking, which explains the workings of the current system, gives insights in the roots of the financial crisis and brings new solutions on how to fix a broken financial system.
The pursuit of economic growth at all costs is driving planetary destruction and creating untold misery for huge numbers of people. However, policies to try to fix climate change, pollution, austerity, poverty and a host of other problems, which do not address the fundamental issue of the debt-based economy and its need for economic growth, are doomed to fail.