The Wealth of Nature: Economics as if Survival Mattered by John Michael Greer - Book review

The Wealth of Nature

Economics as if Survival Mattered

By: John Michael Greer

Published: May 31, 2011
Format: Paperback, 288 pages
ISBN-10: 0865716730
ISBN-13: 978-0865716735
Publisher: New Society Publishers

"Economics is badly in need of a Copernican revolution of its own, one that will recognize that the center of economic activity is not where where today's economists think that it is", writes scholar of ecological history and internationally renowned peak oil theorist John Michael Greer, in his provocative and visionary book The Wealth of Nature: Economics as if Survival Mattered. The author describes the current state of economic theory, and its many shortcomings, and provides an alternative approach to economic thought grounded in the ideas of E. F. Schumacher.

John Michael Greer guides the reader on a tour of the history of economics, including the theories of Adam Smith, David Ricardo, and John Maynard Keynes. The author offers evidence that contemporary economic thought is deeply flawed, and has failed to meet its purpose of providing guidance and ideas for creating a strong and vibrant economy. For John Michael Greer, the economics profession actually benefits more from being wrong as they were in their failure to understand the housing bubble, and that over dependence on mathematical modelling fails to recognize potential economic disasters as they develop and grow more dangerous to the economy. The author points out that simply tinkering with the most popular and mainstream economic theories won't address or correct those shortcomings.

John Michael Greer (photo left) proposes a fresh look at economic based on reality and an understanding of what constitutes real wealth. For this reappraisal of economics, the author turns to the economic thought of E. F. Schumacher, author of the seminal book Small Is Beautiful: Economics As If People Mattered whose ideas were based on the evidence of what he observed in action around him John Michael Greer points out that the ideas presented by E. F. Schumacher are complex and require extensive study beyond the scope of this book. For purposes of understanding the overall concepts behind Shumacher's thought, John Michael Greer breaks them into four main areas:

* Schumacher drew a hard line between primary goods and secondary goods. Secondary goods are what are studied by mainstream economists, while primary goods are those provided by Nature. Renewable resources of nature are constantly replenished capital while non-renewable resources draw down the overall wealth of Nature and the economy.

* Schumacher emphasized the central role of energy within the sphere of primary goods. For Schumacher, energy can not be treated as a commodity, as energy is the gateway resource to other resources. With enough energy, shortages of other goods can be removed. With an energy shortage, an upper limit is placed on the production of those secondary goods

* Schumacher stressed the importance of the cost per worker of establishing and maintaining a workplace. For societies with abundant capital, ample energy supplies, and established infrastructure, replacing workers with technology is a viable alternative. Such is not the case in developing economies where using human hands and fulfilling local needs is the more viable alternative.

* Schumacher considered the central question of the failure of contemporary economics could not be solved with mathematical or statistical models, as their assumptions are so intertwined with current theories. Economics can't predict the behavior of the economy because that requires criticism of the basic assumptions of contemporary economic theory. Those assumptions must be addressed and related to actual observation.

For me, the power of the book is how John Michael Greer meets and addresses the challenges of rebuilding a workable and reality based economic model. The author combines the current peak oil and energy crisis with solutions based on the ideas of E. F. Schumacher. John Michael Greer provides some solutions that will be controversial and likely to face resistance and opposition. That is to be expected, and the author fully understands that not everyone will embrace his recommendations. The author does point out that both peak oil, and the ongoing economic crisis faced by societies today, demands solutions and hard choices. In the end, the book is offered to the general public, as the final decision makers of how society should move forward into what the author calls the twilight of the Age of Abundance.

I highly recommend the important and landmark book The Wealth of Nature: Economics as if Survival Mattered by John Michael Greer, to anyone who seeks real solutions to the challenges of both peak oil and the economic crisis. This book should be read, discussed, and its empowering ideas considered by everyone. While not all readers will agree with the author's ideas, or the solutions offered, but it's essential to understand these proposals, as the time where the twin problems of peak oil and the financial crisis will force solutions be discovered and put into place.

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