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The Economy Needs a Makeover

The failure to resolve the global crisis that began in 2008 baffles the most prominent economists and exposes the limitations of the current economic paradigms. The expansive monetary policy was meant to reverse the decline and gradually heal the world economy, but the reverse seems to have happened. It appears that the economic “toolbox” in the hands of decision-makers treated only the symptoms of the crisis rather than the crisis itself.

The interest rate cuts, expansion of budgets—intended to boost industry and commerce—tax cuts, reforms in finance, interference of central banks in bond and currency markets have all failed to reinvigorate the stalled economy.

To resolve the crisis, we must first diagnose the root of the problem and adopt a solution that corrects it. Treating only the symptoms doesn’t resolve the crisis itself, as its recent re-emergence indicates.

At its very heart, the economy is an expression of how we relate to each other. In the current economy, our primary motive is to maximize our profits in a competitive environment that perpetuates in us the sense of lack. This results in a zero-sum-game, where one’s gain comes at the expense of another.

The solution to the economic crisis requires us to first change our relationships into those based on mutual guarantee. Such a change will be possible only by creating a supportive environment, including information systems that educate us about this change. These will include use of the media, as well as adult and youth education systems. The educational framework will endorse such values as solidarity, collaboration, empathy, care for others, and mutual guarantee.

Social sciences provide ample proof of how the environment influences people [71]. Hence, we must build a society that teaches us to think differently and to adopt prosocial values.

Today, society rewards us with money, power, and glory. Such rewards create competition and induce aggressiveness as each of us tries to exploit or manipulate others on personal, company, national, or international levels. If the rewards were to change and, instead, encouraged mutual guarantee, the change would be easy to make and would have broad public support. This is the power of the environment to influence our behavior.

[71] Perhaps the most notable examples are the studies published in the book, Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives—How Your Friends' Friends' Friends Affect Everything You Feel, Think, and Do, by Dr. Nicholas A. Christakis and Prof. James Fowler:

Christakis, N. A.; Fowler, JH (22 May 2008). "The Collective Dynamics of Smoking in a Large Social Network" (PDF). New England Journal of Medicine 358 (21): 2249–2258.

Christakis, N. A.; Fowler, JH (26 July 2007). "The Spread of Obesity in a Large Social Network Over 32 Years" (PDF). New England Journal of Medicine 357 (4): 370–379

Fowler, J. H.; Christakis, N. A (3 January 2009). "Dynamic Spread of Happiness in a Large Social Network: Longitudinal Analysis Over 20 Years in the Framingham Heart Study" (PDF). British Medical Journal 337 (768): a2338.doi:10.1136/bmj.a2338. PMC 2600606. PMID 19056788.

Christakis, N. A.; Fowler, JH (26 July 2007). "The Spread of Obesity in a Large Social Network Over 32 Years" (PDF). New England Journal of Medicine 357 (4): 370–379

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