Economics as if people matter

New Economics makes fascinating reading. It is must read book for anyone dismayed by the way market economics has driven us to the wall. Authors David Boyle and Andrew Simms begin by arguing that the financial markets are the epicentre of a massive system, the main purpose of which is to make its key players unimaginably rich. Further, it forgives the powerful their mistakes, and cushions them against hard times, but exhausts the rest of us and punishes and corrodes the lives of the poorer two thirds of the world.

It compares sheer diversity of the immediate crises - in credit, climate and energy - to ecological, human and spiritual crises. According to the authors, these are not usually understood as economic problems, but that is exactly what they are: a byproduct of faulty measurement and misleading values pedaled by ill-directed economic system. New economics is an approach that 'values real, rather than illusory wealth, and puts people and planet first.' It puts individuals, equality and opportunity ahead of economic activity and growth.

The book considers economics as a problem and begins each of the ten chapters with an intriguing question and dissects it to the last, which invariably boils down to the fact that economics is breaking society to maximise profit. It is evident all across - urbanization is growing, roads are choked, small shops are closing, people are stressed, marriages are failing and poverty is on the rise. The planet can't take it; the human psyche can't take it; but economics seems to insist that we do it anyway. We all know that life is about more than wealth, but our economy doesn't seem to recognize it.

David Boyle and Andrew Simms have based the chapters of book on most unassuming questions like 'Why did China pay for the Iraq war?' and 'Why do fewer people vote when there is a Wal-Mart nearby?' That new money is created through debt mechanisms and big business leads to erosion of community makes for compelling response to the leading questions. Interestingly, each chapter connects the reader to 'other books of the genre', not as reference but as additional reading material that makes New Economics an amazingly rich experience.

The book list 20 steps to build a better economy and showcases Great Barrington in western Massachusetts, a small American town, which has bucked the trend. It has a high street full of locally owned shops and a thriving network of local banks. It has access to a range of local food, which is fresh and healthy. Great Barrington has its own currency, Berkshares, nearly $2 million of which has been issued in and around the town to keep the wheels of the local economy turning, and to maximize the way that it engages local people, food and resources where possible.

David Boyle and Andrew Simms list plenty of tried and tested new economics solutions, each worthy of emulation. The financial crises may not have toppled the ivory tower of old economics, but it certainly has given a jolt to its foundation that only New Economics can strengthen. Without doubt, it is an immensely readable book that has a visionary appeal.

New Economics by David Boyle and Andrew Simms, Earthscan, UK, 192 pages, $16.99