There has been much talk in recent months about the ‘new economy.’ But for lay people just starting to think about investments, markets, M&As and other related topics, what does this mean in practice for them? Here, we take a brief look in an attempt to offer a basic understanding of the matter.
According to a recent interview conducted by Alter Net’s Allen White, with Stewart Wallis, the former executive director of the New Economics Foundation, the goal of ‘new economy’ is:
“to meet the needs of all human beings while operating within ecological limits. It seeks to maximize the well-being of all species, human and other. Its proponents believe that economics is embedded in, and dependent on, the Earth’s ecosystems. They reject the concept of homo economicus—the notion that humans are self-serving, dispassionate individuals—and instead focus on the reality that we are adaptive, social creatures. Such a new economy rejects the goal of endless growth; indeed, it is agnostic about growth, focusing instead on designs and practices that are regenerative rather than extractive. This framework contains a spiritual element as well, defining the economy as a vehicle for enabling humans to grow and realize their full humanity. A new economy, of course, needs a new economics—a better foundation for explaining our current predicament and analyzing and creating policy.”
In other words it seems that there is an attempt at creating a shift in focus from the ‘me now’ generation of 1980s Thatcherites to an ‘us later,’ demographic looking at the greater good for the future and using economics to advance that.
Another explanation comes from CNBC’s Elizabeth Schulze who talks of the new economy in terms of it being a ‘circular economy,’ and that we are aiming to “keep materials and resources in use for as long as possible.”
So it seems from both these viewpoints that there is an emphasis on the benefits of recycling, maintenance and a move away from one person getting rich to the detriment of others and the community at large. As the Philips Lighting CEO Joao Paula explained vis-à-vis his company: the aim is to “provide the most efficient light, while maintaining ownership of its resources.” Other retailers are already beginning to jump on board such as clothing store H&M which has recently – somewhat infamously – been requesting old clothes to be returned for financial gains.
This ‘new economy’ could actually be quite a backtrack to days of old when we actually truly understood the benefits of real recycling, not just for our economy but also for ourselves.