Never in human history has there been such an accumulation of knowledge like in the last 100 years. What was that knowledge for? What did we do with it? And the point is that knowledge alone is not enough, that we understand very little. When you’re separated, you can accumulate knowledge. And that is—that’s been the function of science. Now, science is divided into parts, but understanding is holistic.
And that happens with poverty. One understood poverty only by experience. And then you begin to learn that in that environment there are different values, different principles from—compared to those from where one is coming. Economists look at the poverty from the outside, instead of living it from the inside.
And you learn extraordinary things. The first thing you learn, that people who want to work in order to overcome poverty and don’t know, is that in poverty there is an enormous creativity. You cannot be an idiot if you want to survive.
The whole language as an economist is not coherent with those situations and conditions. The principles, you know, of an economics which should be are based in one fundamental value and principle five postulates.
The fundamental AXIOM to sustain a new economy should be that no economic interest, under no circumstance, can be above the reverence of life.
1- The economy is to serve the people and not the people to serve the economy.
2- Development is about people and not about objects.
3- Growth is not the same as development, and development does not necessarily require growth.
4- No economy is possible in the absence of ecosystem services.
5- The economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible.
The Threshold Hypothesis :
In every society there is a period in which economic growth, conventionally understood or no, brings about an improvement of the quality of life. But only up to a point, the threshold point, beyond which, if there is more growth, quality of life begins to decline.
Growth is a quantitative accumulation. Development is the liberation of creative possibilities. Every living system in nature grows up to a certain point and stops growing. But we continue developing ourselves. So development has no limits. Growth has limits. And that is a very big thing, you know, that economists and politicians don’t understand. They are obsessed with the fetish of economic growth.
Economist Ha-Joon Chang on the G20 Summit, Currency Wars and Why the Free Market is a Myth