ABSTRACT
The financial crisis is as much a crisis of economics as of the financial system. Inherent flaws in the modern monetary system overlay and magnify conceptual flaws in prevailing neoliberal economic policy that rely on frameworks ill-suited to the current context of ecological and social problems. Our response, therefore, needs to address both the reform of the financial system and a fundamental reframing of economic policy away from an obsession with growth in GDP towards a focus on achieving high human well-being and social justice in harmony with ecological systems. Economic theory should better account for the laws of thermodynamics. Production should be redirected to maximize resource, not labour, efficiency, and to provide good jobs. Consumption should not be used as a proxy for well-being. Such an economic transition will not be possible without a more diverse money system, which is no longer dependent on growth, interest, and debt.
