Ian Grant reviews book for Management Magazine

Healthy Money, Healthy
Planet
By: Deirdre Kent
Publisher: Craig Potton Publishing
Price: $34.99


Sustainability is a current buzz word among politicians and business leaders. It is on many lips; but lip service is about as far as it usually goes.

There’s barely even lip service paid to the idea that our present economic system is not sustainable. It’s a bit like democracy. Most of us accept it without question; some worry about it but decide the alternatives are worse. Yet there are growing doubts about the sustainability, the very survival of the economic system that makes most of the world go round, and that we all depend on so completely.

Deirdre Kent’s Healthy Money, Healthy Planet both confronts the realities and considers some of the alternatives. She argues, as do economists like Richard Douthwaite, that the present debt-based global economic system must continue to grow or it will collapse. “The ritual worship of the desirability of economic growth” can, she writes, be traced to capitalism’s total dependence on continuous economic growth because of the need to pay interest on borrowed money. Almost all our money supply is created by interest-bearing debt by private banks; the Reserve Bank has confirmed that only 2 percent of the money in use in New Zealand is created interest-free.

Collapse is not just a theoretical possibility: witness the Argentinian and Thai economies and Japan’s struggle with its banks’ bad debts for over a decade. “At the time of writing,” noted Kent, “Japan spends more than 40 percent of its taxation revenue servicing debt…” As Clyde Prestowitz pointed out in Three Billion New Capitalists (reviewed in Management Ausust 2005) there is increasing concern about America’s ability to fulfil its international financial obligations: the US trade (current account) deficit was about $650 billion in 2004, financed by huge overseas borrowing, and mortgaging large US assets to foreign lenders.

Deirdre Kent, previously the tenacious leader of the country’s anti-smoking lobby, has written an impeccably researched book that deserves to be read. It discusses, in an agreeably jargon-free and readable fashion, how the current system works, or doesn’t. It looks at complementary economies and monetary systems – at possible changes to taxation, community banking, commercial barter – that have been tried successfully in various parts of the world.

The increasingly stark reality is that unfettered, unthinking growth is now both unsustainable and increasingly unacceptable. Healthy Money, Healthy Planet should be a valuable resource in the essential, and overdue, debate on our economic options.

Rating 4