Could anything be more insane than for the human race to die out because we couldn't afford to save ourselves - the late Prof John Hotson (cofounder of COMER)
Welcome to our website ERA for a just and sustainable society
The buildup of private debt within the modern world's market driven economies threatens human survival
Economic Reform Australia is a non-party-political and not-for-profit organisation dedicated to educating and informing decision makers and the community about how to achieve a socially, environmentally and financially sustainable society. Of particular concern is the drift away from sustainable and just societies around the planet. We regard reform of the financial system as an essential prerequisite to other reforms aimed at tackling the world's immense social and environmental dysfunctionality.
The financial system currently operates in such a manner that - during the asset inflation phase of the so-called economic cycle - debt grows at a faster rate than does the real economy. This flawed system has enabled global debt to balloon to a stupendous scale, and it continues to grow today unchecked, widening the gap between rich and poor and creating unrelieved suffering.
Moreover the debt-driven nature of modern society necessarily implies and embodies an economic growth imperative, without which the contemporary model of capitalism would be unworkable. However unbridled economic growth, as measured by gross domestic product, is responsible for depleting the earth's non-renewable resources at an uprecedented and unsustainable rate.
Consistent with the need for financial reform is a perceived requirement to allow decision-making to devolve to the community level as far as practicable. We are opposed to neoliberal (economic rationalist) ideology and repudiate many of the fundamental tenets of neoclassical economics. ERA also supports measures which will help bring about more humane and cooperative social structures and preserve the integrity of the environment.
It is of especial concern that Australia's sovereignty has been sabotaged by a long period of financial and trade deregulation. As a result, Australia has generated massive corporate, real estate and foreign debts, and its economy has become hostage to overseas ownership and speculation. Total Australian debt exceeds three trillion dollars (the most recent data may be obtained from the Australian Bureau of Statistics and from the Reserve Bank of Australia). Almost all of this debt is private, and especially corporate (public liabilities to the private sector amount to only a few percent of total indebtedness). Furthermore the aggregate of debt within Australia is inordinately large in comparison with the nation's gross domestic product, and has been so for a considerable time.
During the inflationary phase of the business cycle, debt tends to grow much faster than does real productivity. The overall debt load is only reined in by the inevitable recessionary phase - a necessary requirement of the prevailing monetary system if debt is not to become completely unsupportable with the passage of time. Owing to the perpetuation of this design flaw, recessions and depressions have become an inevitable recurring feature of our economic system. The precise mechanics of this process were first worked out by american economist Hyman Minsky.
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