Conventional Economic Theory
The Belief System of the Free Market.

Excerpt from David Korten's book: When Corporations Rule the World, 1995, Kumarian Press/Berrett Koehler

• Sustained economic growth as measured by gross national product, is the path to human progress.
• Free markets, unrestrained by government, generally result in the most efficient and socially optimal allocation of resources.
• Economic globalization, achieved by removing barriers to the free flow of goods and money anywhere in the world, spurs competition, increases economic efficiency, creates jobs, lowers consumer prices, increases consumer choice, increases economic growth, and is generally beneficial to almost everyone.
• Privatization, which moves functions and assets from governments to the private sector, improves efficiency.
• The primary responsibility of government is to provide the infrastructure necessary to advance commerce and enforce the rule of law with respect to property rights and contracts.
  
  These beliefs are based on a number of explicit underlying assumptions embedded in the theories of classical economics:
  
  
• Humans are motivated by self-interest, which is expressed primarily through the quest for financial gain.
• The action that yields the greatest financial return to the individual or firm is the one that is most beneficial to society.
• Competitive behaviour is more rational for the individual and the firm than cooperative behaviour; consequently, societies should be built around the competitive motive.
• Human progress is best measured by increases in the value of what the members of society consume, and ever higher levels of consumer spending advance the well-being of society by stimulating greater economic output.
  
  To put it in harsher language, these ideological doctrines assume that:
  
  
• People are by nature motivated primarily by greed.
• The drive to acquire is the highest expression of what it means to be human.
• The relentless pursuit of greed and acquisition leads to socially optimal outcomes.
• It is in the best interest of human societies to encourage, honour and reward the above values.

David Kortin Directs the People Centered Development Forum. See: http://iisd1.iisd.ca/

Comments and questions welcome.

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