Debt-based economy is real cause of our fixation on GDP | Letters

Caroline Lucas (Letters, 2 December), is right about the need to have a more sustainable and people-friendly measure of our wellbeing. However, it is vital to understand why there is the fixation on GDP and economic growth in the first place. Ninety-seven per cent of all money circulating is borrowed and a debt-based economy cannot survive if it does not keep growing in order to service the interest on the debt. The economists at Positive Money among others have been working hard to raise awareness of how our money is created, the consequences of its creation by private banks and what the alternatives are. Coming from a similar perspective, the economist Joseph Huber has just written a new book entitled Sovereign Money: beyond reserve banking, which explains the workings of the current system, gives insights in the roots of the financial crisis and brings new solutions on how to fix a broken financial system.

The pursuit of economic growth at all costs is driving planetary destruction and creating untold misery for huge numbers of people. However, policies to try to fix climate change, pollution, austerity, poverty and a host of other problems, which do not address the fundamental issue of the debt-based economy and its need for economic growth, are doomed to fail.

David Ashton

Hitchin, Hertfordshire

The debate on problems arising from policies seeking to promote continuous economic growth in a world of finite resources, and to replace human employment with digital automation, has not touched on the positive response to these policies available to all of us who are concerned by them.

The individual can limit the harm of both policies by adopting for him- or herself a more ascetic lifestyle and by returning to the custom of purchasing skilful repair of one’s possessions rather than routinely discarding and replacing them. Impeccable repair as the accepted norm would require the creation of a highly trained, highly skilled local UK workforce. Such work is labour intensive and does not lend itself to automation or to being exported.

The Swedish government, faced with the same problems of a throwaway culture and loss of skilled, dignified employment has adopted a policy of fiscal incentives for repair work. The UK government could easily and usefully follow suit.

Maurice Vassie