The principles of Economic sustainability defined in the traditional sense, means the ability of an economy to keep growing and producing goods and services over a long time without causing harm to people, resources, or future generations.
Systemically, economic sustainability defined as part of the larger socioeconomic system is the ability of an economy to support a certain level of economic production forever. Economic sustainability defined in terms of systemically sustainable development focuses on making sure that growth today does not create problems for tomorrow economically, environmentally, or socially.
The current socioeconomic and financial systems in place demand economic sustainability defined as part and parcel of the current status quo. It includes the need for an economy to maintain growth and productivity over time.
This means the economy, as part of a sustainable system, must avoid financial crises and must not use up natural or human resources faster than they can be replaced. When an economy uses resources wisely, it helps make sure that future generations will also have what they need.
This is only viable through a decentralized economic system that relies solely on logistical support and cooperation from national or international leadership groups, and focuses primarily on the local context and local economies and finance. It does not happen from a larger, singular socioeconomic system making the same demands of economically, demographically, and geographically unique communities.
Sound fiscal and monetary policy is important for economic sustainability. Defined in the traditional sense, fiscal policy means how a government collects and spends money. Monetary policy means how a country manages its money supply and interest rates.
These policies help keep the value of money stable. They also help control inflation and support jobs. A stable currency and strong financial systems help people and businesses plan for the future and make good choices.
US citizens received an assurance in 1913 that the introduction of the Federal Reserve System would mitigate or even eliminate both socioeconomic and financial crises. The central banking system has its origins going as far back as the early seventeenth century, primarily in Sweden with the Riksbank. Central banking became a global institution in the early twentieth century. The Central banking arrived with the Bretton Woods Agreement of 1944.
Despite all these assurances, and the globalization of the banking system, economic sustainability, defined by any metrics, has never been achieved. It can easily be argued that the latter half of the twentieth century and the first twenty-five years of the new millennium have seen far more economic disruption and instability than previous historical periods.
This clearly demonstrates how the need for economic sustainability, defined in any meaningful way, must start with localized, decentralized economic systems, increasing economic and financial growth from the bottom up. The national and international systems remain an imperative part of socioeconomic and financial systems nationally and globally, but do not have the capacity of understanding of the local context to function in matters of localized economic policies.
Economic sustainability defined as part of a larger socioeconomic system, as well as part of a more complete and sustainable system, also means understanding how capital, labor, and goods move through markets.
Capital is money or things used to make more goods.
Labor is the work people do.
Goods are things people buy and use.
Services are beneficial functions provided by the people.
Markets are places where buyers and sellers meet.
Economic actors, like businesses and workers, respond to incentives, such as prices and wages. They also face constraints, such as costs or rules. When markets work well, they help resources move to where they are needed most.
Financial institutions and banking systems play a key role in larger socioeconomic, sociopolitical, and financial systems. Economic sustainability, defined as part of that system, needs to remain at the local level, with logistical support and cooperation coming from national and global institutions. Local banks help people save money and give loans to businesses.
National and global regulations are rules that help keep banks and national and global markets safe. These systems help the economy stay strong and stable for a long time. These are policies that drive the socioeconomic and sociopolitical systems of the nation and the world. This must be accomplished without infringing upon the capacity of local communities to define and participate in local economics. The local economies are a very small subset, although an equally important component of the national and international socioeconomic systems in place.
Global and domestic economic policies affect inflation, employment, investment, and trade. Local economic policies only impact the local economies. When the local economies are strong and healthy, so the economic scenario of the State or Province. When the States and Provinces enjoy strong economic growth, so does the nation. As national socioeconomic and financial systems grow, so does international trade.
Again, all this reinforces the need for the decentralization of localized economic systems, with national economic sustainability defined at the national level, and international economic sustainability defined as a global financial matter, focusing on international trade, not war.
The global banking systems have been controlling economic sustainability, defined for and tasked with socioeconomic and financial stability.
Inflation is when prices go up.
Hungary (August 1945 – July 1946) Germany (1920 – 1923) Yugoslavia (early 1990s, particularly October 1994) Greece (1943 – 1944) Zimbabwe (2007 – 2009) Venezuela (late 2010s to early 2020s).
Where is the global economic stability?
With around one hundred years of centralized systems, economic sustainability remains a distant dream and not a realistic focus of centralized economic and financial policy.
Good economic policies help keep inflation low and steady.
Employment means people have jobs.
Investment means people and businesses buy things that help the economy grow.
Trade is when cities, states, provinces, and countries buy and sell goods with each other.
All these things work together to help the economy grow in a healthy way and to ensure larger socioeconomic and financial systems remain stable.
Economic sustainability, defined as a realistic goal and as it remains necessary for systemically sustainable human growth and development, is about keeping the local economy strong and growing for a long time. Furthermore, it requires that the larger socioeconomic and financial systems can enjoy the benefits and collective strength of the local economic systems. Start with local economics established within the local context, and national and it becomes inevitable that international global economic sustainability will follow.