The economic news has not been encouraging. In Europe, the various national debt crises remain unresolved, with a continued monopoly of banker-friendly austerity programs, and their predictable consequences of rising unemployment and stagnation. Debtor countries are being forced into the same financial orthodoxies that prolonged the depression of the 1920s and 30s, so we shouldn't be surprised at the failures they will bring. More recession may also be the future of the countries enforcing these once-discredited policies, as weak demand across the region represses consumer demand, investor confidence, and government spending.
In the United States the details are different, but the main story is the same. The country is experiencing continuing mass unemployment (25 million Americans remain unemployed or underemployed), further collapse in the housing market and an extremist political movement determined to slash all government spending directed at the people who are most likely to spend: the poor, the unemployed, and the middle classes. The outlook among wealthy countries is for more economic "weakness," a conclusion supported by the plummeting stock markets.
Protecting bankers' and creditors' interests above all else is foolish economic policy. It enriches one group of people at the expense of nearly everyone else. But these days, it's hard to get a hearing for the view that the wealthy countries remain wealthy, that we can solve our economic problems without making most people worse off, and that we can also do it while addressing the much larger challenge we face: climate change and growing ecological devastation.
So what's the alternative to slashing government programs, budget cutting, and more concentrated wealth at the top? The centerpiece of a new approach is to restructure the labor market by reducing hours of work. That may seem counter-intuitive in a period when the mainstream message is that we are poorer than ever and have to work harder. But the historical record suggests it's a smart move that will create what economists call a triple dividend: three positive outcomes from one policy innovation.
The first benefit of hours reductions is a significant reduction in unemployment. In the wealthy countries, many of the jobs lost in the 2008 downturn will not reappear. The revolution in information technology has made many jobs unnecessary, raised labor productivity, and undermined a good swathe of the labor market, as firms...