The economy is in transition. We must open our eyes.

We are not having an economic downturn or a recession. Put quite simply, the 19th century economy is finished and we haven't yet noticed.

Today the city of Detroit announced that it is bankrupt. Detroit had a lot of huge 19th century industries that have recently disappeared. Now there is a lot to its story over many years and there is also a lot of exciting new economic development happening in Detroit. But the comment that pricked my attention appeared on Richard Florida's on twitter feed via a David Frum: "Right question about Detroit: not what happened to old jobs, but why did it fail to create new?"

I think Einstein new the answer to that question: "you cannot solve a problem using the mindset that created it."

In Australia we have largely ridden out the global financial downturn because of a massive stroke of lucky timing - the Chinese boom. The rest of our economy is just as stressed as everywhere else.  And now that the resources boom is over and global market doesn't want our coal anymore, will we head down the same track as Detroit? Or will we invest in the new economy that is bursting to get out?

The interesting thing about the new economy is that it is largely good for people and the planet as well.  Don't worry about the word sustainability. Economic progress is going that way anyway if we just open our eyes and let it emerge. 

I'll give you three examples: 

Ford recently announced that they were shutting down operations in Australia, despite hundreds of millions of dollars in tax payer handouts. Woe! cried the media. Our 19th century car industry should be helped out! What about the workers! Well excuse me for raising my hand and saying the unthinkable, but the age of the large personal car is over. We just haven't opened our eyes and seen it yet. And what if we did? Well Ford stopped making the small cars that people want a long time ago, Gen Y don't even want a car, European cities are charging them to enter and peak car use in fifteen major cities around the world was 2004. Car sharing and carpooling are exploding in popularity around the world as the web creates new trustworthy social networks in the sharing economy. Rapid public transport systems are replacing freeways the world over, walkability and cycling have been found to boost local economies and reduce health budgets. The transport economy is in transition. So it is laughable that in Victoria Australia, our government, which hasn't invested properly in any of these new economy growth areas, wants to build new freeways and refuses to release their non existent business case for it.  If they would just open their eyes they would see that there isn't one. Personal cars are finished as our main form of transportation. Ask  Copenhagen, Guangzhou and Korea.  All of these new economic opportunities also happen to be good for our health, our planet, tourism, urban design and the liveability of our cities.  

Our energy sector has fared no better. In Victoria we have basically banned wind energy (which is growing exponentially worldwide) wherever the wind blows and whenever a person within two kilometres doesn't like it. Hundreds of millions of dollars in twenty-first century investment has gone elsewhere whilst our government attempts unsuccessfully to sell our 19th century brown coal to a world hurriedly creating carbon constrained economies. We must open our eyes. The exponentially growing solar industry has been hit with government subsidy roller coaster ride contempt. Imagine trying to set up a business in that environment ... they are lucky that 10% of Australian homes wanted to put them up in a ten year period.  Politicians typecast solar as the playthings of rich inner city folk, when rural low income homes have been the people installing them.  And then there is energy efficiency. A recent report found that Australia’s poor energy efficiency investment will cost $26 billion in GDP by 2030.  Our energy companies have been privatised and have spent billions gold plating our 19th century power grid based on burning coal in Gippsland, when economic growth and energy employment now lies in smart, networked, distributed renewable energy infrastructure. If we opened our eyes and looked we would see that our future prosperity in energy is also good for our local economies, our health and the planet.

Then there is our forests. Why would we cut down our Victorian forests at a loss? They clean and store our water, saving billions of dollars in treatment costs, they clean the air, they stabilise the soil, they provide habitat for our faunal emblem the critically endangered Lead Beaters Possum, they are a potential ecotourism dream an hour from Melbourne and they pull and store huge amounts of carbon from the atmosphere. Our government is cutting them down at a loss to make pulp to preserve this antiquated 19th century industry. If we opened our eyes we would understand their economic value to our state, let alone the ecological and aesthetic value.  In Tasmania, why would we try to build a pulp mill when no one wants one? International investors fled the project because the economics and the ethics did not and could not ever add up.  The government was still trying to flog the thing when it was a business basket case. And why? Because it could not see beyond the 19th century economy. They did not open their eyes.

When Tony Abbott says "We need to cut green tape" what he means is: I want to prop up the old economy. Well the old economy is struggling to survive because it's product is unsaleable, because it is being disrupted, because it is being outperformed and because it cannot afford to pay for its pollution costs.  If we opened our eyes we would see a great deal of a different kind of economic growth. A kind that respects people, place and planet.

So my final question is this: Do you really support economic progress or are you impeding it on ideological grounds?