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The seven colours of economy

Jul 17,2017 - Last updated at Jul 17,2017

Traditionally, we know of the black economy. It is the underground activity which operates in flagrant violation of existing laws.

A black market is where the activities of drug traffickers and  pushers take place; stolen cars are stripped and sold in parts; or the attempt to outsmart the government tax system are made.

One of the leading books on the subject was published this year by Arun Kumar. Its title is “Understanding Black Economy and Black Money in India”. 

Prime Minister Narendra Modi of India has taken it upon his government to fight this phenomenon, whose size is estimated to reach 35 per cent of the Indian economy.

White economy, on the other hand, is a new term whose coinage is attributed to Professor Douglas McWilliams, a British economist.

In his book “The Flat White Economy: How the Digital Economy is Transforming London and Other Cities”, 2015, Professor McWilliams explains how London was able to compensate the loss of business that occurred after 2007/8, and the expected loss after Brexit, focusing on digital services like e-trade and e-speculation.

Green economy is a term which caught fire at the Earth summit that was held in Rio de Janeiro, Brazil, in 1992.

The United Nations began to issue data on national income accounts after deducting the annual cost of environmental degradation from the actual rates of growth.

You may call green national income accounts the net accounts after deducting the rate of depreciation in natural resources.

It is interesting that the most zealous proponents of green economy are women. A leading reference on green economy is a book by a British European parliamentarian named Molly Scott Cato titled “Green Economics: An Introduction to Theory, Policy and Practice”, 2008.

Economists’ appetite produced other colour economies derived basically from environment-related studies and activities.

The brown economy basically refers to the industries which cause high levels of pollution and gas emissions. Such industries are cement, iron smelting, quarrying and coal mining and coal-using production facilities.

Lots of investments have been launched over the past 50 years to contain the left-overs, sludge, smoke and acids of such industries.

However, the most interesting development is the recycling of leftovers.

This is called the blue economy. According to the proponents of this economy, there is no such thing as useless materials. Everything can be input for new products.

In other words, everything, especially waste, can be reused to the benefit of human life.

They defend blue economy as the main pivot of sustainable growth.

There is now the grey economy, which is the informal activity that the government is unaware of, or because the government allows it to operate free of regulations and taxes.

Of course — last but not least — is the red economy. According to many authors, it refers to the communist-leaning economies where the state takes hold of production and distribution.

We can invent other colours that would paint a seemingly brighter picture of the dismal science of economics. Yet, it would be presumptuous on my part to do so.



The writer is a former Royal Court chief, deputy prime minister and member of Senate. He contributed this article to The Jordan Times.

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