The main cause for this is systemic. There are three core system dynamics that contribute to this:

- Free market dynamics systemically push wealth towards the wealthy (https://www.scientificamerican.com/article/is-inequality-inevitable/)

- Our current monetary system demands growth in order to avoid collapse (Article Interest-bearing loans and unpayable debts in slow-growing e...

- High inequality in society results in a stronger incentive to strive for wealth, thereby neglecting societal values that do not contribute to personal wealth (Article Restless in an Unequal World: Economic Inequality Fuels the ...

Combine this with a strong meritocratic ideology and you get a very poisonous behavioural mix that leads to cost externalisation and resource efficiency if that means more profits can be made.

Silvio Gesell already realised this in the beginning of the previous century (https://www.naturalmoney.org/NaturalEconomicOrder.pdf). More attention should be given to the side effects of our current monetary system in tandem with free market dynamics, meritocratic thinking and side effects of high inequality.

A redesign of our current monetary system could at least alleviate much of the problem (Poster Decoupling Economic Health from Growth: A Novel Money Supply...

Preprint An alternative general-purpose money supply model for a futu...

Stef. thank you for commenting. I usually ask especific questions, that if answer right can be linked to other economic issues you list there. If your answer is wrong, then the comments you made can not be linked. The answer to this question can be linked to distorted markets and these markets can be linked or explain why those negative economic dynamics you list and the need to corrections exists.

Focus on the specific question here and then you can extend the implications of the answer further and highlight that the rational for going circular economy recently does not make sense if fixing the dirty traditional circularity problem was the goal.

What causes the circularity problem in traditional market thinking, cost externalization or resource use inefficiency?

What do you think is the answer Stef?

Respectfully yours

Lucio

Stef, given your comment indirectly related to the specific question at hand here you may find the following publication with ideas outside the box to bring in sustainability into the distorted financial system/monetary system:

Beyond Traditional Financial Market Thinking: How Would An Ideal Structure of Financial Markets Look Like If We Think Outside the Box?

Article Beyond Traditional Financial Market Thinking: How Would An I...

Houria, thank you for your comment. You are right the way you put it except probably the nature of the motive of traditional economic circularity, since the key problem to solve since WCED 1987 is the pollution production problem then going circular sustainability markets or circular red markets or circular green markers is the way to go,NOT traditional market circularity as they internalize the root-cause of the problem. As you indicated, resource use inefficiency is a consequence of cost externalization so traditional circularity is based on fixing consequences, not the root cause as I have shown, going traditional circularuty is going from A LINEAR POLLUTION PRODUCTION MARKET TO A CIRCULARNPOLLUTION PRIDUCTION MARKET, a pollution production friendly move

Houria, traditional circularity addresses only the resource use inefficiencies driven by cost extenalization, the abandon the need to solved the root-cause of the pollution production problem, DISTORTED MARKET PRICES as they work under pollution externality neutrality assumptions just like the linear market did and does.

Yes

Correcting market prices creates transition paths to pollution free markets or clean markets as then pollution reduction becomes a profitable business opportunity, but not many can see this and those who now see it due to writings like mine behave like they can not see it, it seems

Poor planning and zoning which causes congestion, traffic and overcrowding driving consumers dissatisfaction. Therefore may cause harm to the economic activities which eventually resulted to decline in growth.

Clea, the question is about cost externalization or resource use inneficiency and circular economic thinking, what causes the circularity problem in linear markets, the problem circular economic thinking apparently is addressing?.

The following article has some food for thoughts related to the answer of this quesion so I am sharing it here in good faith, read it Clea when you have time:

Sustainability Thought 200: From linear pollution markets to circular pollution markets: Pointing out the third major blunder in terms of development thinking and critical socio-environmental problem solving

Article Sustainability Thought 200: From linear pollution markets to...

The circularity problem stems primarily from cost externalization: when environmental costs are omitted from prices, linear production/consumption patterns persist and “reuse” incentives vanish; that said, resource-use inefficiencies and technological lock-ins interact with externalization to reinforce circularity, so the two are complementary drivers with externalization as the root cause.

Chuck is resource use inneficiency the root cause of pollution production problems in traditional markets? If your answer is No, then it is cost externalization? Which means distorted market prices provide an encentive for resource use inneficiency as leaving or producing enenffiencly is free in terms of socio-environmental costs it creates , meaning resource use inneficiency is a consequences of distorted market prices due to cost externalization....cost externalization drives the thinking of tending to produced at the lowest cost possible.

Can you now see the answer to this cost externalization or resource use inneficiency? The AI WILL NOT BE ABLE TO SEE as it will be seeing only inside the box thinking, but you should be able to see.