green economics

By Mathew Lawrence - Red Pepper, November 16, 2017

British capitalism is deeply dysfunctional. We have the richest region in Europe – inner London – but most British regions are now poorer than the European average. The UK’s productivity performance has been abject for a decade. We are in the middle of the longest stagnation in earnings for 150 years. Young people today are set to be poorer than their parents and poverty rates are rising. The environmental impacts of our economy are damaging and unsustainable. In short, while the UK retains significant endowments and capabilities, our economic model is failing too many people and needs radical reform.

The case for change is compounded by the challenges confronting the country in the decades ahead. Brexit is the most obvious disruptive force, and whatever relationship emerges with the EU, it is bound to have critical implications for our future prosperity.   Yet even as the UK negotiates its new relationship with Europe, an accelerating wave of economic, social and technological change will reshape the country, in often quite radical ways.  Brexit then is only the firing gun on a wider decade of disruption.  Four trends stand out that will shape the course of the 2020s: technological transformation, demographic change, the evolution of globalisation, and growing ecological crisis.  

First, ongoing technological change has the potential to reshape the economy, driving economic, social and political realignments. The accelerating capability of AI and robotics is likely to shrink the areas in which humans have comparative advantages over machines. This does not mean a post-human economy is imminent. Indeed, given the UK’s woeful performance on investment and productivity, it is the relative absence of robots that is the more obvious concern on current trends. Yet the increasing capability of machines is likely to reshape how we work. The greater risk is then not mass technologically-induced unemployment but a paradox of plenty, a world in which we are richer in aggregate but poorer in average, as the gains of automation flow disproportionately to the highly-skilled and capital grows its share of national income at the expense of labour. It is a future in which who owns the robots comes to own the world.  The continued rise of digital platform monopolies – the dominant organisational form of contemporary capitalism – is likely to further concentrate economic gains.

Crucially, the machine age will be human shaped. The pace and distributional effect of automation is driven by a series of factors that public policy profoundly shapes.  The technical capacity to automate is only one. The relative cost of labour and capital, the costs of technological adoption relative to the benefits, the ethical and regulatory norms governing the use of technology all impact on whether roles are actually automated and to what effect. The impact of technologies, in other word, is not a directionless, impersonal phenomenon but rather one embedded and shaped by our collective institutions, cultures, and politics. New models ownership of technologies, data and equity is therefore a fruitful avenue to explore to ensure the machine age is one where abundance is matched with justice.

By John Atcheson - Common Dreams, November 13, 2017

In almost every way you examine it, capitalism – at least the relatively unconstrained, free- market variety practiced here in the US and supported by both parties -- has been an abysmal failure. Let’s take a close look some of its worst failings.  But first, it must be admitted that when it comes to exploiting people and the planet for the purpose of generating apparent wealth for the few, it has been a smashing success.  More about that notion of “apparent wealth” in a moment, but now, the specifics.

The logical end-point of a competitive system is an oligarchic monopoly

A recent report  by UBS reveals that the global march of economic inequality is accelerating.  The report found that the billionaire’s share of wealth grew by nearly 20 percent last year, reaching a level of disparity not seen since 1905, the gilded age.  Interestingly, the first gilded age followed decades of uber-free market laissez-faire policies, just as today’s gilded age has.

Not surprising, really. Empirical evidence shows that without constraint, markets will proceed toward a winner-take-all status. In short, monopolies and oligopolies. For example, the United States has had three periods of prolonged laissez-faire economic policies, and each was followed by extreme wealth inequality and the three biggest economic crises in US history, such inequality causes.

Oh, but the magic of competition makes companies compete for our dollar, so they can’t afford to exploit us, right? Not so much.

The magic elixir of competition doesn’t work—for the simple reason that there isn’t much competition anymore. Having convinced folks that regulation is bad, the Oligarchy is in the midst of a frenzy of mergers that is giving a few large conglomerates control of many of the major market sectors.

Derrick Thompson, in a recent article in the Atlantic, lays out some of the grim statistics that illustrate the trend. As Thompson writes,

To comprehend the scope of corporate consolidation, imagine a day in the life of a typical American and ask: How long does it take for her to interact with a market that isn’t nearly monopolized? She wakes up to browse the Internet, access to which is sold through a local monopoly. She stocks up on food at a superstore such as Walmart, which owns a quarter of the grocery market. If she gets indigestion, she might go to a         pharmacy, likely owned by one of three companies controlling 99 percent of that market. If she’s stressed and wants to relax outside the shadow of an oligopoly, she’ll have to stay away from ebooks, music, and beer; two companies control more than half     of all sales in each of these markets. There is no escape—literally. She can try boarding an airplane, but four corporations control 80 percent of the seats on domestic flights.

The consolidation of the media is yet another example; just six corporations now control 90 percent of the market. And of course, there’s the inconvenient fact that the “too-big-to-fail” banks that were a major cause of the 2008 Great Recession are now bigger and fewer.

This concentration of market power translates into lower wages, fewer jobs, and higher prices – exactly the opposite of what the neoclassical economic theory embraced by capitalists tells us will happen when we remove regulatory constraints – and exactly the opposite of what the Republicans’ trickle-down myth says will happen. Or what the neoliberal Democrats tell us, for that matter.

But it also gives the wealthy control over our political system, and the people have gotten wise to it.  That’s why a little over a quarter of the eligible voters were able to put Trump in power – most of the rest of us are completely turned off by a political system that’s clearly for sale and so, increasingly, many do not show up to vote.

That control has expressed itself in policies that result in extreme income disparities between the increasingly few haves and the expanding have-nots. Today, just five people have as much wealth as the 3.8 billion people comprising the least wealthy half of the world’s population, and nowhere in the developed world is the problem as acute as it is in America.  The system is rigged, and our belief in capitalism and the power of the magic markets is what allowed that.

By various - Ecosocialist Horizons, November 2017

It has been one year since “The Calling of the Spirits” in Monte Carmelo, Lara, when, with spirited minds and seeds in our hearts, we initiated a convocation titled “The Cry of Mother Earth.” Those who responded to this cry are now here: around 100 people from 19 countries and five continents, 12 original peoples from Our America, and ecosocialist activists from 14 states of Venezuela. We are here in the Cumbe* of Veroes, cradled in the enchanted mountains of Yaracuy, where the guardian goddess of nature lives. From the 31st of October until today, the 3rd of November, 2017, we have done the work demanded of us: the articulation of a combined strategy and plan of action for the salvation of Mother Earth.

We have made the decision and the collective commitment to constitute the First Ecosocialist International: To reverse the destructive process of capitalism; to return to our origins and recuperate the ancestral spirituality of humanity; to live in peace, and end war.

We recognize that we are only a small part of a spiral of spirals, which has the profound intention to expand and include others until all of us are rewoven with Mother Earth; to restore harmony within us, between us, and among all the other sister beings of nature.

The First Ecosocialist International is not just another meeting, nor another conference of intellectuals to define ecosocialism. We believe that ecosocialism will define itself to the extent that it is reflected and conceptualized in praxis; based on what we do and what we are. Nor is the First Ecosocialist International a single organization or a rubber stamp in constant danger of becoming a bureaucracy. It is a common program of struggle, with moments of encounter and exchange, which anyone may join, by committing themselves to fulfilling one or more of the various actions agreed upon here in order to relieve our Mother Earth. No person or process can be owner or protagonist of that which is done and achieved collectively.

We invite all peoples, movements, organizations, collectives and beings in the world to join the First Ecosocialist International, and to undertake the collective construction of a program for the salvation of Mother Earth. By restoring a lost spirituality we may arrive at a new one; a new and sometimes ancient ecosocialist ethic, sacred and irreverent, fed by the sun of conscience. We are recreating our spirituality with a new imagination and a new heartbeat, which may carry us to unity and diversity. The understanding and practice of this new spirituality will have the power to repel empire and capitalism which are powered by greed, and it will be able to strengthen our peoples and cultures which are conditioned by necessities. Because right now we are not living – we are merely surviving. We confront a contradiction: restore life, or lead it to extinction. We must choose.

We don’t have any doubts. We are radicals; we shall return to our roots and our original ways; we shall see the past not only as a point of departure but also as a point of arrival.

A collective birth towards a loving upbringing; we are an immortal embryo… Let’s dream, and act, without sleeping!

Read the report (PDF).

By David Bollier - David Bollier, October 2, 2017

The rise of so many right-wing nationalist movements around the world—Brexit, Donald Trump, the neo-Nazis in Charlottesville, Virginia, anti-immigrant protests throughout Europe—have their own distinctive origins and contexts, to be sure. But in the aggregate, they are evidence of the dwindling options for credible change that capitalist political cultures are willing to consider. This naturally provokes the question: Why are the more wholesome alternative visions so scarce and scarcely believable?   Political elites and their corporate brethren are running out of ideas for how to reconcile the deep contradictions of “democratic capitalism” as it now exists. Even social democrats and liberals, the traditional foes of free-market dogma, seem locked into an archaic worldview and set of political strategies that makes their advocacy sound tinny. Their familiar progress-narrative—that economic growth, augmented by government interventions and redistribution, can in fact work and make society more stable and fair—is no longer persuasive.   Below, I argue that the commons paradigm offers a refreshing and practical lens for re-imagining politics, governance and law. The commons, briefly put, is about self-organized social systems for managing shared wealth. Far from a “tragedy,”2 the commons as a system for mutualizing responsibilities and benefits is highly generative. It can be seen in the successful self-management of forests, farmland, and water, and in open source software communities, open-access scholarly journals, and “cosmo-local” design and manufacturing systems.   The 2008 financial crisis drew back the curtain on many consensus myths that have kept the neoliberal capitalist narrative afloat. It turns out that growth is not something that is widely or equitably shared. A rising tide does not raise all boats because the poor, working class, and even the middle class do not share much of the productivity gains, tax breaks, or equity appreciation that the wealthy enjoy. The intensifying concentration of wealth is creating a new global plutocracy, whose members are using their fortunes to dominate and corrupt democratic processes while insulating themselves from the ills afflicting everyone else. No wonder the market/state system and the idea of liberal democracy is experiencing a legitimacy crisis.

Given this general critique, I believe that the most urgent challenge of our times is to develop a new socio-political imaginary that goes beyond those now on offer from the left or right. We need to imagine new sorts of governance and provisioning arrangements that can transform, tame, or replace predatory markets and capitalism. Over the past 50 years, the regulatory state has failed to abate the relentless flood of anti-ecological, anti-consumer, anti-social “externalities” generated by capitalism, largely because the power of capital has eclipsed that of the nation-state and citizen sovereignty. Yet the traditional left continues to believe, mistakenly, that a warmed-over Keynesianism, wealth-redistribution, and social programs are politically achievable and likely to be effective.

By Betony Jones, Kevin Duncan, Ethan N. Elkind and Marilee Hanson - UC Labor Center, August 3, 2017

As the metropolis of Los Angeles spread east and Southern California industry shifted after World War II from manufacturing war supplies to a consumer economy, the sweeping groves of the Orange Empire gave way to the sprawling housing developments of the Inland Empire. Located in the valleys and foothills east of Los Angeles and north of San Diego, the Inland Empire is defined here as Riverside and San Bernardino Counties. Situated in a strategically important area inland from the ports of Long Beach and Los Angeles, the Inland Empire has been a hub for the transportation of goods and people since its initial development. After the economic downturn of 2008-09, the region emerged as a powerhouse in the blossoming logistics and warehousing industry;1 transportation and warehousing employ 7 percent of the region’s workers (compared with 5 percent statewide).2 In addition, the Inland Empire has always included many “bedroom communities” for the Los Angeles area: about 44 percent of Inland Empire workers travel 30 or more minutes each way to work.3

But this economic shift has come with an environmental cost. Industrial air pollution has directly affected the lives of Inland Empire residents since World War II, when a steel plant was built in the San Bernardino County town of Fontana. The air quality challenges have become more pressing with the growth in automobile traffic in the Los Angeles area, as prevailing winds bring smog into the region.4 The Empire’s valleys also trap the area’s own air pollution from the truck, automobile, and train traffic running through the region, connecting the ports to the west with the major throughways to the east.5

In addition to the environment, the economy of the region is also fragile. The Inland Empire makes up over 11 percent of California’s population,6 but incomes and employment lag behind much of the state. Per capita income is about $23,000 compared with a state average of over $30,000, placing it among the lowest earning metropolitan areas in California. More than 17.5 percent of the population was living below the federal poverty line in 2015 ($24,250 for a family of four), compared to 14.7 percent of California’s entire population.7 The environmental and economic challenges facing the Inland Empire make it an important region in which to study the economic impacts of the state’s climate programs.

This report offers a quantitative assessment of the net economic impacts between 2010 and 2016 in the Inland Empire of four of California’s major climate programs and policies: cap and trade, the renewables portfolio standard (RPS), distributed solar programs (including the California Solar Initiative), and investor-owned utility (IOU) ratepayer-funded energy efficiency programs, overseen by the California Public Utilities Commission (CPUC). It also includes projections and factors affecting the impacts of these programs on the region through 2030.

Results for the four programs and policies investigated are summarized below. The findings indicate that California’s major climate policies have had net economic benefits in the Inland Empire.

Kate Raworth interviewed by Adam Simpson - The Next System Project, August 23, 2017

This week on The Next System Podcast. Adam talks with Kate Raworth about her Doughnut Economics model. The pair discuss economic justice, unpaid labor, the commons, and much more. You can learn more about Doughnut Economics at Kate's website or purchase the book wherever books are sold. You can also follow Kate on twitter.

The Next System Podcast is available on iTunes, Soundcloud, Google Play, and Stitcher Radio. You can also subscribe independently to our RSS feed here.

Adam Simpson : I'm joined today by Kate Raworth, author of Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. Kate is a senior visiting research associate at Oxford University's Environmental Change Institute and a senior associate at the Cambridge Institute for Sustainability Leadership. Her previous work at Oxfam and the United Nations, centered on confronting human deprivation, a challenge quite literally at the center of her new doughnut economics model.

Kate, thanks for joining me today.

Kate Raworth : Oh, my pleasure.

Simpson : Obviously, we're talking about your new book, Doughnut Economics but before we get started I did want to get a sense about your own trajectory into writing this book and your experiences and the concepts that led you to becoming an advocate for this doughnut model of economics.

Raworth : I studied economics at university 25 years ago because I wanted to change the world. I was really frustrated and disappointed by what I was taught because it pushed or marginalized most of the things that I cared the most about, like environment integrity and social justice. At the end of three, four years of study, I was too embarrassed to call myself an economist because who would want to be that? So I walked away from academic economics and immersed myself in what I considered to be real world challenges. I spent three years working in the villages of Zanzibar with bare foot entrepreneurs. I spent four years at the UN helping to write the human development reports, so working very much on the global understanding of what is ‘human development.’

Then I spent a decade working with Oxfam on the front line of campaigning, from women workers rights in global supply chains to climate change and adaptation and who should pay. And then I became a mother of twins, and immersed myself in the household economy and really lived the reality of that. Through all of this, I realized that you can't just walk away from economics because it frames the world we live in. It's the mother tongue of public policy. And if I wanted to change any of these issues that I fundamentally cared about, I believed that actually, economics needed to change. So I decided to walk back towards economics but to try and flip it on its head and put front and first, the values that I think are the most important in the world, of what we're trying to achieve as human well-being. Then ask ourselves, what kind of economics would even give us half a chance of achieving that? And that's the goal at the heart of the book.

By Michael Friedman - Monthly Review, August 15, 2017

Growing concerns about climate change and other environmental trends have set off the next round of old Malthusian diagnoses and solutions.

As a case in point, ecological economist William E. Rees recently wrote in the Canadian alternative magazine The Tyee (“Staving Off the Coming Global Collapse” July 17, 2017):

The “competitive displacement” of other species is an inevitable byproduct of continuous growth on a finite planet. The expansion of humans and their artifacts necessarily means the contraction of everything else. (Politicians’ protests notwithstanding, there is a fundamental contradiction between population/economic growth and protecting the “environment.”)

As a first sweep, one might assert that “common sense” would dictate that as a population increases, so does pressure on resources, all else being equal. This is the logic behind the ecological concept of the “carrying capacity” of an ecosystem. It is the basis for the old Club of Rome report, “Limits to Growth.” And it is also associated with some versions of the “planetary boundaries” concept.

All else is not equal.

By David Dayen - In These Times, April 17, 2017

“Money is a utility that belongs to all of us,” says Walt McRee. McRee is a velvety-voiced former broadcaster now plotting an audacious challenge to the financial system. He’s leading a monthly conference call as chair of the Public Banking Institute (PBI), an educational and advocacy force formed seven years ago to break Wall Street’s stranglehold on state and municipal finance. 

“This is one of the biggest eye-openers of my life,” says Rebecca Burke, a New Jersey activist on the call. “Once you see it, you can’t look back.” 

This ragtag group—former teachers, small business owners, social workers— wants to charter state and local banks across the country. These banks would leverage tax revenue to make low-interest loans for local public works projects, small businesses, affordable housing and student loans, spurring economic growth while saving people—and the government—money. 

At the heart of the public banking concept is a theory about the best way to put America’s abundance of wealth to use. Cities and states typically keep their cash reserves either in Wall Street banks or in low-risk investments. This money tends not to go very far. In California, for example, the Pooled Money Investment Account, an agglomeration of $69.5 billion in state and local revenues, has a modest monthly yield of around three-quarters of a percent. 

When state or local governments fund large-scale projects not covered by taxes, they generally either borrow from the bond market at high interest rates or enter into a public-private partnership with investors, who often don’t have community needs at heart. 

Wall Street banks have used shady financial instruments to extract billions from unsuspecting localities, helping devastate places like Jefferson County, Ala. Making the wrong bet with debt, like the Kentucky county that built a jail but couldn’t fill it with prisoners, can cripple communities. 

Even under the best conditions, municipal bonds—an enormous, $3.8 trillion market—can cost taxpayers. According to Ellen Brown, the intellectual godmother of the public banking movement, debt-based financing often accounts for around half the total cost of an infrastructure project. For example, the eastern span of the San Francisco-Oakland Bay Bridge cost $6.3 billion to build, but paying off the bonds will bring the price tag closer to $13 billion, according to a 2014 report from the California legislature. 

Public banks reduce costs in two ways. First, they can offer lower interest rates and fees because they’re not for-profit businesses trying to maximize returns. Second, because the banks are publicly owned, any profit flows back to the city or state, virtually eliminating financing costs and providing governments with extra revenue at no cost to taxpayers. 

By Margaret Flowers and Kevin Zeese - Popular Resistance, February 22, 2017

NOTE: This article initially appeared in the book “Moving Beyond Capitalism,” published in September 2016 by Ashgate Publishing Limited. The book was edited by Cliff DuRand of the Center for Global Justice. We participated in a week-long conference in San Miguel de Allende, Mexico during the summer of 2014. The book came out of that conference. We thought it would be appropriate to post this chapter now because we are in a renewed wave of privatization and predation. We must build resistance to it. – Margaret Flowers and Kevin Zeese

(Based on an article originally published in Truthout.org Sept. 4, 2013)

 “We are poised between an old world that no longer works and a new one struggling to be born. Surrounded by centralized hierarchies on the one hand and predatory markets on the other, people around the world are searching for alternatives.” David Bollier in “The Wealth of the Commons”

These are times of radical change. We are in the midst of an evolution. The old world is one of concentrated economic power that hoards wealth; that creates corrupted and hierarchical governance to serve and further concentrate wealth through exploitation of people and the planet. People are experiencing the ravages of this global neoliberal economy in which the market reigns supreme and everything is a profit center, no matter the human and environmental costs.

We are at a crossroads in the global economic order. If not stopped, the two massive “trade” agreements under negotiation at present, the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (known as TAFTA), will cement this globalized neoliberal market economy through greater deregulation, profit protection and an extra-judicial trade tribunal in which corporations can sue sovereign nations if their laws interfere with profits.

There is another way. We’ve reached a tipping point in awareness of the effects of the current global economy that has erupted in a worldwide revolt as we can see in the Occupy, Arab Spring, Idle No More and Indignado movements. People are searching for alternative ways of structuring the economy and society that are empowering and more just and sustainable. Part of this work includes understanding and building the “commons,” which is the opposite of the predatory market economy.

As we will describe below, concentrated wealth is derived by taking from the commons for personal gain in an undemocratic way. We can reverse the current trend toward privatization and wealth inequality by claiming the commons and using it for mutual prosperity. The commons cannot exist without a participatory governance structure. Therefore, building the commons is a fundamental step toward real democracy.

Bollier makes the case that there is “enormous potential of the commons in conceptualizing and building a better future.” Understanding the commons gives us a vocabulary, vision and practical opportunities to create a new world in which governance builds from the bottom up and connects us from the local to the global level.