Saturday, February 27, 2010

Striving for Peace, Justice and Sustainability through Co-operative Movements

by Heather Tufts

The idea of local people cooperating with each other to provide for the essentials of living and contributing to self-reliant, community-based economies is the epitome of common sense.

The co-operative movement emerged in Europe as a reaction to early 19th-century industrialization which created widespread worker displacement. This social and economic alternative evolved following a set of inclusive principles where each member had one vote regardless of the investment made. The intentional value of member-owned co-operatives includes a vision of collective economics either non-profit or profit sharing, within a framework of transparency, social justice and efficacy.

The co-operative model of enterprise can be applied to any business activity and has become an international movement. Co-operatives exist in traditional economic sectors such as agriculture, fisheries, consumer and financial services, housing, and production (workers' co-ops). However, global co-operative activity spans to a large number of sectors and activities including car-sharing, child-care, health and social care, food distribution, the arts, schools, sports, tourism, transportation and alternative media.

It is inaccurate to equate co-operatives with the traditional cooperation amongst indigenous communities in pre-contact societies. Although there were natural systems of sharing in many indigenous societies they also included matriarchal or patriarchal hierarchies and the concept of land or property ownership was unborn. However there are some obvious lessons and relevant comparisons especially in consideration of environmental integrity, resource management and relationship to the community. But co-operatives are frequently founded as a response to modernity and social injustices rather than being the integral value of society.

Authentic co-operative ventures embrace the guiding principles of participatory democracy and sustainability but it can not be assumed that all co-operatives are ethical. Although most co-ops maintain these values which empower “the village” a few have denigrated the process and lost their way. For example if a co-operative embraces the profit sharing model while ignoring its members' wishes for environmental conservation, ethical trade or gender equity then this contradicts the intention of the movement.

The International Co-operative Alliance (ICA) raises awareness about co-operatives by providing information about the significant role they can play in society. ICA promotes the co-operative model as a contributing and pro-active alternative to a number of economic and social issues. The alliance is available to help individuals and government authorities understand the co-operative model of enterprise so that best practices can be implemented regionally, nationally and internationally.

The transformation that has occurred in the work-place as a result of free trade agreements, outsourcing, the rise of China and India as significant economic players and the augmentation of the unemployed or under-employed suggests an urgent need for alternative social and economic models. Co-operatives could play a major role in transitional and transformational communities and hence establish a leadership position on issues of peace, social justice, climate change and food security.

“Peace and social well-being are not only relevant to co-operatives but co-operatives are relevant to the peacemaking process in communities and societies throughout the world,” says Dr. Yehudah Paz, chairman of the Negev Institute for Strategies of Peace and Development.

The ICA is strengthening its commitment to address some of these issues by developing an invigorated protocol for co-operatives. This initiative led to "Global Crisis - Co-operative Opportunity" as the theme of the 2009 November ICA Assembly. A freshly designed economic model includes a fair and just redistribution of resources and collective sustainable development practices.

Progressive co-operatives can pose a significant dilemma to the capitalist system. Whereas the movement offers real solutions to poverty, sustainability and even conflict resolution, co-operative enterprises are the antithesis of the profit-driven agenda of global capitalism. However it is evident that co-operatives provide valuable economic and social capital within communities or better still, the co-operative is the community!

According to Carol Hunter, director of the Canadian Co-operative Association (CCA) co-operatives are part of the solution to revitalizing Canada's economy: "The history of co-ops shows us that they were often formed during hard economic times, so they are as relevant today as they have ever been," she said. "Since most co-ops are locally based, they not only provide jobs, but also generate wealth which remains in the community."

Locally housing co-ops are part of the solution to the Canadian affordable housing crisis but need to be integrated into a National Housing Policy. Agricultural policies in Canada do not provide incentives for a co-operative vision of farming and unless things change more land will be lost to development or farmers will be bankrupted. Regional and national governments should embrace the co-operative vision as one of the solutions to greener, sustainable economies.

Credit unions which have diminished the potential for unethical loan shark practices have challenged the operations of major banks. Agricultural co-ops have not only become the basis of food security in places like Cuba and Venezuela but have revitalized British farming practices after the devastating mad cow disease event. Naturally, harmonized co-operative ventures have restored fishing capacity in many Asian communities in organized resistance to globalization. In some countries the only access to health care is provided by health co-operatives and many jobs world-wide have been saved by the evolution of worker-owned, member shared business enterprises.

War-torn Nicaragua in the1980s saw the birth of co-ops as part of the popular resistance movement. Although some of them disbanded after the war, new collectives have evolved as a result of this legacy. During a recent trip to Nicaragua, local activist Rosemary Mann visited some successful community-based tourism co-operatives. In El Lagartillo a rural, non-profit Spanish language school has been established within a co-operative village model. “Our co-operative village has inspired a new generation to work collaboratively,” one of the villagers told Rosemary. The school contributes economically by attracting tourism to the community and has recently planted a collectively-managed coffee grove.

In Nicaragua co-operatives can access government grants for sustainable projects like water purification, composting latrines or solar panels and this opportunity encourages family groups to work together. The fertile, volcanic island of Ometepe in Lake Nicaragua is an ideal location for family-driven agrarian collectives and is a popular destination for eco-tourists. The Central American Support Committee (CASC) in Victoria sells fairly-traded organic coffee from Ometepe as a gesture of solidarity with the island co-operative.

In zones of conflict or post-conflict, women’s co-operatives are often essential to rebuilding hope and pragmatism in a chaotic environment. In regions like East Timor, the Philippines and Afghanistan it has been the women who have grasped the inherent principles of co-operatives by breaking down existing male hierarchies and engaging in courageous, community-building, democratic processes. These co-operative ventures can return a degree of normalcy in the face of strife, great poverty and systemic injustice.

Conflict situations embody gender oppression, economic inequities, political unrest, armed confrontation and natural disasters such as the 2004 tsunami. These are juxtaposed with inspiring examples of rebuilding through co-operative movements in Sri Lanka and Indonesia, peace building co-operatives in Ethiopia; sustainable development in Colombia amidst armed conflict; and women’s co-operatives in Nepal. Numerous collectives have also emerged throughout Africa in response to the HIV AIDS pandemic and women lead the way in self-empowerment education, prevention and treatment. Empowering women in developing countries through education and access to land is also one of the keys to reducing world hunger.

In the Mexican Zapotec textile-producing community of Teotitlán del Valle, the indigenous responses to increased economic globalization and neoliberal policies found solutions in collective efforts. From the late 1980s, textile cooperatives were so successfully organized by women that by the summer of 2004 about 15 percent of the local households were involved in textile cooperatives. They were able to bypass local merchant control of the textile industry and have gained political and cultural rights in their community and in the global market as independent artisans.

Modern co-operatives represent an opportunity to assert the rights of women and respond to their needs as well as the co-operative movement’s commitment to fight against child exploitation and improve the living conditions of the world’s children. Child labour abuse is a plague of extreme poverty coupled with the unethical business practices entrenched in free trade. Genuine working co-operatives consider human rights and egalitarian environments and have shifted significantly from the standard array of ineffective solutions.

In socialist societies like Cuba, Venezuela and Bolivia the co-operative movement is integrated into the national vision but elsewhere most co-operatives arise as alternative systems. Raising the profile of co-operatives magnifies their potential, and facilitates community-to-community partnerships in the spirit of self-determination. Poverty reduction programs, housing and food security policies could be enhanced by sustainable, community-based initiatives and increased political will.

Strategic networks are replacing pockets of the competitive market with cooperative, peaceful and solution-building ventures. Collective human resources can empower local communities to challenge the status quo into new ways of thinking and doing.

Thursday, February 25, 2010

The Future of Money: It’s Flexible, Frictionless and (Almost) Free

By Daniel Roth
February 22, 2010
Wired Magazine

A simple typo gave Michael Ivey the idea for his company. One day in the fall of 2008, Ivey’s wife, using her pink RAZR phone, sent him a note via Twitter. But instead of typing the letter d at the beginning of the tweet — which would have sent the note as a direct message, a private note just for Ivey — she hit p. It could have been an embarrassing snafu, but instead it sparked a brainstorm. That’s how you should pay people, Ivey publicly replied. Ivey’s friends quickly jumped into the conversation, enthusiastically endorsing the idea. Ivey, a computer programmer based in Alabama, began wondering if he and his wife hadn’t hit on something: What if people could transfer money over Twitter for next to nothing, simply by typing a username and a dollar amount?

Just a decade ago, the idea of moving money that quickly and cheaply would have been ridiculous. Checks took ages to clear. Transferring money from one bank account to another could take days, as banks leisurely handed off funds, levying fees nearly every step of the way. Credit cards made it a little easier to pass money to a friend — provided that friend owned a credit card reader and didn’t mind paying a few percentage points in fees or waiting a couple of days for the payment to process.

Ivey got around that problem by using PayPal. Since 1998, PayPal had enabled people to transfer money to each other instantly. For the most part, its powers were confined to eBay, the online auction company that purchased PayPal in 2002. But last summer, PayPal began giving a small group of developers access to its code, allowing them to work with its super-sophisticated transaction framework. Ivey immediately used it to link users’ Twitter accounts to their PayPal accounts, and his new company, Twitpay, took off. Today, the service has almost 15,000 users.

That may not sound like much, but it sends a message: Moving money, once a function managed only by the biggest companies in the world, is now a feature available to any code jockey. Ivey is just one of hundreds of engineers and entrepreneurs who are attacking the payment ecosystem, seeking out ways small and large to tear down the stronghold the banks and credit card companies have built. Square, a new company founded by Twitter cocreator Jack Dorsey, lets anyone accept physical credit card payments through a smartphone or computer by plugging in a free sugar-cube-sized device — no expensive card reader required. A startup called Obopay, which has received funding from Nokia, allows phone owners to transfer money to one another with nothing more than a PIN. and Google are both distributing their shopping cart technologies across the Internet, letting even the lowliest etailers process credit cards for less than the old price, cutting out middlemen, and figuring out ways to bundle payments to sidestep the credit card companies’ constant nickel-and-diming. Facebook appears to be building its own payment system for virtual goods purchased on its social network and on external sites. And last March, Apple gave iTunes developers the ability to charge subscription fees through their applications, making iTunes the gateway for an entirely new breed of transaction. When Research in Motion announced a similar initiative last fall at a session of the BlackBerry Developer Conference in San Francisco, programmers crowded the room, spilling out into the hallway. About 20 percent of all online transactions now take place over so-called alternative payment systems, according to consulting firm Javelin Strategy and Research. It expects that number to grow to nearly 30 percent in just three years.

But perhaps nobody is as ambitious as PayPal. In November, it further opened up its code, giving anyone with rudimentary programming skills access to the kind of technology and payment-industry experience that Ivey used to build Twitpay. The move could unleash a wave of innovation unlike any we’ve seen since self-publishing came to the Web. Two months after PayPal opened its platform, 15,000 developers had used it to create new payment services, sending $15 million through the company’s pipes. Software developer Big in Japan, whose ShopSavvy program lets people find an item’s cheapest price by scanning its barcode, used PayPal to add a “quick pay” button to its app. LiveOps, a call-center outsourcing firm, built a tool that streamlined payments to its operators, turning what had been a nightmare of invoicing and time-tracking into an automated process. Previously, anybody who wanted to create a service like this would have had to navigate a morass of state and federal regulations and licensing bodies. But now engineers can focus on building applications, while leaving the regulatory and risk-management issues to PayPal. “I can focus on the social side of the business and not on touching money,” as Ivey puts it.

PayPal is just the latest company to try to harness the creative powers of the open Internet. Google created a platform that lets anyone buy or display online advertisements. Facebook allows any developer to write applications for its social network, and Apple does the same with its iTunes App Store. Amazon’s Web Services provides developers the cloud-based processing power and storage space they need to build applications and services. Now PayPal has brought this same spirit of innovation and experimentation to the world of payments. Your wallet may never be the same.

Monday, February 22, 2010

Report: 1st Solidarity Economy Social Forum

By Miguel Yasuyuki Hirota

The 1st Solidarity Economy Social Forum took place at Santa Maria, Rio Grande do Sul, Brazil from 22nd to 24th January 2010, showing achievements in different aspects of this new economy and defining challenges to get over, with hundreds of participants mostly from all over Brazil and neighbouring countries (especially Argentina and Uruguay) but also from United States, Canada, Europe and Japan (well, it’s actually only myself). Most participants to this event moved to Porto Alegre, Rio Grande do Sul and/or neighbouring cities where more discussion went on during the World Social Forum 10th Anniversary from 25th to 29th January.

On Fri, 22nd January this event began with remembering the path people have gone through so far in the last decade (since the 1st World Social Forum took place at Porto Alegre in January 2001), followed by two plenary sessions which took place in parallel (“Opening of the National Seminar, Fair and Solidarity Trade at Brazilian Domestic Markets” and “Intercontinental Assembly: Solidarity Economy and World Social Forum – retrospectives and perspectives.”) I attended the international one where participants from other countries praised Brazil’s numerous achievements in terms of solidarity economy (the creation of National Secretary of Solidarity Economy (SENAES, and of Brazilian Forum of Solidarity Economy (FBES,, for instance) on top of asking Brazil to take further initiatives to spread solidarity economy into abroad too, and some argued the importance to coordinate custom policies among Mercosur countries (such as Argentina, Brazil, Paraguay and Uruguay) so that more goods of solidarity economy can be traded beyond borders.

The Day 2 (Sat, 23rd January) was spent for five different workshops (“Solidarity Finance”, “Education and Culture”, “International Solidarity Integration”, “Solidarity Production / Commercialisation / Consumption” and “Food and Nutritional Sovereignty”). I was at the Solidarity Finance session where seven speakers (including myself) gave presentations. Heloísa Primavera from REDLASES (, Argentina mentioned that current monetary system is designed to provide money insufficiently and that the Central Bank of Brazil is now starting to provide technical services for community currencies. She criticised that solidarity economy is still regarded as poor people’s economic activities, suggesting a paradigm shift that this is a new development model. Then followed I, as Online Laboratory on Complementary Currencies JAPAN (, mentioning some points such as the character of today’s money as debt, the impossibility of local communities and of national governments to control their own means of exchange, exponential growth forced by compound interest rate and the redistribution of wealth from the poor to the rich and showing some examples of complementary currency. Then followed Paulo Moreira from Rede Estadual de Trocas Solidárias (the State Network of Solidarity Trade), Rio Grande do Sul who talked briefly about his practices of barter fairs in which people do not use real (R$, Brazil’s official currency) but barter tickets to exchange goods.

Other speakers gave their own presentations too: Rogério Dalló, secretary general of COLACOT (Confederação Latinoamericana de Cooperativas e Mutuais de Trabalhadores, Latin American Confederation of Workers’ Cooperatives and Mutuals) from Porto Alegre, Rio Grande do Sul, Brazil said that in his country credit unions makes up for only 4% of all deposits, criticised the harsh trend propelled by the neoliberal policies, such as Basel II and BIS (Bank for International Settlements) and told that some Latin American countries such as Dominican Republic and Paraguay did not introduce them in the way neoliberals wanted, suggesting credit unions to be exempt from Basel II and to set up the World Bank of Solidarity Economy. Joaquim Melo, founder of Banco Palmas at Fortaleza, Ceará, Brazil, told that a huge poverty in Brazil is triggered by the fact that a half of Brazilians are excluded from access to financial institutions, saying that community banks such as the Banco Palmas ( and which he established are a solidarity financial service in network, of associative and communitarian nature, dedicated to reorganise local economies in the prospect to churn out jobs and incomes of solidarity economy. Celina Whitaker from France explained about her initiative of complementary currency called SOL project (, telling that it was conceived from the idea to reconsider money, based on other indicators than GDP and defining solidarity economy as a means to achieve the struggle’s goals, showing how this complementary currency can be used (as loyalty point for solidarity economy shops, time banks and points for volunteers). And as the last speaker, Haroldo Mendonça from SENAES mentioned the Banco do Nordeste (Bank of the Northeast) and its worldwide recognition on top of underscoring Central Bank’s efforts to support community banks which issue local currencies. Another proposal was made to support the social struggle of the Alianza Cooperativa Nacional in Mexico.

On Sun, 24th January as many as 20 workshops were held, dealing with a wide of topics such as food and nutritional sovereignty, urban agriculture, international integration, joint management by public sector and NGOs, solidarity education and culture, socialist identity in solidarity economy, incubators for people’s coops, online space for solidarity economy (, establishing supply chains, youth’s involvement and another consumption. In the afternoon summaries on the discussion on Saturday was done, recognising that there have been reciprocal effects between solidarity economy and world social forum which helped local players of solidarity economy to be articulated intercontinentally, needs to coordinate public policies, importance for the mapping of initiatives, protests to the current situation in which big corporations control food supply, creation of the seed bank, people’s right for food, solidarity between cities and the countryside, the importance of fair trade not only North-South but also North-North and South-South and paradigm shift in the development model.

Discussions continued next week in Greater Porto Alegre, with some interesting seminars such as public policies in different countries (Brazil, Mexico, Paraguay and Quebec) and economy of gratuity where five speakers from Bolivia, Brazil, France and Uruguay spoke. Speakers said that in Brazil solidarity economy is based on the democratic tradition and was strengthened during Lula administration (2003-present) by the setup of National Secretary of Solidarity Economy (SENAES) and Brazilian Forum of Solidarity Economy (FBES) while in Paraguay solidarity economy is still brand-new and in Mexico people are struggling for the law in favour of credit union. In terms of economy of gratuity, some interesting points were given, for instance that in the current economy fundamental mercantilism is rampant, healthcare is the public goods and therefore should be free of charge.

My impression is that the total length of eight consecutive days for these two forums were, to be honest, a bit too long and tiring for participants, especially given that discussion were done in the midst of summer at places without air conditioner. And the distance among different seminar and workshop venues during the World Social Forum in Greater Porto Alegre was another inconvenient factor. From the visitor’s viewpoint, it would be helpful if the forum could take place at universities and/or other indoor places with good logistics.

And another challenge to improve these forums is to strengthen the intercontinental network as well as interpretation services so that non Latin-Americans also could attend this forum and exchange experiences. It was a pity that I was the only participant from Asia and that the participation from out of Latin America was much less than I had thought (I saw less than 10 non Latin-Americans during the whole event). More efforts will be expected, should the 2nd Solidarity Economy Social Forum take place, to enhance non-Latin-American participation and evolve this movement into the worldwide one.

A New American Environmentalism and the New Economy

James Gustave Speth
Senior Fellow, Demos and
Professor of Law, Vermont Law School (7/2010)
New Board member at the New Economics Institute

The 10th Annual John H. Chafee Memorial Lecture
National Council for Science and the Environment
Washington, D.C.
January 21, 2010
James Gustave Speth

I’m both pleased and honored to have been asked by NCSE to give this 10th Annual John H. Chafee Memorial Lecture. I knew John personally and had the opportunity to work with him during his long and distinguished service on the Senate Environment Committee. He was a wonderful person and a great Senator. I wish we had a dozen John Chafees in the Senate today. And I want also to acknowledge the ever-more important role NCSE has played in our national life. Many of you are familiar with its contributions, including this blockbuster conference, but you may not know of its leadership in creating and supporting a council of deans and directors of America’s environmental schools. I know that that initiative meant a lot to us at Yale. And let me especially join in celebrating the achievements of the remarkable Herman Daly, a profound thinker, a generous soul, and a great wit. Herman launched us into considering the steady state economy and led in the creation of the now highly-productive field of ecological economics. We owe him a great debt for all he has done.

To begin, I would like to invite you to join me in a journey of the imagination. I want you to join me in visiting a world very different from the one we have today.

As the new decade begins in this world, the President, early in his first term, stands before Congress to deliver his State of the Union address. He says the following:

“In the next ten years we shall increase our wealth by fifty percent. The profound question is – does this mean that we will be fifty percent richer in a real sense, fifty percent better off, fifty percent happier?...

“The great question… is, shall we make our peace with nature and begin to make reparations for the damage we have done to our air, our land and our water?

“Restoring nature to its natural state is a cause beyond party and beyond factions. … It is a cause of particular concern to young Americans – because they more than we will reap the grim consequences of our failure to act on programs which are needed now if we are to prevent disaster later….

“The program I shall propose to Congress will be the most comprehensive and costly program in this field ever in the nation’s history.

“The argument is increasingly heard that a fundamental contradiction has arisen between economic growth and the quality of life, so that to have one we must forsake the other. The answer is not to abandon growth, but to redirect it…

“I propose, that before these problems become insoluble, the nation develop a national growth policy. Our purpose will be to find those means by which Federal, state and local government can influence the course of … growth so as positively to affect the quality of American life.”

And Congress acts. To address these challenges, it responds with the toughest environmental legislation in history. And it does so not with partisan rancor and threats of filibusters but by large bipartisan majorities.

In this world that we are imagining, the public is aroused; the media are attentive; the courts are supportive. Citizens are alarmed by the crisis they face. They organize a movement and issue this powerful declaration: “We, therefore, resolve to act. We propose a revolution in conduct toward an environment that is rising in revolt against us. Granted that ideas and institutions long established are not easily changed; yet today is the first day of the rest of our life on this planet. We will begin anew.”

Meanwhile, the nation’s leading environmental scholars and practitioners, and even some economists, are asking whether measures such as those in the Congress will be enough, and whether deeper changes are not needed. GDP and the national income accounts are challenged for their failure to tell us things that really matter, including whether our society is equitable and fair and whether we are gaining or losing environmental quality. A sense of planetary limits is palpable. The country’s growth fetish comes under attack as analysts see the fundamental incompatibility between limitless growth and an increasingly small and limited planet. Advocacy emerges for moving to an economy that would be “nongrowing in terms of the size of the human population, the quantity of physical resources in use, and [the] impact on the biological environment.” Joined with this is a call from many sources for us to break from our consumerist and materialistic ways – to seek simpler lives in harmony with nature and each other. These advocates recognize that, with growth no longer available as a palliative, “one problem that must be faced squarely is the redistribution of wealth within and between nations.” They also recognize the need to create needed employment opportunities by stimulating employment in areas long underserved by the economy and even by moving to shorter workweeks. And none of this seems likely, these writers realize, without a dramatic revitalization of democratic life.

Digging deeper, some opinion leaders, including both ecologists and economists, ask, “whether the operational requirements of the private enterprise economic system are compatible with ecological imperatives.” They conclude that the answer is “no.” Environmental limits will eventually require limits on economic growth, they reason.

“In a private enterprise system,” they conclude, “[this] no-growth condition means no further accumulation of capital. If, as seems to be the case, accumulation of capital, through profit, is the basic driving force of this system, it is difficult to see how it can continue to operate under conditions of no growth.” And thus begins the thought: how does society move beyond the capitalism of the day?

You can see that the world we are imagining is one of high hopes and optimism that the job can and will be done. It is also a world of deep searching for the next steps that will be required once the immediate goals are met.

Now, at this point, I suspect there may be a generational divide in the audience. Those of you of my vintage have probably realized that this is not an imaginary world at all. You do not have to imagine this world – you remember it. It is the actual world of the early 1970s. That is really what President Nixon said to the Congress in 1970. Congress really did declare that air pollution standards must protect public health and welfare with an adequate margin of safety and without regard to the economic costs. The revolutionary Clean Water Act really did seek no discharge of pollutants, with the goals of restoring the physical, chemical and biological integrity of the nation’s waters and making our waters fishable and swimmable for all by the mid-1980s. Many scientists, economists and activists supported the longer term thinking about growth and consumerism that I just mentioned, and they recognized the ties to social equity issues. They saw the challenge all this posed to our system of political economy. I have quoted John Holden, Paul and Anne Ehrlich and Barry Commoner, opinion leaders in this era,1 but there were many others, including Kenneth Boulding who famously noted, “Anyone who thinks exponential growth can go on forever in a finite world is either a madman or an economist.”

It was in many respects a great beginning. Not perfect, not to be romanticized, but still a remarkably strong start. And now four decades have passed. So let us fast forward to the present and take stock. What do we find today? The powerful environmental laws passed in the 1970s are still in place. They have been attacked often, chipped away here and there but have also been strengthened in important respects. Overall, the ones that were really tough have brought about many major improvements in environmental quality, particularly in light of the fact that today’s U.S. economy is three times larger than it was in 1970. And the introduction of market-based mechanisms has saved us a bundle. In the 1980s a new agenda of global-scale concerns came to the fore, and there are now treaties addressing almost all of these global concerns.

Major, well-funded forces of resistance and opposition have arisen, and virtually every step forward, especially since 1981, has been hard fought. The environmental groups, both those launched after 1970 and earlier ones have grown in strength, funding, and membership, and most groups can point to a string of victories they have won along the way. One shudders to think of where we would be today without these hard-won accomplishments.

That said, it is also true that we mostly pursued those goals where the path to success was clearer and left by the wayside the more difficult and deeper challenges. Much good thinking and many good ideas of the 1960s and 1970s were not pursued. And our early successes locked us into patterns of environmental action that have since proved no match for the system we’re up against. We opted to work within the system and neglected to seek transformation of the system itself.

And it is here that we arrive at the central issue – the paradox which every U.S. environmentalist must now face. The environmental movement – we still seem to call it that – has grown in strength and sophistication, and yet the environment continues to go downhill, fast. If we look at real world conditions and trends, we see that we are winning victories but losing the planet, to the point that a ruined world looms as a real prospect for our children and grandchildren. And the United States is at the epicenter of the problem. So, a specter is haunting U.S. environmentalists – the specter of failure. The only valid test for us is not membership, staff size, or even our victories but success on the ground – and by that test we are failing in our core purpose. We are not saving the planet. We have instead allowed our only world to come to the brink of disaster. Some who look at the latest science on climate change and biodiversity loss would say we are not on the brink of disaster, but well over it.

I looked hard at environmental conditions and trends, both global and national, a couple of years ago when I was writing my book, The Bridge at the Edge of the World. In a nutshell, here is what I found.2

Here at home, despite four decades of environmental effort, we are losing 6000 acres of open space every day and 100,000 acres of wetlands every year. Since 1982 we have paved or otherwise developed an area the size of New York State. Forty percent of U.S. fish species are threatened with extinction, a third of plants and amphibians, twenty percent of birds and mammals. Since the first Earth Day in 1970 we have increased the miles of paved roads by 50 percent and tripled the total miles driven. Solid waste generated per person is up 33 percent since 1970. Manicured mountains of trash are proliferating around our cities. Half our lakes and a third of our rivers still fail to meet the fishable and swimmable standard that the Clean Water Act said should be met by 1983. EPA reports that a third of our estuaries are in poor condition, and beach closings have reached a two-decade high. A third of Americans live in counties that fail to meet EPA air quality standards, which are themselves too weak. We have done little to curb our wasteful energy habits, our huge CO2 emissions, or our steady population growth. And we are still releasing truly vast quantities of toxic chemicals into the environment – over five billion pounds a year, to be more precise. The New York Times reported recently that a fifth of the nation’s drinking water systems have violated safety standards in recent years.

Meanwhile, the United States is deeply complicit in the even more serious trends in the global environment. Half the world’s tropical and temperate forests are now gone. The rate of deforestation in the tropics continues at about an acre a second, and has been for decades. Half the planet’s wetlands are gone. An estimated ninety percent of the large predator fish are gone, and 75 percent of marine fisheries are now overfished or fished to capacity. Almost half of the world’s corals are either lost or severely threatened. Species are disappearing at rates about 1,000 times faster than normal. The planet has not seen such a spasm of extinction in 65 million years, since the dinosaurs disappeared. Over half the agricultural land in drier regions suffers from some degree of deterioration and desertification. Persistent toxic chemicals can now be found by the dozens in essentially each and every one of us.

Human impacts are now large relative to natural systems. The earth’s stratospheric ozone layer was severely depleted before the change was discovered. Human activities have pushed atmospheric carbon dioxide up by more than a third, along with other greenhouse gases, and have started in earnest the calamitous process of warming the planet and disrupting climate. Despite stern warnings now thirty years old, we have neglected to act to halt the buildup of greenhouse gases in the atmosphere and are now well beyond safe concentrations. Industrial processes are fixing nitrogen, making it biologically active, at a rate equal to nature’s; one result is the development of hundreds of documented dead zones in the oceans due to overfertilization. Human actions already consume or destroy each year about 40 percent of nature’s photosynthetic output, leaving too little for other species. Freshwater withdrawals are now over half of accessible runoff, and soon to be 70 percent. Water shortages are increasing in the United States and abroad. Aquatic habitats are being devastated. The following rivers no longer reach the oceans in the dry season: the Colorado, Yellow, Ganges, and Nile, among others. We have treaties on most of these issues, yes, but they are in the main toothless treaties. Global deterioration continues; our one notable success is protecting the ozone shield.

And so here we are, forty years after the burst of energy and hope at the first Earth Day, on the brink of ruining the planet. Indeed all we have to do to destroy the planet’s climate and biota and leave a ruined world to our children and grandchildren is to keep doing exactly what we are doing today, with no growth in the human population or the world economy. Just continue to release greenhouse gases at current rates, just continue to impoverish ecosystems and release toxic chemicals at current rates, and the world in the latter part of this century won’t be fit to live in. But human activities are not holding at current levels – they are accelerating, dramatically.

The size of the world economy doubled since 1960, and then doubled again. World economic activity is projected to quadruple again by mid-century. At recent rates of growth, the world economy will double in size in two decades. It took all of human history to grow the $7 trillion world economy of 1950. We now grow by that amount in a decade! We thus face the prospect of enormous environmental deterioration just when we need to be moving strongly in the opposite direction.

It seems to me one conclusion is inescapable. We need a new environmentalism in America. The world needs a new environmentalism in America. Today’s environmentalism is not succeeding. America has run a 40-year experiment on whether mainstream environmentalism can succeed, and the results are now in. The full burden of managing accumulating environmental threats has fallen to the environmental community, both those in government and outside. But that burden is too great. Environmentalists get stronger, but so do the forces arrayed against us, only more so. It was Einstein, I believe, who first said that insanity is doing the same thing over an over again and expecting a different result.

Well, we are not insane. It’s time for something different – a new environmentalism. We must build a new environmentalism in America. And here is the core of the new environmentalism: it seeks a new economy. And to deliver on the promise of the new economy, we must build a new politics.

I applaud NCSE for taking the important step of focusing us on the economy and economic transformation. And surely NCSE is correct that it must be a green economy – an economy that protects and restores the environment, one that lives off nature’s income while preserving and enhancing natural capital. Paul Hawken, Amory Lovins and Hunter Lovins have wonderfully described key features of such an economy in their book Natural Capitalism, which I will not repeat now.3

The first step in building a green economy is to ask why the current system is so destructive. As I describe in The Bridge at the Edge of the World, the answer lies in the defining features of our current political economy. An unquestioning society-wide commitment to economic growth at almost any cost; powerful corporate interests whose overriding objective is to grow by generating profit, including profit from avoiding the environmental costs they create and from replicating technologies designed with little regard for the environment; markets that systematically fail to recognize environmental costs unless corrected by government; government that is subservient to corporate interests and the growth imperative; rampant consumerism spurred endlessly by sophisticated advertising; economic activity now so large in scale that its impacts alter the fundamental biophysical operations of the planet – all these combine to deliver an ever-growing world economy that is undermining the ability of the planet to sustain life. These are key issues – these issues that are more systemic – that must be addressed by our new environmentalism.

But the new environmentalism will not get far if it is focused only on greening the economy, as important as that is. As David Korten, John Cavanagh and I and others in the New Economy Working Group are saying, the old economy has actually given rise to a triple crisis, and they are tightly linked. The failure of the old economy is evident in a threefold economic, social, and environmental crisis. The economic crisis of the Great Recession brought on by Wall Street financial excesses has stripped tens of millions of middle class Americans of their jobs, homes, and retirement assets and plunged many into poverty and despair.

A social crisis of extreme and growing inequality has been unraveling America’s social fabric for several decades. A tiny minority have experienced soaring incomes and accumulated grand fortunes while wages for working people have stagnated despite rising productivity gains and poverty has risen to a near thirty-year high. Social mobility has declined, record numbers of people lack health insurance, schools are failing, prison populations are swelling, employment security is a thing of the past, and American workers put in more hours than workers in other high income countries.

An environmental crisis, driven by excessive human consumption and waste and a spate of terrible technologies, is disrupting Earth’s climate, reducing Earth’s capacity to support life, and creating large scale human displacement that further fuels social breakdown.

And I would add that we are also in the midst of a political crisis. The changes we now badly need require far-reaching and effective government action. How else can the market be made to work for the environment rather than against it? How else can corporate behavior be altered or programs built that meet real human and social needs? Inevitably, then, the drive for real change leads to the political arena, where a vital, muscular democracy steered by an informed and engaged citizenry is needed.

Yet, for Americans, merely to state the matter this way suggests the enormity of the challenge. Democracy in America today is in trouble. Weak, shallow and corrupted, it is the best democracy that money can buy. The ascendancy of market fundamentalism and anti-regulation, anti-government ideology has been particularly frightening, but even the passing of these extreme ideas would leave deeper, more long-term deficiencies. It is unimaginable that American politics as we know it today will deliver the transformative changes needed.

There are many reasons why government in Washington today is too often more problem than solution. It is hooked on GDP growth – for its revenues, for its constituencies, and for its influence abroad. It has been captured by the very corporations and concentration of wealth it should be seeking to regulate and revamp. And it is hobbled by an array of dysfunctional institutional arrangements, beginning with the way presidents are elected.

Peter Barnes describes the problem starkly: “According to the Center for Public Integrity, the ‘influence industry’ in Washington now spends $6 billion a year and employs more than thirty-five thousand lobbyists….[I]n a capitalist democracy, the state is a dispenser of many valuable prizes. Whoever amasses the most political power wins the most valuable prizes. The rewards include property rights, friendly regulators, subsidies, tax breaks, and free or cheap use of the commons….We face a disheartening quandary here. Profit-maximizing corporations dominate our economy….The only obvious counter-weight is government, yet government is dominated by these same corporations.”4 As Bob Kaiser says, “So Damn Much Money.”5

These four crises underscore that our current system is not working for people or planet. Far too many people get a raw deal, as does the environment. No wonder there is so much populist anger today.

Now, these four crises are linked, powerfully linked. They cannot be dealt with separately. That seems daunting, for sure, but the only promising path forward is to address them together. And that’s why it is not enough only to green the economy – and that is also why the new environmentalism must embrace social and political causes that once seemed non-environmental but are now central to its success. Let’s explore some of these linkages.

America’s gaping social and economic inequality poses a grave threat to democratic prospects, the democracy on which our success depends. In his book On Political Equality, our country’s senior political scientist, Robert Dahl, concludes it is “highly plausible” that “powerful international and domestic forces [could] push us toward an irreversible level of political inequality that so greatly impairs our present democratic institutions as to render the ideals of democracy and political equality virtually irrelevant.”6 The authors brought together by political analysts Lawrence Jacobs and Theda Skocpol in Inequality and American Democracy document the emergence of a vicious cycle: growing income disparities shift political influence to wealthy constituencies and businesses, and that shift further imperils the potential of the democratic process to correct the growing disparities.7

Social inequities are not only undermining democracy, they are undermining environment as well. If the market is going to work for the betterment of society, environmental and social costs should be incorporated into prices, and wrongheaded government subsidies, a vast empire today, should be eliminated. Honest prices would be a lot higher, in some cases prohibitively high. But how can we expect to move to honest prices when half the country is just getting by? Honestly high prices are not a problem because they are high; they’re a problem because people don’t have enough money to pay them, or they can’t find preferable alternatives. In a similar vein, we cannot get far challenging our growth fetish and consumerism in a society where so many are nickeled and dimed to death and where the economy seems incapable of generating needed jobs and income security. Clearly, addressing social and environmental needs must go hand in hand.

Consider also the link between the recent financial collapse and the ongoing environmental deterioration. Both are the result of a system in which those with economic power are propelled, and not restrained by government, to take dangerous risks for the sake of great profit.

So, we see that the new economy – the prime objective of the new environmentalism – must be about more than green. We need a broader, more inclusive framing of our goal. We need to answer the probing question posed by John de Graaf in his new film: What’s the economy for anyhow? The answer, I believe, is that we should be building what I would call a “sustaining economy” – one that gives top, over-riding priority to sustaining both human and natural communities. It must be an economy where the purpose is to sustain people and the planet, where social justice and cohesion are prized, and where human communities, nature, and democracy all flourish. Its watchword is caring – caring for each other, for the natural world, and for the future.8 Promoting the transition to such an economy is in fact the mission of the New Economy Network, which I’m now working with many others to build. It will be a broad, welcoming space for all those pursuing diverse paths to these goals.

To build the new economy we need innovative economic thinking and new models. There is today wide-spread dissatisfaction with much of current economic orthodoxy. Enter the New Economics Institute, which is now being launched in the United States. The new economy needs a new economics.9 The new economy also needs a journal to focus our attention beyond problems to solutions, and I applaud Bob Costanza for launching the new journal Solutions.10

Beyond the generalities, it is fair to ask for more on how this new economy might look. As an early step in building a new economy, I believe we must begin to question the current centrality of economic growth in our economic and political life, what Clive Hamilton has called our “growth fetish.” With recent books like Peter Victor’s Managing Without Growth, Tim Jackson’s Prosperity Without Growth, and the New Economics Foundation’s The Great Transition, this is no longer as quixotic a cause as it was when I wrote my Bridge book just a few years ago. Peter Brown’s wonderful book, Right Relationship, also deserves mention in this context.11

Economic growth may be the world’s secular religion, but for much of the world it is a god that is failing – underperforming for most of the world’s people and, for those of us in affluent societies, now creating more problems than it is solving. The never-ending drive to grow the overall U.S. economy undermines communities and the environment, it fuels a ruthless international search for energy and other resources, and it rests on a manufactured consumerism that is not meeting the deepest human needs. We’re substituting growth and consumption for dealing with the real issues – for doing things that would truly make us better off.

Before it is too late, I think America should begin to move to post-growth society where working life, the natural environment, our communities, and the public sector are no longer sacrificed for the sake of mere GDP growth; where the illusory promises of ever-more growth no longer provide an excuse for neglecting to deal generously with compelling social needs; and where citizen democracy is no longer held hostage to the growth imperative.

Yet, even in a post-growth society there are many things that do need to grow. It is abundantly clear that American society and many others do need growth along many dimensions that increase human welfare: growth in good jobs, meaningful work, and in the incomes of the poor; growth in availability of affordable health care and in compassionate care for the elderly and the incapacitated; growth in education, research and training; growth in security against the risks of illness, job displacement, old age and disability; growth in investment in public infrastructure and amenity; growth in the deployment of climate-friendly and other green technologies; growth in the restoration of both ecosystems and local communities; growth in non-military government spending at the expense of military; and growth in international assistance for sustainable, people-centered development for the half of humanity that live in poverty, to mention some prominent needs. A post-growth economy would shift resources away from consumption and into investments in long-term social and environmental needs.

I put jobs and meaningful work first on this list because they are so important and unemployment is so devastating. Likely future rates of economic growth, even with further federal stimulus, are only mildly associated with declining unemployment. The availability of jobs, the wellbeing of people, and the health of communities should not be forced to await the day when overall economic growth might deliver them. It is time to shed the view that government mainly provides safety nets and occasional Keynesian stimuli. Government instead should have an affirmative responsibility to ensure that those seeking decent jobs find them. And the surest, and also the most cost-effective, way to that end is direct government spending, investments and incentives targeted at creating jobs in areas where there is high social benefit. Creating new jobs in areas of democratically determined priority is certainly better than trying to create jobs by pump priming aggregate economic growth, especially in an era where the macho thing to do in much of business is to shed jobs, not create them.

Of particular importance to the new economy are government policies that will simultaneously temper growth while improving social and environmental well-being. Such policies are not hard to identify: shorter workweeks and longer vacations, with more time with our children and friends; greater labor protections, job security and benefits; job protection guarantees to part-time workers, flextime and generous parental leave; restrictions on advertising and a ban on ads aimed at children; a new design for the twenty-first-century corporation, one that embraces rechartering, new ownership patterns, and stakeholder primacy rather than shareholder primacy; incentives for local production and consumption and for community revitalization; new indicators of national social and environmental well-being that dethrone GDP;12 strong social and environmental provisions in trade agreements; rigorous environmental, health and consumer protection, including full incorporation of environmental and social costs in prices; greater economic and social equality, with genuinely progressive taxation of the rich and greater income support for the poor; heavy spending on public services and amenities; and initiatives to address population growth at home and abroad. Cumulatively, such measures would indeed slow growth, but we’d be better off with a higher quality of life.

Environmentalism’s new agenda should embrace measures like those just listed. The new environmentalism must be about more than green. Mainstream American environmentalism to date has been too limited. In the current frame of action, too little attention is paid to the corporate dominance of economic and political life, to transcending our growth fetish, to promoting major lifestyle changes and challenging the materialistic and anthropocentric values that dominate our society, to addressing the constraints on environmental action stemming from America’s vast social insecurity and hobbled democracy, to framing a new American story, or to building a new environmental politics. The new environmentalism must correct these deficiencies.
The new environmental agenda should expand to embrace a profound challenge to consumerism and commercialism and the lifestyles they offer, a healthy skepticism of growthmania and a redefinition of what society should be striving to grow, a challenge to corporate dominance and a redefinition of the corporation and its goals, a deep commitment to social equity and justice, and a powerful assault on the materialistic, anthropocentric and contempocentric values that currently dominate in our culture.

I have concentrated mostly on needed policies, I suppose because that is my background. But there is another hopeful path into a sustainable and just future. This is the path of “build it and they will come” and “just do it.” One of the most remarkable and yet under-noticed things going on in our country today is the proliferation of innovative models of “local living” economies, sustainable communities and transition towns and for-benefit businesses which prioritize community and environment over profit and growth. The work that Gar Alperovitz and his colleagues are doing in Cleveland with the Evergreen Cooperative is a wonderful case in point. An impressive array of new economy businesses has been brought together in the American Sustainable Business Council, and a new Fourth Sector is emerging, bringing together the best of the private sector, the not-for-profit NGOs, and government. The seeds of the new economy are already being planted across our land.13

As I mentioned earlier, the transition to a new economy will require a new politics, and a new environmental politics in particular. The leading environmental journalist, Philip Shabecoff, recognized this a decade ago in his far-sighted book, Earth Rising: American Environmentalism in the 21st Century.14 How should we approach the job of building a new politics? Consider the triple crisis I mentioned earlier. All three result from a system of political economy that is profoundly committed to profits and growth and profoundly indifferent to the fate of people, communities and the natural world. Left uncorrected, this system is inherently rapacious and ruthless, to use the description used by Paul Samuelson and William Nordhaus in their famous macro-economics text. So it is up to us citizens, acting mainly through government, to inject values of fairness and sustainability into the system. But this effort commonly fails because our politics are too enfeebled and Washington is increasingly in the hands of the powerful and not the people. It follows, I submit, that the best hope for real change in America is a fusion of those concerned about environment, social justice, and strong democracy into one powerful progressive force. All progressive causes face the same reality. We rise or fall together, so we’d better join together.

Environmentalists should therefore support social progressives in addressing the crisis of inequality now unraveling America’s social fabric and join with those seeking to reform politics and strengthen democracy. And they should join with us. Corporations have been the principal economic actors for a long time; now they are America’s principal political actors as well. So here are some key issues for the new environmental agenda: public financing of elections, regulation of lobbying, nonpartisan Congressional redistricting, a minimum free TV and radio time to qualifying candidates, bringing back the Fairness Doctrine, and other political reform measures.

The new environmentalism must work with this progressive coalition to build a mighty force in electoral politics. This will require major efforts at grassroots organizing; strengthening groups working at the state and community levels; and developing motivational messages and appeals — indeed, writing a new American story, as Bill Moyers has urged. Our environmental discourse has thus far been dominated by lawyers, scientists, and economists. People like me. It has been too wonkish, out of touch with Main Street. The Death of Environmentalism was right about that. Now, we need to hear a lot more from the poets, preachers, philosophers, and psychologists.

And indeed we are. The world’s religions are coming alive to their environmental roles – entering their ecological phase, in the words of religious leader Mary Evelyn Tucker. And just last year, the American Psychological Association devoted its annual gathering to environmental issues. The Earth Charter text and movement are providing a powerful base for a revitalization of the ethical and spiritual grounds of environmental efforts. The Charter’s first paragraph says it all: “We stand at a critical moment in Earth’s history, a time when humanity must choose its future. As the world becomes increasingly interdependent and fragile, the future at once holds great peril and great promise. To move forward we must recognize that in the midst of a magnificent diversity of cultures and life forms, we are one human family and one Earth community with a common destiny. We must join together to bring forth a sustainable global society founded on respect for nature, universal human rights, economic justice, and a culture of peace. Toward this end, it is imperative that we, the peoples of Earth, declare our responsibility to one another, to the greater community of life, and to future generations.”

The new environmental politics must be broadly inclusive, reaching out to embrace union members and working families, minorities and people of color, religious organizations, the women’s movement, towns and cities seeking to revitalize and stabilize themselves, and other groups of complementary interest and shared fate. The “silo effect” still separates the environmental community from those working on domestic political reforms, a progressive social agenda, human rights, international peace, consumer issues, world health and population concerns, and world poverty and underdevelopment, but we are all in the same boat.

And the new environmental politics must build a powerful social movement. We have had movements against slavery and many have participated in movements for civil rights and the environment and against apartheid and the Vietnam War. We now need a new broad-based social movement – demanding action and accountability from governments and corporations, protesting, and taking steps as citizens, consumers and communities to realize sustainability and social justice in everyday life.

Recent trends reflect a broadening in approaches. Greenpeace and Friends of the Earth have certainly worked outside the system, the League of Conservation Voters and the Sierra Club have had a sustained political presence, groups like the Natural Resources Defense Council and the Environmental Defense Fund have developed effective networks of grassroots activists around the country, the World Resources Institute has augmented its policy work with on-the-ground sustainable development projects, and environmental justice concerns and the climate crisis have spurred the proliferation of grassroots efforts, student organizing, and community and state initiatives. Groups like 1Sky, the Energy Action Coalition, the 350 Campaign, Green for All, the Blue-Green Alliance, and others are transforming the environmental landscape. All this is headed in the right directions, but it is not nearly enough.

If all this seems idealistic and daunting, and it must to many, we should try not to let today’s political realities and the art-of-the-possible get in the way of clear thinking. The planet is literally at stake and with it our children’s future. In our super-rich country millions of fellow citizens are facing unnecessary economic and social deprivation. All the crises I have referred to are real – economic, social, environmental and political. They are very real. We see that every day. And right now we are fumbling around unable to find answers to any of them. The current system is broken. We need something better. Let’s find it. The important thing is to know the general direction we should take and to start marching. As Thoreau said, “Go confidently in the direction of your dreams.” We know a lot already about needed policy initiatives, and an impressive array of new economy initiatives is already underway. And here is an especially compelling part: if we succeed in building the new environmentalism, we can not only contribute greatly to saving our planetary home but also help build the ideas and momentum needed to address many other big challenges our country faces.

In conclusion, I hope you will remember three things:

• Remember what my friend Paul Raskin said: Contrary to the conventional wisdom, it is business as usual that is the utopian fantasy; forging a new vision is the pragmatic necessity.15

• Second, in order to shore up my diminished ecumenical credentials, remember what Milton Friedman said: “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”16 Unfortunately the crisis is here, if we would but recognize it as such.

• And, finally, remember that most of the ideas I have sketched this evening are not new. As we saw, they actually take us back to where we began, in the 1960s and 1970s. They gained prominence then and they can again. Perhaps they are now, belatedly, ideas whose time has come. We can’t recreate the 1960s and the 1970s; we shouldn’t even try. But we can learn from that era and find again its rambunctious spirit and fearless advocacy, its fight for deep change, and its searching inquiry.

Thank you.

Friday, February 19, 2010

U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

February 16, 2010 | Issue 46•07
From the Onion
WASHINGTON—The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.

Calling it "basically no more than five rectangular strips of paper," Fed chairman Ben Bernanke illustrates how much "$200" is actually worth.

What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world's largest economy.

"Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…" said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. "You know what? It doesn't matter. None of this—this so-called 'money'—really matters at all."

"It's just an illusion," a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. "Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless."

According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch (R-UT) finally shouted out, "Oh my God, he's right. It's all a mirage. All of it—the money, our whole economy—it's all a lie!"
Screams then filled the Senate Chamber as lawmakers and members of the press ran for the exits, leaving in their wake aisles littered with the remains of torn currency.

U.S. markets closed as traders left their jobs and resolved for once to do or make something, anything of real value.

As news of the nation's collectively held delusion spread, the economy ground to a halt, with dumbfounded citizens everywhere walking out on their jobs as they contemplated the little green drawings of buildings and dead white men they once used to measure their adequacy and importance as human beings.

At the New York Stock Exchange, Wednesday morning's opening bell echoed across a silent floor as the few traders who arrived for work out of habit looked up blankly at the meaningless scrolling numbers on the flashing screens above.

"I've spent 25 years in this room yelling 'Buy, buy! Sell, sell!' and for what?" longtime trader Michael Palermo said. "All I've done is move arbitrary designations of wealth from one column to another, wasting my life chasing this unattainable hallucination of wealth."

"What a cruel cosmic joke," he added. "I'm going home to hug my daughter."

Sources at the White House said President Obama was "still trying to get his head around all this" and was in seclusion with his coin collection, muttering "it's just metal, it's just metal" over and over again.

"The president will be making a statement very soon," press secretary Robert Gibbs told reporters. "At the moment, though, his mind is just too blown to comment."

A few U.S. banks have remained open, though most teller windows are unmanned due to a lack of interest in transactions involving mere scraps of paper or, worse, decimal points and computer data signifying mere scraps of paper. At a Bank of America branch in Spokane, WA, curious former customers wandered aimlessly through a large empty vault, while several would-be robbers of a Chase bank in Columbus, OH reportedly put their guns down and exited the building hand in hand with security guards, laughing over the inherent absurdity of the idea of $100 bills.

Likewise, the real estate industry has all but vanished, with mortgage lenders seeing no reason to stop people from reclaiming their foreclosed-upon homes.
"I don't even know what we were thinking in the first place," said former banker Nathan Collins of Brandon, MS, as he jimmyed open a door to allow a single mother and her five children to move back into their house. "A bunch of people sign a bunch of papers, and now this family has no place to live? That's just plain ludicrous."

The realization that money is nothing more than an elaborate head game seems to have penetrated the entire country: In Wilmington, DE, for instance, a collection agent reportedly broke down in joyful sobs when he informed a woman on the other end of the phone that he had absolutely no reason to harass her anymore, as her Discover Card debt was no longer comprehensible.

For some Americans, the fog of disbelief surrounding the nation's epiphany has begun to lift, with many building new lives free from the illusion of money.

"It's back to basics for me," Bernard Polk of Waverly, OH said. "I'm going to till the soil for my own sustenance and get anything else I need by bartering. If I want milk, I'll pay for it in tomatoes. If need a new hoe, I'll pay for it in lettuce."
When asked, hypothetically, how he would pay for complicated life-saving surgery for a loved one, Polk seemed uncertain.

"That's a lot of vegetables, isn't it?" he said.

Thursday, February 18, 2010

Sustainable Money

From Matthew Slater's Blog

I thought it would be handy to jot down a list of reasons why national currencies are unsustainable. Anyone care to add, or elaborate?

Eternal growth paradox

Because the money is always lent into existence at interest, there is never enough money to pay back the banks. More money must be created. This need to create more money forces the economy to grow, and drives consumption, carbon emissions and pollution with it. It is of course possible to disconnect economic growth from those unfortunate symptoms, but that is a separate strategy.

Interest rates always favour short term investment.

The way that interest rates increase the capital sum over time means that short term returns - which can be reinvested - are more profitable than long term investments. Renewable energy projects and retooling our whole society is a massive long term investment and the cost of not doing it is unimaginable. Yet the investements being made are comparable to Aid budgets - tokens.

Money movement is a symptom of globalisation

With the digitisation of stock markets, money now moves around the world with much greater volume and velocity than ever before. This is part of the globalisation agenda. It also means that labour and goods are flowing around the world ever more freely, which is a poor use of energy.


The present economy is a knife edge, and 'sustainable' growth seems impossible to achieve. Boom/bust cycles are less efficient than sustained behaviour for the same reason that using the brakes on the car is less efficient than going consistently slow.


Money seems ultimately to be its own ethic and raison d'etre. When the free marketeers talk about efficiency, they mean saving money. The present money system struggles to put a value on untouched rainforest, or mother-child contact time, or cost of drug abuse to society.

Monetary transactions are bad for community feeling

Bernard Lietaer points out in 'The Future of Money' how the introduction of money into societies has coincided with the breakdown of community. This is unsustainable in too many ways to document.

Wednesday, February 17, 2010

21 hours: Why a shorter working week can help us all to flourish in the 21st century

Editor's Note: Having had various kinds of employment, I can say without a doubt I consumer more stuff and especially energy when I have less time. When I have more time, the energy comes from my mind and my body rather than relying heavily on external resources as means to the same ends. In general, slow-paced life also provides better ends as far as health, happiness, meaningful and rewarding work. Lower hours also allows for more full employment of the population, leading to less scarcity, competition and fear around income, which shapes our culture greatly.

From the New Economics Foundation
See the full report here

This report sets out arguments for a much shorter working week. It proposes a radical change in what is considered ‘normal’ – down from 40 hours or more, to 21 hours. While people can choose to work longer or shorter hours, we propose that 21 hours – or its equivalent spread across the calendar year – should become the standard that is generally expected by government, employers, trade unions, employees, and everyone else.

The vision
Moving towards much shorter hours of paid work offers a new route out of the multiple crises we face today. Many of us are consuming well beyond our economic means and well beyond the limits of the natural environment, yet in ways that fail to improve our well-being – and meanwhile many others suffer poverty and hunger. Continuing economic growth in high-income countries will make it impossible to achieve urgent carbon reduction targets. Widening inequalities, a failing global economy, critically depleted natural resources and accelerating climate change pose grave threats to the future of human civilisation.

A ‘normal’ working week of 21 hours could help to address a range of urgent, interlinked problems: overwork, unemployment, over-consumption, high carbon emissions, low well-being, entrenched inequalities, and the lack of time to live sustainably, to care for each other, and simply to enjoy life.

21 hours as the new ‘norm’
Twenty-one hours is close to the average that people of working age in Britain spend in paid work and just a little more than the average spent in unpaid work. Experiments with shorter working hours suggest that they can be popular where conditions are stable and pay is favourable, and that a new standard of 21 hours could be consistent with the dynamics of a decarbonised economy.

There is nothing natural or inevitable about what’s considered ‘normal’ today. Time, like work, has become commodified – a recent legacy of industrial capitalism. Yet the logic of industrial time is out of step with today’s conditions, where instant communications and mobile technologies bring new risks and pressures, as well as opportunities. The challenge is to break the power of the old industrial clock without adding new pressures, and to free up time to live sustainable lives.

To meet the challenge, we must change the way we value paid and unpaid work. For example, if the average time devoted to unpaid housework and childcare in Britain in 2005 were valued in terms of the minimum wage, it would be worth the equivalent of 21 per cent of the UK’s gross domestic product.

Planet, people, and markets: reasons for change
A much shorter working week would change the tempo of our lives, reshape habits and conventions, and profoundly alter the dominant cultures of western society. Arguments for a 21-hour week fall into three categories, reflecting three interdependent ‘economies’, or sources of wealth, derived from the natural resources of the planet, from human resources, assets and relationships, inherent in everyone’s everyday lives, and from markets. Our arguments are based on the premise that we must recognise and value all three economies and make sure they work together for sustainable social justice.

Executive summary
This report sets out arguments for a much shorter working week. It proposes a radical change in what is considered ‘normal’ – down from 40 hours or more, to 21 hours. While people can choose to work longer or shorter hours, we propose that 21 hours – or its equivalent spread across the calendar year – should become the standard that is generally expected by government, employers, trade unions, employees, and everyone else.

Safeguarding the natural resources of the planet. Moving towards a much shorter working week would help break the habit of living to work, working to earn, and earning to consume. People may become less attached to carbon-intensive consumption and more attached to relationships, pastimes, and places that absorb less money and more time. It would help society to manage without carbon-intensive growth, release time for people to live more sustainably, and reduce greenhouse gas emissions.

Social justice and well-being for all. A 21-hour ‘normal’ working week could help distribute paid work more evenly across the population, reducing ill-being associated with unemployment, long working hours and too little control over time. It would make it possible for paid and unpaid work to be distributed more equally between women and men; for parents to spend more time with their children – and to spend that time differently; for people to delay retirement if they wanted to, and to have more time to care for others, to participate in local activities and to do other things of their choosing. Critically, it would enable the ‘core’ economy to flourish by making more and better use of uncommodified human resources in defining and meeting individual and shared needs. It would free up time for people to act as equal partners, with professionals and other public service workers, in co-producing well-being.

A robust and prosperous economy. Shorter working hours could help to adapt the economy to the needs of society and the environment, rather than subjugating society and environment to the needs of the economy. Business would benefit from more women entering the workforce; from men leading more rounded, balanced lives; and from reductions in work-place stress associated with juggling paid employment and home-based responsibilities. It could also help to end credit-fuelled growth, to develop a more resilient and adaptable economy, and to safeguard public resources for investment in a low-carbon industrial strategy and other measures to support a sustainable economy.

Transitional problems
Of course, moving from the present to this future scenario will not be simple. The proposed shift towards 21 hours must be seen in terms of a broad, incremental transition to social, economic and environmental sustainability. Problems likely to arise in the course of transition include the risk of increasing poverty by reducing the earning power of those on low rates of pay; too few new jobs because people already in work take on more overtime; resistance from employers because of rising costs and skills shortages; resistance from employees and trade unions because of the impact on earnings in all income brackets; and more general political resistance that might arise, for example, from moves to enforce shorter hours.

Necessary conditions for tackling transitional problems
Work is beginning at nef (the new economics foundation) to develop a new economic model that will help to engineer a ‘steady-state’ economy and address problems of transition to 21 hours. There is much work yet to be done and suggestions set out in this report are there to stimulate further debate and thought, rather than offer definitive solutions. They focus on achieving shorter working hours, ensuring a fair living income for all, improving gender relations and the quality of family life, and changing norms and expectations.

Achieving shorter working hours. Conditions necessary for successfully reducing paid working hours include reducing hours gradually over a number of years in line with annual wage increments; changing the way work is managed to discourage overtime; providing active training to combat skills shortages and to help long-term unemployed return to the labour force; managing employers’ costs to reward rather than penalise taking on extra staff; ensuring more stable and equal distribution of earnings; introducing regulations to standardise hours that also promote flexible arrangements to suit employees, such as job sharing, extended care leave and sabbaticals; and offering more and better protection for the self-employed against the effects of low pay, long hours, and job insecurity.

Ensuring a fair living income. Options for dealing with the impact on earnings of a much shorter working week include redistribution of income and wealth through more progressive taxation; an increased minimum wage; a radical restructuring of state benefits; carbon trading designed to redistribute income to poor households; more and better public services; and encouraging more uncommodified activity and consumption.
Improving gender relations and the quality of family life. Measures to ensure that the move towards 21 hours has positive rather than negative impacts on gender relations and family life include flexible employment conditions that encourage more equal distribution of unpaid work between women and men; universal, high-quality childcare that dovetails with paid working time; more job-sharing and limits on overtime; flexible retirement; stronger measures enforcing equal pay and opportunity; more jobs for men in caring and primary school teaching; more childcare, play schemes and adult care using co-produced models of design and delivery; and enhanced opportunities for local action to build neighbourhoods that everyone feels safe in and enjoys.
Changing norms and expectations. There are many examples of apparently intractable social norms changing very quickly – for example, attitudes to the slave trade and votes for women, wearing seatbelts and crash-helmets, and not smoking in public places. The weight of public opinion can shift quite suddenly from antipathy to approval as a result of new evidence, strong campaigning, and changing circumstances, including a sense of crisis. There are some signs of favourable conditions beginning to emerge for shifting expectations about a ‘normal’ working week. Further changes that may help include the development of a more egalitarian culture, raising awareness about the value of unpaid labour, strong government support for uncommodified activities, and a national debate about how we use, value, and distribute work and time.

We are at the beginning of a national debate. The next step is to make a thorough examination of the benefits, challenges, barriers and opportunities associated with moving towards a 21-hour week in the first quarter of the twenty-first century. This should be part of the Great Transition to a sustainable future.

Restaurant Encourages Bartering With and Between Customers

How to Share a Waffle
Reposted from
By Abby Quillen

Need waffles? At Off the Waffle in Eugene, Oregon, sharing can be a substitute for money.

Off the Waffle in Eugene, Oregon is not your typical waffle house. You won’t find pads of butter, bottles of fake maple syrup, or sides of hash browns and eggs here.

The owners, brothers Omer and Dave Orian, are in their mid-twenties and usually sport matching red afros. They and their seven employees serve traditional Belgian Liège waffles made from yeast-leavened batter. They use pearled sugar imported from Belgium, which caramelizes through the waffles, making them crunchy on the outside and moist on the inside.

And if you’re low on cash, Omer and Dave are happy to make a trade, because they’re big fans of bartering.

“When we were in elementary school, Dave would carry with him a little suitcase full of toys in hopes of trading them for cool stuff that other kids had,” says Omer.

Dave says the brothers have traded all kinds of things for waffles, including “acupuncture, massage, plumbing, a trumpet, and art.” And Omer adds that they received yard rakes from one customer.

“We have bartered for things we never would have gotten were we to have to pay cash for them,” Dave says.

The Orian brothers also installed a “barter wall” next to the counter to encourage exchanges between customers. The “wall” is a large corkboard with an FAQ next to it explaining: “It may benefit you to trade your goods and services with your neighbors as an alternative to using money, which can potentially be a little hard to find these days.”

“I don’t know that our five foot bartering wall will be the thing that turns this local economy in the right direction, but I do think we can make a significant impact,” Omer says. He argues that Eugene possesses ample “human and natural resources” to sustain itself. “The lack of cash flow due to the economy should not stop this city from prospering.”

Right now you can make a number of exchanges using the wall. Ellen will do some proofreading or editing for you if she can borrow your truck for an hour. Heather, a doula-in-training, will provide free labor support in exchange for experience toward her certification. Mike will fix your bicycle for some moped parts. And if you’re a business lawyer, Omer and Dave would like to trade you some waffles for your services.

If legal work for waffles doesn’t sound like a fair trade, you probably haven’t tasted these waffles. Everyone who has seems to invariably sound like a teenager with a crush. The store is wallpapered with waffle wrappers decorated by customers, many of them waxing poetic about the waffles. “Waffles make me so happy,” one gushes. “There’s a waffle at the end of the rainbow,” another proclaims. Off the Waffle’s 1,695 Facebook fans seem pretty smitten as well.

Off the Waffle’s “original” waffle is served in a to-go wrapper just like it would be if you purchased it from a street vendor in Brussels. But you can also sit down in the casual dining area, enjoy the Django Reinhart music that’s often playing on the stereo, and get a waffle served on a plate and topped with a combination of gourmet ingredients you’d expect to find in a much fancier restaurant. The Ahee-hee, for instance, features cream cheese, garlic-rubbed seared rare ahi tuna, sesame seeds, and drizzled sesame oil.

While you wait, you can pick up Off the Waffle’s small “joke basket” and exchange jokes with other customers. It’s crammed with scraps of paper, post-it notes, and pieces of napkin scribbled with jokes like, “What’s the difference between snowmen and snowwomen?” You turn it over for the punch line: “Snow balls.”

Off the Waffle just moved to a new location, and they haven’t put their sign up yet, but day and night, a line seems to snake from the counter to the door. Most people pay cash, but if you have a healthy potted plant or a restaurant-style highchair, Omer and Dave will probably trade you a mighty tasty waffle for it.

Tuesday, February 16, 2010

America's Only 'Socialist' Bank Is Thriving During Downturn

Bank Of North Dakota: America's Only 'Socialist' Bank Is Thriving During Downturn
From the Huffington Post
By Dale Wetzel
Feb 16, 2010

But now officials in other states are wondering if it is helping North Dakota sail through the national recession.

Gubernatorial candidates in Florida and Oregon and a Washington state legislator are advocating the creation of state-owned banks in those states. A report prepared for a Vermont House committee last month said the idea had "considerable merit." Liberal filmmaker Michael Moore promotes the bank on his Web site.

"There's a lot of hurt out there, a lot of states that are in trouble, and they're tying the Bank of North Dakota together with this economic success that we're having right now," said the bank's president, Eric Hardmeyer.

Hardmeyer says he's gotten "tons" of inquiries about the bank's workings, including questions from officials in California, Michigan, New Mexico, Ohio and Washington state. North Dakota has the nation's lowest unemployment rate at 4.4 percent, soaring oil production and a robust state budget surplus – but Hardmeyer says the bank isn't responsible for the prosperity.

"We are a catalyst, perhaps, or maybe a part of it," he said. "To put this at our feet is flattering, but it frankly isn't true."

The Bank of North Dakota serves as an economic development agency and "banker's bank" that lessens the loan risks of private banks and helps them finance larger projects. It offers cheap loans to farmers, students and businesses.

The bank had almost $4 billion in assets and a $2.67 billion loan portfolio at the end of last year, according to its most recent quarterly financial report. It made $58.1 million in profits in 2009, setting a record for the sixth straight year. During the last decade, the bank funneled almost $300 million in profits to North Dakota's treasury. The bank has the advantage of being the repository for most state funds, which can be used for loans and occasional relief for private banks that need a jolt of cash during sluggish credit markets.

"We think of ourselves as kind of a little mini-Federal Reserve," Hardmeyer said.

The state earns roughly 0.25 percent less interest than state agencies would get from a commercial institution. The bank also pays no state or federal taxes and has no deposit insurance; North Dakota taxpayers are on the hook for any losses.

The Bank of North Dakota was a cornerstone of the agenda of the Nonpartisan League, a farmers' political insurgency spawned by anger about outside control of North Dakota's credit and grain markets.

Founded in 1915 by A.C. Townley, who became a Socialist Party organizer after he went broke raising flax in western North Dakota, the NPL advocated state-owned banks to provide low-interest farm loans, along with state flour mills, grain elevators, meatpacking houses and hail insurance.

Supporters gained control of the legislature and the governorship within five years. The movement's power quickly waned, but two of its state-owned businesses survived – the Bank of North Dakota and a state flour mill and grain elevator in Grand Forks.

From the 1940s until the early 1960s, the bank served mostly as a public funds depository and municipal bond buyer, said Rozanne Enerson Junker, author of a 1989 history of the bank. Its economic development activity has greatly expanded since.

Gary Petersen, president of the Lakeside State Bank of New Town, a community on the Fort Berthold Indian Reservation in northwestern North Dakota, said the state bank is often willing to take a stake in local development projects.

"In my experience, you make a contact with the (Bank of North Dakota), and their question is, 'How do we get this done?'" Petersen said. "They're not looking at ways to knock it down."

Alerus Financial, a Grand Forks bank, has sold about $115 million of its $600 million loan portfolio to the Bank of North Dakota, both to spread its risk and provide itself with additional loan money, said Karl Bollingberg, Alerus' director of banking services.

"If you're left to find other participating banks, that can be very challenging," he said. "They don't have the same interest that the Bank of North Dakota has in helping you to do deals."

Mauro Guillen, a professor of management at the University of Pennsylvania's Wharton School of Business, said it is unlikely other states would open similar banks, in part because "the political culture here is very much against that kind of a thing."

Some state and federal agencies, such as the Small Business Administration, already have economic development programs similar to those at the Bank of North Dakota, Guillen said.

Bollingberg said the idea of other state-owned banks would also likely rouse opposition from private banks that wanted to keep their share of state deposits. "Because the (Bank of North Dakota) has been here so long, no banks know what it was like to have those deposits," he said.

Hardmeyer said he, too, was always doubtful others would take up North Dakota's model, but now he's not so sure.

"When I see what's going on around the country, it's not quite as far a leap as I thought it once was," he said.


On the Net:

Bank of North Dakota

Monday, February 15, 2010

The Great Transition

By David Boyle
Feb 12, 2010
From the New Economics Institute Newsletter

The main question we need to know about any vision of the future is what it is that has driven the change. In the case of The Great Transition, it is the rising costs of going back to 'business-as-usual', the huge cumulative cost of climate change (they estimate this at $3.75 trillion in the UK by 2050) and the cumulative cost of high levels of inequality (they estimate this at $6.75 trillion for the UK in 2050).

Drivers of change are often uncomfortable, and this one is no exception. What is exciting about The Great Transition is that it sets out a believable path whereby Britain can take big, radical steps toward a society and economy that delivers long, happy and equitable lives and fits within the planet's carrying capacity.

It means that the UK's conventional GDP will fall by a third. This is offset by making better use of what they have, and by an economic boost from increasing social and environmental value. The costs of climate change can be partly avoided and the costs of social breakdown can be avoided too.

New Economics Foundation policy director Andrew Simms put it like this. "For years we have been told that there is no alternative to an economy that wrecks the environment and worsens inequality. We've been told that we live in a time of prosperity, when really we're no happier than we were thirty years ago. We've been told that crashes, bubbles and recessions are all part of the 'natural cycle' of economies. But faced with potentially irreversible climate change and corrosive inequality, these are dangerous fairy tales. The Great Transition shows we have a chance of a better reality."

The point is that, as we know, GDP is a very poor measure of progress: the revenues skimmed off the financial system by traders in the City of London as they built a pyramid of 'toxic' derivatives added to GDP. So does cleaning up the effects of pollution and paying the costs of high rates of crime increases. This isn't just an academic point: what we measure ends up driving what we do. The Great Transition proposes a move beyond GDP, to start measuring the things which really produce value, for our communities, our societies and our environment.

The report sets out seven main interventions. These include:

- A Great Revaluing to make sure that prices reflect true social and environmental costs.
- A Great Rebalancing that sets out a new productive relationship between markets, society and the state.
- A Great Economic Irrigation that helps money and investment flow to where it is most needed.

But how do we get there? The Great Transition suggests a universal Citizen's Endowment of between £40,000 and £50,000 to give every adult an equal chance in life and the opportunity to invest in education, a business or local productive assets. This would be funded by a phased rise in inheritance tax on all estates up to 67 per cent and would go a long way to reducing the massive inequalities of inherited wealth in the UK.

Community land trusts are also central to The Great Transition. The report also proposes redistributing working time by setting out a four-day working week for everyone that would cut GDP by a third without a major loss of jobs.

There would be a major reorganisation of business, with publicly listed companies progressively transferring shares to their staff, giving them real control over the companies where they work. This would lead to the creation of a series of co-operatives, operating in regulated markets, and subject to competition from new companies. This is designed to change power relations within workplaces, creating a form of economic democracy.

There would be new variable consumption taxes, replacing income tax, reflecting the social and environmental costs of goods. A windfall tax on the profits of fossil fuel companies, for example, could channel funds into clean energy projects. There would be government lending for large-scale green energy and transport projects, channelled through a national Green Investment Bank. There would be a new national Housing Bank, more along the lines of those in the USA, offering people the opportunity to transfer a portion of their mortgage debt into equity and paying social rent on the balance.

There would be new regulations on the reserve requirements of private banks, which would be related to the social and environmental value of their investments. This is intended to engineer a 'race to the top', avoiding the more familiar race to the bottom, at the same time as reducing speculation and credit bubbles.

The purpose of The Great Transition is to inspire debate. It was designed for the UK not the USA. Many of the measures will be controversial. Some will be wholly unacceptable to people who are already steeped in sustainability. But it is a bold and coherent vision, with details and figures ­ using the skills of novelists, as much as the skills of economists, to create a believable world. And it suggests that other kinds of economic worlds are possible. That, in itself, represents hope.

David Boyle may be reached at: