Doughnut Economics on National Doughnut Day

What better way to conclude “National Doughnut Day” than to re-post a great article on Doughnut Economics by Kate Raworth. For those not in the know, Wikipedia describes a Doughnut as “an edible, torus-shaped piece of dough which is deep-fried and sweetened.”

But let’s get serious. This article was Originally published at Open Democracy. I found it at the highly recommended website Evonomics: The Next Evolution of Economics. The embedded videos are excellent in helping to convey the key points.

 

Kate Raworth
Kate Raworth is a senior visiting research associate at Oxford University’s Environmental Change Institute and a senior associate of the Cambridge Institute for Sustainability Leadership. Her new book is Doughnut Economics: seven ways to think like a 21st century economist. Visit her website and follow her @KateRaworth.

Doughnut Economics: Seven Ways to Transform 21st Century Economics – and Economists

Economics matters enormously for the future, but its fundamental ideas are centuries out of date.

By Kate Raworth

No one can deny it: economics matters. Its theories are the mother tongue of public policy, the rationale for multi-billion-dollar investments, and the tools used to tackle global poverty and manage our planetary home. Pity then that its fundamental ideas are centuries out of date yet still dominate decision-making for the future.

Today’s economics students will be among the influential citizens and policymakers shaping human societies in 2050. But the economic mindset that they are being taught is rooted in the textbooks of 1950 which, in turn, are grounded in the theories of 1850. Given the challenges of the 21st century—from climate change and extreme inequalities to recurring financial crises—this is shaping up to be a disaster. We stand little chance of writing a new economic story that is fit for our times if we keep falling back on last-century’s economic storybooks.

When I studied economics at university 25 years ago I believed it would empower me to help tackle humanity’s social and environmental challenges. But like many of today’s disillusioned students its disconnect from relevance and reality left me deeply frustrated. So I walked away from its theories and immersed myself in real-world economic challenges, from the villages of Zanzibar to the headquarters of the United Nations, and on to the campaign frontlines of Oxfam.

In the process I realized the obvious: that you can’t walk away from economics because it frames the world we inhabit, so I decided to walk back towards it and flip it on its head. What if we started economics with humanity’s goals for the 21st century, and then asked what economic mindset would give us half a chance of achieving them?

Spurred on by this question, I pushed aside my old economics textbooks and sought out the best emerging ideas that I could find, drawing on diverse schools of thought including complexity, ecological, feminist, behavioural and institutional economics, and set out to discover what happens when they all dance on the same page. The insights that I drew out imply that the economic future will be fascinating, but wildly unlike the past, so long as we equip ourselves with the mindset needed to take it on. So here are seven ways in which I believe we can all start to think like 21st century economists:

1. Change the goal: from GDP growth to the Doughnut.

For over half a century, economists have fixated on GDP as the first measure of economic progress, but GDP is a false goal waiting to be ousted. The 21st century calls for a far more ambitious and global economic goal: meeting the needs of all within the means of the planet. Draw that goal on the page and – odd though it sounds – it comes out looking like a doughnut. The challenge now is to create local to global economies that ensure that no one falls short on life’s essentials – from food and housing to healthcare and political voice – while safeguarding Earth’s life-giving systems, from a stable climate and fertile soils to healthy oceans and a protective ozone layer. This single switch of purpose transforms the meaning and shape of economic progress: from endless growth to thriving in balance.

2. See the big picture: from self-contained market to embedded economy.

Exactly 70 years ago in April 1947, an ambitious band of economists crafted a neoliberal story of the economy and, since Thatcher and Reagan came to power in the 1980s, it has dominated the international stage. Its narrative about the efficiency of the market, the incompetence of the state, the domesticity of the household and the tragedy of the commons, has helped to push many societies towards social and ecological collapse. It’s time to write a new economic story fit for this century – one that sees the economy’s dependence upon society and the living world. This story must recognize the power of the market—so let’s embed it wisely; the partnership of the state—so let’s hold it to account; the core role of the household—so let’s value its contribution; and the creativity of the commons—so let’s unleash their potential.


3. Nurture human nature: from rational economic man to social adaptable humans.

The character at the heart of 20th century economics—‘rational economic man’—presents a pitiful portrait of humanity: he stands alone, with money in his hand, a calculator in his head, ego in his heart, and nature at his feet. Worse, when we are told that he is like us, we actually start to become more like him, to the detriment of our communities and the planet. But human nature is far richer than this, as emerging sketches of our new self-portrait reveal: we are reciprocating, interdependent, approximating people deeply embedded within the living world. It’s time to put this new portrait of humanity at the heart of economic theory so that economics can start to nurture the best of human nature. Doing so will give us—all ten billion of us to come—a far greater chance of thriving together.

4. Get savvy with systems: from mechanical equilibrium to dynamic complexity.

Economics has long suffered from physics envy: awed by the genius of Isaac Newton and his insights into the physical laws of motion, 19th century economists became fixated on discovering economic laws of motion. But these simply don’t exist: they are mere models, just like the theory of market equilibrium which blinded economists to the looming financial crash of 2008. That’s why 21st-century economists embrace complexity and evolutionary thinking instead. Putting dynamic thinking at the heart of economics opens up new insights for understanding the rise of the one percent and the boom and bust of financial markets. It’s time to stop searching for the economy’s elusive control levers (they don’t exist), and instead start stewarding the economy as an ever-evolving system.

5. Design to distribute: from ‘growth will even it up again’ to distributive by design.

In the 20th century economic theory whispered a powerful message when it comes to inequality: it has to get worse before it can get better, and growth will eventually even things up. But extreme inequality, as it turns out, is not an economic law or necessity: it is a design failure. Twenty-first century economists recognize that there are many ways to design economies to be far more distributive of value among those who help to generate it. And that means going beyond redistributing income to pre-distributing wealth, such as the wealth that lies in controlling land, enterprise, and the power to create money.

6. Create to regenerate: from ‘growth will clean it up again’ to regenerative by design.

Economic theory has long portrayed a clean environment as a luxury good, affordable only for the well-off—a view that says that pollution has to increase before it can decline, and (guess what), growth will eventually clean it up. But as with inequality there is no such economic law: environmental degradation is the result of degenerative industrial design. This century calls for economic thinking that unleashes the potential of regenerative design in order to create a circular, not linear, economy—and to restore ourselves as full participants in Earth’s cyclical processes of life.

7. Be Agnostic about Growth: from growth-addicted to growth-agnostic.

To the alarm of governments and financiers, forecasts for GDP growth in many high-income countries are flat-lining, opening up a crisis in growth-based economics. Mainstream economics views endless GDP growth as a must, but nothing in nature grows forever, and the economic attempt to buck that trend is raising tough questions in high-income but low-growth countries. That’s because today we have economies that need to grow, whether or not they make us thrive. What we need are economies that make us thrive, whether or not they grow. That radical flip in perspective invites us to become agnostic about growth and to explore how our economies—which are currently financially, politically and socially addicted to growth—could learn to live with or without it.

I am convinced that these seven ways to think like a 21st-century economist are fundamental to the new economic mindset this century demands. Their principles and patterns will equip new economic thinkers—and the inner economist in us all—to start creating an economy that enables everyone to prosper. Given the speed, scale and uncertainty of change that we face in coming years—and the diversity of contexts from Beijing to Birmingham to Bamako—it would be foolhardy to attempt to prescribe now all the policies and institutions that will be fit for the future. The coming generation of thinkers and doers will be far better placed to experiment and discover what works as the context continually changes.

What we can do now—and must do well—is to bring together the best ideas to create a new economic mindset that is never fixed but always evolving. The task for economic thinkers in the decades ahead will be to bring these seven ways of thinking together in practice, and to add to them. We have barely set out on this adventure in rethinking economics. Please join the crew.

Kate Raworth’s new book is Doughnut Economics: seven ways to think like a 21st century economist.

Originally published at Open Democracy.

2017 May 6

Consciousness and the New World Order

In the previous post on Chaos, Havoc, and the American Abyss, we began a discussion about the work of Peter Pogany, and how it relates to the situation we now find ourselves in with the pending Trump administration here in the U.S.

A recent post in The Guardian by George Monbiot starkly outlines the seriousness of some of the crises we’re currently facing: The 13 Impossible Crises that Humanity Now Faces (hat tip to The Chrysalis). “One of the peculiarities of this complex, multiheaded crisis,” Monbiot writes,  “is that there appears to be no “other side” on to which we might emerge.”

Recall that in our previous post we discussed how deep infrastructure issues such as resource depletion and climate change impose eventual limits to growth, which then disrupt economies built upon heavy environmental resource extraction and financed by debt. And remember Pogany’s statement that “a stagnating economy is civil discontent waiting to happen – especially at a time when government spending must be curbed.” And also that the coming chaos might eventually, as a chaotic transition, lead to a much healthier organization of society.

What will it take? “It will take nothing less than a mutation in consciousness, as outlined by the Swiss thinker, Jean Gebser (1905-1973).”

And what does that mean?  To unpack this, let’s survey chapter 5 of his book, Havoc, Thy Name is 21st Century!

A concise dictionary definition of ‘consciousness’ is “the fact of awareness by the mind of itself and the world.” Consciousness, according to Pogany, is made up of active and passive components, that together contain the information necessary to deal with the issues that the “physical-social-cultural-economic-environment presents for the individual.”

“Consciousness,” Pogany says, “is best visualized as a continuous spectrum that stretches from intensely active components, engaged when dealing with a crisis in the family, at the workplace, or in the environs otherwise dilineated; to the body’s biological processes, which remain passive unless attention is explicitly drawn to them (e.g., in the doctor’s office).”

A point that Pogany is eager to emphasize is that “individual consciousness is inseparable from its socieeconomic substratum.”  This means that we come to common understandings about the “rules of the game” – cultural ideas about ways of living that we tend to take as given, real, and true. “What people living under a stable global system consider ‘true assertions’ about history, society, and the economy presupposes a scaffolding of the conceptual universe  that the mind tends to conflate with the laws and regularities of the natural world.”

“We are complex products of a world order.” Philosophers such as Kant, Hegel, Marx, and Husserl have all spent a lot of time making this clear, not to mention “the psycholinguists, the existentialists, the structuralists and the postmoderns.” And yet mainstream economics does not recognize this fact.

The stable global system, or world order, that we currently live in takes as a given that growth dependent economics is the only possible way forward. Everything is built around this arrangement, and the shared expectation is that we must find ways to keep it going. Margaret Thatcher’s TINA principle is invoked – “There Is No Alternative!” Never mind the fact that numerous heterodox economists have proposed alternatives, and never mind the fact that there are system feedback signals everywhere telling us that the growth dependent economy is exacerbating so many of  the world’s most intractable problems. The feedback signals are not yet strong enough to overcome the current global system’s self-defense mechanisms. In his 2006 book Rethinking the World, Pogany called these signals “A siren that shrieks too late, then causes a brawl at the fire station” (p. 187).

In my 2015 paper, Patterns for Navigating the World in Energy Descent (available here and here), I wrote:

“[Our growth oriented economic arrangement] is one more “myth of the given” that should not be taken for granted. Edgar Morin referred to “development” as:

The master word…upon which all the popular ideologies of the second half of this [20th] century converged…development is a reductionistic conception which holds that economic growth is the necessary and sufficient condition for all social, psychological, and moral developments. This techno-economic conception ignores the human problems of identity, community, solidarity, and culture… In any case, we must reject the underdeveloped concept of development that made techno-industrial growth the panacea of all anthroposocial development and renounce the mythological idea of an irresistible progress extending to infinity (Homeland Earth: A Manifesto for the New Millenium, Morin, 1999, pp. 59-63).

Addressing this “myth of the given,” Pogany pokes fun at his own profession:

Historically, geocapital [matter ready to be used to feed cultural evolution] has registered a net increase; additions and expansions more than offset exhaustions and reductions. This long-lasting successful experience led to the culturally ingrained confidence in the possibility of its eternal continuation. Economic growth theory keeps “deriving” the same conclusion over and over again: Optimally maintained economic expansion can continue forever. Translated from evolutionary scales to our own, this is analogous to “Since I wake up every morning I must be immortal” (Rethinking the World, 2006, p. 118).”

The problem is, this “economic growth theory” has become something our entire society is built upon and is dependent upon, and has become ingrained into our collective structure of consciousness.  Pogany believed that the challenge to develop a sustainable world system is so great that it will require a major transformation of individual consciousness structures; and yet, the average individual would be incapable of becoming so transformed as long as current socioeconomic conditions prevail. So, the current system is holding up our personal transformation, and our lack of personal transformation is holding up the transformation of the system. “Ay, there’s the rub.”

Pogany introduces the reader to the work of cultural philosopher Jean Gebser, and his outline of five “patterns, structures, or mutations” of consciousness. According to Gebser, we’re currently at the tail end (the deficient stage) of the fourth structure, the mental-rational structure, and are facing the chaotic transition that we hope will lead us to the fifth “integral” structure of consciousness.

We will take a closer look at Gebser’s five structures of consciousness in our next post.  And for a preview of some of the other points we’ll eventually get to, check out The Trump Agenda is a Dead End over at The Chrysalis.

Chaos, Havoc, and The American Abyss

“If a path to the better there be, it begins with a full look at the worst.” – Thomas Hardy

In the final days before the 2016 American presidential election the pundits were out in force, engaged in collective hand-wringing.  Glancing through lists of commentaries and op-eds, here are some of the titles:

Don’t Trust the Future to President Havoc, America and the Abyss, An Order of Chaos, Please, Venomous 2016 Race Slithers to a Finish, Who Broke Politics?, Democracy’s Majesty and 2016’s Indignity, Final Days – Awful Choice, Europe on Pins and Needles, The First 100 Horrific Days of a Trump Presidency, America’s Descent into Banana Republican-ism, An Election is Not a Suicide Mission, Liberals Cried Wolf about Bush and Romney and We Were Wrong – Fascist Trump is Different, and The Post-Truth Presidency.

How did it come to this? And where are we headed after the election?

Many have speculated on the reasons for the current crisis in American politics, and surely there are many facets that have played a part, and there are many angles to cover.  Richard Heinberg’s recent analysis (An Order of Chaos, Please) covers much of the same ground  I was intending to cover here, and serves as a good introduction.  He begins by disabusing us of the notion that things will return to normal once the election cycle has concluded. He then shares the somewhat conventional wisdom that many Americans these days, formerly of the middle class, do not have things as well as their parents did. The “wage class” has declined in both income and political power, thanks in part to globalization and other forces. Backs are up against the wall, and people are ready for change. The same-old, same-old doesn’t cut it.

collapse

Heinberg then takes it a step further, telling us that “American civilization was destined to unravel anyway.” He mentions Joseph Tainter’s work, “The Collapse of Complex Societies,”  and offers the sobering analysis that “social pressures from unsustainable debt levels, increasing inequality, and rampant corruption” are the new normal, thanks to “deeper infrastructural issues having to do with resource depletion, pollution (in the form of climate change), and the essential unsustainability of economic growth.” The current election cycle is merely the prelude to an unfolding spectacle of America’s fabric coming apart.

Heinberg eloquently sums up the depressing scenario that seems all too likely:

“The government of the United States of America has developed increasing numbers of tics, limps, and embarrassing cognitive lapses during the past ten or 15 years, but it has managed to go on with the show. Yet as dysfunction snowballs, a maintenance crisis becomes inevitable at some point. When the crunch comes (most likely as a result of the next cyclical economic downturn, which is already overdue and could be much worse than that of 2008), we will reap the fruits of a system that is simply no longer capable of acting cooperatively to solve problems.”

“…The nightmare of the election itself will end soon.  But we may not like what we wake up to.”

Indeed. We are now being forced to wake up today to a Trump presidency and a divided country.

There is another writer who had a perspective that I have found to be unique, timely, and insightful. His name is Peter Pogany.  One of his last major papers, written in 2013 (Thermodynamic Isolation and the New World Order) before he passed in 2014, was about havoc, chaos, and the abyss, and it was turned into a book published in 2015: Havoc, Thy Name is 21st Century.

Havoc

As dismal as his short term outlook was, Pogany wasn’t all doom and gloom. Like Michael Dowd, Pogany was a short term pessimist, but a long term optimist (Dowd calls himself an “apocaloptimist,” listen to his interview discussing with Terry Patten The New Ten Commandments and the Coming Apocaloptimism here).

Pogany was an economist who saw that “a stagnating economy is civil discontent waiting to happen – especially at a time when government spending must be curbed.” Our current world economy is structured so that it requires continued growth at unsustainable rates just to maintain our standard of living.  We’ve hit the wall, and the wage class around the world is responding – Brexit and President-elect Donald Trump are two corresponding results. According to Pogany, the world is in the beginning phase of a “nonlinear macrohistoric episode” – a chaotic transition, which he saw as a necessity to precipitate a crisis of consciousness that would eventually lead to the wide-spread “integral a-rational” consciousness structure, as based on the thinking of cultural philosopher Jean Gebser

“What will it take to go from considering tightened modes of multilateral governance a monstrous dystopia to people around the world on their knees begging for a planetary Magna Carta that is more detailed, focused and enforceable than the United Nations Charter of 1945? It will take nothing less than a mutation in consciousness, as outlined by the Swiss thinker, Jean Gebser (1905-1973). But a mutation of the implied magnitude amounts to nothing less than a break with centuries of ingrained habits, values, and expectations. It is simply inconceivable without the hard fate of macrohistoric turmoil.”

Darkness must come before a new dawn. It is Pogany’s work that we’ll continue to discuss in more detail in posts to come. An overview of his work can be found on our Peter Pogany page. Many of his older essays are archived at Resilience.org here.

Read Part 2 of this series here: Consciousness and the New World Order

The I-732 Carbon Tax: Responding to Critiques

In response to my previous post, in which I voiced my strong support for I-732, I’ve heard back from several friends who echoed and applauded my position.  I’ve also heard from three respected friends who have voted against, or are considering voting against the initiative.

This is the WA state tax swap ballot initiative that Sightline Institute has declared “would give Washington the continent’s, if not the world’s, most potent, persistent, and comprehensive incentive to move swiftly beyond dirty fossil fuels and to a carbon-free future.”

It’s an initiative that has the support of over 50 climate scientists at UW, as well as numerous economists.

So why would some of my climate change concerned friends consider voting against this initiative? Allow me to address the concerns my friends raised with me.

Argument # One is that a recent report coming out of British Columbia has shown in the ten years of having implemented a carbon tax, emission have actually gone up in the province.

My Response:

The “recent report” was not referenced to a source, so I performed a quick online search.  I found a December 2015 report by the Carbon Tax Center, British Columbia’s Carbon Tax: By the Numbers.  This report found that “The 12.9% decrease in British Columbia’s per capita emissions in 2008-2013 compared to 2000-2007 was three-and-a-half times as pronounced as the 3.7% per capita decline for the rest of Canada. This suggests that the carbon tax caused emissions in the province to be appreciably less than they would have been, without the carbon tax.

British Columbia's Carbon Tax By the Numbers

British Columbia’s Carbon Tax By the Numbers

Note that the chart above provides not only the change in emissions in BC after the tax went into effect, but puts their numbers in context, comparing to the rest of Canada, and also giving us emissions per capita, AND per GDP.

A caveat in the report tells us that “GHG emissions increased in British Columbia in 2012 and again in 2013, not just in absolute terms but also per capita. This suggests that the carbon tax needs to resume its annual increments (the last increase was in 2012; its bite has since been eroded by inflation) if emissions are to begin again their downward track.”

This means not that emissions were increasing beyond the pre-tax levels, but, as the other chart here makes clear, that the downward trajectory had reversed course and was beginning to creep up again.  Note the reason: The BC tax was frozen at 2012 levels. The proposed initiative for WA state does not have this defect – see below.

After more digging online, I think I found the report my friend was referring to.  The report above was prepared by an organization biased in favor of the carbon tax approach.  This second report, by Food and Water Watch, has a bias against market based solutions to climate change.  You can find their report, “The British Columbia Carbon Tax: A Failed Market Based Solution to Climate Change,” here.  This report skews the numbers a bit by ignoring the dramatic drop in emissions that occurred during the first 6 months of the tax, because it was not a full year, and because they attribute the decline to the recession rather than the carbon tax.  So it comes down to what period of time is measured, as they admit: “It largely depends when the change is measured: The taxed emissions decline was more than 10 percent from the 2004 peak to 2012, but that includes many falling years before the carbon tax was enacted; the decline was 2.2 percent from 2008 to 2014, but the tax was in effect only for the second half of 2008.”

In addition, this second report does not give us the context against the rest of Canada, nor the per capita and per GDP numbers.

I’ll admit that I haven’t spent a lot of time comparing the validity claims of the two contrasting reports, but the links are there for those who want to dive deep.  What does stand out to me is that the first report (“By the Numbers“) gives us a long trend comparison between BC and the other Canadian provinces, and I think this mitigates other factors such as the recession and is a more robust and fairer overall report.

However, there are others much more skilled at analyzing data than I, and they devote much more time and resources – we’re lucky to have the Sightline Institute in the Pacific Northwest for this purpose.

Like the “By the Numbers” report, Sightline agrees that the real weakness of the BC tax is that it was frozen in 2012.  In contrast, according to Sightline, the CarbonWA plan of “setting the price’s rising trajectory all the way to 2059 would vault Washington to the head of the North American pack on climate leadership. Other North American carbon prices are not yet high enough nor sustained enough to achieve climate-stabilizing pollution reductions…I-732 would give Washington the continent’s, if not the world’s, most potent, persistent, and comprehensive incentive to move swiftly beyond dirty fossil fuels and to a carbon-free future.”

“…Unlike the British Columbia carbon tax, which froze its price in 2012 pending further legislative action, I-732’s tax would continue increasing by 3.5 percent plus inflation every year until 2059 and by the inflation rate thereafter. This price trajectory sends a clear signal that clean energy is the smart choice in the Evergreen State for the rest of the century.”

The second argument from my friends is in two parts: a) oil and gas companies are supporting this initiative because it would give tax breaks to corporations and instead (b) will put the burden of a carbon tax on the low income working class (and the rest of the public consumers).

My Response:

a) I have found no evidence that oil and gas companies are supporting I-732.  Again, according to Sightline, the tax “covers pollution from burning fossil fuels, including gasoline, diesel, aircraft fuels, refinery and industrial operations, natural gas, and coal or natural gas burned in power plants in-state, and in plants out-of-state when they deliver electricity to Washington homes and businesses.”

b) Will the tax unfairly burden low income Washington residents? No. It actually makes the WA state tax system less regressive and more progressive, and has provisions to benefit those of lower income. It does this by reducing sales tax by 1%, and provides a Working Family Tax Rebate of up to $1500 to low income families. It also lowers the B&O Tax on Manufacturing so that manufacturing jobs will not be lost. Here is yet another quote from Sightline:
“I-732 hews closely to this principle [of mitigating costs to communities with lower incomes], yielding the biggest gain in tax fairness in Washington in nearly four decades, with thousand-dollar net benefits for hundreds of thousands of low-income families. I-732 does nothing procedural to increase the influence of low-income families on decision making. It does, however, put most of them ahead financially. Indeed, has any reform in the last decade, aside from the Affordable Care Act, increased many low-income working families’ annual income in Washington by more than $1,000 apiece in a single stroke?”
If you’re still unsure, read the whole meticulous analysis by Sightline (fyi, they refute the supposed “budget hole” that I-732 would create):
Cliff Mass has a good overview response to many of the other objections raised to I-732, here: Why I-732 is a Win-Win.
Are We Going to Let the Perfect Be the Enemy of the Good?
You might want to check out the conversation Thom Hartman had with Vien Truong, representing opposition to I-732. Hear the perspective of the ‘No’ campaign, along with Hartman’s own reflections, i.e. Does It Have to Be Perfect?.
On that score (does it have to be perfect?), blogger John Michael Greer has a very trenchant critique of climate change activism as a whole, partially attributing it’s failure to gain traction to 4 points he calls 1) piggybacking,  2) the partisan trap, 3) purity politics, and 4) pandering to the priviledged.
1) Piggybacking: “This is the insistence that any movement for social change has to make room on its agenda for all the other currently popular movements for social change, and has to divert some of its time, labor, and resources to each of these other movements.”  The ‘No on I-732’ campaign is guilty of this charge. Many Washington Sate environmentalists actually oppose the measure and want to kill it because it does not include some of their “climate justice” concerns. Greer gives the same-sex marriage campaign as a contrasting success, where they were able to keep their eye on the ball with their single issue and not tie it to every other issue on the left (however important they may be in their own right).
2) The Partisan Trap: “The Democratic Party is the place where environmental causes go to die,” according to Greer. “This isn’t accidental,” he says. “Both US parties have perfected the art of reducing once-independent movements for social change into captive constituencies, which keep on working to elect candidates for one or the other party, while getting essentially nothing in return.” I-732 attempts to avoid this trap by making I-732 revenue neutral and enlisting the support of fiscal conservatives who care about the environment.
3) Purity Politics: “…movements for social change must exclude everyone who fails any of a battery of tests of ideological purity. It’s been pointed out, and truly, that the Right looks for allies to attract while the Left looks for heretics to expel; this is one of the reasons that for the last forty years, the Right has been so much more successful than the Left.” Greer also observes that “capacity to bridge ideological divides and find common ground on a single issue isn’t a guarantee of victory, but refusing to do so is almost always a guarantee of defeat.”  I-732 may not be perfect, but it is a very well crafted, and sincere effort to put together an initiative that bridges ideological divides and has actually gained support from both the left and the right in true bi-partisanship. It is a practical and pragmatic approach that actually has a chance to be implemented.  It will likely be too late if we think we can wait for something better.
4) Pandering to the Privileged: “Since the early 1980s, most activists have framed their appeals and their campaigns as though the only audience that mattered consisted of affluent liberals, and as often as not went out of their way to ignore or even insult the great majority of Americans—you know, the people who would have had to be on their side if their cause was going to achieve any kind of lasting victory.” It is here that the I-732 campaign might have done a better job in engaging with advocates for the poor, minority coalitions, and climate justice folks. But the reality is that I-732 will result in a larger increase of income for low income working families than any other reform of the last decade.
“In summary,  I-732 is a chance for citizens of Washington State to make a meaningful step towards reducing carbon emissions, will make our State tax system fairer and less regressive, will foster business and economic activity, and will serve as a positive example to the nation of environmentally effective bipartisan action.” – Cliff Maas

In Praise of Peter Paul Pogany, an Integral Economist

I’ve just completed a new page on my website dedicated to promoting the work of Peter Pogany, which you can find here, and I’d like to use this post as a way of alerting everyone to this new page, and to provide a brief summary of what you’ll find there.

Peter Paul Pogany (1936-2014) was born in Budapest, Hungary, and later moved to the U.S. to continue his education and begin his career. He worked as an Economist for the U.S. International Trade Commission (where he contributed to many high-profile U.S. government studies on foreign economic issues), and was an Adjunct Professor at George Washington University.

My impression is that it may have been after his retirement that he felt free to more deeply explore and begin writing, relating his expertise in economics to thermodynamics, history, philosophy, and other big picture ideas.

It is my belief that Pogany’s work is essential for anyone wanting to grasp the implications of integral economics, of which I’ll be writing more about in the future.

In 2006 Pogany’s major work was published: Rethinking the World, “the result of several years of full-time, independent, transdisciplinary research.”Rethinking the World

In Rethinking the World, Pogany delved deep into his understanding of history as a thermodynamic process.

From the  blurb about Pogany’s book:

“The still expanding human biomass and mindlessly pursued economic expansion are straining against the planet’s physical limits. Oil! Energy! Ecology! Growing vulnerabilities in hyperlinked national economies! The transformation of the current global system, “mixed economy/weak multilateralism,” into a radically new one, “two-level economy/strong multilateralism,” looks like the only way to avoid drifting toward extinction…

His 2006 book does not once mention Jean Gebser, but from 2009 to 2013, Pogany wrote a number of insightful articles and essays relating ideas from Gebser’s magnum opus, The Ever-Present Origin, to the predicament the world is now facing, and the ways in which Gebser’s ideas about stages of consciousness, especially the yet to come stage of the integral structure of consciousness (a universal “intensified awareness”), support Pogany’s own program of New Historical Materialism.  Many of these essays were prepared for presentation to the International Gebser Society at their annual conference.

HavocSadly, Peter Pogany passed away on May 25, 2014. His final book, Havoc, Thy Name is Twenty-First Century! Thermodynamic Isolation and the New World Order was published posthumously in 2015.  This work is a slight alteration and expansion of a paper published in 2013 (see below).

Here is the blurb for this book:

“Just to maintain our standard of living, we need to grow the worldwide economy at an unsustainable rate.

As we seek to hit such lofty targets, we’re bound to deplete our resources and cause environmental crises on a scale that we have never seen before. Revolutions, terrorism, and wars will follow.

Peter Pogany examines the problems we face and argues that human culture is governed by thermodynamic cycles of steady states interrupted by chaotic transitions. Specifically, he postulates that a steady state was interrupted by World War I, with a chaotic transition following World War II, which has led us to the current world order.

His theory predicts that global society is drifting toward a new form of self-organization that will recognize limits to demographic-economic expansion – but only after we go through a new chaotic transition that will start sometime between now and the 2030s.

Havoc, They Name is Twenty-First Century, delivers sobering thoughts on where the world is headed, but it also offers a glimpse of a bright future that we can embrace once we get through the darkness to come.”

With the two books above, and the essays linked below, you’ll obtain a good understanding of Peter Pogany’s ideas, which I believe are unique, timely, insightful, important, broadly considered, and with wide application. Even better if you can read this material alongside Gebser’s The Ever-Present Origin, and other works and ideas presented on this website (see here and here).

Below are a list of important essays and longer papers that I would like to highlight. Check the Pogany Page if you’d like to see descriptive summaries for each essay. 

Presentations to the International Gebser Society Conference:

“Fifth Structure” – emergence in economics: Observations through the thermodynamic lens of world history (presented October 2009) [Download pdf]

New scientific evidence confirms Gebser’s concerns about technological overreach (presented October 2010) [Download pdf]

Gebser’s relevance to the global crisis (presented October 2011) [Download pdf]

Reprinted as chapter 6 in “Filling the Credibility Gap” edited by Algis Mickunas and John Murphy

An Aperspectival Opinion on the Future of “Smart Money” (presented October 2012) [Download pdf]

Tributaries to Gebser’s Social Thought (presented October 2013) [Download pdf]

  • Longer Papers at Munich Personal RePEc Archive (MPRA):

What’s Wrong with the World? Rationality! A Critique of Economic Anthropology in the Spirit of Jean Gebser (2010)
[Available here: https://mpra.ub.uni-muenchen.de/27221/]

Value and Utility in a Historical Perspective (2012)
[Available here: https://mpra.ub.uni-muenchen.de/43477/]

Thermodynamic Isolation and the New World Order (2013)
[Available here: http://mpra.ub.uni-muenchen.de/49924/]

[This is the paper that the book Havoc, Thy Name is Twenty-First Century! is based upon.]

Washington State Could Enact the Nation’s First Carbon Tax

Will Washington State have the nation’s first carbon tax?

by Kurt Cobb, Resource Insights

“Yoram Bauman is the world’s only “stand-up economist.” He makes his living poking fun at his own profession. But he’s dead serious about fighting climate change, and he’s the intellectual force behind a climate-related initiative that seems likely to appear on Washington state’s November 2016 ballot, an initiative that would implement the first carbon tax in the nation.

The purpose of the measure, dubbed Initiative 732, would be to motivate households and businesses to cut down on the burning of fossil fuels, the major source of man-made emissions of carbon dioxide, the main greenhouse gas. By raising the price of fossil fuels it would encourage conservation and efficiency and the substitution of low-carbon and carbon-free sources of energy by making these energy sources more cost-competitive.

The organization pushing the initiative is Carbon Washington. The principle behind the proposal is simple: Raise taxes on what you want less of and lower taxes on what you want more of.”

Read the entire article here.

And then, if you’re in or near Bellingham, WA, come out tonight (9/30/15) to WWU’s Arntzen Hall:

Join CarbonWA and SRE (Students for Renewable Energy) for a FREE night of stand-up economics and climate solutions, a discussion and Q&A with Yoram Bauman PhD.

Cartoon Climate Change

Yoram Bauman is a PhD economist, author, the word’s first stand up economist, and founder of CarbonWA the organization backing I-732, a ballot initiative to tax carbon emissions.

This discussion will cover a number of topics including but not limited to I-732. It’s the perfect space for students and community members to learn more about climate change and ways they can take action in their community and beyond.

Not only will there be food and a raffle with excellent prizes (think Mallard’s and Boundary Bay), but this will be a great opportunity to learn more about how we can tackle climate change! Bring your friends, impress a date, get some extra kudos in a class, or expand your environmental economics horizon!

Come share some laughs and learn more about clean energy policy, Wednesday, Sept. 30th, 6pm in AH 100!

CarbonWA Bellingham Facebook Event Listing Here.

Transition Whatcom Event Listing Here.

Pogonomics and Pope-onomics

The worship of the ancient golden calf has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings. – Pope Francis

Pogonomics

Pogo was a famous comic strip written by Walt Kelly, that ran from the late 1940s through the early 1970s.  In 1970, Kelly designed a poster to celebrate the first Earth Day, using the slogan “we have met the enemy and he is us.”

pogo-1970_earth_day_poster

On Earth Day 1971, Kelly used the slogan once again, this time in the comic strip itself:

Pogo_Earth_Day_1971_poster

In the 1980s, Joe Dominguez began teaching courses on financial integrity, and later co-wrote with Vicki Robin the best selling book Your Money or Your Life. He framed his teaching around what he called “Pogonomics.”  In a 1990 column on the subject “What is Enough?” Dominguez wrote,

While no one was paying much attention, economics replaced religion as the touchstone of human life. Like religion, economics has priests and rituals. The purpose of these priests and rituals is to interpret the meaning of events while keeping the people in confusion. Any effort on the part of the masses to connect directly with the realities behind the rituals is considered a sacrilege.

Dominguez’s concerns are well expressed in this excerpt:

The purpose of money is to consume resources. Any time that you spend money, you are consuming resources. Since you have traded a piece of your life to get that money (through your employment), you are also consuming your own resource (your life-energy) when you spend money. The new resource you bought with the money now belongs to you – it is not available to others. It is now your right to use it up, to prevent others from getting it, to hide it from other people in your closet, to make other people feel bad because they don’t have it.

When you want to consume more resources than you can get with the money you got by selling your own resource (your life energy) through your employment, you can sell your future and your children’s future. This is called “trading futures,” or debt. You have to use up even more resources when you are consuming via debt – the extra amount being called, interestingly enough, “interest on consumer debt.” This is a very efficient way to “use up, devour, destroy, waste and squander.”

While you are in employment, acquiring money and debt, and consuming, you are creating the environment. All along the way, from when that resource was taken from the Earth to the time you have consumed as much of it as you want and then thrown it “away,” it has been creating environment. The mining equipment that got to the resource had to create environment by removing trees and topsoil that were in the way, had to burn (consume) fuels that created a different recipe for the air environment, had to run a lot of water to take the used-up chemicals into the river environment. Then the resource had to be transported to the refiner, creating a lot of environment along the way, and the refiner created more environment, and then the manufacturer created still more environment, and then the shipper had to create lots more environment to package the resource so that it would appeal to the consumer, who would pay the money that it cost for all that environment (and employment and resource). The consumer often uses the new resource to create more environment as well, and then throws it “away” – creating even more environment.

Hence, the concept of Pogonomics is indeed summed up as “We have met the enemy and he [or she] is us.”

Pope-onomics

Pope Francis has a very similar analysis, which we are here referring to as “Pope-onomics.”  This article by Nathan Schneider (thanks to theurj for the link) outlines some of the Pope’s economic ideas which argue against free market growth at all costs, monetary policies that encourage crippling debt, and  of “a financial system that rules rather than serves.”

Popenomics

Rush Limbaugh is wrong when he characterizes the Pope’s economics as “pure Marxism.”  However, neither is it pure capitalism, which comes as a shock to the mainstream view that our current “business as usual” economic order is non-negotiable. Schneider comments, ” It’s not an economics of the right or left, of Democrats or Republicans, but an economics of cooperation.”

Like Pogonomics (and permaculture), Schneider also points out that “The future Francis hopes for is one that comes chiefly from the bottom up.” He told a group of activists in Bolivia, “The future of humanity is in great measure in your own hands, through your ability to organize and carry out creative alternatives.”

Here are a few comments from the Pope Francis Encyclical, Laudato Si‘ (yes, it is worth your time to set aside an hour or two to sit down and carefully read through the pdf of this entire document):

“In a word, businesses profit by calculating and paying only a fraction of the costs involved. Yet only when ‘the economic and social costs of using up shared environmental resources are recognized with transparency and fully borne by those who incur them, not by other peoples or future generations,’ can those actions be considered ethical.”

“A change in lifestyle could bring healthy pressure to bear on those who wield political, economic and social power. This is what consumer movements accomplish by boycotting certain products. They prove successful in changing the way businesses operate, forcing them to consider their environmental footprint and their patterns of production.”

“Obsession with a consumerist lifestyle, above all when few people are capable of maintaining it, can only lead to violence and mutual destruction.”

“Since the market tends to promote extreme consumerism in an effort to sell its products, people can easily get caught up in a whirlwind of needless buying and spending.”

Pope Francis seems to resonate with Joe Dominguez’s moral and ethical concerns about economics having replaced religion as the touchstone of life. In 2013, in his first major written work,  Evangelii Gaudium, he specifically asks us to say “No to an economy of exclusion” and “No to the idolatry of money,” which he said could lead to “a new tyranny.” “Money must serve,” he says, “not rule.”

 

we-have-created-new-idols

What Pope-onomics does encourage is self-governing economies and cooperative enterprise, which are owned and controlled by the people who depend on them (workers and customers), and are not set up to maximize profits. Co-operatives have a long tradition in the catholic tradition and indeed in the very roots of the very earliest Christians.

Acts 2:42-47: The Fellowship of the Believers

They devoted themselves to the apostles’ teaching and to the fellowship, to the breaking of bread and to prayer. Everyone was filled with awe, and many wonders and miraculous signs were done by the apostles. All the believers were together and had everything in common. Selling their possessions and goods, ghey gave to anyone as he had need. Every day they continued to meet together in the temple courts. they broke bread in their homes and ate together with glad and sincere hearts, praising God and enjoying the favor of all the people. And the Lord added to their number daily those who were being saved.

Schneider references the 1916 book Distributive Justice by priest-economist John Ryan, and quotes his conclusion about the Advantages and Prospects of Co-operation: “Co-operation is a golden mean between individualism and socialism. It includes all the good features and excludes all the evil features of both….[cooperatives cultivate] a greater development of the altruistic spirit than is possible under any other economic system that has ever been tried or devised.”