subscribe to the RSS Feed

Tuesday, June 27, 2017

Capitalism explained

Posted by steve on January 18, 2015

 

Everybody talks about capitalism – but what is it? | Kajsa Ekis Ekman | TEDxAthens

Capitalism is production for profit in private hands according to Kajsa.

And ordinary people are stuck between asking employers for enough wages to pay their bills and banks who want enough money to pay their loans.

Overshoot day August 20: will “economic” reality meet resource reality?

Posted by steve on September 22, 2013

Let us look at overshoot day from the point of view of economics. By economics I mean the technology of keeping track of housekeeping with resources and keeping track of material obligations to those around us.  Economics does not need to be restricted to counting with money. Other measures can be used. And it is fascinating to try it. In this case we can consider that a Nation has its own household that it needs to keep fed and housed, and has its natural resources to do it. We start with a situation however where many nations are living over their means. WAIT! There is more to read… read on »

Experimental currency in Sweden

Posted by steve on July 1, 2013

Does your local community need and injection of money to usher in prosperity? No worry, just get your scissors out and make some! This is anyway what a group of local community developers in Sweden are trying. The initiative is a cooperation between Transition Towns in Sweden (the organization that works on a local level to prepare for a world without oil) and ISSS, the Institute of Swedish Safety and Security – an organization that is working to promote resilience and disaster preparedness.

Philip Wyer, chairman of ISSS, the project’s lead partner, explains that the role of his institute is to study the changes occurring in society and relate them to the safety, security and well-being of people. Understanding resilience and ways for society to show resilience in the face of change is a perspective that ISSS covers with the other partners, the Swedish Transition movement and Open World Villages. Most important is to understand the risks society might face and ways to mitigate those potential threats. Philip likens it to preparing for a journey: you cannot be sure of what to take with you until you know if the journey will be along smooth roads, in hot jungle or up freezing mountains. Having understood where you will be going, i.e. what situation society will be in, the analysis, assessment and recommendations follow, utilizing tools including R.A.I.D assessments. This acronym stands for risks, assumptions, issues and dependencies, which enable the organization to understand the current perspective on a potential scenario and analyze the effect of future changes. WAIT! There is more to read… read on »

Swedish Foundation sees fees on raw materials can create circular economy

Posted by steve on June 16, 2013

Product_matrixJust released, the latest version of the Swedish Sustainable Economy Foundation’s White paper presents in detail how nations can usher in the zero emission, no waste society using a special fee mechanism on raw materials. Download the paper from the Foundation’s web site

 People get worried that we should reduce consumerism, as our way of life is driving resource use and emissions. Just reducing will collapse the economy. Instead, the Foundation proposes fees on introduction of raw materials into the economy.  These fees are raised until the consumption and emission of materials ceases. But the money is redirected into  the economy – paid out equally to all taxpayers. This ensures people have money to buy what they need.

The paper is the result of several years’ work, including projects with the Nordic Council of Ministers on Carbon fees and fees on phosphorous and nitrogen.

It is essential reading for those working with the transition of society away from the resource-hungry to the equitable, sustainable future many long for. It provides a sound basis for practical approaches to pricing and managing pollution.

The paper, along with other versions and  the short summary can be downloaded here.

http://tssef.se/?p=605

The circular economy can be ushered this way: substances that are not biological of origin ( iron, other metals,  mined substances etc) cost to enter the system, and the price is raised until they do not leave it. Biological nutrients circulate too, but enter and leave the economy without burdening recipient or reducing ecological maturity of the source. At the same time, money to enable these transactions circulates freely in the opposite direction.

 

We pick up the pollution bill and go hungry while corporations get the profits

Posted by steve on April 26, 2013

In a recent article in grist.org, journalist David Roberts explains that

None of the world’s top industries would be profitable if they paid for the natural capital they use

Citing a recent report [PDF] by environmental consultancy Trucost on behalf of The Economics of Ecosystems and Biodiversity (TEEB) program sponsored by United Nations Environmental Program, David Roberts explains

The notion of “externalities” has become familiar in environmental circles. It refers to costs imposed by businesses that are not paid for by those businesses. For instance, industrial processes can put pollutants in the air that increase public health costs, but the public, not the polluting businesses, picks up the tab. In this way, businesses privatize profits and publicize costs ….. if we take the idea seriously, not just as an accounting phenomenon but as a deep description of current human practices, its implications are positively revolutionary.

What is the actual tab that is being picked up by us? Trucost estimates that greenhouse gas emissions account38% of the use of natural capital. The effect on food security?

The British met office estimates (see their web page here) that some regions could benefit from climate change, while in others it may offset gains in food security from economic and social development. However, in the overall analysis some projections suggest that 100-200 million additional people could be at risk of hunger due to climate change by 2050.

So the costs of emitting green house gasses alone are negatively affecting the lives of millions. They are clearly picking up the tab, but not sharing in the profits.

http://www.metoffice.gov.uk/climate-change/guide/impacts/food

The citizen pays all, whilst what she wants is taxed and doesn’t want is allowed free.

Posted by steve on February 19, 2013

The engine of the economy is the consumer citizen.

The engine of the economy is the consumer citizen.

Preparing a project to explore the finer art of taxation I created this diagram to illustrate the various fee and tax relationships that exist between the entities in the political economy.

Some rather striking things emerge from this simple diagram: there are a lot of transactions going on, separating them all out from each other is going to be a major task.

Another thing that strikes me is that the consumer, whilst being in the centre of the economy, is actually surrounded by the corporate-state economy that she is actually fuelling.

Let us consider what the average citizen wants:

To live in a society where everyone has a job.
Situation: work is taxed heavily in most countries

To give coming generations the opportunity to enjoy the same cheap energy they do

Situation: whilst work is taxed heavily, it is much cheaper for corporations to replace work with automated, fossil-fuel powered machines. In general, it is more profitable to sell things newly made than services or repaired goods.

To have a thriving economy where people buy and sell from each other in abundance

Situation: most transactions are taxed with VAT or sales tax, in Sweden 2o% of what individuals pay is tax.

To live in a clean environment

Situation: companies supplied by long supply chains leave behind  massive pollution for every kg of product they sell or every unit of service they provide. The fees paid by companies for recycling and waste are only a tiny fraction of all the other taxes.

To use natural resources like metals sparingly

Situation: the tax framework makes it more profitable to mine iron and other metals anew than to recycle existing materials

To have politicians deliver on promises

Situation: there are no bonuses or taxes on politicians beyond those for normal citizens. Regardless of performance, politicians get paid. The politician role comes with generous pension rights, too.

The political economic system is something we inherited from the the century before last. It is well due for an overhaul. A good start would be to collect revenue to run public services by putting fees on things we want less of.

Read more in Capitalism: a hobby

 

 

Secret alternative rules of Monopoly show how everyone can live in prosperity

Posted by steve on

The original board

I am utterly astonished. We have heard of the DaVinci code, but there is a MONOPOLY code. The secret rules of the game from the early 1900s show how, by changing the rules, everyone can live in prosperity.

Back in the early 1900s a woman called Elizabeth J. Magie patented the Landlord’s game to be a “practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences.” Elizabeth was not against capitalism, rather defeating monopoly in all its forms (but, particularly, monopoly of nature). Lizzie continued to work on the design of The Landlord’s Game as a way to explain how the political economy system of  Henry George would work in real life. Henry George was against all forms of taxation except from those who owned land.

Parker Brothers purchased Elizabeth’s patent in 1932 for $500, on condition that Parker Brothers would continue to publish The Landlord’s Game as well as Monopoly.  In the third edition, published in 1939, and consistent with the agreement with Elizabeth, the game came with two sets of rules. However, only the rules copyrighted by Parker Brothers were actually sold with the game. Purchases were required to contact Elizabeth Magie Phillips to obtain the alternative rules. Remarkably, Elizabeth’s rules were made available by Hasbro on the company’s website.

If you download the alternative rules ( I am going to try this as soon as I get my hands on conventional monopoly) and play, do let me know how you get on. The comments are open for you :).

 

 

READ MORE

The article explaining the history is here
http://www.henrygeorge.org/dodson_on_monopoly.htm .

This is the link to the secret rules. They are at the end of the conventional rules. Look for “THE MONARCH OF THE WORLD” and the SINGLE TAX.

http://landlordsgame.info/games/lg-1910/lg-1910_egc-rules.html

http://landlordsgame.info/games/lg-1906/lg-1906_egc-rules.html

Thomas Forsyth is one of the most knowledgeable collectors of the original game boards and pieces related to The Landlord’s Game. He has compiled a detailed history of the game, which can be examined at The Landlord’s Game.

Envisioning a world without work

Posted by steve on January 7, 2013

We are getting closer to 1984 and Brave New World, where people work but that has nothing to do with the cost of living, rather something they just have to do. In this article in the Guardian,   analyses the disparity between the value add workers bring, to the amount of wages they take home.

The theory has been that if companies retain a higher percentage of profits, investment will grow. Looking at the data gives another picture: as wages plummet, partly thanks to the influx of workers from Easter Europe, firms take on more staff to do menial jobs rather than automate.

And the gap between wages for workers and the top-end salaries widens.

Sadly, this is a very negative preparation for peak oil. Reduce wages as far as possible so that workers can become cheap replacements for automation.

In a related post by Guardian’s Economic Editor,  LARRY ELLIOT,  he explains why more jobs may be bad for British workers.  Low wage and falling investment are symptoms of a failing economy.

Eco-village hosts post-peak oil Live Action Role-Play

Posted by steve on October 7, 2012

One of the houses in the Village

Last week, our eco-village, Änggärdet, played host to two days of Live Action Role-Play (LARP) along the theme of how life could look in the near future, 2016-2027, post peak oil and economic collapse. Life after Capitalism! Live action role play, as I understand it, (I might have got this wrong, but this is how it looks from being involved this time) is where a story and a situation are created as the framework and players are given roles and scripts to play out, with more or less room for improvisation. There are a series of events that take place, according to a master script. One basic theory being tested was the idea of a participatory economy  or Parecon (link to wikilinks).

It is an interesting theme for people like myself, involved in Transition and the eco-village movement, as both these movements see very little hope for us to carry on the way we are, the changes being driven by Peak Oil and economic collapse.

Check out the 2027 website here.
Our eco-village offers a lot of space, a collection of tools, a few sheds and soil in need of working, so from that starting point the role-play activities were devised – to be part of a larger exploration of the theme. And everything had to be done by hand as fossil-fueled machines (and agriculture) were a thing of the past in 2016-2027.

IN ROLE OUT OF ROLE

What I would like to share are my experiences of hosting the Role-Play and being part of the action. This is the “out of role” reflection part, to use LARP language. I will say that these perspectives are entirely my own, with reservation for me having they got the whole LARP idea backwards, the plot designed by the arrangers muddled up and what I thought my role was totally confused. Maybe that is part of the fun and the learning of LARP.
Anyway it was a lot of fun, but at the same time there were some quite profound insights to be had.
It is a powerful thing, I believe, just to give oneself the opportunity to, through play, take a step backwards and consider how the future might play out. They say that so much economics is psychology, and I believe you can’t really understand something unless you get up close to it emotionally, through trying it out, or role-playing. Businesses can gain from the approach, too. You need to put yourself in your customer’s situation, and to try things out from their point of view. And why not politicians and local government officials?

PRISONERS ON WORK DUTY OR CITIZENS DOING THEIR SHARE?

Scenario one was where our eco-village was under the control of the government. Citizens were organized in work parties to help out with the food shortage. My role was farm foreman and I directed the citizens to the field where they had to pick up, with whatever tool they could find, potatoes from very heavy clay soil.
What made the whole thing interesting was the presence of the military. I found myself saying that they were there to protect the citizens from terrorists. In fact they were there to control the citizens. I made up a few stories of how work groups were infiltrated and tools were stolen, work disrupted, etc, and how I was thankful for the military presence and they should be too.

Muttering all the time that the collapse was the fault of the intellectual elite who had not seen Peak Oil coming, I went around encouraging the citizens to work harder as the food was badly needed.
The military players were great at organizing the work details. Without their help I would have had to be running around instructing and advising. If I needed anything I just told a military guy to find a “volunteer” and one appeared.

2019: One of my military crew getting ready to fetch the work detail

As someone who has organized working weekends at the Eco-village and been involved in organizing the members of the village, I can say that if we had five military with machines guns we would have got a lot more done by now, and any potential discussion about the right thing verses the wrong thing or wrong way would have been cut very, very short!
Actually, I saw a spurt of activity when the thought crossed players’ minds that we might be waiting for the potatoes in order to make their evening meal. Anyway, five bags of potatoes, unsorted, were delivered without complaint, and the citizens seemed to be going along with the whole thing.

Citizens are herded into the barn for the warm soup they get in return for their labour

What surprised me is how easily a story like that, believable in itself, can be sold to people when they are in effect being marched from the bus to the field, being interrogated as to their political persuasions and generally harassed by people with guns. It all felt strangely safe and secure and gave me another view of what the military can actually achieve when engaged in civil activities.

Would you want these guys on YOUR farm?

Should the effects of Peak Oil be so drastic that there is civil unrest, I have no doubt that a militarized model where the military are “protecting” could be achieved if the story were made believable enough. To put it another way, as the citizens knew they would be getting warm soup at the end of the exercise, and as everybody was in the same “boat” – the military had to eat with them – they seemed not to be too miserable at all.
There is something in everyone that Aldous Huxley, author of the novel “Brave New World” calls the need for the “good order”. We like to see an effective organization, have everything ordered and even roles divided clearly between us. As long as we are all in the same boat, we will pull together.
On the other hand, if there are large differences, I think that is something that fosters discontent. We didn’t have a huge hierarchy and displays of riches where many were poor in the role-play. If you are going to have wide differences then I think you have to work harder at creating fear, and harder at weaving a plausible story. Was it not Hitler who said that if you are going to tell a lie, a huge one is easier to get across? Anyway, the lack of visible hierarchy was quite a disappointment in a way as I had had visions of me playing the “double hard bastard”. I wonder if the real bastards aren’t the nicest people with the best stories after this.

HIPPY RELIGION OR COMMUNIST DREAM?

Scenario two was from a later period, 2027, where peak oil and the collapse of the economy had galvanized people in this part of the world into taking matters into their own hands and creating self-organising communities.

The scene being played out was where a group of people studying our way of life were invited to spend the day experiencing what it was like to be a part of one of these communities.
To make the scene as dramatic as possible, the idea was to hold an opening circle ceremony in the paddock, and to see how far we could go in chanting, holding hands, looking into each other’s eyes – that sort of thing.

2027 "study visit" arrives in the Eco-village on foot.

My first surprise came even before we got to the paddock – a guy playing the “professor” was going around stating that we were living chairman Mao’s dream. To tell the truth, the gameplan was based upon one of the pieces of wisdom from Chairman Mao. He had said that the way to change people is to:
1) Take them out of their ordinary life
2) Give them chance to reflect on their past
3) Build a bridge to the future
4) Stimulate a powerful emotional experience
5) (And this step is needed to give all the others meaning) Introduce a way to repeat and reinforce

2027: the self organising community invites course participants to a welcoming ceremony.

We arrived at the paddock for the opening ceremony, which involved everyone holding hands and me reciting the “circle incantation” about how life is a circle, we organize in circles and we play our part in the circle that is the cycle of nature.
Unfortunately, or maybe luckily for the ones who feel uncomfortable with this sort of thing, it started to rain quite heavily so the more touchy-feely part we had to skip.
However I will say from my own view that the opening was rather a sweet experience. There IS something magical standing in a paddock, in the rain, holding hands talking about that which is important and feeling a connection to nature.
Well in the barn, the task was given to the “visitors” to create a healing garden. A healing garden is a garden that heals the soil, heals the air, heals humans and provides a place to be and to reflect.
The way to heal the soil is to make tons of it. We had chosen Hugel kultur, a method that recreates how the forest builds soil: you cut down trees, place the logs at the bottom and pile twigs and hay and then animal manure and finally leaves and grass on the top.
I also set the task out as self-organizing, drew a rough diagram on a large paper that I had hung up, roughly explained the task and pointed them to the tools and invited them to get on with it.
At this point the rain was coming down still quite heavily. I asked the group if they were up to doing it in the rain and they all (or most at least) said YES!
Now, this is the point in all working weekends and in the affairs of man in general that gets quite interesting. The inner “pull” comes and people feel drawn to one thing or another. It’s amazing to watch as people self-select, self organize and/or go through a bit of soul searching and in this case probably confusion as to if they are playing themselves or the role.
So for this bit I basically took a bit of a back seat and hoped.

Building the garden was heavy, muddy work!

The job was tough, especially for those who had decided to dig as the soil was more or less waterlogged and very muddy.
What people learned, what they went through as they scrambled in the mud, I will leave to them to reflect on and look forward to hearing both in-role and out of role reflections.

Logs in the base build soil and retain moisture

What I learnt was that making gardens is a human activity that can and should involve everyone, and that given a task and a general agreement people like to get on with it. It is healthy and you get good exercise and it creates a good feeling. People will self-organise but it is a journey we all need to take to grow to be really good at it, as our culture is more about having things organized for us.
As if by magic, the Hugel mounds appeared in the beginning of a mandala form. As they took shape, the work seemed to go smoother as players got the idea.

The Hugel mounds, in mandala form, emerged!

What really gave the day a golden edge was the weather. After gushing down for the first part, and drizzling during the mud digging, the skies cleared, the sun came out and we were able to meet back at the paddock in glorious October sunshine, the beginnings of a garden behind us.
Holding hands again, we invited the players to the closing ceremony and to express some of what they felt from the day. Sweet, and for me rather too short as the bus was waiting, the final ceremony brought the day to a close.
One thing I reflect on from the day is that the modern way of life offers too few opportunities to get together like we did, doing fun and useful things in harmony with nature. And the opportunities to get together and express anything from how irritated we feel with minutia to celebrating being alive and part of the universe.
The aim of day two was to create a manifestation of a culture of abundance and appreciation. Everything that was on the timetable was presented as an invitation. The various activities were presented as a celebration or expression of appreciation. And life was presented as an opportunity to enjoy, appreciate to have fun. As I overheard one player say – “I think using a scythe is fun!”. I can hear voices saying things like: “Yes, but if you HAD to do it and were very tired and hungry you would see it another way.” But what if we organized society so we rarely had to be in that position? If day one was an expression of a culture that focused on their being a lack of everything, day two was the opposite: surrounded by abundance, you invite people to be generous, to appreciate and to express that appreciation. Maybe, in some little way this role play gave us a glimpse of what an amazing, healing, healthy culture we can co-create together.

Links:

Role-play features on local news programme

The 2027 web-site

The Parecon economy: wikipedia explanation.

Capitalism a hobby: attempting to understand the role of money in capitalism

Posted by steve on August 13, 2012

The conversion of capital from one form to another

Continuing with my hobby: capitalism, I have come as far as defining different types of capital. Please note that I have not yet taken on the task of actually defining capitalism. This is getting to be a life-long hobby instead of a temporary fad.

To take the analysis one step further let us consider the conversion of one form of capital from the other.

Let’s start with natural capital, encompassing soil, forest, water and minerals like iron as well.  Natural capital feeds (a) into man – made capital, for food, water  and housing systems, for example. Man-made capital feeds nutrients back into the natural environment, to allow growth and ecological maturity (b).

Human capital includes  know-how (could be called technology) is applied to produce man-made capital like housing and transport systems  (c).

Human capital  can be used to create social capital (specialized organisations) that in turn can create more man-made capital (e) . Or indeed, this social capital of specialised organisations can create knowledge and increase human capital.

Now. Where does money, or the store of money called financial capital come in?

As an accounting system

According to my studies,  money should act  as an accounting system.  So you would think that it would keep track of the capital conversions, to provide an overview to ensure that capital conversions promote ecological maturity whilst ensuring a standard of living for all.

Call me old-fashioned, naive or what, but I cannot see how money is doing that. Or if people are using money to do that.  If it were, we would be seeing the status of capital conversions and system performances trounced on the news regularly. We don’t. We see only financial measures of financial wealth, like the value of the stock market.

As a medium of exchange

Here I think I see some use of money in capital conversion. As owners of “bits of capital” swap form(like using money  to buy the expertise of a builder who converts natural, human and man-made capital to more man-made capital)  or indeed bits of the same form (Like  a university that buys a lecturer’s services). This creates another problem, though. The way money is created as credit it is hardly a representative means of exchange. A person who borrows to build a house and then sees the house repossessed by a bank sees capital being created out of nowhere, converted to man-made capital and then the man-made capital changing hands using the money that dis not exist from the beginning.

This is one of the central problems of today’s money system: it is useless as an accounting system that counts anything of real worth, and that it is at best, dysfunctional as a means of exchange if it is created as credit out of thin air.