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Wednesday, October 18, 2017

Reinvent work as volunteerism – the only way to sustainability

Posted by steve on December 15, 2010

It has been striking me more and more recently how the positive developments in sustainability are coming from a spirit of volunteering. ”Going along” is a central theme of my book, ”Inventing for the Sustainable Planet”. The book was imagestreamed and insights can take a long time to sink in. I see how I have emphasized the few technical solutions that came up rather than the social ones, even though these are the central thesis of the book.

Some signs: Firstly, the Transition Movement is picking up speed. There are now Transition Movements in every US state, and other initiatives like 1 Million gardens are gathering supporters

Then there are the countless numbers of websites run by volunteers, with everything from Peak Oil to sustainable gardening.

I am getting a sense that the funnymoneyfest we have all been complicit in has brought a lot of people to their senses. The only business worth having as business as usual is the voluntary, or go along, business in a society that offers security. From the research in my book I’d suggest a number of reasons why this could be so.

One has to do with basic human nature and the need for security. If your security comes from the tribe, then you will gladly ”pay taxes” to the tribe, in the form of helping out, encouraging and teaching others.

For many years Sweden’s high rate of taxes was defended by citizens as actually giving good value for money in terms of social security and free schooling, low cost local transport, medical care, etc. Nowadays the level of service has been eroded, the burden is nearly as high, and there is much less a feeling of security. In fact, the tax authorities see it their role to ”make sure everyone does their bit” which sounds like extracting a pound of flesh with a modicum of threat.

Another reason might have to do with our genetic propensities. The reason you need to be in a group is because together the mixture of personalities, perspectives, feelings, inspiration of the moment, all combine to create an ideal pool from which to handle a situation.

In volunteering, the feeling comes from within each individual and whatever the person does is an expression of wanting to do something and feeling inspired to do it. Contrast this to the situation of work. Even work functions better when people can volunteer for jobs within their areas of responsibility.

I like the Transition Handbook’s approach of mutual planning of what could be done or needs to be done, and then asking people to consider what they would LOVE to do, would feel UNCOMFORTABLE doing and what they would be GOOD at doing.

The prospect of Peak Oil, Peak money, Peak everything in a world that seems to be running on a delusion that economic growth is the only fix-it in town, seems daunting and cause for depression.

My advice is: look at what could be done, how you feel about it, and go out and volunteer for something you’d love to do. Who knows, it might just be the small effort that helped turn the tide.

If the economy were a patient – medicine for trade imbalances

Posted by steve on December 14, 2010

When doctors gather around a patient the goal is clear: they know that they need to cooperate to apply the best medicine and interventions to get the patient on the road to recovery.

So too, when economists, politicians and civil servants gather to consider what to do to put the economy on the right path. The goal is clear, and the steps taken proposed by each specialist should work together.

Most of the globe is working with a market economy. If a sound enough incentive structure can appear in the economy – an incentive harmonizing private good and long term public good – and at the same time externalities are internalized in the market, then, by definition, market forces will automatically work to solve the problems.

This is the same as in medicine. It is ultimately the body that heals itself, the role of the doctor is to harness and stimulate the process.

An accumulated foreign debt presents a challenge which can have a great impact on the health of the country as a whole and especially on future generations. Such a debt will force future generations to work harder and to give up a considerable portion of their income to pay for the debt financed consumption of the previous generation.

The temptation could be to relax environmental constraints on firms, giving them an economic advantage. Although this lowers costs and may drive demand, the costs will be transferred to society and its resources depleted, again affecting future generations.

Trade imbalances which persist for long periods of time tend to warp the infrastructure of the economy and create imbalances which will harm the economy in the long run. Sooner or later these structural imbalances will have to be remedied at a cost.

The sole purpose of export is to pay for import. Just like the need for a household budget to balance outgoings with incomings. Acting according to this principle is the only long-term, responsible and sustainable way of handling the trade between countries.

Viewing a large trade surplus as positive indi­cators in the econo­my and failing to take action – or even worse; trying to increase the amount of exported goods and services by various means, above what is needed to pay for the import – is harmful. The harmful side effects include warping the structure of the economy both in countries with an export surplus and in countries with an import surplus.

There are some straightforward methods to eliminate an accumu­lated trade debt and to turn a trade deficit into a balanced trade. The method is to charge a (sector neutral) import control fee, designed as a flat percen­tage of the value, on all imported goods and services.

It must be publicly and internationally announced that the sole purpose of the import control fee is to achieve a gradual and steady, controlled shift towards a sustainable, balanced trade.

It must also be made totally clear that the import control fee is not a trade-impeding measure but instead a measure to improve the balance of trade both regionally and globally and make it long-term sustain­able and beneficial for all countries.

The income from the import control fee can be used, in full, as a budget revenue. Another possibility is to use the income from the fee to pay for an export control subsidy using the same percentage as the import percentage fee. As long as the value of the import is greater than the value of the export, there will be a net budget revenue.

The import and export markets should be continuously monitored and the percentage fee should be adjusted regularly and sufficiently often for a control fee futures market to emerge spontaneously.

For countries with a trade surplus the import fee can be replaced with an import control subsidy and the export subsidy can be replaced with an export control fee following the same basic logical principles as the control of the above mentioned import control fee and export control subsidy.

To minimize the total societal cost of creating a sustainable econo­mic structure and balancing the trade, the trade control fees should be used with caution and the restructuring of the economy is best done over a period of several years. However the beneficial psychological effects on the market can be immediate as soon as the principle and the long-term effects of the trade control measures are understood.

The trade control fee should not be viewed as a permanent solu­tion to the prob­lem of trade imbalances. These problems need to be solved by proper control of the credit volume and the rate of credit expan­sion in the economy so that the average real wage, in the long term, can reflect the ave­rage real labor produc­tivity and so that the rate of consumer price infla­tion and the rate of asset price inflation can be harmonized within the region.

If the economy were like one household

Posted by steve on December 7, 2010

We could see the national economy as one household. In this household everyone gets fed, and the money coming in  covers the bills. Simple.

But not really. Following the first great financial crisis of this millennium, many nations are struggling with high unemployment, soaring budget deficits and crippling debt servicing costs. The temptation arises to introduce economic austerity measures and shock therapies. However, these measures reduce demand, reduce investments, reduce production and increase unemployment. These measures are unproductive, destructive and unfair. And poor people – the ones who have the least blame for the crisis – become losers and suffer.

That is a bit like making some of the family members suffer for the excesses of a few rich ones. I does just not sound right.
Actually if we, from our macroeconomic vantage look at who owes money to whom, we will see that all domestic financial debts are, by definition, also domestic financial assets.

The money is owed within the family. Using the household expenses picture, we could say that the bills are covered by the money coming in.

So no matter how large the public debt, it does not automatically mean that the country or that population as a whole is poor. An extreme example; Japan is a rich country and the Japanese are a rich people (On average) despite Japanese public debt per capita being the largest in the world. The Japanese public debt is simply owed to (albeit rich) people in Japan.

So what possibilities are there to stabilize recovery? Well, we live in the information age. Most transactions are now digital. We can get masses of information, in almost real time, about how the economy is performing. And we can inform whole nations quickly – governments can explain and introduce measures and fees and prices can be made flexible.

We can steer the economy with almost the same speed a family can gather to share and  redistribute money to balance the household budget.
The London congestion charge gives one small example of introducing a measure along with a flexible fee.
Most of the globe is working with a market economy. If a sound enough incentive structure can appear in the economy – an incentive harmonizing private good and long term public good – and at the same time externalities are internalized in the market, then, by definition, market forces will automatically work to solve the problems.

Could this approach work for the real estate market?
This market is vital as it serves as the underlying security of the financial system. A real estate bubble collapse is often accompanied by serious and sometimes dangerous financial disturbances affecting the whole economy.
Returning real estate prices to pre-crisis value would do much to strengthen the economy.
So what instruments and medicines could we apply? How could we stimulate demand, and growth in prices?
We could introduce a house purchase subsidy. (Not unlike the new car subsidies in US and Germany or the eco-car subsidies in Sweden). And we could make it flexible.
Every house purchase would receive a subsidy as a percentage of the purchase price of the house. T he subsidy would come out of a real estate market control fund when the deed had been properly registered.
Money for the fund comes from a percentage fee on the sale of property. This is how it could work: Publicly announce that the purpose of the subsidy and the market control fund is to restore the value of the stock of real estate to the value it had before the collapse and then to secure its value to safeguard the securities in the financial system.
Adjust the subsidy sufficiently often, the amount of adjustment depending on the rising or falling of prices in relation to the publicly announced target. If prices rise higher and faster than intended, the subsidy could become negative. Then, by definition, the buyer will pay a buying fee to the fund as the seller receives a selling subsidy. If done frequently enough, a control subsidy futures market will emerge spontaneously as a means to reduce risk exposure.
And with house prices stabilized and under control, we have set the conditions for a stabilization of aggregate demand, which stabilizes employment.

Even aggregate demand could be stimulated with a consumption flexible subsidy.
Financed by a flat income tax, the subsidy would be highest at the point where aggregate demand has fallen off. Monitoring the average wage index and the consumer price index closely and adjusting the subsidy regularly and sufficiently often, a consumption control subsidy futures market will emerge spontaneously.

Read more abut flexible fees in my white paper on the subject.

The innovation workshops

Posted by steve on December 4, 2010

I thought I’d take you through the workshop we did in Copenhagen. It was dialogue about sustainably securing food and water for the whole world I’ll post the invitation then the write up, Hope it is of interest!

Corporations are anxious to be involved in improving people’s lives directly. After all, many would say the main business of business is providing people with the essentials of life. Prosperity comes when basic needs are met and with prosperity markets and opportunities grow. At the same time, this challenge is not being fully met – people are undernourished, in poverty and threatened by the effects of climate change, resource depletion and economic downturn.
Much great work is being done by initiatives and NGOs who understand the day to day realities of bringing the world into a sustainable development. But they need help.
This innovation workshop brings together corporations ready to engage their CSR efforts into meeting water and food challenges together with the top sustainability initiatives from the Award’s applicants. These stakeholders will be meeting with the next generation – students from Copenhagen University – to work on a vision of a planet fed and sustainable.

The aim of the workshop is to increase awareness of opportunities and perspectives from each of the participants. And we aim to produce a vision that will inspire people along with the initiatives we present at the ceremony. This vision, put together by applicants, sponsors, students and others will be the driver for our work with next year’s Award

This is a report from our innovation workshop.

The task was to imagine that world hunger is eradicated. Everyone goes to bed on a full stomach. The year is 2021. Sitting at round tables covered in paper, delegates were asked to think back from 2021 to today and answer “ how did they do this?”

It was a great experience to have the privilege to facilitate the workshop, as I went around the tables I saw people from many different walks of life – retired people, students, activists, business people, ordinary workers – discussing how food and water could come to all. And I saw how they were eagerly sharing perspective. It was I believe a valuable exercise to get such a diverse range of people, – CEOs from global corporations, Rotarians, students from Copenhagen University studying agriculture, nominee representatives, and some supporters of charities like the Prem Rawat Foundation – all to discuss the situation from their particular viewpoint and together envision a sustainable future for coming generations.

Here is a summary:

Population pressure became critical

Either there was a food crisis or there was a near crisis.

The food provision system was recognized to be fragile and incapable of supporting everyone.

Trade barriers and unfair subsidies were removed as a first step.

People all over the world started to change their habits, less food was consumed and wasted, and less animal protein was used.

The move to local food production was stimulated by high fuel prices and the recognition that local food is more resilient.

Permaculture was introduced on a wide scale.

An appeal to stakeholders works. Land assets are released, and with low- input approaches, reforestation starts along with soil improvement.

The realization comes that this is not a technology issue but an attitude one. This gives hope, as people realize we have all the tools we need.

In East Africa, population in urban areas rose from 4.3 to 10 million. However, a change of attitude focusing on food security and dignity spreads hope to urban areas. Large scale sanitation with nutrient recycling is introduced to ensure land productivity and weigh up against crippling fertilizer prices.

Finally in 2021 everyone is getting what they need. Food and water to the world’s population, and nature is stewarded in a way that enables it to provide for future generations.

I hope this is fairly accurate as a summary of what people wrote. It is certainly inspiring as a “first take” on how it could really happen. I will add more notes as I get more photos and input.

Sustainable development to feed the planet

Posted by steve on December 2, 2010

I enclose my presentation from the Water and Food Award day on the 25th November 2010 (with soundtrack) explaining the Award’d sustainability approach.