Economic alternatives - Nov 21
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Yes, There Are Alternatives
Robin Broad and John Cavanagh, Phillipine Daily Inquirer
In most countries, there is a dangerous myth that there is no alternative to the past 30 years' path of gearing economies toward the global market. Yet, as financial markets stagnate and food prices swing wildly and the environment come under siege, more and more nations are taking steps to reduce their vulnerability to a volatile global economy. Some are taking steps to encourage more "rooted" alternatives.
On a recent trip to the Philippines, we found a refreshing openness to new directions from the halls of the new Congress to the rice fields of Mindanao. Many people understood that the dominant approach to the economy since the final years of Marcos, building on 400 years of colonialism, has failed: This more vulnerable approach geared the economy toward the plunder of fish, forests and minerals that enriched the few and impoverished workers, farmers and fishers. It created an agriculture sector dependent upon unreliable imports rather than geared to feeding the people.
Industrialization occurred in export enclaves, mainly of electronics, bringing profits to corporations, while remaining dependent upon unreliable overseas markets. And, the model depends upon the export of people to other countries to send home money to relatives, since the economy is not providing for their needs. The result is a plundered environment and an economy that is vulnerable to the shocks of a shaky world economy.
What is the alternative?
How about an economy that encourages the stewardship of forests, fisheries and land for community needs, one that encourages agriculture that is good for the soil, feeds everyone an adequate diet, and reorients industry for people's needs. How about a financial system that helps small enterprises, and an economy that creates enough good jobs and livelihood so that the Filipino youth see a future at home?
There is in fact an upsurge of efforts in this direction in the United States, in Europe and in a number of poorer countries, including many parts of the Philippines. In the US, the Institute for Policy Studies and several other groups have come together to form a "New Economy Working Group." They have proposed that in order to transform economies to meet crises, economic life should be organized around three principles.
The first is "ecological balance": ecosystems should be managed for sustainability. This is best done when communities control the natural resources on which they depend.
The second is "equitable distribution." A growing body of evidence suggests that societies that share wealth more equitably enjoy greater health, less violence and stronger communities.
A final principal is "living democracy," which involves daily practices of civic engagement in decision-making as well as broad participation in the ownership of community assets.
(19 November 2010)
Time for a New Theory of Money
Ellen Brown, Yes! Magazine
By understanding that money is simply credit, we unleash it as a powerful tool for our communities.
The reason our financial system has routinely gotten into trouble, with periodic waves of depression like the one we’re battling now, may be due to a flawed perception not just of the roles of banking and credit but of the nature of money itself. In our economic adolescence, we have regarded money as a “thing”—something independent of the relationship it facilitates. But today there is no gold or silver backing our money. Instead, it’s created by banks when they make loans (that includes Federal Reserve Notes or dollar bills, which are created by the Federal Reserve, a privately-owned banking corporation, and lent into the economy). Virtually all money today originates as credit, or debt, which is simply a legal agreement to pay in the future.
Money as Relationship
In an illuminating dissertation called “Toward a General Theory of Credit and Money” in The Review of Austrian Economics, Mostafa Moini, Professor of Economics at Oklahoma City University, argues that money has never actually been a “commodity” or “thing.” It has always been merely a “relation,” a legal agreement, a credit/debit arrangement, an acknowledgment of a debt owed and a promise to repay.
The concept of money-as-a-commodity can be traced back to the use of precious metal coins. Gold is widely claimed to be the oldest and most stable currency known, but this is not actually true. Money did not begin with gold coins and evolve into a sophisticated accounting system. It began as an accounting system and evolved into the use of precious metal coins.
(28 October 2010)
One-hour PBS special: "Fixing the Future" (the new local economies)
David Brancaccio et al, Fixing the Future, PBS
In a one-hour PBS special airing November 18th (check local listings; watch trailer), Host David Brancaccio visits communities across America using innovative approaches to create jobs and build prosperity in our new economy.
What is the new economy all about and will it lead to new jobs? Fixing the Future examines these questions in a series of animated shorts called the "How the New Economy Works."
Is your community fixing the future? Individuals and businesses across the country are taking the initiative and collaborating to build better, more sustainable communities. Use the map below to find initiatives where you live.
The economy does not have to be the way it is right now. If you didn't believe we were in trouble before the financial tornado hit in 2008, you probably do now, regardless of your political leanings. One response is to put a new coat of paint on the old economy, maybe even fumigate it. But who is trying something fresh, experimenting with ways the economy can better serve more people and be less prone to getting destructively out of whack?
"Decision number one, no driving solo in a rental Hummer from sea to shining sea."
I am embarking on a national road trip to explore economic experiments going on in Main Street America to see if they offer a path toward prosperity. For good measure, my team and I are also trying to lower the environmental impact of our road trip. Plus, we're keeping an eye out for the benefits and costs of eating local, staying local, and generally doing business local.
Recommended by Post Carbon Institute. -BA
7 Ways to Transform Banking
Fran Korten, YES! Magazine
Each of us can help build a resilient financial system that will serve real people in real communities.
Are you as outraged as I am by the Wall Street bankers with their fat bonuses, shoddy mortgages, and financial shenanigans? With the gridlock in Washington, I wanted to know what “we the people” can do to turn our fury into constructive action. So I turned to my friend Jared Gardner for advice. Jared comes from the financial industry and thinks hard and well about how to change the system.
Here are seven things I gleaned from my discussion with Jared about what we can each do to build a resilient financial system that will serve real people in real communities.
1. Move your money.
You may have heard about the Move Your Money campaign. The idea is to move your deposits from a Wall Street bank to a community bank or a local credit union. This is a terrific first step to keep the banksters from playing games with your money. Check out Green America's Community Investing website for ideas on what to do.
2. Move your debt.
Don’t stop with just moving your deposits. Move your debt. It’s in servicing debt that banks make the big money. So if you have a credit card, a car loan, or a mortgage, consider moving them. Find someone at your local bank or credit union who can help you review your debt and see what you could move to a local institution. Your interest payments can build your local economy instead of fattening those Wall Street bonuses.
3. Persuade your institutions.
Do you belong to a church, synagogue, mosque, or temple? How about the place where you work? Or a club or nonprofit where you are a member? All of these institutions likely have money and debt. Talk with the leadership about where they do their banking and encourage them to explore what they could move to a local bank.
(12 November 2010)
The Health Economy
David Cundiff, MD; Culture Change
David Cundiff emerges as the man of the hour for anyone interested in the connection of health, medical costs, and the socioeconomic basis of the U.S.'s spiraling affliction of many interrelated crises. To achieve this, his new book The Health Economy: Changing the Culture of Waste and Preventable Disease proposes bold, sensible restructuring of government spending and taxing to bring about greater citizen control over health, community and the direction that the nation is going in. - Culture Change editor
A century ago, the U.S. was transitioning from an agricultural economy to an industrial/manufacturing economy with millions of workers moving from farms to jobs in factories, oil fields, and mines. Over the last half century, U.S. workers have continued to abandon the agricultural sector but also steadily left the manufacturing sector to find service economy jobs, many taking higher paying jobs in health care, financial services, education, law, and government. Others have taken low paying jobs in occupations not requiring higher education like food services, landscaping, housecleaning, nursing aids, childcare, and general labor.
With 80% of jobs in the service sector with its striking pay inequalities, the U.S. is now moving toward Third World nation status. Causes include trickle-down Wall Street casino-capitalism, globalization, and increased job outsourcing to lower paying countries.
America has arrived at a crossroads: letting the failing service economy fall into an abyss, or embracing a healthy economic paradigm. The latter requires sweeping change, but does not have to be frightening when it need not involve either unsustainable deficits or draconian public services cuts.
It is increasingly accepted that the era of cheap oil that allowed the U.S. economy to boom in the 20th century is behind us. The sought-after energy alternatives for continuing our expansion and boom are not within our grasp, even if they did truly substitute for the unique properties and advantages of cheap oil. Regardless of energy issues, given current fiscal and Main Street realities, no amount of entrepreneurial innovation will revive the past expansion rate of the gross domestic product (GDP) in either our imminent economic abyss or any new economic paradigm.
Fortunately, despite or because of the U.S.'s current dire economic situation, we can rapidly evolve from our sinking service economy to the “Health Economy,” with the creation of tens of millions of high value, if not high-paying jobs.
As my new book The Health Economy shows, we can restructure the U.S. financial and economic system as a “steady state economy” (i.e., 0% GDP growth), steadily advancing in quality of life instead of expanding material consumption. A steady state economy with the right structural reforms in health care, welfare, and other sectors can improve public health, strengthen communities, and lift ecological health. It does this by replacing institutionalized waste and inefficiencies in the public and private sectors with valuable human activities.
The Health Economy would be free-market oriented but less money-driven and afflicted by greed, with more importance given to volunteerism and mutual aid.
(17 November 2010)
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