The economy: Possible scenarios for the future 2
Given that we're entering a prolonged period of economic contraction, what comes next? In the big picture, what are some of the possible routes forward? In the last post I critiqued some of the economic thinkers mentioned by the UK's Rob Hopkins. In this post, I highlight several -- including a U.S. source -- which Hopkins hasn't mentioned on his blog.
This post is an excerpt from a longer paper, "Economic Resilience," which is being posted online in serial form. Links to the full document can be found here.
James Gustave Speth is the U.S. author of The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability, a wide-ranging academic survey of post-capitalism ideas (including, but not limited to, Daly and Jackson), assembled from the point of view of a lifelong environmentalist. Precisely because Speth’s book is U.S.-centric, it is a very valuable big-picture analysis for us in this country.
Speth showcases a carefully selected array of the analysis of others. These fall into general categories:
- Real Growth - the well being of people and nature, which necessitates alternative economic indicators;
- Consumption - the necessary downward adjustment, plus “inner transition” issues presented with far greater breadth than Jackson;
- The Corporation - a wealth of powerful top-down legislative and policy proposals which include eliminating corporate personhood, rolling back limited liability, eliminating shareholder primacy, and getting corporations out of politics.
In “A New Politics,” Speth’s political understanding comes to the fore as he explains precisely why we shouldn’t hold our breath waiting for government solutions. Speth quotes Peter Barnes:
The reason capitalism distorts democracy is simple. Democracy is an open system, and economic power can easily infect it. By contrast, capitalism is a gated system; its bastions aren’t easily accessed by the masses. Capital’s primacy thus isn’t an accident.... It’s what happens when capitalism inhabits democracy.
Yet Speth still persists in his belief in the political system, figuring the transition from what we have now to that new future will be achieved via political action: “The new environmental politics must be broadened ... to embrace a profound challenge to consumerism and commercialism and the lifestyles they offer, a healthy skepticism of growthmania and a sharp focus on what society should actually be striving to grow, a challenge to corporate dominance and a redefinition of the corporation and its goals, a commitment to deep change in both the functioning and the reach of the market, and a commitment to building what Alperovitz calls ‘the democratization of wealth’ and Barnes calls ‘capitalism 3.0.’ The new agenda should also incorporate advocacy of human rights as a central concern. ... [It] should also embrace a program to address America’s social problems directly and generously. ... A related issue to which the new environmental politics must turn major attention is the urgent need for political reforms – in campaign finance, elections, the regulation of lobbying, and much more.”
The chapter “Capitalism’s Core,” presents alternatives to the capitalism we know today. After analysis of the wide variety of national economic systems that currently exist, and definition terms, Speth quotes Clive Hamilton that the focus should be to promote “the full realization of human potential through ... proper appreciation of the sources of wellbeing. While [such a program] would ... represent a profound challenge to capitalism as we know it, it cannot be characterized as socialist.” The chapter ends with a list written with blistering clarity of why Speth believes that “something new will be born though its gestation period will not be short.”
If I could find anything to fault in Speth’s work it would be that his analysis remains primarily a top-down, long-term view. He lacks the urgency that we within the Transition movement feel due to peak oil, and does not see the looming economic threats that infuse thinkers such as Stoneleigh and Prechter. Speth views Relocalization rather negatively as “the anti-globalization movement” and overlooks the limits I think peak oil will inevitably bring. Lastly, his book offers little in the way of practical suggestions to those of us in the trenches locally, to build resilience through collapse. But I have tried to extract ideas from his assemblage, folding them into Part III when possible.
Jerry Mander edited a book called The Case Against the Global Economy and For a Turn Toward the Local. To my surprise, most of the essays within this 1996 book are every bit as current and relevant today as they were when they were written.
The book includes a wonderful essay by Helena Norberg-Hodge, “Shifting Direction: From Global Dependence to Local Interdependence.” (Caution: the Norberg-Hodge online pdf with the exact same title has very different content than the piece in the Mander book. My comments refer to the original hardcopy version, NOT the online pdf.)
Norberg-Hodge is perhaps the lone one of the writers I’m discussing here who truly understands the necessity of returning to local – for ecological reasons, cultural reasons, and matters of the human heart and spirit. Her other writings reveal her in-depth work with third-world villagers and her comprehension of the differences of the global South. Norberg-Hodge has internalized the beauty and groundedness that Local can be.
Her hardcopy essay includes a section on “Conceptual Resistance to Localization” which I think is a great piece for Transition Initiatives to visit.
As far as what we can do about the bigger economic picture, in the section “Shifting Direction” Norberg-Hodge poses several very realistic shifts that could be made at the government budgetary level which would have huge sweeping impacts on facilitating local economies. Many of these mean ending misguided subsidies and subsidy-like support. In an era when government is desperately looking for “what to cut,” Norberg-Hodge’s proposals could conceivably be brought to fruition.
While Norberg-Hodge’s online pdf gets stuck in exclusively food-based solutions, the “Grassroots Initiatives” portion of her hardcopy piece approaches the panorama we see in Transition initiatives: local currencies, tool lending libraries, rethinking education to reflect local resources and pertinent skills. It is hugely refreshing to see “rethinking education” presented as one of the solutions to our economic ills.
Given what Speth says about the native inabilities for our political system to do anything significant about the problems of capitalism, I doubt we’ll see much government-level action. But if government action is possible, Norberg-Hodge’s is a good list to consider.
Other essays in The Case Against the Global Economy are also quite enlightening, although in 1996, Mander et al missed the ultimate game-clincher: peak oil.
The end of cheap oil pulls the rug out from under all of the reasons our economy became globalized in the first place. No longer will it be cheaper to harvest raw materials on one continent, ship them to another continent for manufacturing and processing, to still another continent for single use, and then ship the debris back overseas for “recycling.” Peak oil completely undermines the economic rationale for all this worldwide shipping, and thus undermines the global economy that evolved to support it.
Peak oil and the crumbling of the globalized economy will in turn mean the end of many multinational corporations as their reason-for-being disintegrates. It will eventually mean a huge shift in the political power base, the likes of which none of the political-economic thinkers mentioned here have taken into consideration.
The UK’s New Economics Foundation issued a publication called “The Great Transition” about the transformation of economics. While I’m not impressed with the detailed content, I do like the table of contents, which outlines a list of 7 or so ways we’ll need to reorient our economic thinking and our economic systems to become more sustainable. It brings up concepts I haven’t heard discussed within the Transition movement before.
NEF presents each of these ideas in terms of government-level policymaking. Given the profound insights of Speth, particularly with regards to the political-economic situation here in the U.S., I think it is highly unlikely that we will see government-level policymaking like NEF advocates for the UK.
However I began to view the NEF list quite differently: as a collection of issues we should consider at the local level as we build a more resilient economic system from the ground up.
“THE GREAT RESKILLING” and “THE GREAT LOCALIZATION and Engagement” are of course already cornerstones of the Transition movement. While they are explored in great depth in the rudimentary writings that currently exist within the Transition movement, the NEF document reminds us that they are essential parts of a much broader panorama of economic solutions.
As we pursue Relocalization, I hope that we won’t neglect the language of the land (Jeanette Armstrong, “Sharing One Skin” essay in the Mander book) and local place-centric education (Norbert-Hodge). In the Okanagan view so lyrically shared by Armstrong, self and place become intertwined to such extent that it becomes difficult to define self without including place. Norbert-Hodge questions the current one-size-fits-all concept of what constitutes “education,” advocating instead for training in locally adapted agriculture, architecture, artisan production, and appropriate technologies suited to the specifics of climate and local resources.
“THE GREAT REVALUING” describes necessary shifts in our values -- inner shifts, so that we begin to view things which are good for the environment and good for human survival as economically valuable. This topic heading might include everything from the plentiful ideas in Speth’s “Consumerism” chapter, to the four quadrants of Jackson’s TED talk, to the elegant and meaningful Change In Consciousness of Joanna Macy.
Within our local communities we can help promote value shifts by using tools like Resilience Indicators (Part III, bullet 7) and alternative financial vehicles (Part III, bullet 5). We can design Resilience Indicators which encourage resource consciousness, powerdown practices and carbon reduction. We can hold these new Indicators up as a scorecard within our neighborhoods, which can begin to infuse this values shift into the local business community and into the wider population. We can use carefully designed local currencies and LETSystems to cultivate a Revaluing of the local, and to overcome some of our social injustice issues.
I think The Great Revaluing is much more likely to happen bottom-up, to be generated by grassroots efforts. Returning to the useful term "decoupling" (think of a train car disconnecting from the main train), I think it is very possible that in the medium- term we may see a Relocalization‑driven decoupling, where our local economies become much more self-sufficient to the point of detaching from the overall system. The macro-level economy will probably continue spiraling in upon itself in its internally-rotted form, while local economies “decouple” and begin to redefine themselves in much healthier, wiser, vital new ways.
“THE GREAT REBALANCING” is about the balance between control and freedom. Economists write about it in terms of “market regulation” versus “free-market/laissez-faire.” The NEF document gives a fairly good, plain‑English explanation using sports terminology: We prepare the playing field, the players run out onto the field, and we need clear “rules of the game” to guide whether the game is played fairly.
The problem of course is how to go from here to there: how to achieve the transition from the corporate lobbyists and campaign-favor-driven system we currently have, to that lofty ideal of a fair playing field with clear rules of the game such that corporate profiteering can't overtake democracy. On how we might achieve this journey, NEF is silent.
Without legislation and regulation abilities, we are left high and dry without any enforcement abilities. The Great Rebalancing simply will not occur without changes in the laws that define “the rules of the game.”
In the UK, Hopkins is proposing a Transition Enabling Act. Whether it is timely or appropriate for the UK I cannot judge, but my feeling is that such an Act would probably be far premature here in the U.S. And because of our legal structure, such an Act would be inappropriate at the federal level; it would be most potent at the individual states level. (Why? Because the Dillon Rule could override local attempts.)
At a local level, fragmented baby-step legislation does exist: Arcata, CA declared an end to corporate personhood; several U.S. cities have held out against formula restaurants or chain stores; and the cities of Portland, OR, Ventura, CA, and San Francisco, CA have each officially acknowledged the necessity of peak oil preparedness. Speth dismisses these as “largely symbolic,” and speaking for today, Speth is technically correct. But I believe these local steps hold long-term importance, and Transition initiatives should continue the effort to get appropriate local measures in place.
I see two ways the “new rules of the game” could come about: (1) working within the political system (Speth’s way), or (2) by default via the crumbling of the globalized economy and Relocalization-driven decoupling. The comments of Speth and Barnes leave me with little hope that we will see real and meaningful politically generated solutions. In the words of the Transition movement’s Cheerful Disclaimer, these will likely be “too little, too late.” Thus we are left with the “by default” method.
Imagining one potential scenario: As the broader economy we know today begins to come apart, our local communities will find all their self-sufficiency and resilience-building prep work pays off as they’re doing quite a bit of fending for themselves. At this point, these once “largely symbolic” local proclamations become quite significant: they become the rules of the new, local game.
“THE GREAT REDISTRIBUTION” begins with the basic concept that wealth distribution is out of line. Here in the U.S. wealth inequality is worsening, and recent studies demonstrate that most Americans think the distribution should be far more equitable. We yearn for it, yet we are headed in the opposite direction.
The NEF report proposes achieving wealth redistribution by using taxes as the primary vehicle. Here in the U.S. I think that is extremely unlikely to occur due to the stranglehold that the wealthy elite have upon the overall political system. The kind of policy shift that is inherent in this proposal is fairly unrealistic at this point in time. But I believe that considerable Redistribution may happen anyway, without political intervention, in the natural course of things. More on this in a minute.
The NEF report also observes that “a society in which all have a real stake is about much more than financial assets.” It goes on to discuss redistribution of voice, and of work and time. At a grassroots level, the Transition approach offers real, functional solutions to these issues.
Within a Transition community, the dynamic we are creating with Open Space discussions, Council Circles, and other tools gives many people a voice. Tools like these help (in the words of Hopkins) to “unleash the creative genius of communities to respond brilliantly to times of great challenge.” To view these “people skills” techniques as an integral part of an economics solution represents a very significant cultural shift.
A different sort of “Great Redistribution” (different than NEF envisioned) may occur via the very latest developments among the veteran Transition communities. These newest developments include explorations of Community Supported Agriculture/Farms/Bakeries, community ownership of assets, social enterprise and other forms of Community-based investment (Part III, bullet #6). Couple these with Transition community efforts to engage landowners, local businesses, and schools and the rudiments of a vast shift begin to emerge.
Using Speth’s phrase, these new approaches offer a “nonsocialist alternative to today’s capitalism.” These new directions represent a solid foundation for The Great Redistribution.
We cannot be sure exactly how the economic contraction will unfold. I recall a video (perhaps it was “In Transition” although I’m unable to find it right now) which depicted the path of energy descent with a cartoon character in a roller coaster car. His ride was far from the nice smooth descent of Holmgren’s curve. Instead the path of energy descent included loop-the-loops, wild dips and plunges, and occasional brief ascents.
Is this collapse? Your determination will probably depend upon where you are standing and how much of your personal stake is caught up in the roller coaster plunges. Yet the term “collapse” to me implies unrestrained chaos. The Transition movement is an effort to consciously design our descent from the energy pinnacle. I do believe that the “surge breakers” that the Transition movement works toward – in food supply, water supply, economics, and more -- stand a solid possibility of staving off unrestrained chaos ... if we can get them in place in time.
As all the intricacies of peak oil, climate change, and peak everything unfold, in my opinion we are very likely to see a dramatic shakedown. The few, the wealthy, who currently hold so many assets and so much power, do so within the current system – which is inextricably built upon cheap oil, globalized transactions, and continued growth. Remember how the Crash of 1929 and the Depression of the 1930s caused a massive shakedown and reallocation of wealth: those who entered with money and power in many cases weren’t the ones who afterward emerged with it.
As the cornerstones to the wealth of today’s power elite dissolve to nothingness in their hands, I believe we, the people, hold enormous potential to re-craft things like asset distribution, democratic voice, and lifestyle pace in a vastly different way. Jackson’s TED talk, Speth’s assemblage, Norbert-Hodge’s printed essay, and the NEF table of contents offer some fascinating points to fold into our visions as we undertake that re-crafting project. Returning to Jackson’s phrase, it’s up to us to build local resilience through collapse.
- Woody Tasch, Slow Money: Investing as if food, farms, and fertility mattered. More philosophy, poetry, and introspection than economic theory, this book can help us consider aspects of the NEF list.
- Comments on the Jungian archetypes by Bernard Lietaer, "Beyond Greed and Scarcity"
- More comments on government and the Transition movement
This post is an excerpt from a longer paper, "Economic Resilience," which is being posted online in serial form. Part I explains the problems, because we have to understand what we are working with in order to begin to solve it. Part II critiques what several economic theorists see as possible routes forward for the “big picture” economy. But the central question of this document is what we can do at the grassroots level. Part III (approximately 70% of the document) offers a panorama of ideas for building local economic resilience. Links to the full document can be found here.
Joanne Poyourow is the initiator who brought the ideas of the international Transition movement to many areas of Los Angeles. She is actively involved in the Transition Los Angeles city hub. She was a CPA in public practice for more than 13 years and holds a degree in Business Economics from the University of California at Santa Barbara.
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