Wednesday, November 20, 2013

Fundamental Questions To Build a New Economy


Picking up where I left off in my last post, I'd like to share some excerpts from the Green Economy at Community Scale report I mentioned. In it economists Tim Jackson and Peter Victor try to begin with a set of questions that should help design an economy that works for all.

  • How is enterprise to be organized?
  • How is labor to be employed?
  • What is the structure of investment?
  • What kind of financial systems are appropriate?
  • What sort of government structures are relevant? (p.13)
The answers to these questions would offer 'first principles' about the organization of economic activity.

They offer "three core concepts which form the foundations for a green economy:
  1. Prosperity itself: the pursuit of human well-being lies at the heart of the economy; it motivates economic activity and justifies economic output.
  2. Biophysical boundaries within which economic activity must take place. Economic activity which undermines the ecological assets on which prosperity depends is unsustainable.
  3. Social justice - prosperity which provides only for the few and fails to alleviate the plight of the poorest, where there is a clear mismatch between effort and reward, or where opportunities for advancement are restricted unfairly, diminishes the quality of society and eventually leads to social instability. (p.21)
Jackson and Victor then systematically review each of these components and offer both analysis and examples of what they believe exemplifies possibilities at the community level.

Let's look at what they say about investment.

Conventional investment strategy is a crucial part of the architecture of the unsustainable economy and offers little in the way of a reliable basis for the green economy...The green economy cannot simply be characterized as "more of the same with a smattering of clean-tech investments thrown in."  ...

...The overarching visions emerges in the form of three simple principles:
  • Prosperity consists in our ability to flourish as human beings --  now and in the future.
  • Enterprise concerns the organization of economic services which deliver the capabilities we need to flourish.
  • Investment is the process of setting aside income in the present in order to maintain, protect, and enhance the assets from which future prosperity will flow.
The broad aim of this portfolio is to build and maintain the physical assets through which individuals can flourish and communities can thrive -- with as little in the way of material throughput as possible. (pp.39-40)

Adding to Jackson and Victor's  efforts to refocus our investments, Michael Shuman,
 who has been a leading force in helping focus on LOCAL community development through his books Going Local and the Small-Mart Revolution and most recently Local Dollars, Local Sense has recently shared

 Twenty Four Ways to Invest Locally

 What Jackson and Victor are sharing with us is a map of the territory, pointing out the hazards to avoid as well as the possible routes to prosperity. They have spent years studying that landscape and perhaps there are no better guides to our way forward. We should at least listen closely to their advice before we break camp and head out to the unknown.

We'll get back to the fossil fuel investments shortly -- just gt a pile of stuff sent to me from the SRI in the Rockies conference from last month... film at 11