Economic Crisis & Paradigm Conflict Green Economy review culture and economic development power relationships and economic design scarcity, class & crisis.

Economic Crisis & Paradigm Conflict

• Green Economy review• culture and economic development• power relationships and economic design• scarcity, class & crisis

– waste & debt

• Post-Fordism & the Global Casino• Postindustrial alternatives: creativity, community & abundance

Redefining Wealth

Quantitative: Money & Material

Accumulation

Qualitative: Well-being

Regeneration

Principles of a Green Economy1. The Primacy of Human Need, Service, Use-value,

Intrinsic Value & Quality 2. Following Natural Flows 3. Waste Equals Food4. Elegance and Multifunctionality5. Appropriate Scale / Linked Scale6. Diversity7. Self-Reliance, Self-Organization, Self-Design8. Participation & Direct Democracy9. Human Creativity and Development 10. The Strategic role of the Built-environment, the

Landscape & Spatial Design

A Green Economy-1

1. The Service Economy“Hot Showers and Cold Beer”

Nutrition, Illumination, Entertainment, Access, Shelter, Community, etc. “People production”

2. The “Lake Economy”Flowing with nature, Every output an input,

Closed-loop organization, Let nature do the work. “Biomimicry”: integrate with and imitate

natural systems.

Human Development in the Green Economy

• Production: human creativity the key

• Consumption: “end-use” Direct targeting of human need = massive resource savings

• Regulation: participation at all levels.

The Economy in Loops

A Green Economy-2

• Substitutes human creativity for resources & energy: shift in labour/resources balance.– Human development should be the primary

strategy for sustainability

• Eco-production: high “eyes to acres” ratio. Efficiency depends on participation.

Labour & Resource Relationship

• Industrial economy: resource-intensive. labour productivity: Substitutes resources for labour.

• Green Economy: people-intensive / resource-saving. Substitutes human creativity for resources

A Green Economy-3

The 3 D’s– Dematerialization

• doing more with less

– Detoxification• benign materials

– Decentralization• human & ecosystem scale

The Industrial Definition of Wealth

Money

Material

N.B.: Perpetuation of the System demands the perpetuation of this definition

Industrialism: Accumulation

• Production-for-production’s-sake• Invisibility of key factors• Centralization of production, massive

upfront investment • Focus on labour productivity : resources

substitute for human energy• Cog-labour: humans as component parts• Regulation: controls as limits• Scarcity-based: role of waste since WWII• Globalization: free trade & intellectual

property

Postindustrialism: Regeneration• New relationship of culture to economics: centrality of

human development• Substitution of human creativity for resources• Direct targeting of human need: conscious consumption• Human-scale technologies: production ‘distributed’ over

the landscape ; Integration: ALL places are places of production

• Qualitative Wealth is PLACE-BASED• Distributed regulation: incentives for positive action

throughout economy.• Self-reliance / interdependence:

“Trade recipes, not cookies”

Industrialism: The Divided Economy

Invisible Visible Use-value Exchange-value “Consumption” “Production” People Things Unpaid Paid Women Men Informal Formal Private Public

Invisible Economy (1) Total Productive System of an Industrial

Society(layer cake with icing)

GNP-Monetized

½ of CakeTop two layers

Non-Monetized

Productive ½ of Cake

Lower two layers

GNP “Private” SectorRests on

GNP “Public” SectorRests on

Social Cooperative

Love EconomyRests on

Nature’s Layer

“Private” Sector

“Public”Sector

“underground economy

“Love Economy”

Mother Nature

All rights reserved. Copyright© 1982 Hazel Henderson

2

Invisible Economy (2)

Scarcity & Class

... inequality & relative scarcity:

1. control of scarce resources & ...

2. monopoly of high culture

...by a minority.

Markets and MaterialConnection between needs,

wealth & markets.

the Invisible Hand: worked...

1. for an economy focused on meeting primary needs—simplicity.

2. in a situation of relative scarcity

3. in the absence of sophisticated information technology

The Threat of Abundance

• Productivity boom of the Roaring Twenties– output outdistances worker wages

• Crisis of effective demand & structural overproduction: Great Depression as a reaction to potential abundance.

• White-collar work, universal education: the threat to cultural monopoly.– increasingly social character of production; rise of

industrial unionism

The Post WW II Waste Economy

Permanent War Economy

The Suburb Economy: Oil / Autos /

SubdivisionsNote gender and racial subtext of sprawl

“The greatest misallocation of resources in human history.”

…James Howard Kunstler

Keynesianism & the Crisis of Effective Demand

• Baran & Sweezy: crisis of profitable investment outlets for capitalism.

• Money: a tool of national economic planning. Strong domestic multipliers.

• The Paper Economy: growing disjunction between the real & financial economies

•  Planned Inflation & Purchasing Power• re-redistribution of income: offsetting wage hikes in the

unionized sectors• Debt & the Economic Treadmill: Work-and-spend

Fordism & the Reinforcement of Industrial Wealth

Matter

Waste

Fordism

Suburbanization/ Consumer Economy

War Industry

Money

Debt

Keynesianism

Paper Economy

Planned Inflation

New forms of credit-money

1970s: End of the Line for the Fordist Waste Solution

• saturation of markets

• social & environmental costs coming due: fiscal crisis of the state

• limits to inflationary strategy

• Vietnam war, decline of the dollar, German/Japanese competition

• OPEC & the energy crisis– Petrodollars & Currency Crisis

Post-Fordist Casino Economy• floating exchange rates: “interest rate standard”

– Eurodollars & Petrodollars

• new technologies & Megabyte Money• financial sector: 30-50 times (?) larger than the

material economy• Speculation: Stomp the weak / Get rich quick• Empty wealth creation: de facto redistribution of

wealth.• The End of Mass Consumption & rise of new

“producer services”: new forms of ‘effective demand’.

• Polarization of work and society– end of social contracts: attack on Welfare State– the growing gap between rich and poor

Debt & Forced Economic Growth

1. Competition for money

2. Lack of purchasing power

3. Wage dependency

equals

Export warfare

“The main point that needs to be understood is that in order for money to come into circulation, someone must go into debt to a bank. If there were no bank debt, there would be virtually no money—it’s as simple as that. Since banks charge interest on all this debt, and since the money to pay the interest can come only from further debt, debt grows like a cancer within the global economic ‘body.’ This debt imperative creates a growth imperative that is forcing us to destroy the life-support systems of the planet.”

– Thomas Greco

Debt in the US Economy

• 1970s: debt 1½ the size of GDP

• 1985: twice the size of GDP

• 2005: 3½ times the size of GDP

Source: Magdoff , 2008: calculated from tables L.1 and L.2; Flow of Funds Accounts of the US; and table B-78 from the 2006 Economic Report of the President

The Global Casino: Hijacking the Information Revolution

• expansion of employment in speculative industry– Wall St.: more advanced technologically

than the military.

• Bubble Economies: last ‘frontiers’ for capitalist growth.

-stock crash of 1987

-tech stock bubble of late 90s

-housing bubble of 2001-07

• Housing speculation: most destructive & exploitative of the poor & average people.

Decommodifying Money • diversification of forms of everyday

exchange– supporting the informational character of

currencies.– undercutting the scarcity-power of money.

• financial industry restructured as public utility and/or service industry.

– money directed to priority areas of green development

– transition: green Tobin tax

• new forms of remuneration– direct consumption; basic incomes; account-

money; free food, health care & housing

• gradually enlarging the sphere of gift relationships

– consistent with new productive forces based in mass collaboration

...or turns them into service workers

Living in De-Material World

Redesign not controlsDirect focus on human (& environmental) need

The Service Economy:Extended Producer Responsibility (EPR)

encouraging provision of services not stuff.

Servicizing (voluntary EPR).

The “Lake Economy”: economic biomimicry:sectoral orientation: regenerative food, energy,

manufacturing, c ommunications.

New forms of economic security

Conscious support of the Commons

Disarming the autonomous power of money

Building a community/ecosystem base: localization.

Security in Gift Economies

"In that way, the giving of surplus to friends and neighbours is not very far from the giving of surplus to the cashier in a bank. The quality of integrated society, like the legal rules of banking, guaranteed that the gift would not be forgotten and a future claim ignored.”

--Hugh Brodie on Irish rural life