Which do you fancy – Economic Growth or Financial Collapse?

I have now watched a TED talk on this topic twice and can’t help but respond. Ecological economist Marjan Van Den Belt is right when she says “we are mindlessly addicted to economic growth, we are growth junkies.” She advocates reciprocity in economies and says that is the key to a circular, sharing, regenerative economy. So far so good.

She urges listeners to take “a small step in the right direction”.  She points out that goal 8 of the UN Sustainable Development Goals is “meaningful jobs and economic growth”. What a shame they don’t understand that growth measures both good and the bad and doesn’t distinguish between them. So every time someone gets lung cancer that is good for growth, and when there is an accident the same. But when a mother cares for her preschoolers well or a family member cares for a frail older relative, the GDP doesn’t budge.

She also says neoclassical economic theory describes people as homo economicus – rational, self-centred and suggests trying to put that on your profile for a singles site. Yes.

So why do I want to respond? Because we are trapped. We have designed the money system and the land tenure system and together they are leading us by the nose to the growth imperative. And what happens if the economy doesn’t grow? Why it collapses of course. So is this economics professor really suggesting we crash the money system by allowing economic growth to grind to a halt? Does she really want us to have no money in the system, to have ATM machines that don’t work, to have plummeting house prices with negative equity and all the ensuing misery of foreclosures and bankruptcies? I doubt it.

Yes she wants a new paradigm and quotes Buckminster Fuller’s exhortation to build a new model. Good.

That is exactly what I have done in my new book The Big Shift. Although there may be other possible ways to get there, together in our little new economics think tank we designed this new model and believe once it is built and once it flourishes it will provide not only appropriate jobs, but where jobs are not possible, it will give a basic income so that parenting, inventing, producing needed sustainable energy and products will also flourish.

You see we need to get back to community owned land and community created and designed money systems. I know it is a huge leap for our thinking to get to community owned land and we can only do this fairly by adequately compensating landowners for their land. We can only do this by creating new money because there isn’t enough in the system of the conventional debt-based money created by banks.

Today I had a lovely email from a Green Party activist who said, “I have spent the weekend reading your book, couldn’t put it down. All amazing and well outlined ways to change our world small sections at a time. However, are there enough of us who are willing to take that last step?” And she wanted to buy a second copy to lend out to friends. Nice.

And she wanted to buy a second copy to lend out to friends. Nice.

For those wanting to read more about how neoclassical economics started and why, I suggest reading The Corruption of Economics by Mason Gaffney and Fred Harrison. It outlines how neoclassical economics started as a reaction to the influence of Henry George. Land barons, industrialists and bankers paid scholars to corrupt the discipline. After two decades they had succeeded in getting any mention of land, banks, money or credit in the mainstream texts. They had subsumed land under capital so successfully that even forward thinking economists like Gareth Morgan fail to mention land as a separate factor of production. Moreoever he also fails to mention money creation.

This emphasis on pointing out the fallacies of measuring the economy as the growth in GDP has gone on since the 1970s so it is great that more know about it But they don’t know what causes the growth imperative, which, as Steve Keen has pointed out, is the combination of the tax system that fails to address rises in land value (and other assets) and the faulty money system.

 

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Sarah vs the Govt – thoughts after first day in court on climate targets

Sarah Thomson poses for media outside Wellington High Court. She is taking the Government to court on their climate change targets

On approaching the High Court yesterday I was first struck by the sign outside that said “System Change not Climate Change” held up by a pressure group. Why didn’t I call my book this? It’s a damn good slogan. Crowds soon gathered and the media arrived to interview Sarah Thomson, the law student taking the case on climate targets.

When a 24 year old takes the Government to court it has got to be newsworthy and important. When her lawyer Davie Salmon started up, the years of preparation showed and a very long friendly conversation between Salmon and the judge began. Huge piles of documents were behind the young woman judge and I couldn’t help thinking this judge has the power to rule that the government revisit its emission targets and she looks five foot nothing. We have to stand up when she leaves the court.

Sarah Thomson with supporters. From left Deirdre Kent, James Renwick behind, Sarah, Paul Bruce, Tim Jones (behind) Diana Shand RNZ photo

The argument that New Zealand is small therefore we don’t need to do much was thoroughly demolished, especially with Salmon’s suggestion that if the boat is sinking everybody bails, no matter how small their bucket.

He took us through the difference between the target of 1.5 degrees vs 2 degrees of warming. Reality strikes when you realise that, although he said he wouldn’t exaggerate, he used the word ‘catastrophic’. Yes beyond two degrees it is catastrophic and James Renwick had reminded us outside that it is only five years till we get to 1.5 degrees. David Salmon persuasively argued that you shouldn’t rely on technologies that don’t exist yet to take carbon dioxide from the atmosphere. He said it was like telling someone to keep smoking in the hope someone would invent a cure for lung cancer. One cannot predict inventions. Therefore no real weight can be put on that hope.

System Change not Climate Change

He impressed on the judge the comprehensiveness of the AR5 summary of climate change knowledge worldwide. The sheer size and scale of the work was noted and the fact that it is always out of date before it is published. He said, “I don’t want to make you read it all Your Honour, is scary reading about floods and famines, mass migrations and conflicts and some of it is dry and detailed”. She replied, “I’ll be happy to read it”. He said,”Maybe not happy by the time you finish.”

Sarah and her boyfriend were sitting in front of me in the gallery. Occasionally she would lay her head on his shoulder. When later she put her arm around him I wondered if that couple would ever have children and what sort of world will it be for them. Will their mothers grieve for the grandchildren they wish they had? But I do know they should be immensely proud of their children and of themselves for bringing them up to have such a huge sense of responsibility.

My thoughts, as always, went to economics. Where were the economists in this court? I couldn’t see a soul.  What would they say if they were here? Yes, Salmon talked about Business-as-Usual scenario and I thought that even Helen Clark’s government did nothing to stop the intensification of dairy because it feared the economy wouldn’t grow enough and they would be out of government. And so we get agricultural emissions rising.

Sarah Thomson and Prof James Renwick outside Wellington High Court Monday 26 June 2017

And Naomi Klein realised the economy was at war with the climate.

So I thought what would it really take to change the economic system from growth dependent to a healthy one? How many really want to face up to the money system and that the land tenure system (and therefore the tax system) simply have to change. It’s a big shift for people’s mindsets. What causes the growth imperative? It is the combination of privately owned land system with an interest-bearing debt money system controlled by private banks. A match made in hell. Maybe we have to get to hell before we wake up.

We have the choice of catastrophic climate change or economic collapse. Both are horrible. Please, someone, focus on changing the political economy before it is too damn late!!

I kicked myself that I hadn’t written a flyer for my book and taken it with me.

 

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