The Economy

After our last column about a Steady State Economy, I heard from David Dawson who lives at La Broquerie. David agreed with the column, but thought the language got a little too complex at places.

Here is how he put it: I am just an ordinary guy – certainly not an economist. Here are just common sense thoughts from an amateur. Mind you, I believe the economy as a whole is so complex that no one really understands it completely. Experts build computer ‘models’ but how accurate are they.

David thinks it must be obvious to any thinking person that perpetual growth of anything, anything at all, including population and economy is unsustainable. Eventually something will have to give – probably with dramatic effect.  Nevertheless, if our economy isn’t expanding we are told something is wrong. We call it a recession or even depression.  Unemployment soars and company revenues fall, leading to a drop in government revenue. We fear another depression similar to the 1930s.

Obviously, if we can’t go on growing the economy for ever, David says, there has to be a point where growth stops and we end up in a state of permanent recession/depression or at best stagnation.  Currently our lifestyle is based on continual growth, so we are, without doubt, eventually destined for a major shake-up with huge social adjustments.  Are we possibly seeing the very beginnings of this process at the present time? The USA is having great difficulty creating jobs and getting out of the last recessionary period. There are obscenely high pay levels in the financial sector which are creating a totally unbalanced sharing of the wealth of the nation with poverty rife everywhere. Is this partly responsible for the present situation?  The demonstrators all over the world seem to think so.

According to David, when we are in a period of recession our government borrows money to boost the economy to keep employment artificially high.  By borrowing, government creates or maintains a standard of living unsupportable by the economy.  The government hopes it will be able to pay back the loans when the economy returns to growth, but as you can see growth must eventually stop.  We may end up in a situation where we can never pay back the loans, with a crippled economy paying interest only on the money it has borrowed. These payments take much needed resources out of our economy. I wonder if we are in a time of human existence when we are close to, or are actually in, a period of permanent recession/depression.  If that is the case, what are we going to do about the money we have borrowed, whether it is private, individual borrowing, or government borrowing? If this is the time we are in, now is the time to change the way we do things. 

David’s solution is to learn how to cook instead of buying pre-packaged, pre-cooked, boxed meals.  Dig up that useless lawn and plant vegetables.  Learn how to make jam, preserve and freeze your produce.  Compost the waste.

You might also join us Thursday for a presentation on the Steady State Economy. October 27, 7:00PM at the Eastman Education Centre on Loewen Bld. More information at southeasttransition.com.

Eric Rempel

Presenting the Steady State Economy

Addressing the economic and ecological problems of the 21st century

The human family is about to get a little bigger. According to the United Nations, the global population will reach seven billion this Halloween – on October 31, 2011. It would be too easy to say that the coincidental alignment of this milestone with Halloween should be cause for fear. We don’t need to be afraid of a few more babies; birthrates are even decreasing in some parts of the world. What we should be deeply concerned about is the likelihood that these babies will one day aspire to Western lifestyles at a time when the planet simply can’t handle any more materially opulent aspirations.

Our way of life in the West not only puts immense pressure on the environment, it has also become a catalyst for economic volatility on a scale we’ve never seen before. We have designed our economic system to – as economist Tim Jackson describes – “spend money we don’t have on things we don’t need to create impressions that won’t last on people we don’t care about.” Unlike what most mainstream economists will tell you, that’s a recipe for disaster, not prosperity.

Take a moment to consider how the global economy is performing. Oil prices reached $113 a barrel earlier this year, contrasted with a low of $13 a barrel in 1999 (today they hover around $86). Stocks have seen unprecedented volatility; so too have the prices of grains and other essential foodstuffs. Major economies still haven’t fixed a broken financial system that inflates the prices of assets (such as mortgages) and permits a wasteful kind of “gambling” with legitimately earned money. If investment banking was working properly it would be facilitating much-needed investment in green infrastructure, not phony new financial products that consume rather than produce capital.

If this is what a “growing economy” looks like in the 21st century, we should clearly be aiming for something better! It’s time to start being rational rather than dogmatic about the word “growth.” We need to shake ourselves out of collective denial and engineer an economy that is more practical, meaningful and truly prosperous. Recent global protests such as Occupy Wall Street represent an awakening economic consciousness and a backlash against the status quo. They are revealing the cracks of a deeply broken system. But they’re not yet specific and productive.

I invite you to join me in applying specific solutions to these problems by engineering a new economy with a firm foundation. Fostering economic degrowth towards a steady-state doesn’t mean recession; it means fostering a balanced, manageable level of resource flows. It doesn’t mean going back to the dark ages; it means a life more happily and meaningfully lived.

Using the power of entrepreneurship and innovation, we need to find common purpose in the realignment of our overarching social and economic goals — not toward yesterday’s notions of solidarity or neoliberalism — but towards pragmatic and meaningful capital maintenance for prosperity without growth.

Join us on October 27th at 7pm at the Eastman Education Centre to learn more about how we can engineer prosperity without growth.

by James Johnston of the Centre for the Advancement of the Steady State Economy (CASSE)

Is Growth Always Good?

I recently had a conversation with a local farmer who reflected that the farm work he is able to complete before breakfast today, would have taken his father, in his time, the best part of a week to complete. Bigger, better-designed machines have made this possible. But that’s not all. Indeed the 400 HP tractor replaced the 40 HP tractor, but farmers and researchers also found ways of increasing crop yield more than four fold.

This is just one example of the efficiencies we have gained  in the last 100 years. So how have we all benefited from this increased efficiency? A single farmer today replaces ten farmers of yesteryear. What are the nine “surplus farmers” doing? Something good, I hope! Well some of these “farmers” are now working in a factory where they are building the tractors today’s farmer needs. Others are building roads, and others are marketing farm produce. That all seems to be good.

However, many of the displaced farmers are now working in factories making widgets we do not need. Others are working in the advertizing sector where they are trying to persuade us that we need the widgets that are being produced. And others are working at landfills where these widgets end up very shortly after they have been bought. Some have become doctors, doctors that deal primarily with diseases brought on by overeating and inactivity.

There are two ironies in the situation I have described. First, surely increased efficiency ought to result in increased leisure. Surely, time spent at leisure is better than time spent making unneeded widgets. That increased leisure should give parents more time with their children, teachers more time with their students and nurses more time with their patients. But we all know this has not happened. Parents, teachers and nurses all seem to have less time to do the things they know to be important.

The second irony is that as humans become more efficient in the use of their time, they of necessity replace human resources with other resources. Unfortunately most of the resources we end up using more of are of a finite nature, whether that be fossil fuel, steel, or some other resource. Tragically, as we humans become more efficient in the use of our time, we also become more effective in diminishing the resources our children will need if they are to enjoy the same good life we enjoy.

Those are the down sides. Nevertheless, apparently we believe all economic growth has been good for us and we want to keep it that way. The only alternative we know to economic growth is recession with unacceptable levels of unemployment and worse. So we avoid even thinking of alternatives.

Fortunately, there are an increasing number of economists and other thinkers exploring alternatives. One place alternatives are being explored is at the Centre for the Advancement of the Steady State Economy (CASSE).

James Johnston, an associate with CASSE will be making a presentation at the Eastman Education Centre October 27, 7:00PM. Join us and learn with us.

Eric Rempel

Inspiration to Rethink Lifestyle

In the course of history, there comes a time when humanity is called to a new level of consciousness, to reach a higher moral ground. A time when we have to shed our fear, to give hope to one another. That time is now.

Activities that devastate the environment and societies continue unabated … The Norwegian Nobel Committee has placed the central issue of the environment and its linkage to democracy before the world.

The challenge is to restore this home … and give back to the children a world of beauty and wonder.

The world needs lifestyle rethinkers. Consider the example of this courageous and brilliant Kenyan woman.

With humble beginnings in a small village, she became the first East African woman to earn a PhD, then taught in a Kenyan University. From her position of relative privilege, she was moved especially by the poverty of rural women and the scarcity of water and fuel to found the Green Belt movement, a grass roots organization, which to date has planted more than 35 million trees in Kenya and nearby countries.

Empowering rural women to believe they could be foresters led them to challenge the forest destruction fuelled by post colonial greed and corruption. In the 1980s and 90s, she and others were beaten and imprisoned for speaking out in defense of democracy and the environment. She lost her academic position.

But by 2004, when she said the above words in her Nobel Peace Prize acceptance speech (the first African woman to be so honoured), trees planted by the first Green Belt women’s groups were being harvested for lumber, arid and dry lands were reforested, streams were again flowing, and soldiers were planting trees alongside villagers.

The inspiring story is told in a documentary video, Taking Root: the Vision of Wangari Maathai. Who?? Most of us have never heard of her. She was a lifestyle rethinker, and her thinking led to practical action … the simple act of collecting tree seeds, propagating them, establishing local nurseries, and then planting and tending the seedlings, eventually by the millions All accomplished by dozens of women’s groups throughout the country. The Kenyan countryside is being transformed and revived by these simple, practical activities and the Green Belt movement has spread throughout East Africa.

Initially, the women did not believe they were capable. Many were illiterate. Their cultural tradition did not include tree planting among women’s tasks. “You need a diploma to plant a tree” professional foresters told them.

But Maathai doggedly questioned all the assumptions – the women’s, the foresters’, the corporations’, the governments’ – and pushed for change. Why were forest lands being clear-cut, why were parks and preserves being logged, why were people being jailed and mistreated for challenging government corruption?

There was push back by those in power - beatings, death threats, imprisonment – but changes came. And finally recognition and acceptance for Wangari Matthai. She died of cancer September 25 at age 71.

Some lessons for me emerge from her story ….

I need to watch more good documentary and fewer “entertainment” videos. Like Wangari Maathai’s story, they inspire! This video and others are available from SETI.

 

I can sit back and let the “powers” run the show, but eventually my family and I will feel the environmental impact of greed, mismanagement and bad policy.

Look around. What is obviously incongruent in our lifestyle? What is clearly destructive and unsustainable? I need to respond with personal lifestyle changes, but I need to also question and challenge government and corporate practice and policy.

Take this link to the movie web site.

Take this link to the Green Belt web site.

 Tim Kroeker

,