Topics covered in JiE Working Groups

Author: poppy | Date: 19 September, 2013 | Category: Economics | Comments: 1

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Working groups on the different requirements for the transition
to an economy that promotes well-being sustainably

The literature extracts cited below are just meant to help define the initial agenda’s for the different working groups, and to be starting points for further exploration of research and ideas. No doubt members will come up with different and better sources over time.
Note that the different groups may operate at the different levels of society – political, parochial, personal. The first two will be more concerned with the national and international political levels, the next three may cross all three levels.
 


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WG 1: The big transnational questions – especially:

The concept of a steady state economy (SSE) 
The basic rules of a SSE are:

i. exploit renewable resources no faster than the can be regenerated
ii. deplete non-renewables no faster than the rate at which renewable substitutes can be developed
iii. emit wastes no faster than they can be safely assimilated by ecosystems

(Dietz & O’Neill (ch5) citing Herman Daley’s three rules for limiting throughput)

Dietz & O’Neill note (p45/6 ch 4) that an SSE is not a static economy: it can develop qualitatively rather quantitatively – in relation to ‘knowledge, technology, information, wisdom, the mix of products, income distribution, and social institutions, among other things’. And SSE does not mean the current developed world economy remaining ‘steady’ or not growing.  The current economy violates all three of the above rules.

How to achieve an SSE? Direct methods include outright bans, rationing, tradable permits, cap and share schemes.  Surer ways of accomplishing their purpose – but are considered coercive.  Indirect methods include taxation schemes and the setting up of specific conservation areas. Combination of methods required, inevitably impinging on personal freedoms to some degree.

Four prerequisites for moving towards an SSE:
i.   a more equitable distribution of income & wealth, as available resources will decline (discussed further in WG 3)
ii.  comprehensive monitoring system
iii. an incremental approach
iv. co-ordination across all levels of government

But this framework is only our starting position.  While we in the Joy in Enough project are very impressed by the SSE school, we are keen to emphasise that the we are not the CASSE (Centre for the Advancement of a SSE) at prayer! As we read their documents we may ask many critical questions.

WG 1.1 transitioning to a global steady state economy

Global-level measures are necessary to support positive developments in national and local economies. What would a programme for the transition to a global steady state economy look like? What needs to happen at the transnational level to support the measures that are likely to be recommended by the other working groups in this project?

For example WG2 will no doubt be discussing support for investments in industries and services low in environmental impact and high in contribution to well-being. But some businesses are likely to migrate to countries with lower standards, as they do now, rather than adapting. What international frameworks are required to stop that happening?

Dietz & O’Neill (2013, ch14) suggest a Policy objective: for all countries to pursue economies of an optimal scale, i.e. economies of a maximum sustainable size; or perhaps somewhere below the maximum level to allow some ecological ‘breathing space’.  They discuss indicators that might be used.  They also discuss international trade and financial transactions across national boundaries – including the dangers of ‘capital flight’ to countries that don’t internalise their social and environmental costs

WG 1.2 resource and emission caps

The concept of ‘planetary boundaries’, based on research at the Stockholm Resilience Centre, is discussed by Lynas (2011). Jackson (2009) and Dietz & O’Neill (2013) both argue the need for caps, and for limiting throughput, resource use and waste production.

WG 1.3 gaining international co-operation on these issues

Practically, one very tangible output from this working group might be to list the most important international agreements being campaigned for, what our government’s position on them is, and what we in the churches and ‘green’ movement can do in support of these campaigns.

(See Jackson p175, 178. D & O’N not very clear on the policy and institutional measures required to achieve these ends).


WG 2: Financial and industrial policy questions – especially:

WG 2.1 fiscal reform

rationale for inclusion: because of the role of the financial sector in creating debt and fuelling consumer demand which in turn leads to unnecessary and excess production.

Dietz & O’Neill (2013, ch8) emphasise that money supply has now become detached from economic output; that banks etc create money through making loans (thereby creating debt) and that the financial sector is basically a cost on the ‘real economy’. They advocate the Cato-Mellor strategy:

1. A debt-free national currency: prohibiting banks issuing money as debt by gradually raising the reserve requirement to 100%. The power to create money should be transferred to a public authority such as a central bank. To prevent inflation, taxation and public spending need to be linked to the system of money creation.

2. Local currency: (ala Brixton £!) – issued by a community and valid only for transactions within that community. It encourages the use and production of local goods and services. Also provides some community trust and security at a time of (global) financial insecurity.

As well as local businesses and customers accepting and using it, needs a local exchange mechanism to swap the local currency for units of the national currency. To render the currency more mainstream and less fringe, government could accept them as tax payments (as in Bristol), and it needs to be available as electronic currency (as in Brixton.)

3. International currency – for transactions between currencies and to replace use of dollar and Euro as reserve currencies (giving unfair advantage to USA and Europe). Could be created as fiat money – meaning just declared as legal tender – or it’s value could be linked to a physical resource, such as right to emit CO2.

A Tobin or Robin Hood tax would further discourage the ‘wheeling & dealing’ culture of banks.

They emphasise that the financial system is a subsystem of the economy, which is itself a subsystem of the biosphere. (p105).’ … the financial sector can be viewed as a cost…the cost of getting money to where it is needed in the economy. The fewer resources needed to accomplish this service, the better…’ (p110)

WG 2.2 changing national economic goals and the way we measure progress

rationale for inclusion: we tend to discount what we don’t measure, to ‘mismanage what we miss-measure’ (Dietz & O’Neill p117). We need to educate the public, and political leaders, to give equal prominence to the social and environmental indicators, to that which we give to GDP (Dietz & O’Neill p123-4). Most people are not fully aware of what GDP measures. If they were aware of its limitations they might realise that it does not measure at all well what they value most in life, and be willing to ‘knock it off its pedestal’.

‘In 2008 a group of highly respected economists and scientists led by Pavan Sukhdev, then a senior Deutsche Bank economist, conducted an authoritative economic analysis of the value of biodiversity. Their conclusion? The cost of the business activities of the world’s 3,000 largest corporations in loss or damage to nature and the environment now stands at $2.2tn per year. And rising. …. To quote Sukhdev: “The rules of business urgently need to be changed, so corporations compete on the basis of innovation, resource conservation and satisfaction of multiple stakeholder demands, rather than on the basis of who is most effective in influencing government regulation, avoiding taxes and obtaining subsidies for harmful activities to maximise the return for shareholders.”’ Stephen Emmott, ‘Humans: the real threat to life on Earth’ The Observer 30/06/2013

Dietz & O’Neill (2013,ch9) cite (p115) the four pillars of ‘gross national happiness’ identified by the Bhutanese government:
1. promotion of equitable & sustainable socioeconomic development
2. preservation & promotion of cultural values
3. conservation of the natural environment
4. establishment of good governance.

The UN ‘issued a resolution in July 2011 calling on all member states to pursue measures of happiness and wellbeing to guide public policies.’ (p115)

A range of measures, and their use in different countries, are discussed.

WG 2.3 investments in jobs and infrastructure

rationale for inclusion: we need a range of reforms to ensure that investments optimise well-being ‘in the round’, and facilitate an economy that operates within environmental sustainability constraints.

Duncan McLaren of FoE, in a paper for a business audience in 1995, argued that the firm of the future would be one that made optimal use of the human resource and minimal use of finite energy and physical resources. But Dietz & O’Neill (2013, p129-30) point to misuse of increased labour productivity for the production of extra (and unnecessary) goods rather than reduction in working hours

also rel to WG 3.2 – see WG3 document

and the mismatch between the kind of jobs supplied by the economy and the jobs that society actually needs to be done. Jackson (see below) points to one problem arising from firms striving for increased profitability through increased productivity: it is very difficult to achieve productivity gains in those jobs that provide both a worthwhile service to people and satisfying work for the employee.

Dietz & O’Neill (2013, chapters 10 and 11): at the level of the firm, they point (p142) to an intrinsic problem in the ownership structure of the modern large corporation – or the PLC in the UK: ‘it is legally bound to maximise profits for the shareholders – an interest it must put above all others.’ They discuss (p146-151) the case for structural reform of business, including:

promotion of new business models that generate shared value (such as businesses providing customers with specific results or functions rather than goods – warm homes rather than fuel, etc);

creation of business structures that are less prone to growth – that are legally obliged to take into account employee and/or/consumer and/or community interest in some way (such as co-operatives, social enterprises, community interest companies);

adoption of new measures of success for business, that take into account social and environmental impacts.

Jackson (2009 ch 8) discusses economic strategy in more detail: he calls for a ‘robust, ecologically-literate macroeconomics’ (p123) with ‘low-carbon economic activities that employ people in ways that contribute meaningfully to human flourishing’ as the basis for it.

An economy needs to deliver “Capabilities for flourishing. The means of a livelihood, perhaps through paid employment. Participation in the life of society. A degree of security. A sense of belonging. The ability to share in a common endeavour and yet to pursue our potential as individual human beings.” (p194).

He sees an important role for what he sees as the existing ‘Cinderella economy’: ‘local or community-bases social enterprises: community energy projects, local farmers’ markets, slow food co-operatives, sports clubs, libraries, community health and fitness centres, local repair and maintenance services, craft workshops, writing centres… local training and skills… maybe even yoga (or martial arts or meditation), hairdressing and gardening.’ (p130).

But could this economy provide for all our needs, certainly in a way that would win the widespread support necessary for political acceptance? The scope for productivity improvements in this sector is extremely limited, so our craft products, local services would be very expensive in relation to our incomes. Jackson argues then for very specific changes to the more conventional economy (p133):

“… shifting the focus of economic activity from one sector to another has the potential to maintain or even increase employment, even without economic growth.” but “there are reasons not to accept declining labour productivity across the economy as a whole… even maintaining stable prices relies on increasing labour productivity.”

So labour productivity needs to increase, mainly in the more conventional economy. (p134): “If labour productivity increases overall, then the only way to stabilise output is for the total hours worked by the labour force to fall.” To avoid increasing unemployment that means ‘systematically setting about sharing the available work more evenly across the population.”

Work sharing is a key component of his strategy and he discusses the options (p134-6).

rel to WG 3.2 – see WG3 document

He also cites German and Danish experience which concluded that ‘a stable and relatively equal earning distribution’ is a fundamental pre-requisite for redistributive working time policy (p136).

rel to WG 3.1 – see WG3 document

Jackson also argues for a different focus on investment policy: less locus on increasing labour productivity (though there will be some, especially in those areas where the work process is dangerous or alienating). It will need to be targeted at innovation directed towards sustainability goals, ‘to focus on resource productivity, renewable energy, clean technology, green business, climate adaptation and ecosystem enhancement’ – the ‘kind of targets that emerge from the consensus around a global Green New Deal’ (p138 – discussed in his Ch 7.)

But he emphasises that this investment needs to financed by substituting savings for consumption, not by borrowing (p138). He also discusses the rate at which investment needs to take place, and the role of the public sector in supporting these investments investment.
 


WG 3: Equity and redistribution questions – especially: 

WG 3.1 tackling systemic inequality

rationale for inclusion: Wilkinson & Pickett (2009) provide data on the range of human and social problems that are associated with higher levels of inequality in a society, including mental illness, drug use, physical ill health, obesity, teenage pregnancy and violence. In relation to sustainability, the greater the level of inequality, the greater the status differentials; and ‘a great deal of what drives consumption is status competition’ (p222).

 

Dietz & O’Neill (2013 chapter 7) discuss two strategies for the achievement of greater equality:

1. through taxes, social programmes and minimum income requirements: e.g. Sweden and the state of Vermont.  They also advocate the (so far untried) concept of a citizen’s income or basic minimum income – a universal benefit that would place everyone on the same starting line and replace other direct benefits provided by the state. Problem is that such governmental programmes can be overturned with a change of government;

2. encouragement of low differentials at the corporate level (e.g. Japan, New Hampshire) so that income differences are smaller to start with.  Likely to be a more effective way to achieve long-lasting equality.  Methods suggested include:

set maximum pay differentials – 5:1 highest to lowest the average in the Mondragon co-operatives in Spain; 20:1 recommended for UK public services by Hutton report (2010)

establish more employee-owned companies – as well as all employees having a say in income distribution, company less likely to ‘undertake speculative or needlessly risky actions’ [and more likely to become rooted in it’s community?]

rel to WG 2.3 also

transform enterprises into co-operatives – similar argument

also rel to WG 4.1

Wagstaff and Leach (1986) proposed a method that would combine the governmental and the corporate. Instead of corporation and income tax, and national insurance, one corporate tax could be implemented.   This tax would be a function of the number of people employed, and of the variation in income between them.  So for a given corporate profit before payment of salaries and wages, the more people who are employed the less tax; and the more equal the salary distribution the less tax.

rel to WG 3.2 also

WG 3.2 working time – redistributing employment hours and income

rationale for inclusion: to challenge the myth that ‘we can only solve unemployment through growth’.  In general, in the UK and the USA people in managerial and professional jobs are now working significantly longer hours than people in such jobs did 30 or 40 years, earning significantly more than their parents’ generation did. Not unrelated to the rise in work-related stress. This trend is significantly less in many countries in continental Europe. This working  group will look at the various policies that might be adopted which result, in effect, in ‘carving out components’ of these highly paid, long-hours jobs and ‘parcelling them up’ to create opportunities for the unemployed. Remember only a small percentage of the population are unemployed so the logistical task of carving out new jobs from the timetables of the over-worked is not that great.Orthodox economists will say we are propagating the ‘lump of labour fallacy’.  We will show that there is, at any given time, a finite ‘lump’ of employment opportunities, and that it can be redistributed much more equitably, to the common good.

Dietz & O’Neill (2013, ch 10) discuss three flaws in the economic system (p129-30): as referred to in 2.3 above, the misuse of increased labour productivity for the production of extra (and unnecessary) goods rather than reduction in working hours, and the mismatch between the kind of jobs supplied by the economy and the jobs that society actually needs to be done; also the inflexibility of many employment practices: ‘in trying to cut costs by standardising their operations, firms often institute one-size-fits-all rules for work schedules and hours’.  E.g. some firms only offer ft employment for a range of jobs.

They suggest two strategies for achieving a better distribution of working hours and income:

1.  work-time reduction: they discuss a range of methods for achieving this end: shortening the standard working week; offering opportunity for early retirement (could have mentioned phased-in retirement); offering more opportunities for part time work; career breaks. They cite the example of the Netherlands where work-life balance has been integrated into overall employment strategy.  In an 1980 agreement unions and employers agreed to reduce unemployment by sharing available work. Employees have right to request shorter working hours and career breaks of up to three years.  They can enter and leave the labour market more flexibly, have more security and can spread income more evenly over their lifetimes.  Netherlands now has the lowest (average) working hours among developed countries: 1377 pa as against 1778 pa in USA and 1647 in UK.

As these policies reduce unemployment they reduce tax burden on government.

rel to WG 2 also

2. guaranteed jobs: the state as an employer of last resort creates jobs for those wishing to work but unable to find employment.  The right to work included in UN declaration in 1948 and partially enacted in India.  A guaranteed jobs policy:

* provides income for people who need it

* uses relatively cheap labour to accomplish useful public works

Deitz & O’Neill (2013, p135-6) discuss the Civilian Conservation Corps (CCC) which ran in the USA from 933 to 1942. This programme ‘built some of the most enduring and beautiful structures on the American landscape’ apart from the poverty reduction and social benefits achieved for its 3million participants.

(Read also the Peter Victor study in either Deitz & O’Neill or Jackson;

see also Juliet Schor (2010), Skidelsky & Skidelsky (2012), Wagstaff and Leach (1986))

 


WG 4: Social and psychological questions – especially:

WG 4.1 strengthening social capital

rationale for inclusion: maintaining close relations with family, friends, neighbour and colleagues is one of the principal means of promoting well-being.

see WG 5.2 also.

The Church has also always emphasised the role of the church community in our spiritual development and in promoting responsible citizenship generally.

Additionally the promotion of localisation, of vibrant local communities. plays an important role in the reduction of carbon emissions and of other environmental impacts. Research by transport planners suggests that to reduce the fast-rising travel emissions we need to reduce the need to travel at source, as well as encouraging model changes and changes. Ref to papers produced for CEL/ecocell workshop ‘Not from A to B but make A a better place to Be’.

RobertPutnam (2000) ‘Bowling alone’: analysed the downward trend in the strength of social capital in the decades since the end of WW2. Among the changes required to reverse that trend he argues are: less inequality (the very poor tend not to have the time, skills or resources to contribute to community life), less families with both parents working full time (again no time left over if doing full time work), less commuting (again the time factor).

At the personal level, he argues, we need to challenge the excess belief in personal control and autonomy encouraged by modern society, to question unreal expectations of what we can personally achieve through choice and grit (ch 20). At the community level our challenge now is to re-create the practical, enthusiastic idealism of the 21st C that developed so many local and national community and voluntary organisations. He noted the positive role the church has played in these movements, both indirectly and indirectly through building the organisational skills of its members. Particularly the more outward-looking inclusive churches, churches more concerned with developing ‘bridging capital’ than ‘bonding capital’.

WG 4.2 de-marketing, dismantling the culture of consumerism

rationale for inclusion: The marketing processes of modern business are at a level of sophistication undreamt of in previous generations. Advertising is only the tip of this iceberg – market research, motivational research, ‘sexy’ product design, packaging, product placement, viral marketing, the availability of easy credit, corporate lobbying… these are only a selection of the techniques used either to create or to shape artificial demand, create (artificial) replacement demand or create addictive or dependency-induced repeat demand.We have to challenge the economic dogma that ‘consumer demand’ is something natural and spontaneous: Galbraith (1958) exposed that myth 50 years ago, but Governments still base their policy on it, and say environmental action should be confined to technology of production.

Powley (2011) examines how consumerism works and why it’s so hard to stop buying stuff. It introduces four practical ‘rhythms of life’ that can ‘bring us a new freedom and depth’. It sets out some alternative disciplines: creating and rest to break the 24-7 consumer crush; presence and absence instead of always needing to be connected and/or entertained; waiting and enjoying rather than buying on impulse; engaging more deeply with real life and relationships.

Sigman (2005) elaborates on how electronic communication is coming todominate our worlds: the proportion of time people are spending attending to electronic communication; impact on physical and mental development and on the quality of social life; and it’s role in ‘softening up’ people for the marketing processes and messages, which are themselves so readily available on the electronic media.

Dietz & O’Neill (2013, ch 12) cites research findings from both the social and neuro sciences on human well-being which ‘point squarely away from consumer culture’ (p161). They also cite New Economic Foundation (NEF) work summarising the evidence on methods of improving well-being:

  • maintaining close relations with family, friends, neighbour and colleagues

rel to WG 5.1 also

  • taking part in enjoyable physical activities
  • being curious, savouring the moment and being aware of what’s happening in the world
  • keeping learning, trying new challenges that would be enjoyable to achieve
  • giving, expressing gratitude and doing helpful things for others.

It will require ‘a sustained and co-ordinated effort to curtail the power of the corporations and the media, both of which exercise substantial influence over people’s lives’ (p161). The transition programme needs to be comprehensive, with multiple points of entry. Methods suggested include using marketing methods to ‘sell sound cultural values’, harnessing the power of art, personal example by demonstrating non-consumerist values while actively involved in community, recruiting influential individuals, help eliminate planned obsolescence (including fashion goods) by refusing to buy short life products, limiting marketing (following the alcohol and tobacco precedent), creating and empowering institutions that de-emphasise consumerism.

See also Seabrook (1988), Packard (1957)
 


WG 5: The imperatives in scripture and theology for this new kind of economics, and their implications for the Churches’ mission.

Storkey (2009) traces how the dominant modern economic paradigm has moved away from a ‘recognition of working with God’s creation, of economic life that was not money-centred, of work as service and of markets as communities of shared norms, honouring workers, reflecting quality and knowing the boundaries of market activity’ (p3) and elaborates on the biblical worldview that ‘puts economics in its limited place’ (p4)
Both Skidelsky & Skidelsky (2012) and Sandel (2012) ask questions about the philosophy underlying free-market economics. They make the case for ‘rolling back the frontiers of the market’ as it were. They assert that the state (and other major institutions such as the church, which the Skidelsky’s see as quite important) have a role in promoting the good life or the common good, and challenging the norm that all viewpoints and lifestyles are equally good.
 


Topics that cross working group boundaries (but might be allocated to a particular working group)

  1. Localisation:  relevant to 1.1, 2, 4.1 above
  2. Revival of craft and practical skill training: relevant to 2.2, 2.3, 3.2, 4.1

 


References

Deitz, Rob and O’Neill, Dan (2013) ‘Enough is Enough’, Earthscan from Routledge, Oxford.

Emmott, Stephen (2013) ‘Humans: the real threat to life on Earth’ The Observer 30/06

Galbraith, John Kenneth (1958) ‘The Affluent Society’, Penguin, New York

Jackson, Tim (2009) ‘Prosperity without Growth – Economics for a Finite Planet’ Earthscan,  London

Lynas, Mark (2011) ‘The God Species’ Fourth Estate, London

McLaren, Duncan (1995) ‘Environmental Space – Measuring the Dimensions of Sustainability’ Environment Council (UK) Business & Environment Ecofact Series

Packard, Vance (1957) ‘The Hidden Persuaders’, Harmonsworth, England 

Powley, Mark (2011) ‘Consumer Detox – Less Stuff, More Life’, Zondervan, Michigan

http://makewealthhistory.org/2011/01/28/consumer-detox-by-mark-powley/

Putnam. Robert D. (2000) ‘Bowling Alone: The Collapse and Revival of American Community’ Simon & Schuster, New York:

Sandel, Michael (2012) ‘What Money Can’t Buy’, Penguin, London

Schor, Juliet B (2010) ‘Plenitude -The New Economics of True Wealth’ Penguin, New York

Seabrook, Jeremy, (1988) ‘The Race to Riches’, Green Print – Marshall Pickering, Sheffield

Sigman, Aric (2005) ‘Remotely Controlled’, Vermillion, London

Skidelsky, Robert and Skidelsky, Edward (2012) ‘How Much Is Enough?’ Penguin, London

Storkey, Alan (2009) ‘A biblical economic reformation’ The Bible in Transmission – Winter 2009  http://www.biblesociety.org.uk/uploads/content/bible_in_transmission/files/2009_winter/BiT_Winter_2009_Storkey.pdf

Wagstaff, Howard and Leach, Donald (1986) ‘Future Employment * Technological Change’, Kogan Page, London

Wilkinson, Richard and Pickett, Kate (2009) ‘The Spirit Level’, Penguin. London

http://www.guardian.co.uk/books/2009/mar/13/the-spirit-level

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Comments on "Topics covered in JiE Working Groups"

David Goss:

March 19, 2015

I have just been reading the following book, which might be worth your consideration: Davis, Ellen F. (2009) 'Scripture, Culture and Agriculture. - An agrarian reading of the bible.' Cambridge University Press. All good wishes.


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