Category: Americas

#OCCUPY the Ballot Box

The conundrum of the Occupy movement’s “missing list of demands” is the key to understanding what has to be done.

Protest in a democracy represents a conundrum. Do we want change or do we want to complain?

Who doesn’t realize that our modern world is not serving the majority of us? Probably not even 1% – do you know anyone? We all know the banks have gotten away with theft. We all know politics has been, and is being further, corrupted by money. It’s not difficult to understand that burning millions of barrels of oil into the air every day and dumping tons of man-made chemicals into our waters is affecting our environment detrimentally. Let’s not do ourselves a diservice: we all know that “things ain’t right, and something’s gotta change”.

Our predicament is not in dispute. The solution is.

The fundamental obstacle to a solution is complexity. The reality of our modern world is that it is complex: the banking system is complex, sovereign accounting is complex, the interdependencies of our environment are complex. To understand why writing down half the value of some debts in one of the smallest economies in the modern world could affect the political stability of the largest country in the world is complex; to understand why the largest country can’t just step in a fix that problem is even more complex.

There’s a perfectly natural resistance in the Occupy movement to adopting a “simple set of demands” because, consciously and unconsciously, we all understand that our predicament will not yield to a simple solution or short list of demands. Matt Taibbi, one of the most dogged and brilliant journalists on the financial beat, recognizes this even as he offers a short list of key changes that could be made to address the specific problems resulting from casino capitalism in our overweight financial sector; but, good as his list is, it does not address why we have an overweight financial sector in the first place.

The Occupy movement is a protest movement. It takes its name and its inspiration of the occupation strategy employed by the revolutionaries in Egypt this spring, and it is stirring the wider public to more open consideration of changes that seemed inconceivable only a few years ago. But the difference is that the Egyptians were revolting against a dictatorship and they could coalesce around the simple demand that the dictator be removed; in contrast the Occupy movement is almost exclusively active in wealthy democracies, and cannot reasonably demand the removal of a government chosen by the people a few years ago and available for replacement in a few years time.

The lack of a simple set of demands is not a purposeful tactic of the Occupy movement, it is the manifestation of an understanding that the problems are more complex than a simple list could address. Housing, healthcare, tax policy, the environment, social security, employment and inequality are all prevalent issues expressed in the Occupy protests, and such a broad agenda does not lend itself to a simple list of demands. The protestors can point to the simple manifestations of the problems in their lives, but they also know that any real solutions are going to be complex.

To move forward we need to remember that what appears as complex is in fact just lots of simple things seen at once. And while you cannot solve a complex problem with a simple solution, you can solve a thousand simple problems with a thousand simple solutions. This is the key to system change: it’s not one big solution, it’s a million small solutions.

Self-evidently: every aspect of human society has been created by us, and so it can be re-created by us. But we did not arrive here in one stroke, we are where we are as a result of the culmination of millions of small and simple decisions taken by people like us. When democracy arose it was the next vital step in enabling the broadest possible collective application of decision making to complex problems; and it lies before us now with the same urgent potential that drove its early advocates with such zeal. The short list of demands can be replaced with one: “Occupy the Ballot Box!”

We do not need anyone’s permission, we are not dependent on anyone else’s favors or attention – we are the ones who can bring about the changes we need, one decision at a time. We already have what the Egyptians in Tahrir Square died for: the right to select our own government.

If you support the Occupy protests you must take the next decision and vote for real change. If there’s no one to vote for, you must stand for change yourself – you don’t have to be perfect, you don’t have to know it all, you just have to care enough to be one of a million decision makers who will contribute to the long list of solutions. If you want to stand for election but need a broad platform that fills in and addresses the complex issues raised in the Occupy protests, take what you want from the Standards of LIFE and make it your own. We will vote with you, we will stand with you and we will bring change to our world together.

More money is not the answer

We need to occupy our communities and demand less money, rather than occupying corporate spaces and demand more money.

More money for banks. More money for governments. More money for small businesses. More money for social services. More money for everything – who could disagree with that!?

Apparently the US and the UK are so short of money that their central bankers have had to print trillions more just to keep the wheel of society turning. Banks whose capital base consists of nothing more than bits of paper have apparently run out of the ability to write more bits of paper and now need others to print paper for them. Whole nations that voluntarily gave up the right to print their own pieces of paper are apparently on the brink of collapse without someone else lending them more bits of paper.

This situation is evidently insane. The problem is NOT too little money! The problem is TOO MUCH MONEY!

We talk of not being able to provide for our old age security without money… horse shit! You’ll only need money if no one else will help you. We talk of unemployment, when there is evidently so much basic work to be done around us building and maintaining and improving our communities. We have come to conceptualize ourselves as living in a world of individual separateness in which transactions can only occur when greased by the flow of printed pieces of paper. But this concept does not withstand even the merest scrutiny, in fact it requires deliberate denial all the time. We all know that we are people, living with others and largely dependent on each other to get through any single day. We are dependent on each others good graces, compassion, empathy and generosity – even for the most basic restraint of not running us down with their car in the carpark!

We have not run out of money, we have just run out the capacity for money to substitute for reality.

The frail reality of the theater set we have built to act out our life-play in is upon us. Soon it must surely become too obvious to ignore: neither we, nor our world, are built from money. We are flesh and bone progeny of the earth beneath our feet, and “our world” is but a social construct designed by us to support our huge number.

Money has a role, an important role, but it is just a role in the wider context of our society. Enterprise is a natural aspect of human society, and business is a good thing. But lack of money and lack of economic activity are not what ails us – there isn’t enough money in all the world to fix our social disconnectedness. Money cannot be used to pay for everything, it is an instrument for the exchange of surplus value and if we try to use it as a substitute for the value of life it loses its value, and its role collapses. This is the lesson of our times: we must learn to see the reality of our mutual interdependence and lose the illusion of separateness that our plunge into industrial capitalism pulled over our eyes.

We need to occupy our communities and demand less money, rather than occupying corporate spaces to demand more money. When we start giving ourselves the right to live in the reality we are already in we will not need to protest others to give us permission.

LIFE SPAN – 2011.08.10 – Fire, Riots & Remedies

LIFE SPAN 2011.08.10

Situational Policy Analysis & News from LIFE

Subscribe at lifespan@standardsoflife.org

Situation – No Growth without Fire

The industrial world is trapped, surrounded by a ring of fire. The only way forward for them is to “grow their economies”, but they are finding that they cannot grow. They cannot grow for two reasons, a double ‘liquidity’ trap:

  • Their economies are based on oil, and every time it looks like growth might be picking up, the price of that liquid shoots up and sucks the gas out of the engine, so to (s)peak.
  • There is insufficient ‘demand’ (i.e. people can’t afford to, or won’t, buy).

Today’s industrial economies everywhere are hydro-carbon economies: they are reliant for the majority of their power on oil, gas or coal (except France at 78% nuclear – see SPAN 2011.05.01). The supply of these non-renewable resources is constrained and possibly dwindling, so whenever the expectation is that industrial economies will grow the price of these energy resources goes up, the higher the expectations are for growth the higher the price of the energy. Basically we are in a trap, the cost of growing is too high and any wealth generated by growth is syphoned off to the sellers of oil, gas and coal.

Demand growth is non-existent because wealth-creating production has been separated from wealth-spending consumption. Production is now located in economies that cannot afford to consume the output, and the proposed consumers are located in economies that are no longer producing sufficient wealth because the production has been relocated to somewhere where people can afford to consume even less. This is true of Germany, USA and just about every other industrial “economy”. So, on top of the heavy debt burden that people (aka “consumers”) in the developed nations have assumed, their means of wealth generation has been removed.

There are two options proffered by the old, left of center traditions: increase government spending and borrowing to increase aggregate demand, and increase the supply of money so that money is so cheap it will be worth investing in almost anything rather than have it lying idle. Both of these have been tried in the current situation and both are failing. Governments and people are already so debt laden than they cannot borrow any more without reaching evidently beyond their capacity to repay, so they cannot spend any more without raising taxes, meaning that they would not be increasing aggregate demand. The second option of increasing the money supply has already been done as much as it possibly can be, and now central banks are tapped out and in a ‘liquidity trap’ (where printing more money does nothing, and interest rates cannot be lowered because they are already at 0%).

The situation is terminal. Without growth in demand, there cannot be growth in the economies; and without economic growth pretty much every nation’s debts are unserviceable and, therefore, so is the entire world financial system. This is a serious situation: for the last 100+ years we have been investing the security of our civilizations in the development of an internationally and intercontinentally accepted trading system (aka ‘finance’). We need a way out of this before too many people notice the emperor has no clothes, otherwise our common advances in civilization will be set back by more than a few riots. This is not to say that we should save the bankers, far from it! But we can transition peacefully to sustainable prosperity, if we decide to – it takes more work and greater courage than sitting back and watching it all burn down, but that’s what being civilized is all about.

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Policy – Fighting Fire with Water

There are two ways to grow without running straight into the fire:

  • Unleash the internal markets in our local and regional communities.
  • Decarbonize our infrastructure.

Deliberate policies focused on these two objectives will deliver wealth-producing growth in the economies and societies that have the foresight to enact them. And the industrial societies are best placed to engage in them.

The water that will nourish our local communities is symbolized by water itself: water is a natural resource that everyone recognizes as being the free entitlement of everyone else, to procure in sufficient quantity to sustain their life. Through this easy example we reveal to ourselves that we all believe that everyone else has the right to the bare necessities of life. Now if we take that insight as a principle, we can easy develop a social structure that embodies it as policy, and in so doing we unleash the natural microeconomic potential of our societies to generate wealth. There is no such thing as unemployment, there is only wasted time.

The most urgent task in front of us is also where we will be able to generate the greatest wealth: developing and modernizing the infrastructures on which our civilization stands. We have much work to do to simply achieve the basics of clean water for everyone and renewable energy for all; these two endeavors will keep a generation busy in productive work.

But both of these simple turns require that we deliberately develop policies in our societies that make them a priority and a reality. That means having governments aligned with them, and that means electing representatives who will ensure they are the priorities. Are you waiting for someone?

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Analysis – A Bonfire of the Polities

The riots in London, the student protests in Chile, the drug wars in the Americas, the uprisings in the Middle East and the protests in China all point to the same chasm separating the ruling polities and the politics of the people. Even in the most established democracies we have disjointed the interests of the ruling classes and the interests of everyone else. To see the politicians consistently and continuously act against the interests of the great majority of the people they purport to represent, you’d think that they’d have to lie to get elected!

Here’s a sampling is widely held opinions in the populaces of today’s industrial ‘democracies’ that the elected politicians don’t seem be able to bring themselves to enact:

  • we shouldn’t be imprisoning people for taking drugs
  • better quality education needs to be more widely available and more accessible by all
  • nuclear power is just too dangerous and too badly managed to be better bet than renewables
  • we need to do big things to decarbonize our infrastructures now
  • the banks should be working for the people, not the other way around
  • banks that go bust, should go bust
  • there should be more social services universally available, especially medical care
  • more local control
  • more responsive, accessible and accountable politicians
  • no wars, no arms trading, no nuclear weapons
  • more freedom and better information

There is a basic disconnect between the people and their politicians, and lot of that has to do with scale – the world’s population has multiplied many times over and we are still using the same government structures we were 100 years ago. Without multilayered democratic structures we cannot have accountable representation.
Fixing the disconnect is going to mean making big changes to the way we organize ourselves and our politics, so we have to be prepared to make big changes. We are going to have give up on our “not as bad as the other guy” voting, we are going to have to accept that we are all in this together and we are going to have to grow into our full responsibility for each other and the planet that homes us. Many of our tired attachments will have to go onto the bonfire if we are to escape the backdraft. Burn, baby, burn! It’s OK, it wasn’t working any way… time to try something new.

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News – LIFE Party launching in the UK in 2012

Starting next year the LIFE Party will launch in the UK to run for the 2015 General Election – to win! We will be looking for strong local candidates to stand in every constituency on a LIFE Party ticket to bring responsive politics to every corner of the land that is the grandmother of democracy. To be part of the movement that will bring sustainable prosperity to the UK and then the rest of the world, send an email to uk@lifeparty.org and we will keep you informed of developments as they happen.

This the second issue of the newsletter from LIFE: Situational Policy Analysis and News (SPAN). LIFE SPAN is published online and provides more in-depth coverage of situations at the forefront of public policy at the current time.

To keep information flowing we encourage you to sign up for direct delivery of LIFE SPAN to your mailbox, so that any disruptions in the availability of Facebook, the blog site or the web wiki site do not affect your ability to get the latest news and updates from LIFE. Just send an email to lifespan@standardsoflife.org and we will add your email address to the distribution list, you can always do the same to unsubscribe at a later date if you want to. We will never share your email with any other organization.

A Brief History of TEA

Total Economic Awareness (TEA) is used in this article to describe a philosophical framework, adopted by many people today, in which every activity is perceived as being of monetary value. It is not entirely new, King Midas had a touch of it, but it has never been so broadly adopted as it is now that it has become a defining feature of industrial capitalism. It is worth understanding a little about the evolution and development of TEA so that we can perceive it more accurately, and determine where it has infected otherwise functional systems.

TEA is essentially a completely commercial view of the world, encompassing both living things and inanimate objects. It is the “business” view of life, a mindset that sees everything as tradable and therefore worth something that can be traded for something else. In theory there is nothing wrong with this, and it is used in the theoretical study of economics; in practice, most traditions and religions warn against its adoption as a singular focus, or its use as an exclusive lens for life.

In the pre-capitalist world there were always some who adopted a TEA mindset, and they became the bankers and traders of their time and place. But their actions were always a minority of total activity, and they existing inside a wider context of other frameworks that had greater standing in their society, like religion and culture. It has only been in the last 50 years or so that TEA became such a widely adopted world view, and that is has become the definition of culture in certain societies; so much so that people refer to themselves as living is a “capitalist society” in which economics has come to define the culture they live in. This increase has been spurred in recent decades by the adoption of fiat currencies, which have allowed so many more people to avail themselves of greater wealth. The early industrialists and oil men at the turn of the previous century adopted TEA as a brazenly deliberate approach to life, developing grand plans for their businesses in which people were simply units of resource, borrowing the dislocated condescension of the aristocracy that preceded them. They set an example of grand achievement by developing huge industrial empires and amassing great fortunes without regard to the toll extracted from the ‘resources’ they used. The damage caused by their activities was obscured by dramatic advances in production and technology, and by their industrial contributions to war efforts.

In the middle of the 20th Century, as fiat currencies replaced gold standards, the example set by the early industrialists was adopted more and more broadly by the populations of the industrialized countries, encouraged by the innate desire for competitive advantage and the apparent absence of consequences. The early TEA adopters never had to acknowledge the real support provided by their societies, which constrained their excesses and caught the fallout that they ignored. So long as the purely commercial world remained a minority of all activity and was constrained to its own sphere, the TEA mindset of a minority could not destabilize the society.
But the untrammeled pursuit of advantage through wealth has a limit, and that limit is defined by the size of the consequences that it ignores (i.e. the extent to which it is exploitative). If 20% of the consequences are unaccounted for, then 80% is the maximum TEA penetration that a society can tolerate; if 50% of the consequences are ignored, then 50% is the maximum. But the theoretical maximum TEA penetration into a society has to be modified by the amount of social support that is present by default, without any commercial activity, and that is, at a minimum, 20%, rising to 50% as the prosperity of a society increases.

The formula for determining the maximum penetration that a society can tolerate is:
Population – Default Social Need – (TEA Penetration x Exploitation Factor)
Assuming that TEA activity has a 20% exploitation factor, then the maximum penetration is 65% is an underdeveloped society with a 20% default social need
100 – 20 – (TEA Penetration x 20%) = 80-20% = 65
and 40% in a developed society with a 50% default social need
100 – 50 – (TEA Penetration x 20%) = 50-20% = 40

The absence of fiat currency in pre-industrial economies meant that TEA penetration never reached much above 10% or 20% and could easily be tolerated, even if the exploitation factor was greater than 100%. If exploitation factors reached up into the 300%-1000% range (slavery) then those activities had to be exported to remote lands (colonies) so as not to destabilize the domestic society. The domestically sanitized presentation of the wealth acquired from TEA exploitation abroad gave it a legitimacy, and allowed the domestic audience to focus more on the benefits of the greater prosperity than on the costs of the fallout from the exploitation.
The introduction of fiat currencies effectively removed most of the barriers to broad adoption of TEA and so the only limit on its growth became the tolerance capacity of the society. The concurrence of increased access to wealth resulting from fiat capitalism and the growing dependent demography, caused by increased life expectancy and greater education requirements, created a collision course between the penetration of TEA and the maximum tolerable penetration rate for TEA. It became a race for individuals to adopt TEA (commonly known as the “growth of the middle class”) before the social tolerance level was reached, meaning the point at which there would be no more room on board that bus.

Constraining the exploitation factor allows TEA to penetrate society at closer to its maximum percentage, and in the beginning of broad TEA penetration this was an almost universally adopted convention – manifested in “a growing middle class with strong labour unions and safer workplaces”. But, as the maximum potential TEA penetration approached, it didn’t take a rocket scientist to figure out that even if exploitation was reduced to zero there still wasn’t room on the bus for much more than 50% of the total population of a modern society. So some people adopted the ultimate TEA rationale, which was to increase the exploitation factor by exploiting those running to get on the bus. If there wasn’t going to be enough wealth to give everyone comparative advantage, then you’d may as well stop playing by even the most basic social rules and adopt TEA as a total philosophy, in which those who didn’t grasp the finite nature of TEA should rightly be the victims of it themselves. This final and terminal stage of TEA is where we are today, in which a small minority of TEA adherents have callously figured out that their own advantage is best acquired through the maximization of exploitation. This maximization is achieved through the deliberate obscuring of the exploitation’s effects at the same time as the cynical promotion of TEA. Examples of this terminal TEA include denying climate science while promoting consumer credit to boost wasteful product consumption, and complete destruction of Appalachian communities to produce climate destroying coal.

An alternative to TEA is here.

Wake up!

Sleep-walking would be a particularly tragic way to go. After all that evolving, developing and civilizing, to just sleep walk into oblivion would hardly seem to do those millennia justice. The good news is that there some fairly sharp jabs to the collective ribcage happening, and there seems to be some awakening.

America makes for a good example because its big, and when a giant is sleepwalking, you can see the others in room scurrying to get out of the way. Mr Obama is a nice enough guy, and that guy Ryan looks decent, but they are both selling a load of twoddle. A 10% cut or a 20% cut? Either way the giant’s pants will fall down, and he’ll trip. Last week Obama warned the good people of the USA that in 14 years from now (2025) the amount of taxes paid would only be enough to cover pensions and medical costs for the poor and the elderly. Wow! Except that: the taxes paid today (2010) are only enough to cover pensions, medical costs for the poor and the elderly, interest on the debt and the other mandatory programs – the entire military and discretionary budgets of the US are uncovered! No education, no transport, no infrastructure, no defense! See for yourself.

This economic model doesn’t work, it simply cannot add up; no matter how many cuts are made or how many taxes are raised. Total Economic Awareness (TEA) is bust – not everything can be priced in dollars and paid in dollars. The TEA Party are the only honest ones about this: their solution is to disband society, every dog for itself, and devil take the hindmost. That’s the only economic model in which TEA works, and it’s not a world I want to live in, do you?

“Can’t we just go back to where we were a few decades ago?” (Old liberals ask some version of this simple question, born of a lifetime fatigue of fighting the good fight and a nostalgia for less urgent times.) No, we can’t. We can’t because we no longer live on borrowed infrastructure, with swollen productive demographics, and easy exploitation of a ‘third world’. Sorry, those times have expired and now we have to deal properly with billions of people, a finite planet and honest respect for everyone’s rights.

We didn’t pay for what we’ve got.
We’re not paying for what we’re using.
We haven’t saved for what we need.

This not a budget balancing problem, this is a philosophical realignment problem.

If we don’t want to live in a TEA-dog-devil world, what’s the alternative? The only real option is a universal-social-love world. It so happens that that is also the cheapest, most sustainable and funnest world to live in!

Let’s get some clarity about the world we do actually live in, so we can be clear about why TEA economics doesn’t and won’t work. We live in relative peace, with fairly good healthcare and decent nutrition: that means that our society has a “balanced demography”, in which less than half the population is out of school, able bodied and under retirement age. We live on a warming planet, on which the next 50 years of climate instability are already locked in by our actions during the last 100 years: a healthy, sustainable society has to have the kind of infrastructure that we will have to work really hard for several decades to build. In a multi-polar, mutually-respecting world, a prosperous economy cannot be dependent on the exploitation of other people, stored energy or the waste of resources: that is going to require a really fundamental reorganization of our society and its economy. We need to be able to rebuild our global infrastructure for sustainability while we support a majority of our contemporaries, without exploiting each other or the planet.

Is it starting to get clearer now? Are we going to get to where we need to go, in the time we have available, with spending cuts and tax rises? No, tinkering with the percentages simply won’t do it. Universal Social Awareness (USA) is the route to understanding how we can rearrange our social and economic structures to achieve what must be done in the coming decade or so. As we wake up we will start to see that our mutual promise of social support is not properly represented in a cheque, and when it is delivered in kind instead it liberates our economy, empowers our democracy, and liberates our nature.

Go to the wiki and read about how simple changes to the way we deliver social security, organize our democracy, and pay for it all, provide a path to a future we want to live in.

Peace, love and awakening.

Social Security is Serious Stuff

If you think that social security is the generous expression of care for others in a civilized society, think again.

This may come as a surprise to many Americans, even a few Europeans: a functional social security system is a vital underpinning for a capitalist economy. Without functioning social security, there is insufficient society to support a vibrant economy; social security systems actually catalyze economic activity, and the prosperity it generates.

There are other vital reasons for maintaining a functioning social security system (a basic social “safety net”): maintaining social peace, elevating confidence, satisfying our natural empathy and improving sustainability. But even without those reasons, our economy simply cannot prosper without social security. It’s serious business – social security is really important. It isn’t a policy “option”, social security is the imperative at the root of all the things we cherish about our peaceful and prosperous life.

In the face of massive debts and monetary instability, our “Total Economic Awareness” (TEA) delusion jumps up and we make the kind of mistake that everyone makes in a panic: we grasp for simplistic, obvious solutions. No money left: OK, stop spending it. That’s the kind of reaction you get to apologize for later, in your personal life (so long as you didn’t destroy something or do something unforgivable) but when you’re a sophisticated, modern society, that kind of reaction just won’t do. We didn’t come this far, or get to this point, without a lot of careful attention and wisdom gained from many experiences – we need to remember that, and cultivate the poise that allows us to make sensible decisions about serious matters at important moments.

The current fashion for degrading the social security of our societies, as a means of supporting huge debt burdens, is extremely dangerous and very short sighted. And this is happening just as we enter the times when climate instability is likely to test us all.

The reasons why social security is an absolutely essential foundation of our society include:

  1. Our social cohesion is fundamentally dependent on the maintenance of basic life services for everyone
  2. The health of our economy is dependent on broad economic participation, both as producers and as consumers
  3. Innovation requires risk taking, and social security encourages risk taking
  4. Situations and circumstances change: our societies and their economies need to transition as smoothly and quickly as possible
  5. The rule of law and the control of crime are dependent on broad participation by all
  6. The quality of our democracy is dependent on an educated, informed and involved citizenry
  7. Our ability to withstand shocks and natural disasters is heavily dependent on our social cohesion

Social security is not an optional, luxury expression of generosity, that we can afford to do away with when money is short. Social security provision is an absolutely essential, basic building block of a peaceful, prosperous and sustainable society – without it, peace, prosperity and our survival are all endangered.

How do we square that essential nature of social security, with the budget dilemmas and economic weakness of these times? To resolve this conundrum we must revisit what it is that makes up the essential nature of “social security”: it is the provision of personal security from the elements, hunger, sickness and depravation to each and every member of our society. This is not a monetary transaction, it is a social intention. We will not make our way out of this until we fully grasp the proper nature of social security.

In the Standards of LIFE we have modeled the impact of delivering social security as a set of universal services, and found that this not only fulfills the essential nature of social security, but has positive knock-on effects across the economy and budgetary process that address the concerns of fiscal responsibility and fosters sustainable prosperity.  We must solve our budget problems, resolve the monetary dilemma and build sustainable societies, all at the same time – and the only way to do that is with the parallel adoption of universal services and micro-economics.

Read more and find out how to fix our problems without breaking our societies at www.standardsoflife.org.

Money Flows

Hot money flows will not save the bankrupt status quo.

This week two news stories pointed to an issue that, wish it were otherwise, demonstrate the need for fundamental system change. The first story regards the fortune amassed by the Mubarak family during their rule of Egypt and the second concerns the massive scale of the corruption afflicting Indian society. Read the comments after the Indian article to get a real grasp of how this kind of corruption affects the core of a society down to the smallest neighbourhood, and this story that reveals the extent of the theft of public property in Egypt.

Where do these trillions of ‘hot’ currency go? They go into banks in the Western industrialized nations and their lackey tax havens – these three components form a coherent whole, interdependent on each other. This is colonialism by corruption, and the citizens of the beneficiary societies are as guilty of complicity today as they were 100 years ago. If you live in the West, don’t feel bad about it: you’re as much a victim as the citizens of the new ‘colonies’, because the same institutionalized theft is robbing your neighbourhood of resources just as much, through tax avoidance.

Why is this tolerated? Well it’s not tolerated by those who can’t do anything about it, in Egypt and India; they are just in a state of powerless despair. It is tolerated by those of us who can do something about it, because we have been unwitting clients of the system. The availability and use of debt to finance our distracted acquiescence has been the magician’s move that has drawn our attention away from the true play that is being made. In this trick there is a fine balance that the magician must strike, wherein the audience feels like it is getting more than it deserves, without actually getting real benefits. Like any sidewalk hussler, when the opportunity comes along to really cream a willing punter, the escape requires all parties to feel sufficiently guilty that no one feels entitled to recompense. This where the citizenry of the West is: asleep at the table, engorged on the fake food served up by the chefs in the kitchen while they resell the real food out of the back door of the restaurant to their buddies on the black market.

What can be done about it? The complete reorganization of the banking system. Preferably a coordinated reorganization encompassing the US, the EU, the UK and Japan; but even a principled stand by one of those financial centers would put the cat amongst the pigeons enough to disrupt the system and lead to change over the medium term.

What are the consequences? Without the hot, secret money Western banks will not be able to generate the profits they do today, nor would they be able to support the same level of employment. The fall off in tax revenues and employment in the client states would have to be offset, requiring a fundamental reorganization of commercial and social infrastructure. The net effect on tax revenues to Western states might even be positive, as banks pay a smaller percentage of their profits in taxes than the individuals and corporations who use the banks to avoid tax would have to pay on their incomes if they were properly declared. Potential benefits to non-haven states would be massive improvements in social wellfair, but would only accrue if accompanied by a significant democratization of their political systems – that democratization would be much easier to achieve without banking system support for corruption.

When will this happen? When the balance of benefits to the citizens of the haven states falls below even. The citizens of those haven states have already assumed the burden of the 2008 bank bailouts, but they have accounted for that with debt, so the full reality of those costs have not yet been bourn. The “plan” is to meet those debts over the coming decade by leveraging the same financial colonialism and conjuring (the failures of which created the debts in the first place) so that the massive increase in the money supply (aka ‘printing money’) that was used to account for the debts can be matched to grown wealth. This plan relies on the perpetuation of the existing banking system, complete with inflows of hot, corrupt money from all over the world. This is why today’s Western leaders will connive, lie and obstruct as much as they think they need to to protect the status quo, because they do not know how to plan for or adjust to a fundamentally reorganized society – they are not evil, they are just clueless.

The troubles with the “plan” are already becoming obvious. First is that the wealth that is being created is being confined to very small slither of the populations of the haven states, and, in a superb irony, they are using the same financial corruption to avoid adding to the wealth of states they inhabit. Second is that the debts cannot be satisfied with the growth that is available, and must be supplemented by sucking more wealth out of compliant tax payers through ‘austerity measures’. Third, none of the first two plans is happening fast enough to stop the excess money causing inflation, further exacerbated by real increases in the costs of raw materials. These problems mean that the haven states will start, this year, to raise interest rates to combat inflation, and in so doing push the balance of benefits for their average citizen firmly into negative territory. 20% youth unemployment, rising basic living costs and a kleptocratic ruling elite are the perfect ingredients for a revolution – witness North Africa, January 2011.

In the next few years, as real social disruption develops in Western states, a serious debate will emerge around whether completely reorganizing our economic and social frameworks is actually any less disruptive that attempting to maintain the old status quo. If we desire a constructive process of change we need to start thinking now about how that reorganization can manifest positively – that’s the reason to read and contribute to alternative thinking like the Standards of LIFE.

Social supremacy

The ascendancy of society in a post-evolutionary age.

Nowadays we like to talk about the supremacy of our constitution and the ascendancy of market forces. We like to think of ourselves as living under the rule of law and we tend to think of our good lives, or our bad lives, being the output of our economies. After all, the muscular development of our economies has brought us the fruits of development and our societies are held together by the rule of law, right? Well, true, up to a certain extent. But we are in danger of missing a crucial truth that underlies these facts: law and wealth have existed before.

Great wealth and strong legal systems have been features of human empires before now: Egyptian, Mayan, Roman, Mongol, Ottoman, Russian and British empires, to name but a few, all had strong legal systems and generated enormous wealth. The difference between what exists today and the history is not the mere existence of law and wealth, it is the manner and tone of their application. This is the first hint at what we might be missing in our perspective of the current times. The fact that we have laws and wealth is not the defining character of our times, it is the nature of our laws and our wealth that distinguishes us from our forebears.

What determines the nature and manner in which law is applied, or economic wealth is experienced? It is the culture and norms of the society within which they operate that shapes the form and function of law and wealth. To think of the value of our society as the crude existence of the rule of law and the freedom of markets is to miss a crucial element; the application of our rules of law and the operation of our free markets are critically dependent on our social standards to deliver the preferred outcomes. Our society is not shaped by law and wealth, our society shapes our law and wealth. If you are thinking some version of “Well duh! Of course!” at this moment, then dodge this: you are not the recipient of the benefits of this system, nor are you the victim of it, you are a critically important shaper, protector and developer of this system. The supreme determinant of the quality of our system is not our laws and economies, it is the social framework within which those operate; and we are all individually and collectively responsible for the nature of that framework.

Understanding the supremacy of our social constructs as the defining framework that determines the quality of the outputs from our other mechanisms is a crucial step toward delivering better outcomes. Only once we accept responsibility for our role in determining the nature and norms of our society can we expect our laws and our economy to deliver the outputs we seek. Our laws and our wealth cannot protect us from that which we fail to take responsibility for, they are dependent for their efficacy on us first.

So it is the nature and the character of the society within which we define our laws and economies that determines the results. We cannot expect that our laws will defend us from the flaws we establish in our basic social constructs. Laws against profiteering will not prevent profiteering in the delivery of services that we outsource to profiteers. Laws against the trade in substances that we desire will not prevent the trade in those substances. Laws against unequal treatment will not create equality. Only when we have taken responsibility for establishing our standards will the mechanisms deliver results – intention is everything.

A crucial understanding that evolves is that we are not a society made from laws and economics, we are an intentional society that creates laws and economies to serve our society. A constitution does not define our society, it reflects our society. Free markets do not create our society, they serve our society.

The challenge that this presents us is that of being responsible for shaping our society, our environment, our framework. As creatures evolved from millennia of being passive recipients of our environment, we are not yet used to having to take responsibility for creating it, we are more used to seeing ourselves as actors subservient to the scriptwriter. But humans are no longer the passive recipients of evolutionary constraints, we have become active participants in defining our evolution. This presents an huge increase in our responsibility, and one which we tend to neither accept nor enjoy; but fact is truth and we have no escape from this development.

Talk of being the hapless products of our environment, of being the vassals of something bigger, of being the lucky recipients of the fruits of external systems, are all abdications of our responsibility; albeit a responsibility we wondered into unintentionally. We cannot get out of our way and everything will be alright, we have surpassed the point of no return on the evolutionary path and now we have no choice but to take up the mantle and grow into our role. I’m not sure there ever was one, but now there is no such thing as a self-directed free market that will serve our needs; our needs can only be met through intentionally directed activity. We cannot be slaves to a constitution written two hundred years ago and founded in traditions even older than that; we must accept the responsibility to develop a constitutional framework that suits our times and the nature of our modern predicament. Much of the nonsense spouted in the name of politics today is mere cowardice and ignorance in the face of an inescapable need to face up to the reality that humankind is now a partner in evolution, and not just a product of it.

Abdication in the face of necessity is not a strategy, it is pure childish folly. If you’re young enough to be pretty sure of being alive in 2030 you’d be a fool to let the mirage of ancient fallacies deter you from action any longer. And if you’re old enough to be pretty sure that you won’t be alive in 2030 you’ll go down in history as the most selfish and ignorant generation of the entire human race, if you don’t come alive to your responsibilities now and stop hiding behind the skirts of dysfunctional democracy and the hollow promises of dysfunctional economics. You are the determinant of the nature of your society and your society is the determinant of the output of your laws and your economy – take up the mantle, wake up your heart and grasp the nettle that is our common responsibility to intend our future, not accept an impoverished alternative.

Next Left

“It is clear that centre-left thinking is in need of radical reappraisal”, to quote from an Institute for Public Policy Research (ippr) paper entitled “Where Next?“, and which I recommend you read. The paper, subtitled “The challenge for centre-left politics”, is the outcome of a series of events on the subject and includes a summary by Tony Wright, Professor of Government and Public Policy at University College London.

The reality is that centre-left politics has been in dire need of new thinking since the 1970s when the oil shock put paid to the illusion of the imperial-welfare-social-democracy that was born out of post War social ambitions in those nations that were still riding on the subsidies of colonial pasts. When the resource origin nations suddenly demanded their price for their resource the industrial-welfare states had to reconfigure their economies to survive; and thence was born the modern capitalist-democracy in which the welfare of all was dependent on the abilities of their capital-finance agents to revive the same imperial exploitation, but this time in the name of capital instead of their Capitals.

What about the nascent rise of neo-socialist governments in South America, is that the next left? Unfortunately, while heartening in their self-determination, these examples are based on the same flawed socio-economic thinking that has just crashed neo-socialist governments in the old industrial world: a faustian bargain with the “masters of the universe” to bring the riches of resource exploitation and financial alchemy home to support their political ambitions. Not only do the New World resource-socialists risk being taken for a ride by the master manipulators, they also face the certain arrival of curbs on the very resources they hope to exploit, as the realities of atmospheric balance (to which they are most susceptible) start to bite.

It is clear that center-left thinking is in urgent need of radical reshaping, not only in the old industrialized nations but also in the New World and in the two great land powers without whose cooperation any such reshaping will be meaningless: China and Russia. A task indeed! But let’s follow the points raised by the ippr paper to see if we can’t see a way through to what’s next. At the core of the questions raised in the ippr paper is a reboot of the relationship between citizen and state in which the power that people have over their own lives is enhanced so that they can access the means of civilization for themselves, while the statecraft of government is reformed to provide core public functions and underwrite the results with its guarantee. This recognition of the legitimacy of the individual, along with the role of active government to deliver what individuals cannot, is the ground on which the centre-left must stake it’s camp. It is a citizen/service orientation, distinct from the worker/capital or market/government orientations of yesteryear.

A fundamental point raised in the paper is that now is precisely the right time to promote politics, in the face of widespread civic disengagement, as the means by which citizens confront common problems without recourse to violence. To do this effectively and credibly we will have to be open to institutional reform and even some constitutional reform. Enhancing our democracies to enhance the citizen-government relationship requires us to develop and implement better systems of representation, greater localism and a more transparent connection between voter and voted. The difficulties of delivering effective democratic control over the necessarily different levels required for differing purposes is a challenge that has not yet been met. The Next Left must come to bat with proposals, and open minds, to resolve the local through supra-national influence expectations of citizens. A system of multi-layer democracy that incorporates the principle of subsidiarity is the goal, and it can be developed by extending and enhancing what we have today, but not without some reform of our constitutional structures. We have to be prepared to bring this reality with us, develop solutions based on values and be willing to explain ourselves. When we know that local decisions are not well made in national assemblies and that national decisions cannot be made locally, we must embrace those facts in the adoption of a multi-layer structure that seats political power at the level appropriate for decision making. Citizens are not afraid of voting and they would rather vote for multiple assemblies than be disconnected from their right to influence. And when we know that a single transferrable vote in a multi-member constituency is the fairest way to vote, we must have the courage to lead with that as our banner for representation.

A new economic model is also vital. Governments need markets and markets need governments, that debate is done – what still remains is to establish is the basis for our future economy. We now understand that capital exists in relation to environment, regulation, people, society and unprofitable but vital needs: the new capitalism is a component of the total picture, not its foundation. In the Next Left the foundation of society, embodied in the vital service requirements of the people, is the responsibility of the people themselves and forms a foundation on which capitalism operates as a client system. Tackling the “poverty trap” and “incentive” problems inherent in the old welfare models remains critical because there must still be an infrastructure of support services in place that protect against insecurity and expand opportunity. The model that works here is that of Universal Services, whereby the cash-based welfare state is replaced by the delivery of the services themselves at the most local level, financed by taxes collected at the highest level.

Everyone has a stake in Universal Services and they fulfill the promise that links every citizen with the reason for having a state. But equally important is the effect that Universal Services have on the economy, on the ability of every person to participate and contribute to the society as a valid and valuable economic entity. It is at the local level that this effect is most pronounced as microeconomic activity is unleashed, complementing our capital-intensive industries. The economy becomes a client of the society and in so doing it develops a broader, more sustainable and less growth dependent nature. The guaranteed service levels implicit in Universal Services provide real accountability for local government, while directly linking citizens with the obligation to define priorities and accept that doing more of one thing will often mean doing less of something else.

So a framework emerges which combines the enhancement of democracy with a multi-level structure, the replacement of welfare with universal services and the placement of economic activity within the context of the society, not the other way around. This Next Left is grounded in principles and based on standards that provide a coherent narrative, placing the standard of life above the standard of living.

The Next Left must lose its predecessor’s reticence to tell its story, and paint a clear picture of a society that has intentionally moved beyond the democratic-capitalist model, that unashamedly takes responsibility for delivering the core public functions it is best placed to do, and which embraces the natural enterprise of the human spirit.

It’s time to stop asking what’s next, and to start answering that question. The Next Left is what’s next, and we’re all the ones who’ll do it.

Fundamental Rethinking Required

Why we won’t make it out of all of this without more fundamental rethinking.

If we think our economies, and particularly our government budgets, are in trouble now, just wait until we wake up to the true costs coming our way in the next decade or two. Balancing our budgets, using our existing system of economics, is about to go from difficult to impossible.

If the only problem the developed economies had to worry about was repaying their massive debts after correcting their budget deficits during a recession, then one could argue that a way forward can be found. However the challenge we face is greater, and we are going to have to fundamentally reform our thinking before we can turn our economics around.

There are clues to why our situation is more complicated in three factors that underlie our already obvious economic dilemmas: infrastructure underinvestment, social support bankruptcy and global resource constraints.

Infrastructure underinvestment
Even without providing for investment in climate mitigation, the WEF estimates that we are running more than a $2 trillion annual deficit in infrastructure investments and replacement. It is likely that the USA, India and China will need to spend $2 trillion a year on infrastructure by themselves, the unfunded deficit across the globe is probably around 2 to 3 times that number.

Social support bankruptcy
Never mind that we aren’t meeting the basic sustenance needs of millions of children every year in the developed countries, the global targets that the UN set itself for “Millennium Goals” are being missed at every turn. On top of all the social support we are failing to provide and haven’t accounted for, we have a massive overhang of known social support costs that we have accounting for. The unfunded pension obligations of developed nations are over $100 trillion and those pension shortfalls will start to materialize in less than 10 years from now – half a dozen states in the USA will have bankrupt pension schemes by 2020, and that’s before the US federal system runs out of money between 2030 and 2040. The published deficits in existing social security systems and pension schemes are not a complete picture of the gap in funding for social security worldwide – that’s probably 10 to 20 times as large again.

Global resource constraints
The third leg of this upside down stool is the inevitable rise in the cost of resources as the supply of raw materials becomes constrained due to increased demand and higher production costs. This will add another $2 trillion or so to the burden of the global economy every year for at least the next 30 years, probably more likely it will be 50 to 100 years. A $65 increase in the price of oil (putting it back at 2008 prices) would add $2 trillion a year to the cost base of the global economy all by itself.

Just fixing the current budget and debt problems of developed nations will mean correcting an annual $3 trillion imbalance, and then attempting to pay back $30 trillion of debt over 30 years. Assuming costs remain stagnant and growth could be accelerated to 3% plus, these seemingly enormous problems could be coped with. But when you add $6 trillion or more of annual cost on top of these numbers, the global economy would have to achieve never before seen (and completely unsustainable) rates of economic growth to make the numbers work out. It just ain’t going to happen–something’s got to give.

What could “give” to correct this impending imbalance of economic mathematics? One or more of the following will have to give: peace and freedom, the global economy and “sound” money or our current, traditional perspective. Indeed, all of these will have to give if we don’t rearrange our relationship between society and economy. Without a reorientation of perspective we can only have one of the first two, and even then only for a short time.

As we think about and plan our societies, we have to carry this understanding with us: if we try and pay for all of our welfare and social services with money, we are trying to satisfy the non-wealth portion of our society with our wealth. Not only isn’t there enough wealth to perform this feat, we’re actually abusing the role of money in our society. It’s like trying to make water out of milk… it’s possible, but you’ll run out of milk before you have watered the cow.

We have become blinded by the amazing rise of the capitalist economy, and in so doing we have dropped the notion of “in-kind” exchange from our thinking and our imaginations; even though we know intellectually and emotionally that “the best things in life are free”. In the real world, the in-kind transfer of social support is a necessary and vital complement to the capital economy.

What we are missing is the very nature and meaning of money. Money is a means of representing wealth. Wealth is material value accumulated greater than material need. You would not hesitate for a moment to profess that the total real value of your life, your family and your community is greater than the sum of your money, and therein lies the truth about why our attempts to value everything in money is doomed to fail the basic test of mathematics. The total value of every society is greater than its total wealth, and any attempt to contain its value within its wealth will wreck on the rocks of reason, sanity and economics. And yet this is what we are trying to do when we provide money in lieu of the social support we intend to supply.

The “traditional” perspective, although it is actually very modern, is that everything has to be valued in currency. The shift we have to make is to revert to a more fundamental understanding that currency is a method of transferring wealth is part of an economic transaction, and not every transaction needs to be, or should be, valued in currency. There are quite obviously enough people to provide all of the required social support services, to build the bridges and to modify our infrastructures for sustainability; it’s just that we can’t afford to pay everyone to do all of these things. Why should we pay each other, in currency, to do these things? Are these activities wealth creating?

The reason we are running out of money is because we, rightly, understand and practice the science of preserving the wealth symbolized by our money, otherwise we’d just print all the money we needed to pay for everything. But we cannot maintain the value of money and at the same time value everything with money, money can only be a symbol of wealth. That portion of human activity that is not wealth creating cannot be paid for with wealth and still preserve the value of money. I do not feed myself with wealth, wealth is what I have left after I have fed myself. The fundamentally distorting spell we have all fallen under is that our society will fit inside our economy. We are so used to using money every day to pay for everything we buy, that we forget to notice all the things we do for others, and receive from others, every day without pay. Our society is bigger than our economy and believing that we can pay for society out of the proceeds of the economy is borderline insanity.

Before we get too heavy, let’s recognize that there is plenty that we should value with money, everything that represents a transfer of wealth, and that’s many things. But there’s a large portion of society that we must learn to value differently, almost like a separate, parallel currency, only without numerical denomination. That portion of society that is what we must have before we can consider ourselves to have wealth, must be paid for in kind, otherwise we will destroy our wealth. The basic necessities of life, without which wealth is meaningless, must be removed from the accounting system we call our economy. The way to do this is to establish a system of universal services that satisfy the most basic universal needs we all have, and without which we cannot consider ourselves to have wealth. When we provide these for ourselves and each other without payment, we integrate the cost of our social needs into our lives, liberate money for its intended purpose and can actually build functioning, sustainable economies that can balance their money books.

Eventually we will have to change our perspective, it’s our choice as to whether we decide to do it now or later. The longer we wait, the greater the pain; but I suspect we haven’t felt quite enough pain yet to entertain such a change in thinking. After all, letting go of our attachment to a concept that we believe makes the world understandable, is one of the hardest things to do. But once we do, the world will make infinitely more sense.

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