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.

Scale Matters

What do Spain, Japan and Croatia have in common? They are all suffering the consequences of industrialitis. Industrialitis is the inevitable malaise brought on by the failure to understand our economy as a function of our society, which mastaassizes into disease with the concentration of political power.

Business is actually a function of society, it is fundamentally dependent on the political process to create the conditions for commercial success. Businesses need legal systems, infrastructure, academic research and a host of other supporting conditions in order to operate successfully. It follows that businesses coalesce around political structures, and the level of which political power is concentrated is the level at which commerce is most successful. For the last century political power has been concentrating at the national level, and it is businesses that operate at the national level that get the most attention from national politicians. Some of this is a self reinforcing cycle, but once it has started it is certainly a self-perpetuating structure, mostly innocent but inevitably corruption also accompanies decision density concentration.

The true nature of human society is not adequately or properly represented in the concentration of political power at the national level, nor do national scale businesses harness the full economic potential society. Human scale politics and economics start at the local community and build up from there, and that’s how we need to arrange our political and economic structures if they are to serve the humans that comprise the society.

Spain, Japan and Croatia all have different problems, but they are all symptomatic of industrialitis, and their politicians are grasping for industrial-scale solutions, when what they really need to do is to rightscale their politics. In each case, the hollowing out to local and regional economic activity has followed concentrations of political power to the national level.

In Japan the result of their industrialitis is the loss of rural sustainability as commerce has focused in national and global scale clusters, necessitating economic migration to the cities where those businesses are located. Large-scale businesses are capital intensive and naturally gravitate towards geographic concentrations for their operations, a tendency that is only constrained by limits to market access. This is not a failure of the businesses, it is a natural outcome of their capital intensity. The national Japanese government has tried to employ national-scale solutions in an attempt to maintain the economic and social viability of its rural regions: top-down infrastructure projects, and subsidies. In the former, the national government allocates funds to build or improve infrastructure in rural areas, which results in temporary construction booms without sustained commercial activity. In the latter, a very commonly prescribed remedy in countries with industrialitis, the national government attempts to persuade industrial-scale businesses to do what is not in their self-interest, by providing subsidies and other financial incentives to locate some part of their operations in a region that they would not choose to be in, if left to their commercial instincts. Subsidies have the pernicious effect of corrupting the politics, the market and the businesses that accept them, and only further exacerbates the incentive for businesses to build and maintain political influence. It probably never even crosses the mind of most national politicians that the effective and sustainable solution to regional and local economic self-sufficiency is to devolve political power down to the regions and communities.

In Spain there is an employment crisis, with national unemployment at 20% and youth unemployment running at 64%. This symptom of industrialitis, caused by the concentration of financial capital at the national and supranational levels, is the result of a busted property and construction boom. The failure to develop local and regional economic activity independent of centralized, external capital has left the entire economy at risk, now that the global financial crisis has caused the flow of capital to evaporate. The national government sees itself as saving the regions by bailing out regional banks, but it is really just doing debt collection for national and international banks – everyone still has to carry the debt burden, but without the local and regional economic infrastructure to maintain commercial activity and employment. It probably never even crosses the mind of the average national politician that they need to devolve political power down, to get their economy working and make their society sustainable.

In Croatia people are coming out in spontaneous and leaderless protests against the failure of 20 years of “market capitalism” to deliver any improvement in their lives. The reality is that the national government has been concentrating political and economic resources at the top, while waiting for an even bigger entity, the EU, to rescue them by bringing large-scale businesses to their economy. In the meantime economic policy has consisted only of selling public assets to large, and largely foreign, businesses, further impoverishing their ability to develop internal, localized, self-sustaining economic activity. Their legacy of 20th century Communist centralized planning probably contributed to the failure to develop a more diverse economy, but the failure to devolve political power was the root cause.

When the Industrial Revolution started it developed on top of an existing economy that had local and regional fabrics, but during the last century the codevelopment of large-scale industrial commerce and national political concentration has led detrimentally to an almost exclusive focus on enabling national, and increasingly global, businesses. Many, and far too much of, modern societies have become dependent on the prosperity generated by large-scale industrial businesses, and the large-scale service industries that support them. We have neglected local and regional development in favor of an almost exclusive focus on national and international structures. But the reality of human society is multilayered, wherein each person lives in a community, that is part of a region, that comprises some part of a state; and that natural truth of our existence has to be reflected in the way we organize our power structures and economic fabric if we are to develop sustainable human societies.

This weakness in the sustainability of our societies is not confined to Japan, Spain and Croatia; it is ubiquitous and pervasive around the world. Until we acknowledge the multilayered nature of our human condition, we will not make the adjustments to our political structures necessary to enable more deeply rooted and broadly-based economic fabrics.

If Japan devolves political power to their rural regions, those regions will develop the marketplaces and infrastructure that enables local businesses to meet local needs. If Spain and Croatia did the same they wouldn’t be so dependent on external financing to provide employment for such large percentages of their populations. Every society has sustainable economic potential in the needs and wants of its population, but in order to to develop that potential into prosperity each society has to enable marketplaces at each level of social organization (local, regional, national, etc) where needs can be met by willing providers at freely floating prices. The Industrial Revolution spawned the capital revolution so that the creation and recognition of value was not constrained by physical representation, and this revolutionary development allows for accelerated prosperity in non-capital-intensive micro economies, just as it does in large-scale, capital-intensive ones.

A sustainable economy is: multilayered, scale appropriate enterprise operating in free markets, fostered by universal service societies that enable marketplaces for local, regional, national and international commerce. The prerequisite for a sustainable economy is a multilayered, scale appropriate free democracy.

Scale matters. We cannot look to industrial-scale businesses to satisfy local micro needs, anymore than we can expect national politics to satisfy local community aspirations. We humans are multidimensional beings, living in multilayered social configurations, and only a structural organization of power and commerce that reflects those realities will serve us and enable us to develop sustainably.

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.

New Economics

Along with the newly emerging democracies of the world, a new economics is desperately needed. The current economic model is at the end of its road and that is readily apparent to many savvy observers.

There are two factors driving the need for a new economic model:

  1. The desperate need for social and physical infrastructure investment
  2. The crisis of monetary management

We can see a new economic model by reconnecting with the truth of our existence: individual humans, born in relationship and seeking purpose – in that order. Understanding that sequence and priority, we can place our economy in its appropriate context: our economy is a client of our society. In so doing we can shed the delusion of “total economic valuation” (in which everything has a price tag), and clearly see that there is much activity that is not, and cannot be, valued in monetary terms.

In the new economics, social value is not accounted for with money. Demonetizing social value immediately transforms our economics; it makes investments affordable, protects the value of money and creates sustainable social structures.

Investments

We need to make some massive investments. The demographics of the developed world demands social infrastructure to manage the changing ratios of contributors and dependents. The demographics of the developing world requires economic infrastructure to support the burgeoning youth population. And the demographics of the entire world requires physical infrastructure for transitioning to a sustainable energy supply.

Among the recognized investments that we all need to make are:

  • education – life long, civic and skills
  • energy – replacing stored & extracted with renewable & sustainable
  • transport – leveraging the new energy infrastructure
  • water, food and health
  • shelter and sanitation
  • information, democratic accountability and transparency
  • investment in research, innovation and development

These investments are not only large, they are essential! We have to find a way to make these investments, and no one in the current economic modus has got a clue, let alone a practical path to their accomplishment. The most significant reason why none of the current practitioners has advanced any concrete ideas is because they are mired in the current morass that is modern monetary policy.

Monetary Mess

The worldwide crises in monetary management of fiat currencies has exposed the fundamental flaw of attempting to visualize all human activity as economic activity: the debt burden is unreasonable and unsustainable. This is resulting in the need to bankrupt national societies just to try and maintain a delusion of currency rectitude.

The economists and economic policy makers of today are stuck between what seem to them to be unreconcilable problems:

  • massive public debt
  • unbalanced budgets
  • unaffordable social security systems
  • currency credibility issues
  • inflationary pressures
  • massive investment deficits

Central bankers across the world, in the vacuum created by political inaction, are trying to balance the credibility of their currencies and budgets with massive debts and the need for growth and investment. In a world where prosperity is seen as a gift to the people from the bounty of commercial enterprise, these problems cannot be resolved. But they can, if we just pause for a moment and observe the reality.

New Economics is the only option

Into this world of monetary and investment crises arrive the newly emerging democracies of North Africa and the Middle East. The need to replace decrepit, crony economies with sustainable economies is a parallel requirement of the arrival of freedom and dignity. The demands of the protests are overtly political, but they are subliminally economic as well. What do they see when they look around the existing economies for inspiration for their new world?

None of today’s dominant economic models are providing a sustainable path to a future for their current adherents, nor would they for any new arrivals. Read this collection of essays from some of the preeminent economic experts of the day, and you will see that no one has a solution to the debt v. investment conundrum we are facing. The Western capitalist models cannot balance their books without forever pushing their debts out to the next generation. The Eastern capitalist models are mired in inefficiencies, corruption and environmental degredation that do not deliver sustainability, while also being dependent on the suppression of freedom and dignity.  Neither of these offers a model worthy of adoption.

The new, sustainable economics seats the economy firmly within the context of society and generates growth out of untapped micro-economic capacity. The new economics provides the wellfair necessary to support aging populations, enables affordable infrastructure to create a new energy platform and delivers vibrant growth for coming generations.

New Economics is the result of a three step process that yields sustainable prosperity, affordable investment and sound monetary management:

  1. Understand the economy as a client of human society
  2. Take responsibility for society by delivering social value through Universal Services instead of welfare
  3. Unleash the total potential for growth using modern communications to enable micro-enterprise

To preserve the peace we have, and move forward to sustainable prosperity, we all have to take the first step. Ask yourself: “Am I a human being, or an economic asset, first and foremost?”. I think you will agree that you are a human first; and so it follows that your economic value and activity is a subset of your humanity. That too is the valid order and construction for human society. The economy is a subset of our humanity and it is an illogical and impossible task to try and value all human activity in monetary terms. When we assimilate this understanding and stop trying to “pay” for our social needs, we can liberate our economy to fill its natural role in the firmament of human existence.

The structure of New Economics is laid out at www.standardsoflife.org in full. The principles that reconcile the seemingly intractable problems of today’s economic systems are also discussed extensively in this blog – select the Economics category to see a full list of articles.

Option 2 : Everyone is right

We need to cut our debts down to size. We need to invest in our infrastructure. Taxes reduce incentives, and need to be held to a minimum. Without education and research we cannot build a peaceful and prosperous society. The political system is unresponsive and corrupt, and needs fundamental reform. The financial industry is overweight, and needs to be regulated. Without enterprise we cannot afford our lifestyles, so we must support and encourage businesses. There are bad people in the world, and we need to defend against them. There is oppression in the world, and we need to support the rights of the oppressed. We must balance our budgets. We need alternative energy sources. We are too selfish, ignorant and introverted. We are empathic, loving creatures who all share common ancestors and a common planet.

All of that is true.

And there are the truths we dare not speak aloud because no one has their answers:

  • Capitalist economics is fundamentally dependent on a social safety net for its survival.
  • Humans have never before inhabited this planet with today’s atmospheric configuration.
  • Human-scale is not an option, for humans it is the only option.

In the face of all these seemingly conflicting truths many of us are dazed and confused. How do you lower taxes and spend on infrastructure? How do you regulate banking and enable commercial enterprise? How do you survive in a world of differences without a massive army? How do we get from the mess we’re in, to sustainable prosperity? Confused?

Confusion is only a very short term option. When you are walking in tall grass and you hear a rustle, you have a moment to decide whether you will change direction or speed; after a short time you have made your decision, even if you have not acted. Confusion is not a valid state, it does not appear anywhere in Nature except in the human mind. Confusion is the nexus of choice and contemplation, and it exists within the unyielding contexts of time and consequence. It is the curse on the flip-side of the luxury of choice. We cannot remain confused in our thinking and about our options for long.

It’s time to stop taking sides and start deciding.

Option 2

The choices we face are simple:

  • Option 0 : There’s nothing wrong and nothing needs to change (Ignorance)
  • Option 1 : Things need to change, and I don’t know what to do, but I am ready to support someone else changing them (Confusion)
  • Option 2 : Things need to change and I am changing them now (Action)

Which option are you taking?

In order to take “Option 2” you have to move past describing all the things you know to be true, and decide what to do about them. Everything in the first paragraph of this article is true, there is no sense in splitting one set of truths from another. Identifying with one set of truths might provide you with identity, but it does not move us closer to resolution.

It’s time to start talking seriously about what we’re going to do differently, about what we are actually going to implement in the next few years. We need to engage with solutions: real, practical changes we are going to make in our social, political economic structures now that will actually lead to a sustainable existence.

That’s what we are doing at Standards of LIFE – and we need you to join in. Take Option 2!

Infrastructure has never been commercial

Great civilizations require great infrastructure, and great infrastructure has never been a commercial endeavour. It’s time to face reality and get on with the job.

The great societies, those that have spawned the great advances in learning and development, have been built on great infrastructures. Those infrastructures have never been built by commercial enterprises operating in competitive markets. Great infrastructures (like the Egyptian, Chinese, Roman, Indian, Euro-colonial and American) have been built with public funds subsidized by socialized labour.

The greater Los Angeles area has over 20 million people, with less than 20 days’ food supply – if it were not for the roads and other infrastructure, built with public funds and socialized labour during the Great Depression of the 1930s, the entire LA basin could not survive for long: no food, no water, no power. There would be nowhere in the world to land a jumbo jet, if it were not for publicly funded infrastructure.

Now the world needs to move to a new energy infrastructure that complies with our planet’s laws of thermo-dynamics. This infrastructure, where it does get built in time, will get built by the societies that leverage public funds and socialized labour.

What is “socialized labour”? Socialized labour is labour that is provided at below market rates of monetary compensation, and it is available in three varieties:

  • forced – involuntary labour coerced by violence and manipulation, such as slavery and prison labour
  • reluctant – marginally motivated by meagre rewards and the threat of ostrification
  • cooperative – willing labour provided as part of a mutually recognized common purpose from which all will benefit

Which one of those models for socialized labour is likely to yield the effort required to build our new infrastructure?

Some version of forced labour was the choice of ancient civilizations, and some version of reluctant labour is the option provided by today’s social and economic structures. What we will need is a cooperative effort, and that will require social and economic structures akin to those proposed in the Standards of LIFE.

Our current preference for giving public money to commercial organizations, that operate using market-priced labour, will NOT deliver the infrastructure we need at a price we can afford. There isn’t enough money in the world to pay for the infrastructure we need – this is a fact that would be much more obvious to those of us sitting on infrastructure built by our forebears, if we weren’t. Think about it: we’re broke and we haven’t even invested in maintaining the infrastructure we inherited. This is serious and immediate, we must act now.


Option 0: do nothing

Option 1: fantasize about a different future

Option 2: implement Universal Services and start building our 21st C infrastructure


Vegetarian lions?

What kind of insanity have we fallen so easily into? When did we become so abstracted from what we know about ourselves that we started to swallow whole such counter-intuitive nonsense? Corporations with social “responsibility”, and public services that make a “profit”? How about vegetarian lions and wooden clothing? Or perhaps we should put sails on cars and wheels on boats?

Corporations that have awareness of the society that holds them, and public services that are accountable for their efficiency are both wonderful things; but let’s not let confusion permeate the proper roles for these different entities in our human sociosystem. Commercial enterprises competing in the market for the right to use limited resources, and public services striving to deliver the highest quality services on limited budgets, are both valid and vital components of a sustainable society and economy. It is important that both attend to their primary roles with due diligence, in order for them to contribute their unique qualities to the greater good.

The reason why the word “socialist” is such an ill fitting description of the modern sustainability movement is because it does not convey the fundamental adherence to the “natural order” of things that is at the heart of new political thinking. We are looking out on the world, and inside ourselves, to determine the natural flows that we can harness to fashion sustainable structures for societies and economies. Objective retrospection of the last 2000 years, and especially the last century, has to lead to a recognition of the natural human capacity for competitive enterprise and the benefits that commercial innovation can deliver. Competitive commercial enterprises are a great thing, we can and must acknowledge that. Bludgeoning those enterprises with responsibility for things that are not their natural role, is a rude fig leaf for lacking the moral courage to take responsibility for what is ours to own.

When we paint commercial enterprise with responsibility for our crumbling social fabric, for the desolation of natural resources or for the poverty of the many, we are absolving ourselves of our own responsibility for those undesirable facets of our modern world. The facts of life are that commercial enterprises are clients of our societies, and it is we, the public citizens of those societies, that must take personal responsibility for describing the environment within which commerce is transacted. We must expect that businesses are driven by their profits, and create a framework within which they can operate in that manner without destroying our social fabric, our natural world or our political supremacy.

Similarly with public services, funded by tax payers to deliver efficient services to the citizenry – these are not (typically) operating in environments where competition is desirable, possible or necessary. The profit motive is a reward system that induces risk taking in a competition to reach the most effective result, a competition that is necessary destructive of the less successful alternatives, and in so being it is inefficient. To the extent that the efficiency and quality of public services benefit from innovation and development, these can be achieved most naturally by opening up their management and direction to wider input from the public, non-profits and academia. Rewarding excellence in the performance of public services, by allowing incentive pay for those that work in their delivery, should not be confused with the services themselves having to adhere to a profit motive – they are separate and independent processes (as corporate experience has proved).

Give unto Caesar what is Caesar’s, and give to your neighbour what is ours. This is the natural order of things: don’t expect businesses not to be profit driven, and don’t force altruistic services to be profit driven. When we accept what we know is the natural order, we are left holding our own responsibility for defining the intended outcomes, and the frameworks within which we wish those natural forces to operate. And when we assume our responsibility we will find it much easier to have clarity and to be effective in reaching the goals we intend. What happens in the world happens with your permission, unless you are actively doing something to change it; when we all own that fact, we can come into the power that has always been ours.

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.

Open letter to the Basic Income community

Dear Citizen

The purpose of this open letter is to invite you to consider whether the goals of Basic Income can be attained more effectively and more sustainably through the provision of Universal Services.

First, let us say that we heartily agree with the basic objective of moving forward to the next evolution of social organization, and that we find the historical precedents that you cite in support for Basic Income are indeed the very same that support Universal Services. There is not the width of a hair between our visions of a peaceful society, in which each individual can fulfill their potential and use their unique skills and abilities to contribute to the whole in a way that honors their freedom. We both recognize that the empowerment of the individual is the basic fabric of our common society, and that it provides the foundation on which to rebuild a new economy.

Furthermore, the distinctions between our mechanisms for achieving the same goals can be seen as quite subtle, even muted. The basic mechanism of providing a structure within which each and every citizen is guaranteed the bare necessities to sustain life is common to both of our approaches, and it is this commonality that drives us to believe that we are sufficiently of one mind as to be able to bridge our differences and join forces in the pursuit of our common goals. Our differences do not separate our intentions, our commonalities define our opportunity to work together.

The primary difference between Basic Income (BI) and Universal Services (US) is whether or not money is provided to citizens. This is not a difference in intention or objective, it is a distinction in the mechanism used to reach the same goals, based on the same principles. We have studied the fundamental economics of modern, monetary systems and concluded that the most important rebalancing that must occur is to return to the social sphere those costs that are social, and that this is necessary to develop a sustainable economy. If we do not socialize our social costs we cannot make the books balance and we cannot preserve the value of currency.

We recognize that the development of our societies and commerce over the last centuries has left us with an unconscious assumption that monetary instruments are the appropriate, and often only, way to measure and account for value. It is a natural extension of this assumption that we think of welfare and opportunity in terms of monetary values. However when we use money to pay for what is actually a social cost we are both devaluing the currency and creating unsustainable accounting, because we cannot monetize the social benefits that would be necessary to balance the books.

In the US model the same objectives of BI are achieved: every citizen is availed of the basic necessities to sustain life, and the opportunity to develop their contributions to themselves and their society. No one is obliged to “work” to receive the services, and they can use the services as they need them. The level of universal services provided is dependent on what that society can afford, in the same way that the size of the BI grant varies based on the wealth of the society. Many of the enhancements to the functioning of the labor market as well as the environmental benefits are the same with both US and BI. However there are important differences in both the practicality and the impact of US versus BI.

The biggest advantage of US over BI is that it is affordable (and therefore more practical) because it “pays” for the “cost” of the services by socializing the labor portion of the cost of delivering the same services. BI does not change the fundamental accounting practices at the base of the modern capitalist system, which are crumbling under our feet as we speak. US removes the subsistence portion of labor costs from the monetary transactions in the economy, and in so doing balances the economic accounting by constraining the use of money to value only economic assets. The impact of BI is the reverse, it encourages the fallacy that monetary accounting can balance the world, that social good can be paid for and that social costs need to be measured in currency.

The second most important reason why US is preferable to BI is that it enables the development and growth of a microeconomy that can supplant capitalist enterprise as the primary economic fabric of our societies, and this is a fundamentally more sustainable foundation for our society. By removing cash payments from the social support system US effectively enables the provision of micro services rendered for micro payments. When citizens seek to supplement their US in order to afford “luxury” items that are not included in the US they can meet those needs by providing services, products or labor according to their skills and abilities at prices that are effectively the marginal value added. This creates a rich ecosystem of micro transactions that creates a micro economy that meets needs more directly and accurately at lower cost and with less waste. With BI the transactional value of any service, product or labor is increased to a level that is defined by the value of the BI grant more than the value added by the service, product or labor.

Admittedly BI is presented as a supplement to social security, not a replacement, but it is inevitably perceived as an alternative and in practice it would be almost impossible to separate the two. This problems leads to many of the structural issues that BI has difficulty addressing, such as:

  • the incentive gap
  • abuse
  • effectiveness (size of BI grant)
  • appropriateness (differentiated needs)
  • and finally the most significant: we still need a social safety net.

The BI community has been extremely inventive and diligent in working to overcome these objections and problems by developing mechanisms that seek to redress these issues through different implementation processes, however this has led to overly complex constructs that further detract from the practicality of BI.

We are fundamentally of one mind regarding the necessity of moving forward to a better socio-economic model that incorporates the unassailable truths of freedom and individuality, and we share the same heritage and the same goals. We hope to unite with such a caring and thoughtful community as you have built around BI, and we would hope that this letter can serve as an introduction to the possibility of uniting forces around a cohesive vision for our common futures that will bring your and our communities together to fight for a better future.

Please consider this an open invitation for engagement and discourse that will yield a common platform incorporating the best of both of our approaches. Check out the framework described in a fair degree of detail at www.standardsoflife.org and let’s get moving forward together.

Yours faithfully,

The Standards of LIFE Community

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.

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