Transcript De-Growth in Slovenia Brian Davey Feasta 1972 Club of Rome report • Message: In the 21st century humanity would have to divert much capital and manpower.

De-Growth in Slovenia
Brian Davey
Feasta
1972 Club of Rome report
• Message: In the 21st
century humanity would
have to divert much capital
and manpower to battle
against ecological system
constraints – manifested in
a shortage of energy and
other resources on the one
hand and the increasingly
destructive effects of
wastes produced by the
economic system on the
other.
40 Years later the Limits to Growth
even more evident
• Shortage of resources: Oil, gas,
water, top soils, phosphates,
metals and minerals in
depletion and nearing or at
peak of production/supply
• Effects of ‘wastes’ - particularly
CO2 and “greenhouse gases”
with climate change in danger
of increasing out of control
because of reinforcing
feedbacks
200 years of growth have been based on cheap
and energy dense fossil fuels
• But in burning these fuels
• (a) depletion eventually
occurs
• (b) the climate is changing
and moving towards a
“runaway threshold”
• (c) Toxic wastes are
overwhelming local ‘sinks’
• With poor harvests,
rising energy and other
costs growth begins to
falter....
A lot worse may be
coming...
In the opinion of many
climate scientists
humanity is likely to
create a runaway process
of climate change which
will be more than merely
dangerous, it will be
utterly catastrophic.
At the international and
national level there is an
utter failure to deal with
this global emergency.
Projections of the Climate Crisis
Graph created by
UK Climate
Scientist Kevin
Anderson –
On current trends
humanity is on
track to an
absolutely
catastrophic
increase in global
temperatures
There are many more problems in
addition to climate change e.g.
So what we have is really
“Uneconomic Growth”
• The additional costs of growth exceed the
additional benefits...in damage to our health,
that of our children and the environment...
A future of fighting for scarce resources?
A future of global financial sector meltdown?
A “Super-Bubble that could burst”?
• Is this a hyper
inflation of
speculative
bets?
• Financial assets
ultimately only
have value if
they represent
a claim on real
resource flows
in the real
economy.....
Add to these problems a common currency system which
takes away from countries the ability to adjust exchange
rates and interest rates according to the different
conditions in different countries...
The Eurozone Crisis
And the solution
of the global
political elite?
A Crisis of Democratic Governance
Politicians make
promises, they
get elected and
then they get coopted into the
circles and
networks that
organise the
corporations that
dominate at the
national and
international
level.
An alternative politics needed
If we want something else to
happen we have put
politicians in political power
who are integrated into
different kinds of economic
activities and networks –
working for a different kind
of society at the local level
that involves developing a
community economy.
How does “de-growth” differ
from austerity?
De-growth recognises that well being is
increased by things other than buying and
owning increasing amounts of material
possessions – for example
1. greater equality,
2. more free time,
3. different value systems encouraged and
supported,
4. more public infrastructure, community facilities
and efficient households reducing the need to buy..
More equal countries have less drug use,
mental health problems, crime, violence,
better life expectancy, lower obesity, less
teenage pregnancy, greater child well
being....(source Wilkinson and Pickett – ‘The
Spirit Level’
Many people wish to trade income for more
time – 19% of the US population of working
age and 23% of the Australian voluntarily
decided to take less income to have more
time in a 5 year period...- Source Clive
Hamilton “Growth Fetish” citing
Social psychological research in multiple countries
finds people who are motivated most by intrinsic
values (e.g. finding meaning in life, protecting the
environment, social justice, equality) tend to be
happier than people motivated by extrinsic values
(e.g. wealth, power, authority) - Source “The Common
Cause Handbook” citing research by Schwartz et al
Returning ‘Economics’ to its original meaning:
producing resilient and comfortable habitats
“Economics is an art of
household management” Aristotle
Eclogical efficiency = food, energy and
materials provided close to home (or
the need to buy them, and to travel,
reduced)
Developing a
neighbourhood
infrastructure to minimise
the need to “consume”..
Every city, town and
village has shared
infrastructure – public
transport, libraries, leisure
services. The task at hand
is to extend these shared
facilities as much as
possible so that people
can have access to
resources without
needing goods as personal
possessions
e. g. Haus der eigenen Arbeit Muenchen: Workshops for wood, metal,
paper/bookbinding, jewellery, textiles, upholstery, ceramics, art crafts, glass,
blacksmith
“Solidarity economy” - an
extension of more
effective households.
Places where people
can come together and
help each other, learn
from each other and
develop ideas and
projects together. The
aim is to develop
connections between
people, the
encouragement of
creativity for its own
sake and for the
pleasure of doing things
together.
Creating a seed bed for
creative and interesting
projects so that people
are less centred on
stressful employed
work in order to earn
money to buy their
satisfactions in the
shops.
Places where people
develop different values
and priorities enjoying
creative opportunities
and convivial social
contact for its own sake
– rather than because
they have been
“incentivised”.
Creating a different “life style
package” to that of the
supermarket economy...with
skills needed in the ecological
economy
Changing
management
approaches
Alternatives to the top-down
paternalistic we-know-what’sbest-for-you - command and
control way of managing things..
Yet we do need to try to make
sure that the different community
gardens, energy projects, tool
libraries, workshop sharing
arrangements evolve into a
coherent whole...
Co-ordination networks
between groups that share
common or complementary
purposes.
Minimise outside interference
in each organisation....
........while at the same time
facilitating forms of co-ordination
where a bigger picture makes it
appropriate.
(a)conflict resolution procedures,
(b) steps to achieve synergies,
(c) developing a common strategic
view of what is happening in
shared environments and,
(d) activities that clarify and
develop shared value systems and
purposes.
Complementary national and
international policies
Given the global crisis and the national crisis that has
occurred in Slovenia what ought to happen right now are
reforms of
the tax system
the money and bank system.
the energy system
The Disintegration of Tax Systems
Everywhere you
look in the world
the tax system is in
crisis because the
political-economic
elite are
opting out of its
obligations to the
wider society by
looking for ways to
avoid paying taxes.
A global network of
secrecy jurisdictions
and tax havens
allows them to do
this and facilitates a
growing amount of
elite crime.
Solution: tax land values and natural resources more
– labour and work incomes less
Tax land values and natural resource
use more, and labour and work
incomes less.
Because land is crucial as collateral
when bank loans for property
developments are made, it follows
that land value fluctuations are
closely tied to the stability of the
banking system.
It is by taxing away the
capital gains on rising land
values that the incentive
for speculative property
bubbles is removed.
Site Valuation
What makes an already developed
location valuable is its closeness to
transport links, to schools, theatres,
shops as well as the existence of street
trees and a park plus public sector
funded infrastructure.
A community and its tax payers create
these desirable features of a location but
a landowner can then charge rents for
advantages to a site created by others.
Sites which are still to be developed see
land values rise as they are re-zoned with
permission for development and
scheduled for government investment in
infrastructure...
Land value tax to protect
community economic
development from
landowner parasitism
A community economic development
when people work together to make the
places that they live in interesting,
pleasant and cheap places has a
vulnerability – landowners might put up
the rent in these places when they
become desirable locations to live.
Hence the need for a site value tax to
ensure that any extra rental values
should go, instead, back to the local
state which should then recycle it to pay
the local project costs of a local
communities that are helping
themselves
You cannot hide land values
Land value cannot be hidden
in a tax haven and you
cannot hide land...
Site Value Taxes would
remove the incentive for
speculative bubbles that
destabilise the
financial system
It would stabilise the political
system too (removing the
incentive for corrupt political
involvement in land
speculation).
Monetary and Financial Reform
Is it because the Slovenian banks
are state owned and controlled
that the banking crisis occurred?
In other countries when banks are
under private control they do not
behave any better – and politicians
usually do what they can to rescue
them.
The issue is not who owns or
controls the banks – the issue is
that it should not be banks
creating the money supply.
Amplifying booms and slumps
Economic conditions
• Boom: banks and borrowers
confident
Finance Sector response
• Lending rises, money supply
expands and boom
overshoots into speculative
asset bubble
• Slump: banks and
borrowers unconfident
• Banks cut back on loans,
borrowers repay where
possible. Money supply
shrinks
What ought to happen – but is unlikely under the ECB
Monetary authorities create nondebt money when the economy
needs a boost when there is a lot
of unemployment
Unlikely to create inflation if there
is unemployed capacity
In any case, if inflation starts once
full employment reached the
state can tax the money when
people have jobs....not increase
taxes and cut benefits when they
are already poor...
An Alternative?
When countries under an austerity assault from the
Troika they should set up alternative “liquidity
arrangements” to run alongside the euro. There are
precedents for such arrangements running alongside
the main currency – and many have been successful.
For example, in Switzerland the WIR is a parallel
payment arrangement alongside the Swiss franc
which helps stabilise the Swiss economy.
I would not expect your government to set up such a
system – you will probably have to set it up yourself –
only don’t call it a currency or the Troika will close it
down.
Transforming the Energy System in order to
drive de-growth in a way that is equitable
Without policies to drive decarbonisation very hard and
completely transform the
energy sector we have little
chance of preventing
catastrophic climate change.
This is a responsibility of
every country...
But it effects effects the
more wealthy among us
above all else...
Pareto’s 80:20 rule
• 80% of something relates to 20% of those
involved
• 80% of emissions from 20% of population –
run this 3 times = 50% of emissions from 1%
of population or 40-60% from 1 to 5%
• The richest 5% of the global population earn
above £30,000 = 35,000 euros = 266,000 Kuna
Ban the initial production, sale or
import of fossil fuels without a
permit for the amount of carbon
contained in the coal, oil or gas.
Limit the number of permits issued
each year and reduce the number as
rapidly as is required by climate
science. Make fossil fuel suppliers
buy the limited number of permits.
To make the process fair the money
that suppliers pay for the permits
should mainly be returned to the
people – per capita.
Cap and Share
Winners and Losers?
Initial gain – the money from
the sale of permits distributed
equally to each person
Initial loss – the price of
permits is passed on by fuel
suppliers and leads to a
rising cost of living
People with a low carbon
lifestyle get more from their
share of the permit revenues than
they lose in the rising cost of
living.
People with a high carbon
lifestyle end up paying out
more than they get back from
their share of the permit
revenues.
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