Utopia for Realists

It’s surely obvious that the current economic system is not working, what with increasing inequality, increasingly low wages at the bottom, squeezed public finances,  financial crashes, resulting populism, ever-increasing automation, ineffectively-addressed global warming and so on. And it seems equally clear that the global elite haven’t a clue what to do about it and plan to just let it run while they continue their comfortable lives.

utopia for realistsRutger Bregman’s book Utopia for Realists: And How We Can Get There brings up the heretical suggestion that we can do something about it, all we need are the visionary ideas and the determination to follow them through.

There is no reason why we cannot end poverty, give free money to everyone (basic income), move towards a shorter working week, pay important workers like nurses and bin men a commensurate salary, and open borders once the imperative to move anywhere but home is removed.

That sounds like a Utopia, you say. Yes it is. But we need a stretching vision of where we want to get to and then maybe we’ll start moving there.

Bregman cites the fascinating story of how neoliberal free market ideas moved from being the interest of just a few economists in the years after WW2, when Keynes dominated economic thought, to becoming the dominant force behind world economics from the 1970s to the present. These ideas have now run their course and are actually the cause of the predicaments we increasingly find ourselves in.

We desperately need these new Utopian ideas to gain momentum. So go read Utopia for Realists.

What human energies could be freed up for a New Renaissance!

 

 

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Gödel, Maths and Physics

Edmund M. Law has some fascinating posts on his blog. A recent one had the following quote from Freeman Dyson.

Fifty years ago, Kurt Gödel, who afterwards became one of Einstein’s closest friends, proved that the world of pure mathematics is inexhaustible. No finite set of axioms and rules of inference can ever encompass the whole of mathematics. Given any finite set of axioms, we can find meaningful mathematical questions which the axioms leave unanswered. This discovery of Gödel came at first as an unwelcome shock to many mathematicians. It destroyed once and for all the hope that they could solve the problem of deciding by a systematic procedure the truth or falsehood of any mathematical statement. {53} After the initial shock was over, the mathematicians realized that Gödel’s theorem, in denying them the possibility of a universal algorithm to settle all questions, gave them instead a guarantee that mathematics can never die. No matter how far mathematics progresses and no matter how many problems are solved, there will always be, thanks to Gödel, fresh questions to ask and fresh ideas to discover.

It is my hope that we may be able to prove the world of physics as inexhaustible as the world of mathematics. Some of our colleagues in particle physics think that they are coming close to a complete understanding of the basic laws of nature. They have indeed made wonderful progress in the last ten years. But I hope that the notion of a final statement of the laws of physics will prove as illusory as the notion of a formal decision process for all of mathematics. If it should turn out that the whole of physical reality can be described by a finite set of equations, I would be disappointed.

— Freeman J. Dyson, Infinite in all Directions, 1985

Law presents this under the heading ‘Inexhaustible Mysteries’. To me, it’s just important to be reminded of Gödel’s Theorem from time to time. Mathematics is inherently open-ended, and I believe the implication is also that physics is also open ended. We can never have a model that fully describes reality. There will always be more for mathematicians and physicists to do.

Equally, we will never have a perfect economic system. There will always be space for economists and politicians. And those who seek single solutions to complex problems (e.g. ‘free markets’) are inherently misguided.

See also my post on Godel’s Theorem.

Picture of the tomb of Kurt Godel in the Princeton, New Jersey, cemetery by Antonio G Colombo, from Wikimedia Commons. What a legacy!

Removing poverty

Contrary to what some politicians might like you to believe, it is easy to remove most poverty. Simply give poor people, indeed everybody, enough money to subsist. It’s called basic income.

How to pay for it? There are two ways.

1. Pay out of current government moneys

There are many benefits to the economy:

  • more economic activity, so more taxes
  • less need for benefits, so less government costs
  • reduced minimum wage, so more employment, so again more taxes
  • less crimes of desperation
  • more intelligent behaviour from the poor (yes)
  • disincentive to immigration, as would apply to citizens only; there is also less incentive for people to move from other countries with a similar policy
  • reduced inequality means reduced discontent with governments
  • of course, you would net off against current tax and benefit schedules so that most people were not directly affected and continued to be paid the same as previously
  • etc.

So it wouldn’t cost as much as you might think.

2. Just create the money

The central bank simply creates the necessary cash, outside of government accounts. You could regard this as pump priming the economy. (Compare QE, but this time for the needy.)

If just one government does this, this will inevitably cause its currency to slowly decline against others, but we are talking small percentages, so slow, here.

If a majority of world governments do it, there is no cost. It is free money.

Basic Income is a no-brainer. Why doesn’t it happen?

There is this obsession among the empathy-bypassed richer classes that the poor are feckless and not trying hard enough, so they should be forced into desperation so that they will do any job at any price for all hours of the day and night. I suspect this came from the early days of industrialisation, when cannon fodder was need for the emerging industries. It went away after WW2 (did you know that Richard Nixon tried to introduce basic income in the US in the 1970s?) But this prejudice has been reinforced since the 1970s by right wing parties in UK, US and elsewhere.

It is nonsense. Basic income has been tried many times, and the evidence suggests that if you treat people like paid-up members of the human race they will behave like it. Give people a decent start and they will make their way.

In a world of increasing automation and concern about where the future jobs will come from, basic income seems even more needed.

It’s about political will

In the end, in a world of plenty as we have in the West, poverty is about political will and little else.

Eradication of poverty is also surely an essential precondition for a New Renaissance.

The inspiration for this post came from ‘Utopia for Realists’ by Rutger Bregman. Beware reading it, it might haunt you with the sanity of its ideas!

Featured image is Caricature of poor people at a workhouse having dinner; by Phiz (?), via Wikimedia Commons

 

 

 

Trickle-Down Economics – child’s view

We should be looking more through the eyes of children at this crazy world. They see the nonsense that is being propagated by the status quo. Brilliantly captured in this blog post by Paul Duncan.

The Out And Abouter

Julie Wilson, 8, trying to work out how to let the big guy know he’s been had.

BROKEN FORKS – Saying she just wasn’t ready for the look on her dad’s face when she tells him that there’s no such thing as trickle-down economics, little Julie Wilson, of Broken Forks, Montana, today admitted it was getting pretty hard to answer her Republican father’s increasingly probing questions.

“At night, when he’s getting ready to head out to his second job – the one he works in the evenings to pay for our health insurance – it can be really hard to look him in the eye and say supply-side theory isn’t going to let him down this holiday season. Not like last year. And the 39 before it.”

Eight-year-old Julie says that the elaborate charade she goes through to avoid dashing her dad’s belief in the inherent decency of rich people…

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‘Everything, in short, except that which makes life worthwhile’

I just discovered Tim Jackson’s excellent website and blog, particularly this item with the above title. (Thank you, daughter.) Tim seems like the sort of economics thinker that we need so much, questioning the conventional wisdom that is not working, and pointing the way forward.

In the post he reminds us of Robert Kennedy and particularly his thoughts on the usefulness of GDP as a measure for the health of an economy.

The GDP ‘measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country… It measures everything in short, except that which makes life worthwhile.’

Robert F Kennedy, Kansas 18 March 1968

You can hear the Kennedy speech in greater length on the video included in the above blog item.

Tim goes on to identify a number of modern initiatives that give hope that the professionals in this area are really eventually going to move on from the obsession with GDP, which is stopping us from addressing many of today’s problems (I will not bore you by listing them all again). When will the politicians and media follow suit, one wonders? The obsession with GDP and ‘growth’ is still evidently pervasive in UK ‘mainstream’ discourse.

Of course, this is just one example of the modern business and political approach of managing by metrics, which gives the illusion of control, without actually addressing the real issues that need to be managed. Metrics can be useful, so long as you are aware of their limitations, and so long as they do not become the dominant factor in what you are managing.

As Tim reminds us, Robert Kennedy was assassinated a few months after his Kansas speech, while mounting his run for the US presidency. I well remember the devastating effect that event had on young people in the UK, including myself. Robert Kennedy seemed a beacon of hope in difficult times. How different history might have been…

Picture shows Robert Kennedy addressing a crowd in 1963, by Leffler, Warren K., via Wikimedia Commons

The Next Crash

Why should I lie awake in the middle of the night thinking about the next financial crash, when we’ll again see failing banks and governments frantically trying to stabilise ‘confidence ‘?

Of course there will be another financial crash. There always is. It’s built into the system.

Maybe next time we should apply some common sense, says my feverish nighttime reverie.

  • Put failing banks into special administration, keeping current contracts going where possible.
  • Remove and investigate bank directors, recovering mis-spent money where possible.
  • Break up big banks rapidly into saleable and social banks eg regional banks.
  • Crucially, the money it costs should be created by central banks as ‘sovereign money’, not taken from the people and public services by increasing public debt and resulting ‘austerity ‘.
  • Of course this will slightly devalue the currency, but then that is simply a recognition of its true value in this situation.

If only…

Featured image of bank run 1933, via Wikimedia Commons

Saving Capitalism

Readers of liberal media know the story. Inequality is getting worse, banks, corporations and rich individuals distort ‘the system’ to their own advantage. Communities are being gradually destroyed, as is the ability of the mass of people to support public services. In short, modern capitalism has become unfair and unsustainable. And then on top of that, increasing automation is destroying ever more jobs, just as education is creating ever more people capable of doing them.

saving capitalismRobert Reich is a professor on public policy at Berkeley and well known author. His book ‘Saving Capitalism’ explains it all, particularly in the context of the US. His subtitle ‘For the Many, Not the Few’ expresses well where he is coming from.

Reich points out that typical public debate between right and left between ‘free markets’ and ‘more government’ actually obscures the real issue. Governments are responsible for designing, organising and enforcing markets, and this is where the focus should be. Particularly in the US, moneyed interests have successfully subverted the process in their own favour. The resulting increased inequality is there for all to see.

As Reich explains, this direction has been supported by both Republican and Democratic establishments from the era of Reagan, through Clinton, Bush, Obama. The countervailing powers to the extremes of capitalism have been gradually eroded, organised labour largely destroyed, ever-reduced and ineffective regulation, lack of control on monopolies, lax bankruptcy laws for big companies, shareholders given preference over other stakeholders, legislation influenced ever more by big money, revolving doors between corporations and government, obscene rewards to chief executives… All of course came to a head with the financial crash of 2008, after which banks were deemed ‘too big to fail’, were bailed out and the American people paid the price.

As Reich points out, this sort of thing has all happened in the US before, and the system has eventually righted itself, notably when ‘big oil’ was dismantled, when Franklin Roosevelt’s ‘new deal’ came along, when AT&T was dismantled and so on.

The challenge today is to restore suitable countervailing power to the political-economic system, so that the system can again flourish, and democracy itself be renewed. And this in a climate where technology increasingly means that the old ways of mass employment will no longer work.

The ‘rules of the market’ need to be designed anew, and the corporation ‘reinvented’. Reich is confident that this can be done. But to do it people need to begin to care and maybe re-establish some of the grassroots movements that provide necessary countervailing power. The Bernie Sanders and Jeremy Corbyn movements begin to show that the impetus is there among younger people, in both UK and US. Indeed on the other side of the spectrum the Tea Party showed similar characteristics.

The populism currently sweeping the world is not the answer, rule by over-blown egos is ultimately non-democratic. Reich highlights the problem and the needed direction with a clarity that is commendable. We all need to be listening and using what influence we might have.

Animal sentience

Animals clearly have an inner life, feelings, emotions, and so on. You only have to observe them. Start with a pet.

So why the great animal sentience debate? Because somewhere along the line some people started treating animals as objects whose sole purpose was to be eaten, shot at, exploited. Great factory farms became necessary to give cheap food (in the US, Soil Association estimates 99% of chickens, 90% of pigs, 78% of cows are ‘produced’ in concentrated animal feeding operations – CAFOs – animal factories). Farms in UK are gradually increasing in size to stay economically viable. Great swathes of land in the UK are managed to produce birds to be shot at, which is indeed a common sport across many countries. How long is this barbarism to continue?

Fortunately scientists have decided that animals are sentient. Thank God they’ve confirmed the bleeding obvious!

Hurrah for organisations like the Soil Association, whose ambition for animal welfare is for all farm animals to live ‘a good life’ within 10 years.

It seems that EU is moving in the right direction of recognising animal sentience, as is the UK. But this is clearly going to be a major issue in any future post-Brexit trade deal with the US, when they will want us to buy their barbarically produced cheap food as part of the deal.

The root problem is abstracting human affairs from inner values and morality, leaving the money monster in control. We really do need to reclaim our humanity, our inner compass, our conscience.

Measurement and Targets

Measure an aspect of a system and you will change it. For example, I once included a graph of number of people late for a regular meeting; the tardy individuals soon began to arrive on time and the measure ‘improved’. So measurement is a great management tool.

Set a target on that measure and you (possibly aim to) fundamentally change the system. The target becomes a part of the system.

If the system is one involving human values and relationships, it is likely to be thus dehumanized. It is quite apparent that immigration/removal targets set at the UK Home Office led directly to the inhuman practices that feature in the current ongoing ‘Windrush’ scandal.

The interesting thing about targets is that, if the target is the main way of measurement of staff (or of a separate subcontractor), then they are effectively being pushed into behaving in a value-free and inhumane way – and, when this is discovered, the management can hold up their hands, say ‘not me gov’, and blame the lower level operatives (or subcontractor) whose jobs depended on meeting the targets.

This is the dirty secret of much high level management, and of course politicians. Management by numbers alone is, at the end of the day, not management at all, but abdication of responsibility.

A target is a good servant, but a poor master.

Of course, profit and other financial numbers are measures, and our current capitalism depends on using them. Use them as the main incentive for senior management, and what do you get? Enron, banking crises, bribery, corruption, all sorts of value-free behaviour…

Universe alive or dead?

Is the universe alive or dead?

For millennia humans who emerged from living immersion in the life on earth knew they lived in and were part of a living universe. This is reflected in the essential heart of most widespread religions, and was the essential knowledge of indigenous peoples. All was alive and interconnected.

Then along came materialism, creeping in on the heels of the emerging scientific approach after the Renaissance. Materialism, with pet theories such as the ‘clockwork universe’, suggested that the material world is a dead world of cause and effect. Economic systems followed, based on the value of material things and discounting inner experience and the value of the natural world. With the rapid expansion of European ideas through colonial domination these ideas became dominant throughout the world.

Today these materialist systems are in crisis, having lost touch with nature. The wonderful diversity of nature enjoyed by earlier generations is being reduced, and the materialist emphasis is leading to increasing threat of wars caused by resource conflict and population movement when there are few remaining virgin lands. Global warming is bringing this all to a head.

In a way, the solution is obvious. To reclaim our heritage as a co-creating part of the living earth. Not to revert to the earlier unaware immersion in the stream of nature, but to move beyond our ignorant materialism to become a new co-operative part of nature.

living universeObviously this is not easy. I recommend Duane Elgin’s book The Living Universe for a good analysis and exploration of how this might come about.

Anything good about Brexit?

It has for some time been suggested to me that I should write a post on what is good about Brexit. I’ve struggled with this, as there appear to be few advantages compared to the enormous disadvantages. Yes Brussels is a large bureaucracy, with all the disadvantages that entails, but getting out of the club never seemed a sensible option to me, rather than working to reform it from within.

Most important is the reason that the EU was invented – to bring together the European countries and avert for future generations the possibility of further wars such as those that disfigured preceding centuries right up to the World War. The worst conservative government in my memory has, by their own incompetence, put all this in jeopardy, dividing the country in the process and endangering the European enterprise.

In today’s speech former UK Prime Minister John Major has expressed it all very well. His speech is well worth reading, and a salutary reminder of what is at stake and the importance of the UK government taking parliament and the people along in this supremely hazardous enterprise. Major is certainly an elder statesman worth listening to.

There are no positives that counterbalance this monumental mess.

 

The money-go-round

Let’s get this straight.

  • Most money is created by banks as debt, i.e. ‘out of thin air’.
  • Banks ensure they keep plenty for themselves, the grandest buildings, the biggest salaries, huge bonuses.
  • Eventually they always lend too much, confidence declines, some bank(s) get(s) into trouble because there is a run on the bank, because the money doesn’t really exist.
  • So a bank or two fails, but is usually bailed out by governments.
  • So governments need to borrow a bit more from… banks.
  • And/or they take it from the people by ‘austerity’, reduced public services or additional taxation.
  • And they say there was too much debt, another way of saying it was the banks wot did it.
  • And the most egregious banking behaviour appears to be but lightly punished – the rewards appear to greatly outweigh the risks.

You couldn’t make it up!

There must be a better system. At least someone’s proposing solutions. See eg Positive Money.

 

Licence to Operate?

We see so many instances of large corporations acting against the public interest – tobacco, sugar, pesticides, pollution, Enron, subprime bank lending, plastics, enabling interference with elections, cartels, monopoly restriction of competition, and on and on.

Is it not time to require a licence for any corporation above a certain size to operate in a particular country, renewable say every five years, based on a transparent licensing process that is under democratic supervision?

Large businesses have privileges such as limited liability, generous bankruptcy laws and the ability to act trans-nationally and shift profits between countries; it is only reasonable to require them to not act against the interest of the societies in which they operate.

This provides a way for democratic politicians to take back control of forces that are, frankly, acting purely to make as much money as they can regardless of the impact on everyone else.

[US readers note licence = license.]

James Robertson

james-robertsonI was sorry to learn that James Robertson is to no longer produce his regular newsletter or maintain his website, This is a great shame, but one can well understand it at the age of 89.

I first came across James at Schumacher Lectures in Bristol, maybe in the 1980s, and was inspired by his ideas on economics and the money system, which originated in a career at times closely associated with UK governance. This inspiration has continued over the years since then, in his articles, books, talks, seminars and then his regular newsletters – Turning Point 2000 up to the turn of the millennium, and his regular email newsletter since then.

James’s ideas deserve to be more widely known. I won’t try to summarise; the following from the front page of his website gives a good idea. This truly does indicate a necessary component of a New Renaissance, as indeed James said in his Knutsford Lecture in the 1990s.Read More »

Growth vs Sustainability

It is one of the main dilemmas of our time. Economic growth is seen by governments and people as essential. If the economy falters then there is unrest and governments get thrown out.

Yet economic growth is creating unsustainable demands on the ecosystem – pollution, global warming, resource depletion, and so on. The two do not appear to be reconcilable. We know all this.

There has to come a solution. If we leave it to the earth’s natural systems, we may well not like the result. We are getting a taste, as extreme weather events become more common, plastic pollution becomes increasingly pervasive, species extinctions accelerate. Refugee crises, population migrations and epidemics are likely to get much worse.

So it’s important to consider possible solutions. One is put forward by Positive Money in their excellent research paper Escaping Growth Dependency, just published. They argue that the debt-based money system is a major factor driving the growth imperative, and reform of this money system is essential as part of the solution.

They propose adding a new tool to the Central Bank’s toolkit: ‘sovereign money creation’, and preventing banks from creating money altogether. Thus money as means of payment is decoupled from money as a source of credit.

The paper suggests that such a change could ‘open the door to a transition to a sustainable economy’. I’m all for that!

 

 

World Economic Forum

So the annual shindig of the world’s rich and powerful is soon upon us, 23-26 January at Davos-Klosters, as usual.

Its theme is Creating a Shared Future in a Fractured World. The overview context is impressive, and I note that it has 7 female co-chairs. The website claims that the WEF process is having a positive impact (it is much more than just Davos.) It appears to be addressing the right sort of issues, but has the state of the world actually improved in the nearly-50-years of the Forum? There has been progress in some areas, but the current situation on global warming and pollution, and increasing inequality, let alone the ongoing disasters in the Middle East and Korea, suggest there is so much more to do. Obviously, the influence of this one organisation/ process is limited and the vested interests preventing progress are so strong.

We should at least wish WEF well, with honourable intentions. The Lucis Trust suggests a theme for meditation, from the impressive Klaus Schwab, Founder and Executive Chairman of WEF, to send helpful energies to the forum in this time of world need:

Our collective responsibility must be to develop  new models for cooperation that are not based on narrow interests but on the destiny of humanity as a whole.
Worth trying.

Brexit turkey evidence

More evidence of Brexit turkeys voting for Christmas in this Birmingham University Regional Paper on the economic impacts of Brexit, reported in today’s Guardian. What the paper aims to analyse is “the exposure of regions in the UK and the EU to Brexit, via an analysis of the nature and scale of their trade linkages”. (The paper itself looks rather complex – not easy reading.) The featured image shows the paper’s illustration of the level of impact by region.

Key findings include:

So it’s pretty clear who has the strongest negotiating hand in the forthcoming trade talks.

 

Disasters

I wrote this post a while ago, but didn’t publish it because it seemed too negative. But then again it is facing the truth, they are coming thick and fast…

Disasters are in the nature of things. Life is evolution and change. Galaxies collide, solar systems merge, orbiting objects crash into each other, storms and subterranean events cause cataclysmic events on planets. So however stable things might seem, it is inevitable that disasters will occur.

california wildfire
Wildfire, Ventura, California, December 2017, NY Times

So is it any surprise that disasters are also caused by human beings. However, we do seem to be particularly good at creating the conditions for them, e.g. we:

  • invest in new sources of fossil fuels that we know are not sustainable, thereby exacerbating the global warming we know is happening – and continue to prevaricate on taking effective action to minimise and mitigate its effects.
  • degrade our soil and food with chemical-based farming, when biological and organic methods are the only sustainable way.
  • base our economic system solely on growth, regardless of the quality of that growth and its ecological non-sustainability.
  • propagate increasing inequalities that history tells us are not sustainable and result in conflict, yet refuse to contemplate alleviatory measures, such as taxes on financial transactions, wealth and land.
  • elect those who base their campaigns around separation and collective illusions, such as making countries ‘great again’, standing above others.
  • fill our seas with plastic, to the extent that our food coming from the oceans includes increasing residues of it.
  • cut down forests to create more land to feed animals for food or grow more oil, thereby removing the planet’s lungs (analogy).
  • globalise everything such that (with climate change) diversity of species is drastically reduced.
  • invest in escalation of arms including nuclear, chemical and biological weapons that no sane person would wish to see ever used.

The entrenched status quo appears to be manipulated by the main beneficiaries (the rich and powerful) such that any rapid change of direction is not possible.Read More »

Easy abstractions 

This week’s Guardian ‘long read’ on Globalisation: the rise and fall of an idea that swept the world by Nikil Saval is well worth a read, outlining the failures of economic/political policy that have led to today’s dysfunctional world economy and its increasing inequalities.

How easy it is to propound abstractions and not consider the real world implications – free trade, free markets, globalisation – the apparent obsession of many economists and politicians over the last 40 years.

Of course, chickens eventually come home to roost. And this is what we see in the real world, with people in the West disillusioned with the effects of a failing globalisation system, just as in the early 20th century.

Deluded by these abstractions have politicians failed to act according to the interests of those they represent? It is after all their job to so act.

But of course we all have our own favourite abstractions, and our own view of what might have been better decisions…