For 21st century progress, pick your paradigm…

I spent a day at the OECD in Paris earlier this week, and had fascinating discussions there. They had asked me to be provocative so I proposed they rewrite Article 1a of the OECD’s founding constitution – and I later tweeted it like this:

That tweet caught the attention of Branko Milanovic, who is one of the world’s leading economists in analysing global income inequality trends, and whose work I hugely admire (and cite in Doughnut Economics, of course).

Branko had a visceral reaction against my suggestion, prompting him to write a fiery blog on why economic growth is an inevitable necessity in all countries, no matter how rich they already are.

What fascinated me in reading Branko’s blog was the deep difference in the fundamentals underlying the worldviews that he and I hold – differences that implicitly underpin many public debates today.

So I have done my best to summarise the crux of Branko’s position in just five bullet points – and then to write down, in equally stark terms, a five-point summary of my own, very different, worldview (spelt out more fully here).

I absolutely understand why Branko might find my assumptions and beliefs untenable – just as I hope he would understand why I think his are equally so.

Here I’m not interested in twitter spats or bloggers’ boxing matches – they are ten-a-penny online and there are far more fruitful ways to engage.

I sincerely believe we – humanity – are at a critical juncture in determining our chances of having a flourishing planet on which we all can thrive this century. And the economic worldview that we use will significantly shape that. So there is much to be gained by engaging respectfully with those who disagree with us.

Hence I’m taking this opportunity to step back and acknowledge that both of our visions of the future include strong beliefs about human nature versus human nurture, big uncertainties about how economic variables may respond, deep assumptions about how much change is possible, and lots of hope about how the future might be different from the past.

Neither route is easy. Neither is proven. And a lot depends upon the choices we make.

Listening respectfully to those who disagree with us is a fascinating (and still too rare) thing to do.

So thanks for the opportunity, Branko.

120 thoughts on “For 21st century progress, pick your paradigm…

  1. Peter
    14 July 2017 at 17:06

    Admirable open mindedness, intellectual honesty, objectiveness and willingness to engage on merits not on prejudice. I hope and trust Branko reciprocates.

  2. Peter
    14 July 2017 at 17:14

    This
    https://lifeonlauralane.wordpress.com/2017/07/11/an-open-letter-to-glastonbury-from-a-victim/
    tells me that your faith in humanity and its motivations has some merit

  3. 14 July 2017 at 17:34

    Kate… I like what you write and in a perfect world it makes sense. But aren’t you assuming that everyone who can contribute will contribute? The sad truth is that there are a lot of people who want as much as they can get for as little effort as possible. All one has to do is look at the the promises of the courses the marketing gurus offer or things like The 4 Hour Work Week or… the USA welfare system. Are you suggesting a system like the one Ayn Rand wrote against in Atlas Shrugged? The problem has never been with the system. It’s the people who live within it.

    1. 14 July 2017 at 18:32

      Kate, I worked over 20 years in the World Bank and helped bring Herman Daly into that organization. As I recall, he left very frustrated after five years, getting nowhere as regards introducing steady state economics concepts into World Bank thinking. I shared his frustration.

      World Bank models used in making projections for the World Development Report and other documents at that time saw more growth in rich countries as essential for developing country development. That, in a world with limited ecological space (see Herman’s paper on Economics for a Full World), is an absurdity. I too protested, to absolutely no effect.

    2. Liz Connor
      15 July 2017 at 03:35

      I couldn’t disagree more. All those courses, and all the advertising that’s needed to persuade people to prop up the current Ponzi global economic system proves that it’s NOT human nature to be thoughtlessly greedy.

      Yes, as a first reaction, like a toddler eating all the chocolate at once, but when a toddler sees another child looking sad because they don’t have any ‘chocolate’ and the toddler knows that they’ve really had enough, virtually all of them offer what’s left.

      Then as adults, when we also know that many children work as slave labour to harvest and begin to transform the cocoa beans into chocolate without ever tasting the result, we need to be persuaded big-time that we need the chocolate more than they need a childhood. But that commercially-driven persuasion doesn’t work with me. How about you?

    3. David Harold Chester
      21 July 2017 at 09:11

      Most people would like to make as little effort as possible but simultaneously they want to achieve as much as they can. This is the basic nature of economics–a combination of opposites. One interpretation of this double axiom is that we are greedy and lazy but it is equally possible to say that we are energetic and ambitious, without spoiling the initial terms of the statement. This is what makes our subject so interesting.

      The consequences of these human qualities are disappointing because within our society wealthy classes of people form, who have discovered that by speculating in land they can get a “free lunch”. This is whilst tax payers (like you and me) help to improve the infrastructure and thereby boost the productivity and value of the land owned by these monopolists.

      Ayn Rand does not appreciate this and sees capitalism in a distorted way. Henry George, in his 1897 seminal book “Progress and Poverty” had a better idea–were land values to be taxed instead of incomes, purchases, capital gains, etc., the huge benefit and bounty created by population density would be better shared.

      1. Peter van den Engel
        21 July 2017 at 10:15

        You are moving into the right direction by starting to talk about the financial system. That is creating unequality by itself, also in ecological terms.
        Nevertheless, in your statement the ownership of land resulting into wealth, is compared to the people on the land working to improve it, benefitting only the owner, so he should be taxed for it.

        But that sits on two levels. Logically the people on the land profit themselves from the improvements they made. So what is the problem?
        Do you mean these improvements have an economic money value? That is, are they making money/ or do you project cultural value on money representing it?
        So, in the end the owner of the money; he who owns the land in terms of money value; owns these benefits.
        But that is only a mind projection.

        You should wonder if land could be owned in terms of money. When it is not an economic enterprise/ but a place a democracy lives, they call their own culture. On that case it is not a matter of taxing/ but changing the responsible ownership into the hands of democracy, the people. That is a matter of justice.

        1. David Harold Chester
          23 July 2017 at 08:58

          Peter, the trouble with a nationalized land situation is that individuals no longer have the incentive to use it in the best way because the government decides instead. So people should be permitted to own the land, but when its access rights take some of the working or residential opportunities away from others, the owner should pay a tax (or revenue, to describe it better) for this privilege. TAX LAND NOT LABOR; TAX TAKINGS NOT MAKINGS!

  4. 14 July 2017 at 17:40

    Enjoyed your ‘For 21st century progress, pick your paradigm…’ and as you say no point in having needless social media spats.

    It seems to me that the critical limiting factor for both camps is the bio-physical. It is the key ingredient for a harmonious and a healthy degree of well-being. Surely then the ‘lever’ to unlock the stand-off in perceptions and thinking is for a global adoption of ‘natural capital accounting’ or ‘ecological economics’. Without taking proper account of nature and nature limits and striving for a fusion of methodologies and disciplines we have little hope in achieving the right levels of well-being and development. (Growth is a loaded term so I guess development will suffice). But how do we break down the ‘silo thinking’ and move in the right direction? Can we really wait for the younger generation to bring the needed fresh approach? And is there a risk they get sucked in to ‘uber’ capitalism.

    I guess there is no time to wait and see or be pushed to act in the face of too many ‘tipping points’ before we change our ways? So is a fresh approach for change needed and what is it?

  5. 14 July 2017 at 17:51

    I’m with you Kate!

  6. Peter Thompson
    14 July 2017 at 18:01

    All of this, and the comments above, seem to circle round the mysteries of human psychology and behavioural characteristics. Sure, there are fools who are attracted to an easy life, something-for-nothing, and irresponsibility; but are they the majority? Will they determine the future of us all?

  7. Richard Nicholson
    14 July 2017 at 18:09

    So I don’t particularly care how well respected Branko is in the world of ‘traditional’ economics – he sound like he’s rehashing Margaret Thatcher sound bites. Branko needs to go back to school and study Complex Adaptive Systems – of which Economics is only one minor branch. Physicists are well down this road.

    I also disagree with Branko from both ethical and anthropological perspectives. He should study both Jared Diamond & David Graeber (Debt: The First 5000 Years). Also the group selection work be Edward Wilson. Dawkins “Selfish Gene” is only a small part of a much bigger tapestry of group selection.

    Humanity on Planet Earth doesn’t have much of a future with Branko’s model – so we better be right!

  8. RW
    14 July 2017 at 18:13

    Nice post with an even nice tone.
    I also admire BM but I think his view is too narrow here (focusing solely on inequality, from what I understand Kate also raises ecological issues here).
    But I totally agree with his main point:
    “If one really believed in, and wanted to argue for the incidental nature of economic growth (“whether or not the economies grow”), then he or she should start by trying to change the bases on which our (global capitalist) civilization has been built, namely insatiability of needs and commodification. ”

    Any approach that doesnt want to change those bases is romanticism indeed. Not agreeing with the implied defeatism of BM though, I think we can – and have to – change this.

    1. 18 July 2017 at 00:17

      The more unequal and insecure we become the more risky it is to be generous and cooperative. The rich get greedier when they can see how far down the steep slope they might otherwise fall, while youngsters dream of joining them because no other security seems attainable.

      Conversely even small moves towards more equality could encourage greater trust, and begin to tip the selfish/collaborative balance.

  9. James Atkins
    14 July 2017 at 18:36

    What amazing patience and humility you have in the face of such a ghastly world view from the economist chap. Well done. Humans are not the only thing trying to keep a foothold on this Earth.

  10. Herb Wiseman
    14 July 2017 at 19:02

    The scientists who study Nature vs. Nurture generally note that they interact with each other. I had a brother-in-law who was a scientist of some renown and he told me that nature is vitally important. But more and more studies are being published showing how genetic structures and supposedly innate physiological processes can be altered by environmental factors. Manufacturing Consent and the entire PR industry coupled to the work of Lakoff and others points to how we need to reframe our minds to understand society and its purpose. People may also want to take note of a Canadian initiative called the LEAP Manifesto. It is best described in a book by Naomi Klein called No Is Not Enough.

  11. 14 July 2017 at 19:22

    Paradigms are a dime a pair.

    It is crucial to pay close attention to shifting meanings and substitutions of terms. “Economic growth” is a placeholder for what used to be known as “Say’s Law,” the notion that there is “no such thing as overproduction” because the supply of one sort of commodity constitutes the demand for another.

    The substitution went through several stages. First, Keynes refuted Say’s Law. Next, growth theory was advertised as something consistent with Keynes’s analysis that Keynes “never got around to” (Harrod). Third, “aggregate demand management” through deficit financing became the preferred policy tool for promoting economic growth. Fourth, stagflation discredited conventional demand management policies. Fifth, “supply-side” policy was touted as the cure for stagflation. Sixth, Blairite/Clintonite “third way”ism adopted the supply-side as an agenda for the “left” (meaning neoliberal centrists).

    To paraphrase Brad DeLong, the goal of government growth policy now is to make Say’s Law, which is false in theory, true in practice. But there has always been an ideological bent to the promulgation of Say’s Law because it makes capital accumulation the prime mover. “Progress” is only possible so long as the rich get richer. And, incidentally, as long as the rich are getting richer, that is progress enough — eventually the benefit will “trickle down” because “in the long run” and for “the whole of society” more is more.

    Economic growth is like the chess-playing automaton Walter Benjamin wrote about in his “Theses on the Philosophy” of History — except for Benjamin the mechanical Turk was “historical materialism” and “theology” was the wizened dwarf hidden inside who pulled the levers. In the automaton of growth, it is compounding interest return on investment that performs the function of theology.

  12. Ian Barrett
    14 July 2017 at 19:26

    I agree with you on this one, but 2 points:
    Branko appears to equate ‘growth’ with increased GDP, but even leaving aside the externalities argument only accountants think all forms of growth are the same.
    I would also question both of you on assuming that everyone is greedy and wants to consume (or just possess) more and more goods and services. I want enough to live a reasonable quality of life which, for me, includes a comfortable home, enough to eat and drink, access to sources of knowledge and entertainment, health services, etc. I’d like meaningful and socially valuable work, paid and unpaid, but that’s not possible now due to illness and disability. I don’t need or want umpteen houses, cars, the latest model widget or more money than I could ever spend in millenia. I sincerely hope I’m not the only one who thinks like this!

  13. brian lindberg
    14 July 2017 at 19:31

    bottom line: (i chose this phrase to honor Branko’s tribe)…Branko’s conception of mankind is bankrupt

  14. Peter van den Engel
    14 July 2017 at 19:43

    Wonderfull you as an ecological economist (would that be the right definition?) are willing to step up to the official economy and question it with respect within its own vocabulary/ instead of ignoring it, like most ecologists do. This is the only way to go and I believe in you.

    Although I also think some more defining metrics are still missing. As for bullet point two, I would rather say: succes is money and everyone wants more of it, describes the problem and not the solution.
    The material posession level in general has reached a neutralisation level, that’s why the money system needs to be reformed. It is no longer productive/ but counter productive. I can prove that.

    As for bullet point four, about GDP, mr. Branko apparently has not understood yet that new digital technology being efficient takes more money out of that equation than in. So, sadly mr. Branko proves to be not even a good economist in traditional standards.

    Succes Kate.

  15. Alan Ball
    14 July 2017 at 19:56

    No net growth does not me ‘no change’ or ‘stagnation’. The earth is an open system, with lots of energy coming in (from the sun) and an equal amount of energy (eventually) leaving. Life as we know it exists via the energy merry go round in the middle. Clearly we need to learn to live within this equilibrium. However, that in turn does not mean that we have to freeze the status quo from an ecological perspective, and trying would probably be a mistake in terms of evolution. That said, we currently don’t understand the complex, chaotic global system that equates to the Gaia concept, so we should be cautious about the rate of change in the various energy fluxes moving through our economies and the way these disrupt the energy flows of the ‘natural’ economies that are, in most economists thinking, outside of economics. Carbon dioxide release from fossil fuels is clearly a problem if we wish to retain the current climate balance, but so is the gross rate of energy usage if it results from increased capture of the solar input into human economies.
    Equalizing the wealth amongst all of humanity is an ideal goal, independent of the economic system that makes it possible. Clearly though, privately owned capital, which represents humanities aggregate wealth, is not a good route (or root) to equal shares for all. We have to find away to both leave the wealth aggregated – so that it can act at scale on large problems – while sharing the benefits equally.

    1. Frank Inglis
      21 July 2017 at 11:59

      Brilliant Alan

      A realistic start point for change. it seems this “Ownership” is a problem. If I clasp my hands around the air inside them, does this mean I own it or have simply laid claim to it temporarily? On the other hand, if the economy collapses, the government can and will change the rules as in the past, seizing money, gold, property and land if need be. How do people without “power” (and presumably authority) address the myth of ownership using the myth of law? These historical constructs were created for a reason; to prevent those in power from losing it!

  16. Martin
    14 July 2017 at 20:17

    Would a more inclusive and sustainable economy be synonymous with growth? By which I mean an economy based solely on a strict measure of GDP deprives a future of its growth by demanding it now – with the usual caveat that a small majority get to enjoy the spoils. Surely Branko’s version is just more of the same unimaginative line toeing.

  17. Jonny Gutteridge
    14 July 2017 at 20:18

    For me it’s a question of two conflicting visions rather than conflicting systems. We aim together for a world where everyone has more than enough – quite possible – or aim keep on believing in the wild west rollercoaster we find ourselves riding on. Vision’s much more likely to motivate ordinary folks’ decision making than their belief in a particular system.

    The belief that we are primarily driven by greed is a nonsense, not worth the argument.

    That our resources are limited is a given.

    When most corporate wealth is valued for its benefits to the individual without concern for social and environmental consequences we definitely have a problem.

  18. 14 July 2017 at 20:48

    For a 1975 article presenting an alternative paradigm to economic growth, see http://paulharris.org/eia1975.PDF

  19. Peter Mikkelsen
    14 July 2017 at 21:01

    I like your doughnut economics.
    And regenerative economics is a fine new and necessary concept.
    From a qualitative point your doughnut is excellent and I think most people agree.
    But could it also be quantified with a single measure and so totally replace GDP?
    In that case we could get a true instrumental measure of human wellbeing, which should increase with time.
    Good luck!

    1. Frank Inglis
      21 July 2017 at 12:08

      Peter

      I think it can be reduced to a single metric. Energy All the activities use energy and energy is easily measured. Energy as “currency” is not a new concept and we can’t print it out of thin air and we can’t add interest to it! It can still show debt and can be a store of value and is fungible, divisible and transportable? What’s the problem?

      1. 21 July 2017 at 12:24

        Dear Frank,
        ‘Energy as currency’ IS a new and interesting concept to me.
        Can give me some references?
        I would like to combine it with my thinking as expressed in “Licensed to print money”. http://www.thebrokeronline.eu/Articles/Licensed-to-Print-Money

      2. 21 July 2017 at 12:50

        Here is an approach using exergy analysis to material and energy flows in Sweden.

        http://www.mdpi.com/1996-1073/9/9/707

        Exergy Analysis of the Supply of Energy and Material Resources in the Swedish Society

        Abstract
        Exergy is applied to the Swedish energy supply system for the period 1970–2013. Exergy flow diagrams for the systems of electricity and district heating as well as for the total supply system of energy and material resources for 2012 are presented. The share of renewable use has increased in both electricity and district heat production. The resource use is discussed in four sectors: residential and service, transportation, industry and agriculture. The resource use is also analyzed with respect to exergy efficiency and renewable share. The total exergy input of energy and material resources amounts to about 2700 PJ of which about 530 PJ was used for final consumption in 2012. The results are also compared with similar studies. Even though the share of renewable resource use has increased from 42% in 1980 to 47% in 2012, poor efficiency is still occurring in transportation, space heating, and food production. A strong dependence on fossil and nuclear fuels also implies a serious lack of sustainability. A more exergy efficient technology and a higher renewable energy share are needed in order to become a more sustainable society.

  20. robert davies
    14 July 2017 at 21:06

    Well said and a lovely post.

    The crux of the discussion, to my mind, is an intellectually honest assessment of Branko’s final point, which is that technology makes possible the full decoupling of economic growth from environmental impact.

    To my (physicist’s) mind, this statement is untennable. There is of course evidence for a partial decoupling ― we’ve seen it. But there is no foundation in physical law for a complete decoupling; decoupling has it’s limits. Fleshing out this question, I think, is will what can ultimately reslove the difference of opinion.

    His fourth statement is also untennable. The evidence from the field clearly indicates our impacts on the planet are nearing tipping points, beyond which an organized global civilization simply will not be possible. Consequently, pursuing that which has led us to this place ― growth ― is most certainly not the pursuit of human wellbeing. As Daly has said, we are in the realm of un-economic growth. Demonstrably.

  21. Tully
    14 July 2017 at 21:17

    Kate, thank you so much for being brave enough and generous enough to present these views on the world’s stage. I am currently reading your book and thrilled about the alternative you present. The most common response I find to Capitalism is that is suits our nature, which is why it is successful, but realising that it could be that homo economicus has shaped us is revealing and hopeful! I certainly feel the tensions that having to live to accumulate money presents to my personality and I don’t like it. Much better to live communally, respecting limits, caring for eachother within nature’s (potential) abundance.
    I’m so glad you’re not engaging in Twitter’s tit-for-tat. The format of much ‘social’ media does not seem to bring out the best in humanity, best eschewed in my opinion, I have pulled out of all forms of it myself.
    Thanks, thanks and thanks again!

  22. Fernando
    14 July 2017 at 21:40

    Go Kate go! The inertia in the views that we have had for decades, pushes us to stay in the way of maximizing economic growth. But that’s not proven to be the absolute best way, and intuitively your proposal makes a lot of sense to me (but be careful, we could also be wrong). I hope many others could hear about your proposal, think about it, and then choose a position. Challenge old believes has proven to be useful many times in history already.

    PS: It is a good-to-have debate.

  23. Megan
    14 July 2017 at 21:42

    Exactly. The problem is greedy people cannot imagine that others can be motivated by other aims. But those of us who have never been motivated by greed have until now been disenfranchised from economics by the neoliberal paradigm.

    If we consider Maslows hierarchy of needs, doughnut economics is about ensuring we all have our needs accounted for, while neoliberalism abandons this goal as too lofty.

    The neoliberal paradigm links status with consumerism and power gained through wealth, which has led to runaway consumerism and increased inequality which is destroying our society and planet. We need a new way for people to achieve status amongst their peers, and I propose it is to link status with achievements that represent service to society- something we can all achieve without competition with each other, and something that enhances society. Once more people can achieve these higher needs on Maslows hierarchy, they can move towards self actualisation and wisdom. This in turn will lead to increased wise choices and happiness in society, rather than people going to their graves feeling hollow inside, regardless of their wealth, because earning and spending money failed to deliver lasting status but instead brought only anxiety that someone else might earn or spend more and their status might diminish.

  24. tom fisher
    14 July 2017 at 22:59

    Branko seriously exaggerates the extent of commodification. I am retired, as is maybe 25% of the UK population. My income is fixed by my occupational and state pensions. I am not trying to get richer.

    When I go to the pub, I go to drink beer, talk to my friends and yes, you can call that networking. I like to build a good range of friends. But I am just not doing that to increase my wealth.

    How on earth can he suggest otherwise?

  25. Andrew Corcoran
    15 July 2017 at 00:44

    Since I am only a retired high school economics teacher, I have no real expertise to offer, so I present these as unqualified opinions.

    Some of the examples Branko Milanovic provides in his reply leave me scratching my head. His reference to commodifying his apartment by renting it out (AirBnB?) when he is not in it or using his car as a taxi (Uber?) seem examples of using resources more efficiently and more sustainably. Those efforts reduce the need for hotel construction projects or cab manufacturing. That seems to be in line with the doughnut concept. The fact that it is commodified is immaterial.

    The current malaise he describes in Italy is less of a head scratcher but remains unsatisfying (realizing it is a simple blog post and may be based on extensive research). It is a bit ironic to say the young are dissatisfied because they don’t have opportunities (i read “jobs”} and in the next sentence to say those who have jobs are not satisfied because they are not challenging. Could that be a reflection of the nature of jobs which are focused growth so shifting that focus could result in greater satisfaction? As for the pensioners, is the dissatisfaction stemming from the lack of increase or from a real decrease in pension values as prices increase while pensions remain static? Or could dissatisfaction be a result of lack of opportunity for personal growth, which pensioners reduce to euros when that is not the real issue?

    One concern I have about the doughnut concept is its association with the 60’s and 70’s work on static or steady state economics. Reaching and maintaining a sustainable level will require complex and dynamic systems. A sort of dynamic equilibrium that will continue to require innovation, creativity and opportunity for intellectual growth. In my view, it is important the discussion keep that sense of dynamism front and center. My fear is people will look on sustainability as a monotonous status quo and we will have nothing interesting to do, when the opposite is true.

  26. John Tons
    15 July 2017 at 01:46

    The difference between Branko and Kate amounts to a difference in the role of the institutional framework. Economists tend to assume that our economic institutions are normatively neutral they respond to our human nature and so to advocate anything different is utopian. This seems to be Branko’s position. On the other hand there are those who argue that our economic institutions play a significant role in shaping our normative beliefs. In other words change the economic institutions and you will also impact people’s belief systems.
    So Branko’s summary is right but it is a product of the economic system. This can best be illustrated by considering the way the OECD compares the quality of education in the OECD. It limits educational quality to those aspects of the curriculum that can be measured and then determines standards from those results. The result is a commodification of education and a very narrow view of quality.
    Change the economic system and you will also change normative beliefs. As for his comment that this cannot be done in the foreseeable future this shows a poor grasp of history. There have been major transformative changes in the last 100 years. But equally the sort of debate that we are having here has echoes of the debate the Gracchi brothers were conducting about 200 BCE. We can change but we need to recognize that there will always be a tendency for some to try and get support for the ideas that Branko offered up.

  27. 15 July 2017 at 02:17

    You are awesome,special,unique and endearingly humane besides a super,unconventional intellectual.
    GokateGo.

  28. Steve Hawkins
    15 July 2017 at 02:44

    Branko–and other growthists, both economic and population–have only blind faith when they simply assume that ‘scientists’ and ‘technology’ can always and will always overcome environmental limits.

    You only have to look at the pitiful attempts of the worlds’ scientists to even get the ‘economic’ and political elites to stop searching for ever more fossil fuel resources and burning them ever faster, to see that is not going to happen.

    No Mr Branko *you and your kind* are *not going to let* technology save your world. That is patently obvious to anyone not enthralled by The Economy: which is nothing more than a false god. And your Growth, is just an exponentially expanding bonfire of resources, which every scientist knows is impossible to maintain, and must burn out, eventually, whatever they do.

    Even in the UK, with one of the most crowded and overdeveloped of countries, that has record high employment and record low unemployment, the politicians and ‘economists’ are still not satisfied, and insist on the ‘planning system’ being made ever weaker and less accountable to the actual people it is meant to serve, and the removal of all ‘red tape’ and environmental regulations (it’s not the technologists calling for this!); and the very purpose of planning and government itself is perverted, and given the overriding command that *everything must be sacrificed*: in order to keep on and on with construction development, just to ‘create jobs’ for people who do not exist in this country!

    Our totally insanely forced to grow ‘economy’, has been sucking in population at the rate of a net excess of 300,000 per year, for more than a decade–tragically so, as it was just stabilising naturally at the turn of the century before the planning system’s purpose was reversed–while sensible countries in the rest of Europe see their populations stabilise or even fall.

    Laughably, right wing politicians keep trying to crack down on the very immigrants that are the result of their own insane planning and ‘growth’ drives! It’s as clear as day what they need to do: but they will *never* do it. And you ‘economists’ won’t let them. ‘Technology’ be damned: you won’t let it save you!

    ‘Economics’ is a religion, not a science, and all the technology that scientists can devise cannot save us, because our leaders do not believe in science, and many believe it is just a ‘left wing environmentalist’ conspiracy.

    If he’s lucky, Mr Branko is as old as me or older, and may not live to see what happens when wishful thinking runs up against the very real physical limits to growth. It is not going to be pretty.

  29. Gray
    15 July 2017 at 03:31

    I was listening to Jorgen Randers speak three years ago at a conference where he pointed out not so much how we need to behave, but rather how we have been behaving, which is very much in line with Branko’s way of thinking. The one exception being that he did not agree with Brankos 5th point (and frankly I’m a little surprised at Branko’s interpretation of resource economic here). He argued that it is literally hopeless, and very convincingly so I might add. The only reason I disagreed with him is because I believe (as apparently you do too), in the capacity of the human spirit.

  30. Richard Edmonds
    15 July 2017 at 03:47

    Thanks Kate, I concur with your ideas totally. Branko’s view reminds me of how we got into today’s global overshoot situation.

    To Arthur: Kate is not assuming that everyone who can contribute will contribute. That’s why she wrote ‘people are greedy and generous, competitive and collaborative’. Human nature is not black and white, but shades of grey.

  31. 15 July 2017 at 05:28

    Hi Kate. I am looking forward to reading your book this summer but it already seems obvious to me that you are right. Please check: https://giseco.org/2017/05/26/death-by-gdp/. Regards, Henrik

  32. Marjan van den Belt
    15 July 2017 at 05:48

    This worldview needs to be repeated as often as possible so that it becomes normalised. Here’s my recent TEDxWellington contribution:

  33. 15 July 2017 at 06:06

    You can also argue that people respond to the systems or institutions (the rules of the game in particular identify/value groups e.g. engineers or religions) they are part of as well as influencing them as well. This is for instance a key focus of institutional economics. There is substantial evidence for instance that different economic sectors have different norms when it comes to complying with regulations (see Prof Hodgson at Oxford and Ethical Business Regulation). If we look back to different historical times, we can also see different norms (e.g. crime has apparently reduced). We could also look at how people reacted post Grenfell. As Kate suggests, people have all sorts of potentials. I think institutions can be key in terms of setting which potentials come to the fore. Clearly we currently have a very strong institution, often called Neo-liberalism, that suggests the ‘rules of the game’ are about monetary gain, competition etc. Institutions though do change and it seems we are at a time in history when they are shifting…. So let us have hope.

  34. 15 July 2017 at 06:56

    Well done Kate. Reading your book now. Hoping to make my own small contribution to the transformation WE all need via my Thesis “An epistemic case study of competing sustainable development agendas in the boom bust Pilbara Region in Western Australia” – due for completion next year (2018)

  35. Judy Seymour
    15 July 2017 at 09:15

    What I like about your thinking Kate, is that it suggests what might be possible if we didn’t behave purely out of greed. It’s widely agreed (is it?) that gender is part socialisation and so too, I think, is greed. If we are told it is our nature to be greedy, then that becomes the norm. What if we premised some thinking on the idea that our grandchildren need us not to be greedy? For example, why don’t we make it easy for people to return their winter fuel allowance if they don’t need it? Personally, I don’t use my bus pass because I don’t need to. Could I return that/have it counted in some way that was useful? What if examples of non-greedy behaviour were publicised so that the norm starts shifting towards not being greedy? Of course, that might already be the norm for all Arthur and I know…

  36. Frank Inglis
    15 July 2017 at 09:19

    As living things we are governed by our energy regime. Lots of energy = lots of people. Net energy within the economy is required for productivity growth (Profit/Surplus). In 250 years this has gone from a “Net Energy” of over 1000 to 1 (i.e we got 1000 units of energy out for the 1 unit invested to get the energy); In the 80’s we still had a healthy Net Energy of about 50 to 1; In 2017 our Net Energy is between 8 and 13 to 1. Below about 11 to 1 “Productivity growth” is not possible. Without cheap unending fossil fuel energy and unending credit-(Debt) based capital; the economy doesn’t contract, it goes away! We are half of one per cent of the biomass of the planet but we use 24% of the Earth’s photosynthesis, that’s not sustainable. the population of every living thing on the planet MUST adjust to the energy (food) available to it, our lives are about to become forcibly simplified whether we like it or not, it is just a matter of time before the abundant cheap fossil fuel energy runs out with 7 to 8 billion humans and a lot less food and other essentials of life. The stone age didn’t end because we ran out of stones and the Oil age won’t end because we run out of Oil.

  37. 15 July 2017 at 09:32

    I prefer integrative thinking and conversation over debate.
    Stating ‘strong’ positions and describing clear differences denies my truth/hope/meta-perspective that different perspectives can and must be combined to build truth.
    Theses and antitheses don’t create syntheses, but war or at least constitute a denial of the connectedness that I believe in.

    Both Branko and Kate have a point, a valid perspective, from my point of view.
    Both also fall short of a fuller perspective that combines their perspectives (and mine is not full either).

    I cannot to afford to go into full detail of how I would tweak this worthy attempt by Kate to fairly describe both positions to show that they can be part of one narrative.
    Just a sketch.

    Branko has a point, I think, that humanity requires ‘growth’ in some sense, that it needs a broader perspective, a better future, an option to break out of its limitations, its ‘self’, to look forward to.
    The essence of humanity combines connectedness with all and everything, the ability for awareness of more encompassing unity and complexity than any other lifeform, with the urge to grow beyond the limitations of its own self, with art, religion and/or science.
    Both individual humanity and collective humanity (society, the noosphere) have that paradoxical biune essence.

    My tweaking of Branko’s point goes beyond greed (unsatiable desire for more) and competition being individual respectively collective ‘foundations’ for modern (capitalist) society.
    Even before capitalism humanity implied, needed and sougth growth, in a sense, beyond its self.
    The implication of this different (deeper?) understanding of that human essence and need is, that it need not express itself in GDP and/or material economic growth, or rather that GDP (or another summary measure of human collective well-being) can be used to show growth while we DO stay within our ecological ‘budget’.

    Kate is right, from my point of view, about the limits ecology and society set on growth.
    We MUST end material economic growth (while redistributing it, of course) or it will end ‘us’, civilization as we know it, even if we can’t from Branko’s perspective.
    And humanity WILL end material economic growth to be true to its essential -limitations denying- humanity even if that requires changing itself beyond humanity as we know it (maybe even by ‘migrating’ into artificial miniaturized intelligence embedded in crystals or starr-stuff or whatever wild SF option or by ‘migrating’ into nature itself, by identifying with Gaia/God).
    Humanity will overcome, I believe.

    I have been trying to tweak Kate’s point by suggesting a third dimension to the doughnut, a dimension in which it can fly or grow, offer humanity a way out, a way up, without compromising its ecological and social limits.
    The essence of the doughnut is not that it IS true, but that it should be MADE true for humanity as we know it to survive.
    It should be performative, it should outperform ‘GDP growth economics’ as we know it.
    It should inspire people and societies to give their lives and their histories meaning in a way that does NOT endanger earth’s ecosystems and the fragile fabric of human society and civilization that spans the earth.

    The implication is that the doughnut image may need changing to be performative enough to save humanity.
    Why not position our ecological limits as the foundation of our well-being, which we risk by eroding ecosystems and exploiting natural resources?
    Why not position our society, our aspiration to build a humane society that includes all and enables all to live a full-filling life, as a ‘ceiling’ that we can reach for and can reach beyond?

    I do not think it is helpful to describe a performative picture of greedy, competitive mankind as ‘foundational’ for ‘modern’ society, as Branko seems to do.
    Nor do I think it is helpful to describe ‘fundamental’ differences between what ‘underlies’ worldviews, as Kate does.
    Not helpful, that is, if we want to integrate perspectives and build on valid points that can be made from different perspectives.

    1. 15 July 2017 at 10:37

      Yes …..lets position our ecological limits as the foundation of our well-being, to avoid eroding ecosystems and exploiting natural resources. But how do we get from ‘here’ to ‘there’?

      1. 16 July 2017 at 09:58

        Danny, I fully agree with your premise and its resulting query – to which my reply would be: NOT. One of the key critiques of the present system is that it not only disregards actual human behaviour – but also that of human societies. History tells us that the latter do not adapt rapidly to profound changes at all – other than through bloody revolution – and even then the outcome is not ensured. So any change of the systemic paradigm would have to be introduced gradually – while simultaneously being opposed by those who gain from the status quo. In the meantime we are running out of time – globally. A dystopian outlook – unfortunately.

      2. 16 July 2017 at 13:27

        Dear Danny,
        Getting from ‘here’ (a global economy that erodes ecosystems and exploits natural resources) to ‘there’ (a regenerative, distributive and inclusive economy) requires performative narratives (including visuals like the doughnut) and deconstruction (outperforming) of 20th century economics.
        Who knows whether that will be enough?
        We can only try.

    2. Peter van den Engel
      15 July 2017 at 13:47

      Yes, interesting. I am foremost looking at it from an evolutionary point of view. It’s true that everything is connected to everything. But that also means that within the whole there are different levels of evolution; interconnections; with their own pragmatism and believe systems.

      Usually they go along excepting one another, sometimes even cooperating/ or in the contrary fighting each other.
      In the current situation economy though with its globalisation; whereas in the past this might have been religion; has become an all levels overlapping system, or proces if you like, that influences all levels.

      Since as a believe system it is only connected to labor, it creates its own segmentation in cultural society, that has its consequenses for everybody else, loosing their right to consume.

      Since labor has become much more efficient the fiscal system no longer makes up and threatens GDP. So, in some sence governments fighting for higher GDP; also because they are in a debt crisis; like Trump is doing as well as Europe and England since brexit in yeopardy; is a fight that is behind the curve of economic evolution.

      So, it is not just a matter of two different thinking groups; elites; that have trouble agreeing/ but that evolution is driving them together unevitably.
      I am worried though, because economists believing in creative destruction might in the end when they find out their economic solutions for productivety growth don’t work, might see war as a solution.

    3. Gordon Willis
      15 July 2017 at 15:50

      I don’t think it’s very constructive to confuse or try to combine all the various things that can be meant by “growth”. Kate Raworth and Branko Milanovic are talking about economic growth (e.g. as expressed by GDP). I believe that it is better to stick to that point, rather than spinning off towards the idea that, because there are other and perhaps necessary things called “growth”, some sort of rapprochement between the two views is needed. One sometimes has to accept that ideas can be opposed, and some of the ideas worth opposing might (for example) be called “growth”.

      If you are looking for some sort of combination “to build truth”, I think that you need to examine your assumptions about the nature of truth. If you believe that a synthesis of very different ideas is the only way to discover truth, you might find yourself engaged in attempting to reconcile morally contradictory principles. Truth is not a reconciliation of views but a matter of what happens to be the case, and the latter is something about which we too often turn out to have been completely wrong. You cannot “build” truth, but you can try to discover how things actually are.

      Ms Raworth has in fact offered a synthesis of a kind. In her very first bullet-point she accepts Milanovic’s principle that we are selfish animals, but points out that we can also be unselfish: we are not merely greedy, but can also be generous; we don’t only compete, we also work together; and (by implication) we are not simply insatiable but know how to exercise restraint and moderation (and I would like to add that in any case we are not in principle insatiable, except in the sense that although I might eat today, I will be hungry tomorrow; which is no more than to say “this vehicle needs refuelling”. I think, for example, that the rampant consumerism that we see today is a requirement of our economic system and to that extent a cultural product, and is not entirely a natural condition).

      The opposition is not between (sensible) vice on the one side and mere (foolish) virtue on the other (morally exclusive) but between an assumption (Milanovic) that vice is all our nature (or at least the only part of us that should be considered) and the recognition (Raworth) that we can be vicious but we can also feel, think and behave very well (and this must be considered, too). So she accepts Milanovic’s axiom — that we are selfish — simply as a fact, but the implication is that it is a partial view and that as an axiom of economic theory it must fail precisely because it is partial.

      Recognising the selfish side of our natures is critically important, because it engages us not only with the need to understand and work constructively with our nature but also with our real needs. Selfishness and need are not necessarily the same thing (in any given instance), but they must be considered together nevertheless.

      In the present economic system, a small number of people become fabulously wealthy while countless others suffer deprivation and misery — a situation which supports Milanovic’s axiom on both sides (the rapacious/insatiable and the desperate/needy) of the growing social divide. If we are to enable ourselves to have any of the kinds of growth that actually benefit all of ourselves and our world, we need at the very least an economic system within which they are actually conceivable.

      1. Peter van den Engel
        16 July 2017 at 11:11

        Wise words. At the same time you can also discover the paradox hidden in between the words, by following its logic as it unfolds.

        We are selfish, because no one accept our individual selves can understand the logic of our needs. It makes sence in terms of the logical culture humans (homo sapiens) represents.

        So, how can it at the same time represent an unwanted cause/effect relationship in the economic function, as you confirm just a few getting endlessly rich and a vast majority poor?

        This is by coincidence. Because labor is also a single centered natural physics function, that makes it parallel; in the consciousness of understanding; to our selfish needs.
        But when we look closer, we find out that with labor we are always producing amounts that far exeed our own needs.
        So, the conclusion is we are not selfish at all.

        The only thing that creates an inverted reality in contradiction to that, is the money system. The monetary system.

        So, if that is by itself a wrong conclusion, a mistake, the answer does not seem to be too complicated to figuer out.

        1. Gordon Willis
          16 July 2017 at 17:40

          @ Peter van den Engel

          Wise words.

          Now that’s a real compliment! But I’m a stoic, so thanks, but forgive me if I just get on with it.

          At the same time you can also discover the paradox hidden in between the words, by following its logic as it unfolds.

          Do you mean my words, or the words I was replying to? Or Kate Raworth’s words? If you mean my words, I dispute the existence of any paradox. I’m not hiding anything, honest! And I thought that paradoxes were especially intended not to be logical.

          We are selfish, because no one accept our individual selves can understand the logic of our needs. It makes sence in terms of the logical culture humans (homo sapiens) represents.

          I don’t think that needs are logical. We are simply contingent, so, of course, we need. Culture isn’t logical, either, and for the same reason. We are selfish, not because no one else can understand our needs (however logical) but because we are contingent and thus have needs.

          So, how can it at the same time represent an unwanted cause/effect relationship in the economic function, as you confirm just a few getting endlessly rich and a vast majority poor?

          I suppose that this is the paradox you refer to, though I have to go “between the words” (I mean yours) to find it. My point is that the present economic system has made a very few people far too rich and very many people far too poor. This is hardly a paradox.

          This is by coincidence. Because labor is also a single centered natural physics function, that makes it parallel; in the consciousness of understanding; to our selfish needs.

          No, it’s not by coincidence. This appalling situation is the direct result of an economic system which is imposed with the intention of benefitting private enterprise and reducing public services. I don’t know what a physics function is, sorry, but I accept that there might be a parallel between labour and selfishness to the extent that we work to get a new i-phone, or simply to eat (if being hungry is selfish, which I dispute). On the other hand, we also work because we care, or because we believe it is right, and so on.

          But when we look closer, we find out that with labor we are always producing amounts that far exeed our own needs.
          So, the conclusion is we are not selfish at all.

          Let us talk about logic, please. There is no logic here at all. Employees produce things they do not need because that is how they get what they do need (wages, or [in translation] meat, potatoes, mortgages and nappies). People who want the things which the employees produce will buy them. Want (desire), of course, is not necessarily correlated with need (necessity), but it is directly linked with advertising, social expectation, and natural greed; as well as actual needs, of course. None of this means that we are not selfish. And further, employers generally work to get sales (wages salaries and as much else as possible profit), and will naturally produce as much as they think they can sell.

          The only thing that creates an inverted reality in contradiction to that, is the money system. The monetary system.
          So, if that is by itself a wrong conclusion, a mistake, the answer does not seem to be too complicated to figuer out.

          I’m not sure I can, but I have to confess that my eyes glaze whenever anybody talks about the monetary system in the context of an inverted reality. I always assume it’s just another post-modernist essay.

      2. 16 July 2017 at 13:46

        Dear Gordon,
        In a sense you are right that I’m not being constructive.
        I try to deconstruct and outperform 20th century economics.
        I also try to salvage some of its insights, however, and to tempt some of those who invested huge amounts of sunk costs in it to see 21th century economics as a continuation of it.

        As for my assumptions about truth (good you ask me for them!):
        In the physical & biological realms truth is largely there to be ‘discovered’, I think, but in the social realm (including the economy) it is largely a human construction from language and visuals, concepts and models.
        See my “Economics as meant” for the performativity (social reality building effect) of various economic concepts.
        http://www.linkedin.com/pulse/economics-meant-normative-discipline-wim-nusselder
        As you say: our economic system is largely a cultural product.
        We can change it if we use the right performative tools.
        The doughnut can be one, but I’m not sure if it suffices and to what extent it may need redesigning.
        Yes, we must recognize and to some extent accept our selfishness.
        You might be interested in my “Economics of want and greed”.
        http://wim.nusselder.antenna.nl/schrijfsels/economics.htm

    4. 15 July 2017 at 23:44

      Not clear from your comment if you have read Kate’s book. She talks extensively about growth and integrating ideas from around the world and from different perspectives. And Branko admitted that he had not read the book before weighing in. We live on a finite planet with finite resources but behave and set up our economic system as if the planet resources are infinite. What could be more insane than that? We should be using a GPI — Genuine Progress Indicator. I have just sorted out some of my now-adult children’s belongings left in my home and found myself thinking about how wasteful of the planet’s resources these things were when ordered by fast food chains as a gimmick to get people into their establishment. Branco’s comments about human psychology are also uniformed as has been the case with most classical and traditional economists. If there is a fault in her book it is her optimism about people and ignoring the evil in some people. But there are ways to deal with that.

      1. 16 July 2017 at 13:58

        Daer Herb,
        I read the book partially and selectively, as I do with all books.
        I am responding to this blog post (which I did read fully).

        Yes, it would have been insane if we HAD ‘set up’ our economic system as it is.
        It has grown, however, largely involuntarily, because most of our behaviour is subconscious.
        Redesigning it is not enough to counter the intertia of the system as it is.
        We have to partly ‘go with the stream’ to be able to steer it away from the edge of disaster.

  38. 15 July 2017 at 12:05

    In theory it would be desireable to integrate different perspectives.

    In science you have collaborative research projects, opposition, peer review and other methods of evaluating and refining knowledge of the world. Overall goal should ideally be a common effort to make progress.

    In economy and politics you could also wish that humanity would make a common effort to make progress. But the perspective of Branko is a kind of virus that is contaminating the brains of many individuals and groups. If you have the virus, you will not likely contribute to cooperation and human progress. How can we neutralise and stop theese virus-infected persons? Not likely with lame acceptance of greed as a normal behaviour.

    An example of the greedy behaviour and mindset from “No is not enough” by Naomi Klein (p 140):

    Trump described a deal he made with Muammar Quaddafi:
    “I rented him a piece of land. He paid me more for one night than the land was worth for the whole year, or for two years, and then I didn’t let him use the land. That’s what we should be doing. I don’t want to use the word screwed, but I screwed him. That’s what we should be doing.”

    This is Trump’s attitude to negotiations, he has also said:
    “You hear lots of people say that a great deal is when both sides win. That is a bunch of crap. In a great deal you win – not the other side. You crush the opponent and come away with something better for yourself.”

    The world has yet to stop and neutralise the greedy people in power. We must realise that there is a fundamental conflict between the greedy mindset and the cooperative mindset that we cannot solve by understanding and mild negotiation. We must firmly resist greed and build politics on our own cooperative mindset. Negotiations with greed will screw us all.

  39. Lindsay Wood
    15 July 2017 at 12:07

    Top marks Kate – both for your own viewpoint and for presenting a competing view in a format that encourages debate.

    It is a sad truth that your “meet all reasonable needs within planetary limits” stance is seen as provocative, when it should be treated as axiomatic.

    It’s 50 years since the Club of Rome’s seminal work “Limits to Growth” was published (and subsequently derided by much of “the establishment”). It’s almost 10 years since Australia’ preeminent research institute CSIRO conducted the first serious study of the book’s accuracy, and found the “business as usual” model predictions surprisingly accurate (except for the unheralded explosions of the Chinese and Indian economies). We’re perilously slow learners.

    It’s also time default thinking let go of its GDP fixation, and used measures that deal with the gains from economic activity, not just treat the activity itself as the end goal (like a company confusing gross turnover with net profit). UK economics researcher Tim Morgan has an interesting commentary on this.

  40. Peter Barz
    15 July 2017 at 12:27

    I always marvel at the embarrassingly Über-politeness of this ‘scientific’ debate. Mr Milanovic’s crucial statement is that he BELIEVES that the environmental limits to growth can be overcome through technology. But he has no proof – nobody has. Meantime, Mr Milanovic accepts – on the basis of his religious belief in a system based on a fake theory – the ongoing extinction of the world’s biodiversity and the brutal submission of millions – possibly billions of human beings. Is it not high time to call a spade a spade!?

  41. Ian Barrett
    15 July 2017 at 14:44

    Yes, we should aim for synthesis where this is possible. For instance, competition can be totally individualistic or involve an element of cooperation – Lone Wolf vs Wolf Pack if you will – and solutions to achieving sustainable development will require both socio-economic and technical innovation. But what does seem to me to be a “fundamental difference that underlies worldviews” is Branko’s assertions re. Commodification (I would prefer the term monetisation) which he appears to believe is a good thing and the only way to ascribe value. Now I know economists like to assert that assigning monetary values to everything is the only way to describe/understand/control the economy and, by extension, the planet. But I’m an ecologist and evolutionary biologist by original training and inclination and I don’t believe natural systems – of which humans and our communities are part – can be fully described in those terms. Try assigning a monetary value to a beloved person, pet or place and you will see what I mean.

    Sure, society does do this in relation to all sorts of things, but it is a very flawed system because the judgements are inevitably based on all sorts of cultural biases and assumptions – many of which are unconscious – that tend to favour rich, white, middle aged males. I don’t have an answer. I’m just posing the question in the spirit of promoting reasoned debate.

  42. Sandwichman
    15 July 2017 at 17:18

    Paradigms are a dime a pair.

    It is crucial to pay close attention to shifting meanings and substitutions of terms. “Economic growth” is a placeholder for what used to be known as “Say’s Law,” the notion that there is “no such thing as overproduction” because the supply of one sort of commodity constitutes the demand for another.

    The substitution went through several stages. First, Keynes refuted Say’s Law. Next, growth theory was advertised as something consistent with Keynes’s analysis that Keynes “never got around to” (Harrod). Third, “aggregate demand management” through deficit financing became the preferred policy tool for promoting economic growth. Fourth, stagflation discredited conventional demand management policies. Fifth, “supply-side” policy was touted as the cure for stagflation. Sixth, Blairite/Clintonite “third way”ism adopted the supply-side as an agenda for the “left” (meaning neoliberal centrists).

    To paraphrase Brad DeLong, the goal of government growth policy now is to make Say’s Law, which is false in theory, true in practice. But there has always been an ideological bent to the promulgation of Say’s Law because it makes capital accumulation the prime mover. “Progress” is only possible so long as the rich get richer. And, incidentally, as long as the rich are getting richer, that is progress enough — eventually the benefit will “trickle down” because “in the long run” and for “the whole of society” more is more.

    Economic growth is like the chess-playing automaton Walter Benjamin wrote about in his “Theses on the Philosophy” of History — except for Benjamin the mechanical Turk was “historical materialism” and “theology” was the wizened dwarf hidden inside who pulled the levers. In the automaton of growth, it is compounding interest return on investment that performs the function of theology.

  43. 15 July 2017 at 20:08

    A distinction must be made between life-capital economic growth which can be infinite on a finite regenerative and distributive planet, and between money-capital chrematistic growth which is cancerous and cannibalistic of the life-giving and life-supporting systems of society and planet.

    I go into more detail here:

    https://bsahely.com/2017/05/01/sitting-in-the-right-pew-but-wrong-church/

    1. Peter van den Engel
      16 July 2017 at 10:20

      Interesting point of view, read your article, but at the same time you must not forget we also need an economic system, with money involved; or any kind of point system; to be able to monitor the material economic balance, because we all play a different part in that.

      What you describe as a disaster in the current collecting money (wealth) system, is because it does not properly distribute wealth, by being only connected to labor. This is a correct view. Because in natural physics labor does not devide itself in the way the money system makes it believe. Different verse indeed.

      That’s why I advise a different, correct monetary system to be found and introduced; I am working on that now in a paper; before you can evolve to the spiritual level you are describing.

      1. Richard Nicholson
        16 July 2017 at 10:36

        Read – https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years – Credit based social system predate Market based fiat / non-fiat money based systems by some time.

        1. Peter van den Engel
          16 July 2017 at 13:37

          Yes, interesting literature.
          I guess barter trading in the early days represented social knowledge that was seen as culturely just by itself.

          Money represents an unknown in culture, because you don’t know anymore who’s trading what. You cannot say that the monetary system created this unknown/ because it was just a counterreaction to that. But, yes it afirms it for the second time.

          Basicly debt represents a swapped time.
          I did this for you in my time/ now you do the same for me in your time.

          Since money created an abstract reality, one presumes that everything should be traded fair, in the way the money system represents within its own accounting logic. When we cannot feel anymore, at least we should know.

          I agree this creates problems, especially in a global society full of ‘strangers’.
          On the other hand it is impossible to retreat to a barter of social values, when you don’t know them anymore. That is opportunistic.

          However, it is possible to change the financial/fiscal system into one that does not create suspicion, but trust. It is even fairly simple. Just needs to be found out and recognized.

          1. Richard Nicholson
            16 July 2017 at 14:20

            Peter – I guess my point is the following.

            The ‘Economic’ establishment of the 20th Century tell us that there is no other way. And yet …

            1. Societies all formed before Markets were invented.
            2. The foundations of Modern economics are known to be incorrect.
            3. The science of Complex Adaptive Systems provides a roadmap for the way ahead.

            And yet traditional Economist remain blissfully ignorant. We are still told – there is no other way…

            There is – and we need to quickly figure out how to move towards it.

          2. 17 July 2017 at 10:57

            There is a formula for building trustworthy money system.

            Public resources + accountability + transparency = Trustworthiness.

            Public goods and services + unit of accountancy + medium of exchange = Trust worthy system

            The issue is the pricing system when it also becomes a store of value – as it can be corrupted to become a store of life-debasing chrematistic value or its integrity preserved by becoming a store of life-enabling economic value – in that it facilitates to management of all of our life goods and services so that all can meet their needs and actualize their potential within the means of the life-giving planet.

            Unless we have a non-corruptible money system that totally accountable and transparent as a social institution, it will never engender trust and social cohesion.

            That is why the present money system as designed manufactures scarcity and greed and fosters fear in scarcity, and thus programs us to be competitive and all the complications we see today.

            Hence the money system is not fit for life purpose. Unless we bring the money-creation process into the discussion and make it more fully and integrally life-coherent in its operation and more trustworthy, we will always be working against our best interest and creating more life problems than we can solve.

            So I agree that money system and its reform is the DNA of any economic revolution and that is where all hands on deck need to be.

    2. Gordon Willis
      16 July 2017 at 15:06

      @ Bichara Sahely
      I go into more detail here

      While I am not against the idea of a mystical approach to our problems of ecology, social justice and economy, I prefer to treat it with caution. I advocate secular democracy, which allows people to believe in anything they like but refuses everyone the power to undermine any individual’s fundamental rights. If a quasi-religious view of the earth helps people to relate well to their world and to each other, all well and good. However, one needs to keep a balance. Your attachment to Catholicism is not helpful. Catholicism can say all sorts of good things, but still fail to deliver. The reason is that although the Church is filled with kind and generous souls they are still slaves to a set of doctrines which relate primarily not to how we should live but to what we should do to be saved. Call to mind that this is a salvation of the eternal soul, not a saving of our earthly world, and, according to Christian scripture (Paul, John, et al.), it requires believers’ acceptance of whatever status quo exists as the will of their god.

      Illustrative problems arise in the following, from the TED speech made by Pope Francis which you linked to on your blog:

      “Even science — and you know it better than I do — points to an understanding of reality as a place where every element connects and interacts with everything else”.

      The first problem here, of course, is the word “even”. As though science were not primarily about how the world works, as though scientific endeavour were not exactly the endeavour to understand the relationship of all the parts to the whole. One has an image of scientists as bumbling idiots who don’t really “get” the spiritual view but do occasionally manage to stumble upon something useful. And then: “you know it better than I do”, from a man who guides millions of people, who is well-informed and knows better than most, but who appears to think that this contemptible get-out insertion will provide sufficient excuse for his implied slur.

      What I find most difficult is reconciling Pope Francis’s easy and cheap words about understanding and tenderness with the actual policy of the Roman Catholic Church as shown in its treatment of anyone who takes seriously the ideas which his words express and acts upon them. The RCC has consistently supported extreme right-wing tyrannies against the people who actually believe in the recognition of the “I” and the “Thou” that he implicitly references, against people who understand this recognition in a fundamental way, as did the Good Samaritan whose story Pope Francis discusses. The RCC will always support the priests and the levites against good Samaritans, but will nevertheless continue to appeal to our emotions by referring to the parable. Under the RCC, women cannot achieve full selfhood, as (for example) having control over their own bodies: a woman’s selfhood is defined by the RCC, and is not something which the Church can permit her to establish for herself. It is the salvation doctrine, the godly words, and the assumption of absolute moral authority which determine the Church’s course, not the so-nice sentiments it spews.

      Here he is, with his cheap emotive words:

      “And so, does hope begin when we have an ‘us’? No. Hope began with one ‘you’. When there is an ‘us’ there is a revolution”. (Argentina, where the Church could not countenance the murder of pregnant “dissidents” until they had given birth?)

      “But the future is, most of all in the hands of those people who recognise the other as a ‘you’, and themselves as part of an ‘us’. (Chile? Germany 1936-45?)

      He asks us to think tenderly of him (he has so much to say about tenderness): “so that I can fulfil the task I have been given for the good of the other, of each and everyone, of all of you, of all of us” (No doubt there is an Irish laundry in there, somewhere).

      Now try reading this: http://www.monbiot.com/2013/03/18/cardinal-sins/ .

      Bichara, the reason why I am wasting time going on about Catholicism on a blog devoted to Doughnut Economics is that you have unintentionally highlighted one of the difficulties we will face in trying to establish a new system: the power of conservatism, which, even while believing that there is a good and necessary change to be made, will fall back upon inappropriate and deluded notions of antiquity and try to include them in the new deal, on the principle that anything we know must be better than an uncharted future. Even Pope Francis has to do it, though I allow that he believes everything he says, when he says it. The conservative mind has its good points, because it can provide a necessary check to enthusiasm, and its tendency to look backward can provide a useful reminder of past experience; but its persistent belief that loyalty (e.g. to a religion or a government) is a virtue on a par with fundamental virtues such as honesty or compassion is not one of them. Such a belief opposes all the good Samaritans for all time and everywhere. This is the part of the parable that Francis does not and cannot engage with, yet is it not the whole point?

      I think that our rank consumerism is culturally ingrained, and that we need to learn to think quite differently if we are to create a society founded on new principles. This is not impossible, because the seeds of change are already there, have indeed always been there (despite the Church and the various worldly powers), and are busily growing. My worry is that the planet is now in such a mess that we won’t have enough time. I do not think that speeches by the arch-representative of a world-view that is doctrinally opposed to worldly concerns (consider the lilies of the field and the sparrows [Matthew 7:26-34 and 10:29]) are of any help in our worldly concerns, however nice nice words make one feel.

      1. 17 July 2017 at 11:19

        I understand fully your concerns, but there is something to be learnt as in practice our neoliberal policies are basically the latest iteration of the same conservative “faith-based” system that the catholic church once represented.

        https://www.theguardian.com/news/2017/jul/11/how-economics-became-a-religion

        Both social institutions are not perfect, but when leaders are bereft of vision and ideas, they always go back to what seemed to work, and repeat the same mistakes over and over again. Both discount social cohesion in the present societies and for future generations in the hope of salvation in a fake manufactured world! Conventional religions aim for individual salvation in an after-life and our secular religions (neoliberalism) is individual salvation in the market, and both worship the same god with two different faces – the traditional God and the Market God Mammon).

        Both are individualistic and breeds fear, hatred and competition, but not the hope, love and cooperation that all social constructs that are life-serving should.

        I am sure we have the wisdom and technology to creatively design a money system that can capitalize on the goods and learn from the bads of both system.

        Kate’s doughnut economics creates the cognitive map in which the variables we are dealing with are now more transparent for all to see and can be amenable to full-cost accounting. We just have to cooperatively design a money system that is now fit for life purpose and help socially design a system that is grounded in an ecology of life vocations that serves to regenerate life goods and services in sufficiency to be readily distributed from where it is unused to where it is needed, and have our rules of engagement (be they laws and policies or treaties) inclusive of our money creation process to facilitate these exchanges within the life-enabling management of the households, form the body of the individual to the body of the planet. All taking into account in a transparent manner the limits of our individual needs and the needs of the planet to build social cohesion and trust.

      2. 17 July 2017 at 11:21

        I understand fully your concerns, but there is something to be learnt as in practice our neoliberal policies are basically the latest iteration of the same conservative “faith-based” system that the catholic church once represented.

        https://www.theguardian.com/news/2017/jul/11/how-economics-became-a-religion

        Both social institutions are not perfect, but when leaders are bereft of vision and ideas, they always go back to what seemed to work, and repeat the same mistakes over and over again. Both discount social cohesion in the present societies and for future generations in the hope of salvation in a fake manufactured world! Conventional religions aim for individual salvation in an after-life and our secular religions (neoliberalism) is individual salvation in the market, and both worship the same god with two different faces – the traditional God and the Market God Mammon).

        Both are individualistic and breeds fear, hatred and competition, but not the hope, love and cooperation that all social constructs that are life-serving should.

        I am sure we have the wisdom and technology to creatively design a money system that can capitalize on the goods and learn from the bads of both system.

        Kate’s doughnut economics creates the cognitive map in which the variables we are dealing with are now more transparent for all to see and can be amenable to full-cost accounting. We just have to cooperatively design a money system that is now fit for life purpose and help socially design a system that is grounded in an ecology of life vocations that serves to regenerate life goods and services in sufficiency to be readily distributed from where it is unused to where it is needed, and have our rules of engagement (be they laws and policies or treaties) inclusive of our money creation process to facilitate these exchanges within the life-enabling management of the households, form the body of the individual to the body of the planet. All taking into account in a transparent manner the limits of our individual needs and the needs of the planet to build social cohesion and trust.

  44. Merijn Knibbe
    15 July 2017 at 20:36

    As I see it human population will grow to eleven or twelve billions. that’s about 4 billion more than at present. And quite some billion of the 7,5 billion already present need better and more housing, better and more Healthcare, better and more education and better and sometimes more food. All this will add to GDP. At the same time, the additinal 4 billion will need all this too, as well as clothing, transportation, government services and such kind of things. This will all add to GDP (which surely does not only track market transactions!). This is not about insatiable wants – but about a decent standard and way of living. As we all should know: building is one of the most environmental damaging branches of production (concrete and bricks are a disaster) – but we still need billions of dwellings. Yes, we can make building these dwellings as well as inhabiting them more sustainable by using other materials as well as: no more suburbs. Let alone: any return to the land. Luxury, energy producing, waste treating appartements are the future. At the same time, my sustainable friends who pride themselves about their sensitivity to environmental issues crave for a little, badly insulated old stand alone in the countryside and love to cross the Atlantic for a vacation or work. And oh, they adore their pets (who are fed quality dog and cat feed containing a high content of meat…). And they of course use the car to travel to work, from their friendly little cottage in the countryside. Summarizing: the twenty first century will be a century of growth (or a century of grinding poverty). And we do not need another concept of GDP (environmental activities are included in GDP, by the way) but we need technologies, to reduce the use of materials and the output of waste which are shown clearly by the input output models related to the national accounts (of which GDP is a minor part). And the sustainable way of living is in an appartment, not having pets, eating much less meat, cyling to work and not crossing the Atlantic for a vacation or work. And not using a tumble drier. Except for the cycling and the tumble drier I do not pass the test. Do you?

    1. Peter van den Engel
      16 July 2017 at 09:49

      Yes I cycle; don’t even have a car; don’t have a tumble dryer too; but, yes I still live in a brick house; never knew that was a disaster.
      But anyway you are mentioning a couple of interesting observations regarding GDP and economic growth.
      I come to the conclusion that both can be valued in different ways, so they simply don’t have one explanation for themselves..

      When you are referring to population growth, you accept that as economic growth reflected in GDP. But that is not the case. Economic growth can only be experienced by one person, on his/her living conditions. When a billion people more grow GDP by half a billion, than each person will experience a loss of half his welfare. So GDP in that respect has nothing to do with economic growth.
      For government GDP has yet another meaning. It means that when it grows in a relative sence; disregarding population gowth; it has more money to spend on social needs and its ideals.

      GDP always has a money relation; that’s what it is expressed in; so you are wrong thinking market transactions have nothing to do with it. That’s all what it is!

      The next case connected to growth is that it can also be destructive, a you point out. Eating more could cause diabetes fi, so more is not always positive growth.
      So growth; also as it is reflected in GDP; does not mean a net result. The money system cannot register what has not been a transaction yet. It does not take future costs into account, because it does not know them.

  45. David Harold Chester
    16 July 2017 at 07:57

    Unlike almost every other science, the two axioms applicable to economics are contradictory. “Man seeks to satisfy his desires with the minimum amount of exertion.” and “Man’s desires are unlimited”. This allows us to understand what economics really is, the combination of two opposites. (They were first proposed in 1879 by Henry George in his seminal book “Progress and Poverty” which sold at least 3 million copies and is still in print.) Now if anybody finds that he/she can replace one of these axioms or both of them with something that is more basic, I would like to hear of it.

    To argue about our subject in a less logical way has no value, we need to be absolutely certain about what our contradictory subject consists of first. Then we can build on a model that comes from logically and sensibly representing the whole of our social system, see SSRN 2865571 “Einstein’s Criterion Applied to Logical Macroeconomics Modeling”. The rest is natural once the start is properly made, but few will even try to see it this way as a social engineering problem.

    1. Peter van den Engel
      16 July 2017 at 12:26

      David, I love basic logic thinking.
      So I would like to comment on that.

      First, all sciences are based on contradiction. Not just economics. Fi mathematics uses + and _ , so does magnetics and electricity. Language uses verbs and anti verbs, culture uses love and hate, war and peace.

      Second, also the axioms Henry George found out need some further explanation.

      Man seeks to satisfy his desires within the minimum amount of time (note that time compares to endless or unlimited and obviously this costs less energy -exertion as a value is a relative random equation).

      Man’s desires are unlimited (unlimited means time, because no one knows his future needs – it is an unknown, in contradiction to the certainty it suggests to formulate).

      So, we have found the equation as it has been formulated contains some flaws, some presumptions that are unequal to reality.

      Al in all though, it does describe the kind of relations human concsiousness; as a thumb of rule; is making correctly. It shows where it goes wrong.

      Since labor is a perpetual instinctive time sharing; that has an endless potential to it and at the same time an unknown end result, this is in thinking parallel compared to ones future, that is also a relative endless unknown, in terms of time and needs, so therefore labor with its unknown, precisely covers the other unknown. So it is neutralised within both unknowns.

      They compare logically/ but it is far from representing a system.
      So, you cannot base a system on that.
      It is not logic.

      Since humans always over produce; by instinct, but also because it happens to cover the needs of the ones we love; it would be wise to know what is needed: it does not relate to endless desires.

      So, the system has to be related, not to ones own needs/ but to the end total of what is needed. Since this is in the current system still a relative unknown; although it manages to somehow improvise its way into the future; our monetary system needs to be revised.

      I fully agree it is a social enginering problem.

      1. David Harold Chester
        16 July 2017 at 16:38

        Least exertion does not mean least time. We can work on several projects or jobs simultaneously and the way the time passes would allow us to complete one of them faster were the others not equally pressing. So we control the speed of completion of each job and simultaneously try to satisfy our many projects over a longer period. This does not result in different equations as you put it, but it does allow for them to run in parallel.

        If you haven’t yet visited SSRN 2865571 (o9n the open literature of the internet), your agreement about social engineering has not yet made any progress in your way of seeing the situation. I may not have the last word, but at least what I have to say makes some progress over and in opposition to donuts.

    2. 17 July 2017 at 18:31

      “Man’s desires are unlimited.”
      This is not true for healthy people, who are happy to live simple lives on modest incomes. The disease called greed is so pervasive that it is incorrectly believed to be an inherent human characteristic. We must beware of “Monopoly Game Capitalism.”

      “When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value.” — John Maynard Keynes

      When and where will we share peace, joy and love? Why not now here?

  46. 16 July 2017 at 10:08

    Kate, having read all of the comments, what is missing is a neurobiological perspective of our true human nature which grounds, anchors and steers your Doughnut Economics on sound life-enabling grounds.

    It hope it would help to shed more light and create less heat as we work together to address this most urgent and pressing life-challenge.

    https://bsahely.com/2017/05/07/on-why-our-pathogenic-credit-creation-system-creates-pathogenic-disconnected-and-addicted-selves/

  47. Patricia Mason
    16 July 2017 at 13:32

    A quote from John Maynard Keynes: “How much economic growth is ‘enough’ and what other valuable human purposes may be pre-empted by a single-minded concentration on economic growth?”

  48. 16 July 2017 at 16:48

    The tension between the two paradigms and why money reform has to be part of the solution in seeing and steering our way through is best explained by Charles Eisenstein’s Sacred Economics. He makes the compelling case in this video here:

    https://youtu.be/EEZkQv25uEs

    What is missing is not the wisdom or technology, but the political will to take the necessary steps.

  49. 16 July 2017 at 19:49

    1. Capitalism: end-game of male-only consciousness?
    2. Balanced economic system: Iroquois League

    1. Capitalism: end-game of male-only consciousness?
    It seems to me that the “growth” that Branko Milanovic and others cite as innately and universal to all humans is actually the adolescent male’s natural psycho-spiritual search for his place on a physical, female world (Mother Earth). D.H.Lawrence described this search as men’s desire to “change the world”. A South American shaman talking about folktales and hero stories described it thusly: “Men are pictured often because women don’t have to go out seeking to find themselves, their adulthood or their power. A woman is already on the quest, she is a hero, every time she bleeds, every time she bears a child. A man takes his Song in his hand and hunts for his own opportunity to create his change.” Again, “He absolutely must quest in order to find his uniqueness and his place in the universe—in order to push himself into his best potential. For a woman these things are already there and they become fully part of her as she searches into her bleeding.” (Sacred Link, by Kay Cordell Whitaker)

    Unfortunately, “western” civilization as it exists in the 21st century seems to be the dead-end of a male-only framework of consciousness, what Prof. Barbara Alice Mann calls “bully boy economics”. As an American Indian of the northeastern woodlands (Bear clan, Seneca nation), she should know.

    2. Balanced economic system: Iroquois League
    Luckily, Dr. Mann (and others) have described the more balanced economic system that existed in the North American northeast woodlands (and other North American territories) pre-1492 and how the economic system was intertwined with the social-political-spiritual system for the benefit of all — including non-humans. I would highly recommend Mann’s 2000 book, Iroquoian Women: The Gantowisas. Gantowisas is translated variously as Clan mothers, Keepers, government women, indispensable women.

    Of special interest to this conversation might be these two paragraphs in Chapter 4: “Good Rule: They Assist one Another”: Women’s Control of Economics (pp. 212-13).

    “It is interesting to me that, in all of the debate furiously raging ever since Bruce Johansen’s Forgotten Founders (1982) rubbed academia’s nose in the fact that the authors of the U.S. Constitution had been strongly influenced by the Iroquoian Great Law, few have noticed the main disparity between Iroquoia and the United States. It was not the political presence or absence of women, or trial by jury, or a standing army, or any of a dozen other, readily spotted political differences that marked the distinction. It was, instead, the failure of the Founding Fathers also to adopt and adapt the Iroquoian system of grass–roots economics that complemented its political base of Ne” Gashasde”’sa’ (popular sovereignty).

    “The true failure of the resultant hybrid lay in the unthinking assumption by the Founding Fathers that European war-lord economics and Haudenosaunee Ne” gashasde”’sa’ could operate in harness without the plunder economics of Europe throwing the political system of Ne” Gashasde”’sa’ into disarray. By furthermore ignoring the sibling principles of Ne” Sken’no” (Health) and Ne” Gai’ihwiio (Righteousness) as practical tools of economic prosperity (as opposed to mere moralistic pieties), the Founding Fathers sabotaged hopes for real participatory democracy by writing the proprietary economics of Europe into their Constitution. It is this mismatch of popular but unfunded sovereignty bound to the naked exploitation of capitalism that is short-circuiting American Ne” gashasde”’sa’ today, subverting the political will of the people through the undue economic pressures exerted by a financially privileged elite. No such unbalancing access was possible in the prototype, however, for the clan level where Ne” Gashasde”’sa’ was fomented was also the level at which the confederated economy was managed. Power, will, and weal did not trickle down in Iroquoia; they percolated up.”

    Another book about the Iroquois Constitution (AKA the Great Law of Peace) and the Haudenosaunee world perspective is Basic Call to Consciousness, edited by Akwesasne Notes (Native Voices, 2005). The editors talk about liberation theologies and liberation technologies (as well as liberating political systems).

  50. Malcolm
    16 July 2017 at 23:56

    Branko Milanovic’s analysis of our current situation is (embarrassingly) accurate, and growth is required for capitalism. What then happens when growth isn’t an option? Capital productivity is diminishing, labour productivity is decreasing with an aging labor force, and total factor productivity is in decline (see Robert Gordon). Globalization no longer gets as much support even from former adherents. Business as usual is not an option for much longer. “Neither increased resource consumption nor increased consumer demand are viable. Growth will give way to sustainability, and technological innovation will be superseded by biomimicry.”
    Nor, given our current subjective consciousness, will there be any political will to change – until we do. Almost tautological.
    Eisenstein’s sense of ‘self’ and ‘other’ goes to the heart of this. The dualism of subjective, individual consciousness v. the objective, exterior (to me) world leads to a sense that I need to manage that world as best I can to survive.
    Is this “bad” or a “problem”? No, it’s the way consciousness has evolved.
    When I take a good look, I see how my ‘self’ is a construct and a process, the objective world is also a process and not really external. Best guess? There will be an evolutionary change in human consciousness to something which lets us relate with the world in a radically more connected and sustainable way. This shift is not time-predictable but event-driven, and likely driven by a major crisis in our civilization.
    We seem to be doing our best to provoke that crisis – so maybe we’re headed in the right direction!

  51. 17 July 2017 at 09:37

    I don’t think Kate’s is wholly right to summarise Branko’s position as “people are greedy insatiable and competitive”, suggesting that Branko takes this as some immutable truth (in contrast to Kate’s indisputable suggestion that actually people are “greedy and generous, competitive and collaborative – and it’s possible to nurture human nature”).

    Branko is quite clear in his blog that the “fundaments” of capitalism – greed and the insatiable desire for more, and competition as a means to achieve more – arise as a result of nurture:

    He writes: “Such characteristics have then become fully internalized by the majority of the population.”

    And he concludes:

    “If one really believed in, and wanted to argue for the incidental nature of economic growth (“whether or not the economies grow”), then he or she should start by trying to change the bases on which our (global capitalist) civilization has been built, namely insatiability of needs and commodification. But these features have become so strongly ingrained that I cannot see how they can be changed in any foreseeable future.”

    So perhaps the real point of difference between Kate and Branko is not one about immutable aspects of human nature, but rather the time-frame required for undoing the “nurturing” (I’d prefer “enculturating”) influences of living in a capitalist economy?

    Rather than Kate and Branko advancing two incommensurable worldviews, there seems to be an important shared departure point!

    1. admin
      17 July 2017 at 09:50

      Fair point, Tom – though I tried to reflect that with the 3rd point: that this can’t be changed in the foreseeable future. One of the perils of swiftly writing bulleted summaries of arguments….

      1. 17 July 2017 at 11:42

        Kate, what we are dealing with here now is deep psychology and our enculturated dysfuntional mindset (the collective unconscious) which we need to explicate if we are going to make any serious changes in the foreseeable future and transform our world order before it is too late.

        Bernard Lietaer is the best guide I have found so far.

        His article may be of interest:

        http://www.yesmagazine.org/issues/money-print-your-own/beyond-greed-and-scarcity

        I have summarized his ideas from several resources here. It may provide some food for thought and may pave the way for radical psycho-social-culutural therapy to undo the life-dysfunctionalities of the past so as to implement your cognitive map which is the best I have seen so far.

        https://bsahely.com/2016/11/23/coming-out-of-the-shadows-into-the-light/

    2. 17 July 2017 at 10:22

      I think that is absolutely right and is why studying how institutions change (for I believe that is what we are talking about) is crucial and institutional economics has a lot to offer and needs further development. The study of real institutions is a key hole in Neo-classical economics which we need to fill urgently.

  52. 17 July 2017 at 17:05

    I always felt that the way economics was taught to my (mostly) male peers was alienating and left the most basic questions about ethics and the point of human life unanswered. I find these arguments refreshing because they give me the tools to enter an area of conversation which until now I’ve felt that I have no place in which is manifestly untrue.

    1. 17 July 2017 at 18:09

      As the Women’s March in Washington has made unequivocally clear and now irrevocably conscious (at least for Americans), EVERY issue is a woman’s issue — including theoretical economics.

      Likewise the work of women like Marilyn Waring, Mary Mellor, and Kate Raworth herself are making these conversations refreshingly more inclusive and universal.

      And yes thanks to men like Charles Eisenstein, Bernard Lietaer, and the recently deceased Stephen Zarlenga (Lost Science of Money). As someone else said in this thread about this moment in human history — all hands on deck. For sure.

    2. 17 July 2017 at 21:30

      I agree Rebecca a hundred percent. Our male driven economic theories were “alienating and left the most basic questions about ethics and the point of human life unanswered”.

      The best moral philosopher of our time to guide us is Professor John McMurtry.

      His article explaining his life capital concept which I have adopted in all of my musings have connected the most dots for me.

      http://www.worldfinancialreview.com/?p=4270

      I am a medical doctor and my expertise is management of the household of the human body. What I have discovered with Prof McMurtry’s guidance is that everything is connected and I can use the wisdom within the individual life host to understand the social and planetary life hosts, and issues in one area can be translated and help to shine light in issues in other areas.

      Kate’s Doughnut Economics helped connect the dots to McMurtry’s Cancer Stage of Capitalism.

      Here is the article which helps explain the connection and how I came to be drawn in this direction.

      https://bsahely.com/2017/05/31/from-pathogenic-human-interferences-to-anthropogens-to-allostatic-overloads-to-the-doughnut-economy-to-the-cancer-stage-of-capitalism/

      1. Peter van den Engel
        18 July 2017 at 12:53

        Yes, it is interesting but also a complicated matter.

        I don’t believe that what prof McMurtry is doing, rejecting something by refusing to understand it, is a regenerative strategy. Economics is just as well a logically funcioning normality as biological physics are.
        If you would consider money to be the same potential (energy) as blood circulaton and breathing for the body is, you would not call it a cancer.

        By analysing you should also make a difference between economy and the financial/fiscal system. On what level it disfunctions. There are clear interconnections, but they don’t always have the same result, since there are inverted relations.

        When the body for instance does not recognize the amount of fat and sugar in products, is that due to a malfunctioning food industry; while he has other options, is that a malfunctioning biological concsiousness?/ or the result of misunderstanding his social cultural environment, so he overreacts in the opposite biological direction/ or was his environment itself out of bounce and why did he react to that being out of bounce himself.
        Is that a normal reaction, because it is parallel?/ or abnormal because it stresses the same asynchronicy.
        So, the question is did he have no other options, or was he too blind to understand them and if being blind is the normal condition, than his food industry should never be blind/ but does that mean being blind yourself is the normality?

        Obviously the best result would be if both were not blind. So, in an economic sence the consumer always defines his economy.

        I agree there are many problems in the current system, but the paradox is it creates them itself.
        Is this because of the endless desire for competition? As desribed to be a male character flaw? No, that is a wrong conclusion.

        The inverted relation is that being the most economic by itself creates a scarcety in the rest of the equation. When you labor the most efficient, this means you have all the money and the rest of society nothing/ but should you than need to start laboring inefficient?

        I believe the logic shows an incongruent impossibility. However, this could be overcome when you understand the financial system.

        Not just by making it a local alternative, to compensate unemployment, because that was inefficient by itself to start with/ although of course there is nothing against communities wanting to be aggricultural within their own community.

        I believe Kate’s model is a very good function for comparing cultural concsiousness needs within their interelations/ but not an enginering model for economic function.

        At least, so far the ‘ecoligical’ community is convincing politics it’s making big mistakes, so that is at least very helpfull for concsiousness development/ but alas does not provide the answers. So, the question is: how will they react? How can they react.

        1. 18 July 2017 at 13:30

          Ths thread now has 46 items or response in it. Would it be better to set up a discussion board?

          As for your criticisms of McMurtry, I could go on at great length but suffice it to say that your error begins with the statement “Economics is just as well a logically funcioning normality as biological physics are.” It simply is not. Biological Physics utilizes “a wide variety of experimental techniques, including multimodal optical microscopy, ultrafast laser spectroscopy, magnetic resonance spectroscopy, computer modeling, machine vision, and computation” not to mention proper sampling and experimental design so to compare it to economics that way is nonsense. Biological physics generate hypotheses that are tested and peer reviewed.

          Economics generates hypotheses that are seldom if ever tested and other than computer modeling and computation, uses no real tools or comparable tools to biological physics. You may want to spend some time reading Lars Syll who has excellent critiques of the lack of empiricism in economics. By the way, there is a typo. I believe you meant “functioning.”

          Finally, unlike economists, biological physicists make no attempt to advise (and mislead) politicians on serious issues (of the environment for example) until it has completed both qualitative and quantitative analyses.

          To close, McMurtry has correctly pointed out that some economic thinking has led us into a cycle where life and the means of life is divorced from the life-money-life cycle and is now a life-money-money-money cycle. The Canadian Tar Sands are a prime example.

          1. Peter van den Engel
            18 July 2017 at 14:49

            I agree that the financial/economic system is disfunctioning, that’s what the discussion is all about.

            I also agree the biological body has been far more evolved as an integrated system, whereas economy functions are far more simple, since its parts are not always knowing what other parts are doing; they function in different times; the same goes for politics by the way.
            Although I am optimistic thanks to digital techniques it can evolve much more into the wanted direction.

            I made the comparison with biology because money in principle has the same kind of function as energy for the body has, like
            fi in neurotransmitters. It depends on the design of its connections, like the body has it s well intended designed connections too.

            As far as lobbying goes I believe the pharma industry and epidemogical specialists are doing that as well in governments in their own interest, or blind believes.
            I also agree on the issue that thanks to unconscious programming of the financial system docters in general are only curing diseases, but not preventing them. In one way or the other everybody is involved in the same system.

            But that, however interesting at the same tIme, is somewhat beside the point.

        2. 18 July 2017 at 15:46

          “I believe Kate’s model is a very good function for comparing cultural concsiousness needs within their interelations/ but not an enginering model for economic function.”

          Very interesting observation! And that begs the question, Why?? What has been missing? How can we help creatively design a financial system or engineer a model for economic function that includes Prof McMurtry’s prescriptive life-values and give it predictive power to be understood and implemented with authority for provisioning of all needs within the means of the planet?

          I am convinced that our physical scientific models were incomplete and that the cornerstone that was missing in the edifice of understanding is Prof Adrian Bejan’s Constructal Law. Here we are dealing with flow architectures of life goods and services and how efficiently they self-organize.

          https://bsahely.com/2017/06/05/helping-to-evolve-our-planetary-abode-to-greater-and-better-futures/

          Kate’s Doughnut economics can be operationalized with stocks and flows and engineered using the tools engineers use to simulate, monitor, evaluate and make improvements over time.

          Finally, I have upgraded the analogy between money and energy to money and information, which may help you in your analysis and synthesis of your ideas and as a matter of fact researchers in other fields of endeavor. The new idea is the concept of Maintainers versus Innovators and how this ties in to everything else.

          https://bsahely.com/2017/07/02/a-nucleus-of-an-idea-whose-time-has-come/

          1. 19 July 2017 at 05:00

            Can we please stop with the pseudo science and pseudo-mathematics? This kind of fuzzy reasoning in search of scientific credibility is the major flaw in ‘the science’ of Economics. For example:

            “The Constructal Law is: “For a finite-size system to persist in time (to live), it must evolve freely in such a way that it provides easier access to the imposed currents that flow through it.”

            This doesn’t stand the test of thermodynamic analysis. The earth is not a ‘finite system’, it is a non-equilibrium system from an energy perspective.

            These analyses in general also seem to have a built in assumption that the planet earth is all we have. Perhaps you should pay more attention to the solar system?

            BTW, most of the responses, including my own, seem really biased towards the commenters current hobby horse; haven’t seen much constructive comment to date.

          2. Richard Nicholson
            19 July 2017 at 17:59

            Alan

            Speaking as an ex AstroPhysicist – with two daughters currently studying Ph.d’s in Planet Formation and Gaia theory (with Lovelock) – I can categorically state that – much as I’m a Trekkie (original series) – Planet Earth is all we have! As a species – we might just one day get to nearby stellar systems – but that isn’t going to happen ANY anytime soon.

            I agree lets avoid Pseudo Science. But you must also avoid Scientific reductionism / dogma. As you say – the Earth is not in Thermodynamic equilibrium – it is actually a Complex Adaptive System – with a energy source and sink. As pointed out by Kate – the Economic system should be viewed in exactly the same way – an embedded emergent system – formed from a Society substrate which is an emergent property of the Planet’s Biosphere.

          3. 19 July 2017 at 18:24

            I respectfully disagree with your conclusion. The earth is a closed system in terms of materials but an open system in terms of energy flows. You can get emergent and far-from-equilibrium phenomenon depending on the rate of flow of energy and the feedback loops involved.

            This is not pseudoscience or pseudomathematics and I stand by the claim that the constructal law is the missing piece to make any scientific understanding of societal and planetary management whole and complete. This is the science of flow architectures and their optimizations in terms energy flows and entropy.

            I will leave you with the link for the paper by Prof Bejan which I highly recommend:

            https://www.researchgate.net/publication/292670027_Constructal_thermodynamics

            Also here is a list of the application of this law so far:

            https://constructal.org/

            I will let the evidence speak for itself.

          4. richard nicholson
            20 July 2017 at 16:39

            This – https://en.wikipedia.org/wiki/Constructal_law – doesn’t look like mainstream ‘Complex Adaptive Theory’ to me. I’m open-minded – I’ll read a little further.

            But I’d strongly recommend anyone interested in this area to visit – https://www.santafe.edu and http://www.necsi.edu

          5. 21 July 2017 at 12:25

            “This – https://en.wikipedia.org/wiki/Constructal_law – doesn’t look like mainstream ‘Complex Adaptive Theory’ to me. I’m open-minded – I’ll read a little further.”

            Of course, it is not mainstream as yet, but it does add to how a complex adaptive system self-organise to optimize its flows.

            He has shown that some hierarchy/inequality of flows in terms of size of channels and rate of flows are necessary and the optimized hierarchy/inequality can be simulated and calculated. You need a few large flow channels and many more smaller slower percolation interfaces to be matched upstream and downstream in a certain proportion to be optimal. Also the size and numbers of the channels and interfaces morph along with the flow rates so that output capacities match input capacities. And this involves top-down bottom-up, parts to whole to parts complex system that adapts to the demands place on them.

            And Kate’s Doughnut Economics deal with flows of material, energy and information within the means of the planets to the needs of its inhabitants. This now has to be modelled mathematically within the limits of thermodynamics and using the constructal approach of each element (be it channels/interfaces/energy/material/information) morphing (evolving) to maximize work and minimize entropy over the long run to be regenerative and distributive at the same time.

            Please keep an open mind. I am using the wisdom of management of the organism (household) to guide my selection of models that can be used at the societal and planetary level. Our circulation (highways of laws), gastrointestinal (material), urinary (waste), respiratory (energy – O2 as terminal energy acceptor like a credit card) and nervous systems (information) have already been evolutionary designed to optimize energy, information, material and waste throughputs to be distributive and regenerative over a person’s lifetime.

          6. Richard Nicholson
            22 July 2017 at 15:13

            Bichara

            The realisation that some form of “hierarchy” & “flow” / “change” are fundamental to Complex Systems is not at all new. Indeed these observations almost define CAS – so a circular argument / discussion.

            However – there are rigours studies of this area

            In addition to the other links I provided – I would strongly recommend Kauffman ‘Investigations’ as an excellent start point.

            Kauffman’s Makespan analysis – as evolved to modelling techniques known collectively as “Tangled Nature Models” that have recently been used by the likes of the Bank of England.

          7. richard nicholson
            21 July 2017 at 08:41

            Constructional Law.

            From the limited amount of material I’ve been able to find – this strikes me as Pseudo science. It seems to comprise of tenuous suggestions with no predictive / testability – I agree with Alan Ball – until something of more substance is presented.

            What is and what is not accepted science is a fascinating area – and I suggest you read – https://www.amazon.com/What-This-Thing-Called-Science-ebook/dp/B00OR0F9J6

            Current valid scientific controversies include ‘Top Down Causality’ – see https://www.youtube.com/watch?v=nEhTkF3eG8Q – and the ongoing argument between Individual Fitness (Dawkins) and Group Fitness (Wilson) groups concerning evolution.

            These areas have a direct relevance to what we need from Next Generation Economics.

          8. Ian Barrett
            21 July 2017 at 11:39

            Bichara,
            I’ve read the key paper you reference and whilst I understand what Bejan is trying to do (though I have a problem with physicists trying to to assert hegemony over other sciences) and the concepts of flow and access. The difficulty I have with this is his use of terms such as ‘better’ and ‘easier’ without defining what he means. Better could mean faster, using less energy (for all? Some? A Minority?) or even more aesthetically pleasing (for humans or perhaps in terms of some human cultures).

            I also can’t see any mention of morality in this approach, yet in other posts you have referred to the need to focus on future generations.

            Lastly, I would characterise this approach as materialistic, mechanistic and patriarchal – in the prejorative sense of that term. Too many of the posts here reflect that perspective even though, as some of the few female posters have pointed out, that ‘alpha male’ economics is the (or at least a) root of the problems we face. I’m not suggesting crude gender-based biological determinism in terms of ways of thinking, just that there is an issue about structures of wealth/power/control that relate to male/female and feminine/masculine behaviours and modes of thought. Along with other Equality issues like sexuality, race and disability.

          9. Frank Inglis
            20 July 2017 at 17:24

            Could it just be that we are not supposed to live the way we chose to live? As a species we should be in small social groups governed by the available resources? There is nothing natural or sustainable with the way we live, I don’t really know why we are discussing this? Maybe as a species we were only designed (fated?) to survive for 2 or 3 hundred thousand years? Surely that’s okay, the planet will carry on without us? We seem obsessed with survival, yet we decide not to? Our population will reduce to the available energy – no matter what we try to do to stop or delay this inevitability.

          10. richard nicholson
            20 July 2017 at 17:37

            Frank

            Indeed the earth will continue and there is probably enough time for Intelligence to re-evolve again before the Sun becomes a Red Giant.

            However it would be such a tragic waste – especially as it is quite avoidable.

            To quote InterStellar – we need to ‘Think as a Species’ not selfish individuals – we are custodians / guardians of the Planet Earth

          11. 20 July 2017 at 18:13

            “However it would be such a tragic waste – especially as it is quite avoidable.”

            Yes, we are talking about preventable real human suffering and this is not something to be taken lightly or dismissed glibly. There are already over 7 billion individuals and billions more of sentient animals on the planet.

            I have a 5 year old daughter and twins three years old, and to bring them into a world with potential escalating social and environmental destabilizations and instabilities, and to accept this as the natural order of things is definitely not an option I am prepared or willing to entertain.

            We as a species have the capacities to think, rationalises, anticipate, imagine creative solutions, model and predict and we should make a sincere effort to learn of the strengths, weaknesses, opportunities and threats we bring to our societies and the planet and improve on our models so as to help us fix our past mistakes and create a better world for our children and theirs.

            This is no longer about us, but them!!! Once we focus on our children and the next seven generations, then it is obvious what we need to do. The true wealth of our societies and the planet are our children who should be empowered rather than handicapped in helping improve on the world we bequeath them.

            Kate’s Doughnut model is the best shot we have in initiating the Great Turn, as it helps us to keep our eyes focused not only on the planetary limits but the minimum amount of universal human life necessities for us ALL to succeed.

          12. Frank Inglis
            21 July 2017 at 11:27

            The only way we have a chance of reversing the destruction is if we stop exploiting the Earth. As a species, we could replenish it for the next generation if we chose to? But our 5 myths that we have created to ensure some sort of societal order: Religion, Laws, Money and Interest, The Nation State and Ownership ALL ensure that we won’t take such a step. My “Blook” (A cross between a blog and a Book!) “No Reverse Gear!” shows that we continually start from some suggestion of right or wrong based on what are no more than human constructs? We have evolved into a society based on greed and called it progress, status matters, hierarchic models dominate, our governments, organisations and firms and even our schools. We are trained to be obedient slaves to someone else. education is about controlling the means of production. Are we really prepared to spend half our waking hours securing enough shelter, food and water as our ancestors had to? We are angry apes. We can show empathy with others, including all the living things we share this ecosystem with, we can seek companionship, love and happiness if we want to but these are different to different people it seems? I have a 13 year old son, I worry what kind of world he will face and I would hope that we (as a species) wake up to the madness of the last two to three centuries of progress based on what amounts to just a lucky find (fossil fuel). Even in these comments I detect some sort of belief that we have some sort of right to survive? This isn’t true, we have designed a society with failure baked into the system. Until that failure occurs, many will continue with what their education and mental models say is the “right” thing for them. Until we turn man’s efforts towards fixing what we have done over “the fossil fuel age”; we, like the stone age, the bronze age and the iron age and many of the great civilisations across the millennia must end. What happens after that will depend on whether the human species can adapt to the available resources on which it’s survival depends. I say again, all living things are governed by the energy resource available. the population will size to the availability of food and water. Whether we eventually learn to cooperate rather than fight is unknown. Our highly complex way of life only occurred because of fossil fuel exploitation. This unprecedented supply of energy allowed our population to explode. The reverse is also true as this energy source runs out. We are not designed to live the way we are and we need to face that fact if we are to stand any chance of starting the now growth model. Whilst many people now realise this, our society (Governments, business, trade, finance and commerce generally) absolutely depends on this fact being wrong! Making hay while the sun shines is what opportunist people with power do. The 5 myths have created the “power” that stops us waking up and doing right by the ecosystem we share! So what are we going to do about this perfect system that guarantees it’s own survival against all attempts to change to a fair, fruitful and meaningful existence instead of one based on Power and (economic) “Growth” ? Do we just all stop going to work? Obeying the law? take our children out of the supply side? ban ALL religion? Abolish “ownership” and the Nation State? I just can’t see it.

          13. Peter van den Engel
            21 July 2017 at 12:12

            OK, interesting.

            The constructal law is: cultural social consciousness aware of energy relations that exist for it in terms of connections promising either a positive/ or a negative in future. This is as well individual/ as community shared. It does not function like a fixed natural law, as in this is a meter and that is a liter. Foot or gallon.

            The ‘myths’ you are talking about are no myths, but constructions that proved to be most valuable for human consciousness at that time in its evolution. In the mean while they are also overlapping each other. This, however does not mean they can also overcome new evolutionary problems, by selecting one of them.

            To go into the stated problem of destruction and depleting recourses, you should consider applying logic thinking. The problems created by fossil industry were very much part of the fact that initially there were no other alternatives for economy to use energy/ in combination with an in the mean while strongly grown global economy, that proves fossile energy to be counterproductive. Can you blame the economy for that? No.
            Fortunately the same economy has discovered solutions that are free energy (solar, wind) and also clean for environment. This solves both problems; the earth’s and economy; in one blow.

            However, you are right in stating that this evolution does not evolve rapidly enough. Which economy is to blame for/ and you translate into self interest.
            That’s interesting, because you impose a problem on the other half, refusing to recognize the problem, which is your observation. But here you are mixing up a couple of things.

            It is not the economy/ but the financial system that has created a relation between labor and coexistence. So, what you are asking your fellow human is to give up his coexistence/ because yours is more important. Do you call that regenerative thinking?

            Of course in some way (the at the same time inverted connection) you are also right. But just blaming the other side does not get you anywhere. This by the way is not just your ‘problem’, but in general that of the whole ecological movement I noticed.
            Kate however does make a connection with economy and is willing to respect it. So which one of you is in the wrong church?

            I agree it is difficult to find all the expertise in one group. But releasing the connection between an obligated coexistence/ and work that is destructive, you solve the problem for social consciousness, to pick another connection which is positive for energy in future, because it understands the collective interest.
            To do this, you should first solve the financial system connection. Which is in a way understanding the economic relationship problem.

          14. David Harold Chester
            21 July 2017 at 10:13

            I’ve got news for you. Our dismal and tottering subject of macroeconomics is no longer in the class or being a called a “pseudo-science”. No longer is there any need for taking an intuitive approach to what now is seen to be a more exact subject.

            I feel that we should better understand this subject, so that our next generation of economics experts will actually understand their policy-making decisions. For this reason and the idealism associated with all scientific knowledge I seek no monetary reward here, but it would be nice to know that my words have been of significance to civilizing our wobbly world.

            My new book: “Consequential Macroeconomics–Rationalizing About how Our Social System Works” is the result of many years of research and it takes a logical, formal approach to better understanding of our subject. Now it can stand up for itself and proclaim that, at last, it is a TRUE SCIENCE. Should you manage to read a free e-copy of this book, it will show how close to exact formulation and better understanding one can get! (write to me at chesterdh@hotmail.com and get your socks blown off, assuming you have them on and they are loosely attached.)

          15. Peter van den Engel
            19 July 2017 at 18:18

            Yes. Interesting Bichara.

            As far as Kate’s model goes it represents a social cultural relationship that contains knowledge: information. But information does not mean action.

            Coincidently, being a circle it fits in the universal theory that I found; which could be described as ‘living circles’; although this does not explain yet why and how it functions; which within the donut have two meanings. In that the wider circle is our future, containing the most potential: energy= information; so it means we have to understand the interconnections, with where we are today: the inner circle/ and our future. (different variations of the same concept could fi contain radiant circles)

            Obviously the picture suggests that in relation to global warming and social inequality fi our future is at stake. But in does not really explain that in a visual, expressing a shifting potential. We can imagine that vaguely, but there is no real information.

            You could fi visualize that the lack of social equality takes out the potential talent of a large group of people; that are only worrying about their material future – and have no time for anything else; so this also results into a negative for you: a lacking potential. Which can be visualized as a shrinking circle.

            My thinking model is a dynamic visual of relevant connections and how they can shift the potential: as free energy. Relating present to future.

            You could perhaps compare it with the Greek endless token/ but not within the symmetrie which it has. It can shift the energy from one circle to the other; something the Ying Jan circle perhaps suggests, but also does not visually explain.

            In that way you could show; preferably in animation, but also possibly as a double sided static; explaining what this shift means for its connections. Something which cultural consciousness can observe and absorb as information. This will direct its future actions. It is not a mathematical equation, but understanding. That’s why nobody understands E=MC2, so as a cultural meaning it is useless.

            Before I get to the alternative monetary system; which I am currently coincidently working on by the way in a research paper, related to the universal theory; I first feel the need to explain something about the complex cell organization you are pointing to, which also parallels to ecologist theory of regeneration.

            There are two levels of meaningful consequence. On one level you can conclude that the cells in our body are only there to assure we can fi walk somewhere. So its function is ‘economized’ into one overlapping, which is its main function. Therefore ecologists are making a big mistake by presuming reductionist theory in economic practice is a bad idea in principle/ because it is the very function of biology itself, that determines this as a general natural physics law. That’s why I earlier stated that economy does not differ from biology logic.

            Of course on the other preceding level, the organization of all its internal functions are most important, but that only refers to what it means within that equation.

            So, we see that energy shifts from one level field/ to the next, which contains different information. This information is returned to the brain/ and not the previous, because that is foremost a self organizing level. The same energy has different meanings in terms of information, so we have to be able tot relate one field to the other, as soon as this becomes relevant. Because there is always an overlapping inverted connection.
            The further we walk, the more important the energy level becomes (you can see the shift in a picture that reacts contrary to the information level) so we have to interrelate to that, how we are doing in the other equation.

            Money as a substance represents a meaning, an information which is energy related to the design of the connections it is swapped in.

            So as a potential (free energy) it does not contain the same information always/ but can be shifted from one onto the next level. As in that we work, earn money – and with the same money buy our consumption needs.

            In the mean while, it has shifted from one level equation to the other/ but who says they have that chosen logical relationship? When we look closer… they don’t.

            It is incorrect to presume that by chance the consumption needs of all people buying your goods, should be equal to your own private needs.

            So we conclude that economy has created a self organizing connection; because all we make in goods, is traded – and therefore returns to the center of labor. * * Which by the way is a natural physics impossibility, as if all our motions would automatically return as energy into the center of our body.
            But because it looks similar to eating, nothing seems to be wrong; while a farmer can impossibly eat all the potatoes on the field himself; so you see: information creates itself. Because it seems to be logic – and on the next level creates a behavioral pattern relating to what it has perceived.

            Describing the three biggest mistakes the financial system overall makes, they are:

            1- to presume that labor is equal to consumption; therefore only who labors has a right to consume/ while labor by itself produces much more than it can consume itself. (you can visualize the inverted swap)
            2- to take what is needed elsewhere by fiscal swap out of the labor equation/ while that doubles its labor costs, so has an inverted relation to what it is supposed to do. It does not make prices higher due to demand/ but before demand, so it remains a self-restricted spread.
            3- it presumes that money is a separate property; because it has created that relation itself; as an unrelated ownership (no labor, nor a consumption relation), so it becomes an unrelated whole, as it floats over the economy. In the mean while representing 30x the real economy/ and because it is used before labor; as speculation (investment); it must result in economic financial crises (Minsky’s law). Because there is a separate ownership involved that disappears in thin air, as soon as the economy becomes more efficient!!! So it ends up even being an inverted outcome regarding reality itself, but that is ignored. Because what has self-organized itself naturally; the invisible hand; must be right as natural physics.

            To change all this, what needs to be done is to define the proper connections money belongs to. In the first place a consumptional freedom of choice; that is what the labor spread equation IS. A guaranteed medium level of that representing reality. Which is not a basic income, being paid out of the fiscal swap sum, so that problem does not exist anymore. It has its own properties. Resulting in much cheaper labor and a much broader choice for it to evolve. When fi fossile related industries are no longer wanted.
            Workers leave that out of free will, as workers once left the properties of feudal nobility owning agricultural land as a property, which was the only labor connection that existed before.

            Of course there is more too it than this, but it describes in grand terms what should change, opening an universe of new possibilities; not negative, but only being positieve for everyone. Of course at the same time I do not presume current systems will just change because of superior knowledge. Because there are all kinds of political relationships, like fi in fixed debt responsibilities.

            I have nog studied yet on a possible relative evolving shift from old into new/ although some crisis could also lead to it (as in creative destruction), but that should not be wanted.

  53. Sue Grimley
    18 July 2017 at 10:18

    I am just learning about economics. I find your ideas very attractive, I want the human species to survive in peace and I don’t see how we can do it unless everybody tries to be satisfied with what they need, rather than fulfilling their greed. We need to learn contentment.

    Thank you for being an inspired voice.

    Sue

    1. David Harold Chester
      18 July 2017 at 16:38

      Sue,

      we have a saying here about a person who is rich is one who is content with his/her lot.

  54. Antonio Tonin
    20 July 2017 at 13:50

    Dear Kate,

    I have just finished reading your book for the second time and you continue to hit the target dead centre with Dougnut Economics, bless you.
    Having lived on this planet for the last 82 years, and having struggled as an engineer to understand this crazy idea that even though we live on this forever limited size planet and its resources, that production and consumption MUST increase all the time.
    Since when have we taken to ourselves to be GOD like and think that our science and technolgy will make something out of nothing, once we have used up all the planet’s renewable and non renewable resources.

    With due respects, I would suggest that part of all economists’ training should involve them in spending at least two years actually working, using their hands, in any manufacturing concern, or in the fields of farms. Then they will begin to appreciate what is really involved in earning a living by actually providing the necessary goods to sustain life.

    What we need to face is the fact that we have led such a charmed life up to now, and we now have to face the fact that we cannot keep up this standard of existence as we run out of oil, and all the other resources needed to sustain this standard.

    What we need to appreciate, as you so succinctly state in your book, is the true value of everything. for instance, the most precious, priceless resource on this earth is WATER; without it everything dies. Therefore it should be the standard against which everything else on earth is valued; 1litre of water will be the unit AND it will remain fixed forever. It could be called a VITA meaning lfe.

    Suffice it to say that this means we need to make a paradigm shift in thinking about we develop an economic system that will respect the myriad, interdependent environmental ecosystems of which we are an integral part.

    THE ENVIRONMENT IS THE REAL ECONOMY, and ORDINARY PEOPLE REALLY DO MATTER.
    IT IS IMPOSSIBLE TO SQUEEZE TWO LITRES OUT OF A ONE LITRE CONTAINER.

    1. 20 July 2017 at 18:48

      “I stand by the claim that the constructal law is the missing piece to make any scientific understanding of societal and planetary management whole and complete.”

      To continue this debate, statements like this, which claim to have found “the answer” are essentially unscientific – dogma, certainly; bordering on religious belief. The equations in the paper quoted are certainly pseudo science, purporting to show exact relationships between fuzzily defined, essentially non-measurable concepts that are difficult, if not impossible to map onto the concrete.

      1. 21 July 2017 at 11:43

        “To continue this debate, statements like this, which claim to have found “the answer” are essentially unscientific – dogma, certainly; bordering on religious belief. The equations in the paper quoted are certainly pseudo science, purporting to show exact relationships between fuzzily defined, essentially non-measurable concepts that are difficult, if not impossible to map onto the concrete.”

        I agree, but isn’t a hypothesis a belief to be true until proven false via evidence?

        The exact problem with economics is that life and the the environment are “fuzzily defined, essential non-measurable concepts” that is externalized in their theories because they cannot map unto the “concrete” value of prices and equations.

        Using new concepts that give us a better understanding of life as flows, and upgrading the concepts of thermodynamics to include life to make it readily understandable as aggregates of entropy-minimizing engines and entropy-maximizing brakes is a major conceptual advance that can analysed in mathematical terms.

        All new theories start as simple statements that are easy to understand. Did Adam Smith have equations to start with? Did Charles Darwin? No. The mathematical models and equations came later.

        Are there any mathematical equations in Kate’s Doughnut Economics?

        All the above inclusive of Prof Began has provided the cognitive map to navigate. How best these cognitive maps help us model and predict and understand reality is the real test of the scientific method.

        The less we externalize and the more life-coherent our theories and models are, the better we will be at understanding.

        We should never hide behind our ignorance in the search for the reality of our truth!

  55. Anne Thompson
    21 July 2017 at 16:28

    A sad sensation is often felt when one discovers a person once considered admirable is naught but a follower of extremist religious views

  56. Malcolm
    21 July 2017 at 17:23

    I was saddened to read of Stephen Zarlenga’s passing. His talk to the Treasury in 2003 about the nature and history of money is still essential reading, available at http://www.monetary.org.

    The interview in Yes! linked above is also revealing:

    “Just to give you an idea, 1995 statistics indicate that the volume of currency exchanged on the global level is $1.3 trillion per day. This is 30 times more than the daily gross domestic product (GDP) of all of the developed countries (OECD) together. The annual GDP of the United States is turned in the market every three days!
    “Of that volume, only 2 or 3 percent has to do with real trade or investment; the remainder takes place in the speculative global cyber-casino. This means that the real economy has become relegated to a mere frosting on the speculative cake, an exact reversal of how it was just two decades ago.”

    Maybe, just maybe, a speculative bubble?

    I’d guess folks interested in this blog and Doughnut Economics are well-educated, probably with middle-class jobs and incomes. For me at least, it’s almost unimaginable that this could collapse in a heap. Surely the lifestyle I take for granted can carry on indefinitely? Puh-leeeeeaze? Yet the fact is, the real economy is the environment, and the numbers just don’t stack up for ever-increasing population growth, resource consumption and pollution. Rather too many discussions with very smart over-60’s end along the lines of “I’m just glad I won’t be around to see it crash”.

    Understandably, we’ve offered up a range of opinions and options, especially, of course, Doughnut Economics. Most of us also expect that rational people can act together & implement intelligent solutions to glaringly obvious problems. We can pretty much guarantee that’s not going to happen while someone still believes they can make a buck. Insatiable greed justified by ideology is a lethal combination, but it’s also all the ordinary people I know whose retirement depends on the status quo. And they pay my wages.

    1. David Harold Chester
      23 July 2017 at 10:49

      I suspect that the greater part of this huge turn-over in the value of exchanges wealth is in land values. These provide speculators with a large part of their “free lunch” for which no work is required but from which a lot of useful land is being wasted by being held out of use. We should note that in terms of GDP land values do not figure and any presentation which takes these sums into account will need to be reassessed if and when a proper evaluation is needed.

      If land values were formally included in both sides of a company’s balance sheet, this situation would become clear. Mostly they are not.

      This situation of calculating true GDP also requires that goods in the stages of production are not included because what is being gained by one firm must equal the cost to another so the product has not been made available for true consumption or as durable capital for investment.

  57. 23 July 2017 at 11:10

    Here are some articles on the Constructs Law that is relevant to economics and may be of interest to those who are are skeptical. There is a lot of potential for advancement in economic design by applying the insights to be gained here.

    Sustainability: The Water and Energy Problem, and the Natural Design Solution

    https://www.researchgate.net/publication/283117243_Sustainability_The_Water_and_Energy_Problem_and_the_Natural_Design_Solution

    Abstract
    People like to say that energy and water are two problems, two vital commodities in short supply. Here I draw attention to the emerging literature and physics principle (constructal law) that provide the scientific foundation for sustainability. I show that the sustainability need is aboutflow: the flow of energy and the flow of water through the inhabited space. All the flows needed for human life (transportation, heating, cooling, water) are driven by the purposeful consumption of fuels. This is why the wealth of a country (the GDP) is directly proportional to the annual consumption of fuel in that country. This hierarchical organization happens; it is natural and efficient. Sustainability is the one-word need that covers all the specific needs. Sustainability comes from greater freedom in changing the organization – the flow architecture – that sustains life. Greater freedom to change the design (from water and power to laws and government) leads to greater flow, wealth, life and staying power, i.e. sustainability.

    Wealth inequality: The physics basis

    https://www.researchgate.net/publication/315690002_Wealth_inequality_The_physics_basis_Wealth_inequality_The_physics_basis

    Abstract
    Inequality ” is a common observation about us, as members of society. In this article, we unify physics with economics by showing that the distribution of wealth is related proportionally to the movement of all the streams of a live society. The hierarchical distribution of wealth on the earth happens naturally. Hierarchy is unavoidable, with staying power, and difficult to efface. We illustrate this with two architectures, river basins and the movement of freight. The physical flow architecture that emerges is hierarchical on the surface of the earth and in everything that flows inside the live human bodies, the movement of humans and their belongings, and the engines that drive the movement. The nonuniform distribution of wealth becomes more accentuated as the economy becomes more developed, i.e., as its flow architecture becomes more complex for the purpose of covering smaller and smaller interstices of the overall (fixed) territory. It takes a relatively modest complexity for the nonuniformity in the distribution of wealth to be evident. This theory also predicts the Lorenz-type distribution of income inequality, which was adopted empirically for a century.

    Economies of scale: The physics basis

    https://www.researchgate.net/publication/312988267_Economies_of_scale_The_physics_basis_Economies_of_scale_The_physics_basis

    Abstract
    Why is size so important? Why are ” economies of scale ” a universal feature of all flow systems, animate, inanimate, and human made? The empirical evidence is clear: the bigger are more efficient carriers (per unit) than the smaller. This natural tendency is observed across the board, from animal design to technology, logistics, and economics. In this paper, we rely on physics (thermodynamics) to determine the relation between the efficiency and size. Here, the objective is to predict a natural phenomenon, which is universal. It is not to model a particular type of device. The objective is to demonstrate based on physics that the efficiencies of diverse power plants should increase with size. The analysis is performed in two ways. First is the tradeoff between the ” external ” irreversibilities due to the temperature differences that exist above and below the temperature range occupied by the circuit executed by the working fluid. Second is the allocation of the fluid flow irreversibility between the hot and cold portions of the fluid flow circuit. The implications of this report in economics and design science (scaling up, scaling down) and the necessity of multi-scale design with hierarchy are discussed.

  58. Roger Kapp
    23 July 2017 at 17:06

    “overcoming planetary limits to growth”

    lol

    This summarises so well the limits of an economist (‘s view on the world).

    In order to believe in unlimited growth, you have to be an economist, or a fool.

    Cancer unlimitedly grows.

    Anyone wants (more) cancer ?

    “Economy” – as a someday to be recognised discipline – should be disciplinedly seated between history, geography and sociology (in the meantime).