Ready, Steady-state, Go!

Tonight's journey started with a read of Norm's post, "The Implications Of A Zero Growth Society," which was more intriguing than I originally though it would be. He recaps some arguements and concepts having to do with creating a no growth, zero growth, or solid state economy. These movements and concepts are in reaction to the radical discovery that we live in a bubble which contains finite amounts of resources and fragile organic ecosystems with limited carrying capacities both for extraction of materials and for absorption of wastes. Norm notes that, "our global consumer culture, and the nature of our economic system is predicated on constant economic growth.  In order to address the problem of global warming we will need a different culture and a different economic system." Which is to say both that the need for a different economic system is great and that it would require a very radical change. 
Further down the rabit hole we go. Norm linked to a very interesting paper by Ted Trainer called, "The radical implications of a zero growth economy." Trainer's paper is very interesting as I have to admit liking the idea of a steady state economy, but also not really knowing much about what that would entail. As is implied by the title of his paper, this kind of economy would not look like ours with the simple adjustment of no growth, but would need to be radically different. He states, "It is not just a matter of getting to an economy that does not grow any further; the imperative is to reach a steady state economy in which production, consumption, investment, trade and GDP are very small fractions of their present quantities."
I would love to go into the deeper mechanics of a steady state economy at some other time, yet for now will instead point out some very interesting issues that come along with it. Inequality is a fond topic of mine. In this economic system we accept a large amount of economic inequality as legitimate or necessary or inevitable. Part of how we do that is because of the mythology that says anyone can be rich and live the American Dream if they just work hard enough. The other way we do it is through the mythology that economic growth is the way to eliminate economic inequality as it becomes the "tide which raises all boats." Trainer points out that economic growth is actually the concept and mechanism by which economic inequality is created and perpetuated. In a steady state economy everyone understand and finally acknowledges that the economic pie cannot simply grow forever, but instead is a fixed size. If this were the case then, "inequality would have to be addressed and dealt with consciously and deliberately, involving social decisions regarding distribution and fair shares...which again would involve a very different kind of society" notes Trainer. So in addition to being a solution to or a necessity of global climate change, the steady state economy might be a place where we all have to get serious about equity and finally have no greed inducing mythologies to hold us back. 
Another interesting tid bit about life in a steady state economy relates to what the purposes of social structures and the meaning of life really are. In our current system the meaning of our existence is tied to consumption and accumulation of wealth and material goods, and the social structures are for the purpose of facilitating those goals for a few, supported and made possible by the many. In a steady state economy, the purpose of social structures is to facilitate a meaningful and quality life. Trainer explicates that, "People would have to be concerned to produce and acquire only that stable quantity of goods and services that is sufficient for a satisfactory quality of life, and to seek no increase whatsoever in savings, wealth, possessions etc. It would be difficult to exaggerate the magnitude of this cultural transition."
Speaking of the cultural transition, I found this amazing speech by Christine Milne, a senator from the state of Tasmania in Australia. She is speaking about the kind of economy they need to build in Australia in order to create the world in which they wish to live. She asserts, “Surely it’s time that those who advocate economic growth derived from resource extraction and pollution as the major path be the ones labeled wacky, loopy, irresponsible, divorced from reality or connected to the CIA.” I wonder how long it will be before top elected officials are saying things such as this, and getting re-elected after doing something about it? I do not ask this rhetorically either. We must move not only beyond our false mythologies and conveiniently forgotten history of the evolution of these human created social structures brought about by power and those who wield it--not simply by "good" ideas benevolently implimented and with unintended consequences--but also beyond alternatives which leave the core structure of this system intact. We must create a system which facilitates true human happiness and harmony with our natural ecosystem. 

The Global Economy and You

We learned this week about how the global economy functions and is structured. This was again a frustrating experience for me. Much of economics the religion seems to be about rationalizing what those at the top of western societies want to do for their benefit. The creation of economics and its increasing rationalization and rootedness in abstract mathematical formulas and "laws" was perhaps the most useful intellectual innovation for the wealthy. This allowed the changes to society needed for their pursuit of more and more wealth to be justified and legitimated by a "science."
 
Globalization and the international financial institutions (IFI's) were the most interesting concepts in this weeks lesson, and also the most contentious. Just as Western society has been conquered by the fairly new capitalist way, backed by the science and rationality of economics, Globalization is the new frontier of imperialism which allows the western countries and corporations to conquer the third world nations. We learned about the methods used by the IFI's to spread the "Washington Consensus" far and wide. More and more international trade agreements were pursued by the developed nations after World War II. With the creation of the IFI's such as the World Trade Organization, these sorts of trade agreements came to be institutionalized, normalized, and almost necessary for all countries to be part of.
 
For developing nations this new global trade regime came at a great cost. They were bombarded with the gospel of comparative advantage so that they would both "open" their nations to trade as well as restructure their entire economies in the hopes of one day being as wealthy as the developed nations. Opening your economy also meant you would become eligible for international investment. Investors and experts from the IFI's would bring in large amounts of loans to be used for infrastructure. The developing nations would take on the debt, but western multinational corporations would most often do the work recommended. Whole industries would be re-structured so that nations could better maximize their competitive advantage. As we did learn from our text, this also had a downside; vulnerability and volatility. Changes in the weather or the market could violently disrupt a whole nation's exports, leaving them in a bind. Many of these nation's took on large debt burdens, paid western companies large sums for infrastructure, and then found themselves unable to pay their debts. Then the IFI's would swoop in and forcefully make "structural adjustments" to their economies. This usually took the form of cutting as much government spending as possible, reducing as many tariffs and taxes as possible, and deregulating as many industries as possible.
 
I called this the new frontier of imperialism for a reason. The western multinational corporations, and in turn the wealthy from the western nations, were able to get paid to extract the natural resources, establish dependencies on our products and companies, create new markets, access dramatically lower cost labor forces and therefore maximize their profits, all without firing a shot or swinging a sword. The same goals of imperialism were accomplished, but this time by a new type of missionary and military. That of the global economy.
 
This effects us in the U.S. as well, especially in regards to the recent presidential election and the looming "fiscal cliff." Norm wrote recently, "The super rich and Obama also share a common view of the global economy.  It is providing huge rewards to those who benefit from globalization and it is punishing the middle class in rich countries as wages, and standards of living converge across nations." This was all in response to an interview of Chrystia Freeland by Ezra Klein in her Washington Post blog, about how "Romney is Wall Street’s worst bet since the bet on subprime." In this interview, Freeland speaks about her insights from numerous interviews with members of what we would call the "super rich." One insight was that the wealthy mainly backed Romney in the election because they viewed him as their best shot at more deregulation and lower taxes; the "Washington Consensus" on home territory.
 
In a recent New York Times article called, "How the Tax Burden has Changed," we can see why the wealthy would want to at least keep the tax system the way it is, if not improve it further for themselves at the detriment of everyone else. This article presents research on taxes from 1980 to 2010. Key findings are that all taxes have actually decreased in the last 30 years. Also, the share of local and state taxes paid by the bottom third of income earners has increased versus that paid by the top income earners; mainly in response to declining municipal revenues and reduced federal support. And the kicker, the distribution of benefits from our tax system as a whole benefits those in the top income brackets much more than those in the bottom half of income brackets.
 
This is all to say that the global economy and our very own economy are structured to benefit the same small group of people. Yet, we all now worship the god of neoclassical economics which was created to make the unjust seem logical. The wealthy in our society are regarded as hero's, job creators, innovators, and intellectuals; a regard that they perhaps deserve since they have been able to create and perpetuate a system which maximizes their wealth and power at the expense of the majority of the world's people and ecosystems.