UN Warns of Global Collapse: So How Can We Prevent It?

By Roar Bjonnes

In a recent report, the UN comes with a stark warning: The global capitalist system is on the verge of collapse. Those are the dire implications of a new scientific paper prepared by a group of Finnish biophysicists. The team from the BIOS Research Unit in Finland was asked to provide research that would feed into the drafting of the UN Global Sustainable Development Report (GSDR), which will be released in 2019.

The BIOS paper suggests that much of the political and economic volatility we have seen in recent years has as its root cause the global environmental crisis. “We live in an era of turmoil and profound change in the energetic and material underpinnings of economies. The era of cheap energy is coming to an end,” the authors of the paper write. “We face a form of capitalism that has hardened its focus to short-term profit maximization with little or no apparent interest in social good.”

This report comes at an important juncture for humanity, a time when the very foundation of our economic system is questioned. But what is the reason why capitalism has brought us to the brink of global collapse? More importantly, what do the UN suggest as the alternative to capitalism?

The Gifts and Failures of the Greens

One of the main gifts of the environmental movement has been to show us some of the fundamental flaws of capitalism. For example, that true wealth has little to do with profit and more to do with people’s overall wellbeing. The greens have also managed to present a new macro-economic vision where sustainability trumps growth, where consumption for real needs and not mindless consumerism guides economic planning, and, most importantly, they have emphasized the need to establish environmental and resource limits on economic activity.

What the greens have overlooked, however, is the very foundation of capitalism and its power–the alluring and sinister profit motive, the structurally inbuilt growth impulse in capitalism, which will always trump all other visions and needs, unless we restructure the macro-economic system itself. And since the green movement has overlooked this issue, it has most certainly been overlooked by mainstream economists as well as political parties. It is for this very reason we are in this dire predicament: on the precipice of a man-made global disaster.

Capitalism’s Achilles Heel: The Profit Motive

“The most important aspect of capitalism, its objective function, is to maximize profit,” says economist Jaroslav Vanek of Cornell University.1  For this reason alone, capitalist firms do not like environmental regulations; they do not like to be told to add environmental costs to the profit equation. They will fight that possibility at every turn of the way. It is for no other reason than this that greenwashing—when companies spend more money or time advertising they are green than actually being green—is so common. This is also why an unregulated capitalist economy and a democratic and sustainable economy are incompatible. And this is why the very foundation of capitalism—the profit motive–will also lead to its downfall.

Time for Systems Change

With this looming global crisis on the horizon, we have two choices: we can, as we do today, make incremental or half-hearted changes through consumer choices and painstakingly slow legislation. The result of these kinds of policies would result in a Titanic blunder; we would certainly hit the looming icebergs ahead and go down with the global ship.

Our only choice now is to make fundamental changes; to facilitate a democratic but revolutionary change in the economy. This new economy’s objective would not be to maximize profit but to maximize the welfare of people and the environment through better participation and planning.

We must restructure the entire economy, or else the old economic vision will continue to drive economic concerns. We will continue to look at nature as a free lunch and a sink hole to dump our waste in. But rhetoric aside, what is the main problem with the old economy? It is the size and goal of the capitalist market, its inevitable nature to grow and concentrate wealth and compromise human and environmental concerns. This fundamental issue—that it is inadequate to simply reform the capitalist market—has not been compellingly addressed by neither the left nor the green parties, nor the leftist or the environmental movement at large.

Beyond Green Capitalism

It is an understatement to say that our economy is dependent on nature for its survival and continued growth—the economy is part of a living environment composed of nature and humanity, and can only thrive if nature and humanity thrives. As humans we thrive best when living in harmony with nature and human culture thrives in expressing its reverence for nature. But if these qualities are lacking in society then humans suffer another form of poverty—spiritual poverty. With the right economic and environmental policies, it is possible to create an economy that continues to exist and thrive, both culturally and economically, coevolving with nature herself, in virtual perpetuity. Such an economy will be decentralized, restructured, democratic, culturally rich and circular. Here are, in a short summary, a set of comprehensive recommendations that can form the basis of a green economy that is more democratic, equitable and sustainable:

Policy Suggestions to Avoid Global Collapse

Policies

  • Shift planning away from profit concerns toward economic democracy, and social and environmental responsibility
  • Governments to encourage development of local industrial and agricultural markets—this will also maintain market competition but from the bottom-up, which is an important key to economic democracy, to better wages, to a better local and global environment
  • Create an effective global carbon tax to reduce global CO2 emissions—today individual countries have such taxes, but corporations, such as in the EU, are lobbying to stop or reduce them; this must not be allowed.
  • Divest from the fossil fuel economy and investing in a fossil fuel free economy for the future
  • Move towards zero emission technologies.
  • Increase research and development of environmentally friendly products
  • Enact economic policies based on ethics and sustainability, not profit
  • Educate and do community development to curb consumerism by promoting better lifestyles and non-material sources of happiness. Studies have shown that once people have a good standard of living, increased consumption decreases people’s happiness.
  • Enact short and long term legislation to make all farming practices organic within 10-20 years
  • Reduce subsidies to farming so that prices reflect real cost and thus creating a localized agriculture based on real consumer needs
  • Reduce meat production for sustainability and health—meat production, unless based on free range, grass fed fowl and animal production, is the most wasteful and environmentally unfriendly agricultural method, and its overconsumption has been proven to be the main cause of heart disease, cancer and diabetes
  • Educate on national level on the importance of a more plant-based diet as per the latest science on nutrition and health
  • Increase the production, food processing and distribution of fruits, vegetables, herbs, plant oils and grains for maximum local, regional and national food sovereignty

The main reason why there has been little progress in implementing the kind of environmental policies outlined above is not because we do not have solutions, it is simply because there is no global consensus on what the problem is—that capitalism’s bottom line, profit-driven economy is fundamentally incompatible with a sustainable economy. Hence, in order to avoid irreparable damage to the ecosystem from global warming, and to avoid political instability and widespread poverty from resource depletion, we need not only more reforms, we need economic systems change. There is simply no other alternative.

 

1 Jaroslav Vanek, interview first published in Prout Journal, then republished in New Renaissance Magazine, please see: http://www.ru.org/51cooper.html
UN Warns of Global Collapse: So How Can We Prevent It?
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Making the Unthinkable the New Norm

By Tim Shanks

The unthinkable

If a politician a few years ago had been overheard saying that he could get away with touching a woman’s private parts because he was famous, that would have made him unelectable. Not any longer.

In spite of numerous profanities, lies and vicious attacks on anyone who disagrees with him, or simply stands in the way of his objectives, Donald Trump is as popular as ever with his supporters. In a drastic departure from established politics, it seems that these vile outbursts increases the intensity of his support.

One reason for this shift in perception might be that, for a change, people see in Trump a person that talks and acts much like they do, not as a politician. For many people, when they get angry, it is common to simply say what’s on their minds, damn the consequences. There is something very American in that frankness of spirit. So when they see Donald Trump do the same thing, they can identify with him and see in him a different person from the glib, hypocritical politicians they are used to listen to.

The new norm

More than being an isolated phenomenon, Donald Trump has spearheaded a shift in the civic discourse in America, if not the world. Ideas that were previously unspeakable are now expressed openly, and political acts that were unthinkable before are becoming the new norm. Restraint and efforts to be diplomatic and polite seems no longer to be in vogue. To be moderate and respectful of those with a different view is now a liability. To be aggressive, nasty and abrasive has become a political virtue.

Down a slippery slope towards dictatorship

The foundation of all great civilisations has been to have a common goal and the cooperation between its people. The more inclusive a society is, the greater the chance it has to prosper. Similarly, all democratic societies are built upon the principle that everyone’s views are to be respected, even if we do not agree with them. Modern history has taught us that when this tolerance is absent or breaks down, democracy is unable to grow and dictatorial leaders, such as Pinochet in Chile and Somoza in Nicaragua, can easily consolidate their power.

People who supported Hitler in the early 1930s could hardly have imagined him as a dictator unleashing unthinkable horrors, not only in Germany, but in the whole world. In hindsight, we now know that his supporters helped him in legitimizing hate and intolerance. And, thus, in 1933, Hitler outlawed all non-Nazi political parties and forced the Reichstag to abdicate its democratic responsibilities.

One may argue, of course, that intolerance and incivility has always been the norm in politics. Speeches that have sounded politically correct on the surface have simply been a smooth veneer of politeness hiding the grossness and manipulations underneath. While the tone may be courteous and the outer expressions civilized, greed, corruption and hypocrisy is often hiding just beneath the surface. Politicians mostly say one thing and do another. As Shakespeare said in the Merchant of Venice, “The world is still deceived by ornaments.” In a recent article Roar Bjonnes points explains how the Democratic Party has often paid lip service to their progressive causes of increasing wages and improving health care for those on Main Street, while most of their actions have increased inequality and favoured the rich on Wall Street. This is a good example of the hypocrisy that underlies most politics.

Under Trump, the nature of the discourse has changed. He is not worried about political correctness. He actually says what’s on his mind. This does not mean, however, that Donald Trump openly speaks what he really believes. Rather, he expresses what he feels will help him at that moment, which is a very different thing. When the circumstances change, or, perhaps, when his mood changes, he does not mind contradicting himself. As in George Orwell’s 1984, where the Ministry of Truth constantly rewrote history to fit the momentary views of the government, Trump also rewrites history according to his own shifting moods.

But is it not better to speak one’s mind than to think inhumane and uncivilised thoughts while hiding one’s real intentions under a veneer of civilised expression? On one level, the answer is yes. But on the other hand, outer decorum does matter.

If someone lies in secret, one may eventually be able to expose the lie, and the person will have to back down. But when someone lies openly, does not care the slightest if anyone finds out, and not only that, when nobody else cares either, then the entire fabric of civil society has been torn apart. When lying and hate speech has become legitimized, as it has today, then the previous standard for civil discourse has been radically altered.

What we sorely need today are honest political leaders who are not afraid to say what they think, and who do not conceal their true intentions behind polished speeches. But being frank is not enough. If they are selfish or support special interest groups, this virtue turns into a vice.

So the qualities we need from our leaders are twofold.

First, they must have the correct aspirations and convictions. We need leaders who are prepared to protect our planet for future generations, and to ensure that all people have a chance to a decent life. This would mean creating a sustainable society working with nature instead of against it; reducing inequality; and create a reward system where people are rewarded for their real contributions to society, and not by how much they manage to steal by clever financial manipulation.

Secondly, the leaders must be honest, outspoken and transparent. They must tell the truth and not be afraid of controversy as they pursue their goals. Like Donald Trump, they must not be afraid to break with the past and not be worried about political correctness. But unlike Donald Trump, they must do this out of love for humanity, for the betterment of all people and the survival of humanity, and not for personal gain and fame.

Making the Unthinkable the New Norm
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How the Democrats Handed Trump the White House

By Roar Bjonnes

Today, almost two years after Donald Trump became the 45th President of the USA, many ask themselves these questions: Why did white blue collar workers—who have very little in common with the super-rich—vote for a real-estate tycoon like Donald Trump? Why didn’t these hardworking laborers vote for a Democratic candidate instead? After all, the Democratic Party has historically been the party of the working class, so why did a privileged leader of the Republican Party receive so much support from the poor?
According to some left-leaning pundits, Trump received all this unprecedented support from the working class because an entire industry has been devoted to convince poor white Americans that elitist Democratic liberals do not understand them, even look down upon them. So, because of this ingrained, cultural scorn, Trump won the contested election.
This right-wing media industry, the story continues—headed by the loud voices of Sean Hannity and Tucker Carlson at Fox News, radio talk show hosts Rush Limbaugh and Alex Jones, as well as alt-right ideologue Steve Bannon—has brainwashed Appalachian miners and Midwestern auto workers to believe that Trump was the only candidate who could bring them back their jobs and their dignity.
There is definitely some truth in this political warfare and scare-mongering scenario, but it’s not the whole story. The main reason for Trump’s populist rise to the top started a long time before Bannon, Jones and Carlson became household names in America and the rest of the world. Trump’s rise to power is mainly the fault of the Democrats themselves.

The Democratic Betrayal

The main reasons for Trump’s win are many, and they are complex, but the important lesson is that many poor and middle class voters feel betrayed by the Democratic Party. And not without reason. Over the past decades, the Democratic Party has done more to look after the interests of big business than the average voters they are supposed to stand up for. While much of their rhetoric has been pro-labor, their actions have mainly supported the corporate sector.
Trump was therefore not the only upset during the last presidential election. Bernie Sanders was another. He also challenged Hillary Clinton and the Democratic establishment. Describing himself as a democratic socialist, the 74 year old Senator from Vermont received 47% of the votes during the Democratic primary. Sanders’ major theme was strong and clear: the country has been rigged in favor of big corporations, Wall Street and the super-rich.
The reason for both the independent Sanders’ and the right wing Trump’s rise in popularity is thus ironically the same: the Democratic Party’s lack of support for the working class.

Bill Clinton: The Betrayer in Charge

The Democratic switch away from the working class toward the corporate sector started to increase dramatically in the 1990’s, during the presidency of Bill Clinton, when the Democratic Party moved strongly to the right. Clinton’s rhetoric was pro-labor, but all his deeds where pro-corporation. His “welfare reform bill,” for example, has been devastating for millions of American families. Twenty years after he scrapped the Aid to Families with Dependent Children in favor of the right wing’s underfunded and more punitive vision, the number of poor American children has exploded.
President Clinton’s presidency was characterized by financial deregulation, which in many ways set in motion the excessive lending practices leading up to the 2008 finance crisis. One of his free-wheeling capitalist strokes was the Gramm-Leach-Bliley Act, which repealed Depression era regulations that had held the economy in check. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. According to Columbia Journalism Review, Clinton was responsible for “damaging financial deregulation—and thus, for the [2008] financial crisis.”
Clinton’s Presidency also helped destroy America’s manufacturing base by promoting and passing the North American Free Trade Agreement (NAFTA), in 1993, with Mexico and Canada, when Democrats controlled Congress. “NAFTA signaled that the Democratic Party—the ‘progressive’ side of the U.S. two-party system—had accepted the reactionary economic ideology of Ronald Reagan,” wrote Jeff Faux, on the Economic Policy Institute’s blog.
While NAFTA sent 700,000 US manufacturing jobs to Mexico, the agreement also devastated the Mexican small farm economy, creating a massive flow of illegal migration into the US. A problem, which turned into one of Trump’s main stump speech topics: his populist cry for building a wall on the US/Mexican border—thus to stop illegal immigrants from taking American jobs and reduce crime– and to abolish NAFTA—thus to return jobs back to American workers. These ideas spoke directly to the needs and interests of many poor and middle class workers.
The deregulatory and free-trade legacy started by Bill Clinton was continued under the leadership of both George W. Bush and Barak Obama. Both of these administrations promoted corporate and financial interests above those of the workers.

Barak Obama: The Progressive Who Sold the Farm to Pay the Bills

Barak Obama started his presidency with the highest popularity rating in modern times, and with extremely high expectations. To many, he was seen as a Progressive who could change the course of America and improve the lot of the American workers, especially that of minorities—African-Americans and Mexican-Americans.
But when Obama’s policies were analyzed by the Norwegian newspaper Aftenposten, his policies came out to the far-right of the Norwegian Right Wing Party. Hence, during the first six years of Obama’s Presidency, we saw many more hits to the middle-class in the form of decreased pension guarantees from companies, less job security, and more volatility in financial markets that made retirement planning challenging. Indeed, in the aftermath of the financial crisis of 2008, the Obama administration did very little to help the middle-class other than to make sure that the banks stayed open by shoring up Wall Street and the rest of the finance system.
Simply put, Obama’s policies helped the rich banks and their investors while the bill for the massive bail out after the finance crisis was handed to the tax payers. This cowardly act has not gone unnoticed and has helped fan the flames of middle class discontent. According to economist Emanuel Saez, the one percent did much better under Obama than it ever did during Republican President George W. Bush’s time. That might not have been much of a political issue if the average voters also had seen greater income gains under Obama, but they did not.

Obama did not have a choice in having to save the broader economy. But he did have a choice in how to do it. He chose to bail out the big banks instead of the people. He could have done what they did in Iceland: let some of the big banks fail and instead bail out the people.
Under Obama, when the finance crisis caused a 1 million dollar home to fall in price to $400,000, he let the owner lose the house and go bankrupt. He bailed out the banks instead. If, on the other hand, the government had absorbed the amount of debt on the house that was in excess of market value, many of those who lost their homes could have kept them, re-mortgaged the lower value, and be able to pay their monthly payments. This would not have cost any more money than bailing out the banks, while at the same time it would have put more spending money into the pockets of people and thus the real economy would have recovered much faster.
Since the 1970s, income inequality has been increasing in America. Most importantly, the purchasing power of the middle class has been in decline as well. During the last election, Trump cleverly promised to undo the mess created by the elitists in Washington, whom many people felt had betrayed the average voters.
As history has taught us, when times are tough, the winds of the populist right will flicker strong in the nationalist flags and demagogic leaders like Trump will prominently enter the political fray. So, what now, America? What now, Democratic Party? Will you move further to the right? Or will a new, more progressive wind blow your way?

New Direction for the Democratic Party?

As political activist and former Green Party presidential candidate Ralph Nader once said, there is only one party in America, the Corporate Party, and it has two wings, the Democratic wing and the Republican wing. There is much truth in this. As the Democratic Party has lost touch with its progressive roots and the middle class, it has moved to the right and in support of policies that has increased inequality and reduced pay and security for the middle class. It has also failed to safeguard the environment against exploitation by corporate business. However, there may be hope for change.
Columnist for the Guardian George Monbiot thinks that a “new revolution” has started in America. This new revolution is headed by Bernie Sanders and the likes of Alexandria Ocasio-Cortez, a young leftist woman who recently beat establishment Democrat Joseph Crowley in the New York Primary election. These Justice Democrats, according to Saikat Chakrabarti, one of their core organizers, aim to “take their seats in Congress…” and to “legislate the hell out of everything, like the Republicans do … proposing the boldest, biggest ideas on Day One”.
America needs a new, bold vision for the future. The old American Dream has faded and failed; it has turned into a self-serving, corporate, finance empire out of touch with ordinary people and in a war against the environment.
Will the new Democratic leadership stand up and create a new American agenda for and by the people? Will we see the formation of a new American dream that will demand and demonstrate that taxes on wealth and carbon pollution will not stifle the economy? Will they stand up against the lies and hateful rhetoric spewed by the likes of Rush Limbaugh, Alex Jones and Fox News?
If that will be the case, I would agree with George Monbiot: a new revolution will indeed have entered American politics.
Roar Bjonnes is a researcher and writer with the Prout Research Institute in Copenhagen, Denmark. He has written numerous articles and essays on economic and environmental issues for books, journals and newspapers. He is the author of two books, Growing a New Economy and Principles of a New Economy. His website: www.growinganeweconomy.com

How the Democrats Handed Trump the White House
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The Bank that Broke Britain

Book review by T. Shanks

Shredded: Inside RBS, the Bank that Broke Britain, by journalist Ian Fraser, is the story of the rise, collapse and bailout of the Royal Bank of Scotland (RBS), at one time one of the world’s largest banks. While this narrative is the main focus of the book, it is about so much more.

https://www.amazon.co.uk/Shredded-Inside-Bank-Broke-Britain-ebook/dp/B00KRCKR9A

Many books have been written about the financial crisis of 2007, including the collapse of the Lehman Brothers, but they have almost exclusively described the crisis from an American perspective. Shredded takes an inside look at the crisis from the perspective of a British bank, and it is likely the definitive work in this regard.

Fraser’s work is much more than a description of the crimes, corruption, mismanagement and selfishness of the management team in a single bank, as it also illustrates how the mind-set and priorities shown by the RBS bosses is representative of the thinking inside large portions of the financial sector.

Praise for the book has been effusive. Martin Wolf of Financial Times wrote, “A gripping account …RBS was a rogue business, operating in what had become a rogue industry, with the connivance of the government. Read it and weep.” Max Keiser calls it “An instant classic,” and Yves Smith, author of Naked Capitalism, calls it “The definitive account for the RBS fiasco. It’s an engaging tale of how self-serving bank executives systematically broke the rules, lent with astonishing recklessness, abused customers and got suckered by Wall Street – before dumping their mess on the taxpayers.”

In this well-researched book, Fraser describes how the RBS, a bank that exemplifies a whole financial sector, had gone awry. Over the years, RBS was taken over by executives driven by equal portions of personal greed for perks and bonuses and an ego to lead RBS to become the biggest and most profitable bank in the world. In their relentless quest for expansion, the management bought up other banks at overvalued prices heedless of whether the deals made financial sense or not. If the deals went through, they paid themselves huge bonuses, and if they later turned out to be bad deals, the shareholders would pick up the tab.

Billions of pounds were paid out in bonuses every year, and it seems that all activity was geared to maximise these at all cost. Bonuses were paid on unrealised profits, and due to flawed risk assessments, huge profits, with the accompanied bonuses, were booked on transactions that turned out to generate losses. This perverse culture encouraged reckless risk taking and total disregard for the interest of the bank, its customers, or society as a whole.

In general, banks make profits on fees and interest they charge their customers. RBS, however, went even further. The bank actively tried to put some of their customers out of business so that it could grab the underlying assets used as security for their loans. This is probably a new low, even for the notoriously greedy banking sector. RBS is currently fending off a number of lawsuits related to this behaviour.

Even though the actions of the bank were horrendous, the most frightening image the reader is left with is that the malpractices seems to have continued unabated after UK taxpayers bailed out the bank with an astonishing GBP 54 billion, close to 5% of the British GDP. In spite of the UK government now owning over 70% of the bank, the culture of exorbitant bonuses, running into billions of pounds annually, continued, even as the bank was losing money. Other malpractices, such as the rigging of interest rates, continued as well. And customers were still treated shabbily. Even though Derek Carlyle won a Supreme Court judgement against RBS in 2015 for trying to financially destroy him, it took three years before the bank agreed to compensate him. Throughout, the bank continuously refused to take responsibility for its bad behaviour.

This raises an important point. If the taxpayers now are the owners of the bank, one would assume that the culture would change and that a new moral compass would lead the bank’s decision making process. But this never happened.

Presently the UK government is in the process of selling its shares of the bank at a price far lower than what they bought it for. In June 2018 it sold the first chunk of 7.7% of the shares in RBS for GBP 2.5 billion, taking a loss of GBP 2 billion in the process. It is anybody’s guess how big the losses will be once the government has sold all its shares.

Ian Faser does not provide a wider analysis of the financial sector, nor does he ask questions about its role within the broader economy. This is both a strength and a weakness. By sticking to the abuses of RBS and other rogue institutions the book becomes less controversial and will probably reach a larger readership. But given the magnitude of the financial crisis, and the intransigence of present day financial institutions, there are many broader issues that needs to be brought into the light of day.

One of the questions not raised in the book is how and why a person like Fred Goodwin—or “Fred the Shred” as he was nicknamed, due to his cost savings methods–became the CEO of RBS. The short answer: he fit the bill of the financial culture of greed at the time. Mr. Goodwin’s abrasive nature and poor human relationship skills were well known inside the bank. Mr. Goodwin also had a reputation for aggressive cost saving schemes, including cutting 18,000 jobs during the merger between RBS with NatWest, while at the same time pursuing acquisitions and mergers. In short, there was nothing hidden in his agenda, and everyone knew before his appointment what type of a leader he was. Therefore, the problem was not just Fred Goodwin, but rather the new culture of profitmaking gone wild. Thus the shareholders handed over the running of the bank to “Fred the Shred” quite readily.

Another question that is unanswered is the role of banks in a broader sense. Banking is supposed to provide a supporting function so that the real economy can work more efficiently, but the financial sector has now grown so big that it dominates all other sectors of the economy. Instead of serving the real economy, it has now become its master. And a cruel master to boot.

In 2012, 40% of all corporate profits in the US came from the financial sector. However, as Professor Michael Hudson points out in his book The Bubble and Beyond, the financial sector does not produce any wealth. That means that the 40% share of these corporate profits did not add to the income of the US economy, but simply reduced the profitability of the companies in the real economy by the same amount. Another way of putting it is that the financial sector acts like a parasite that sucks off large portions of the wealth created by the real economy. In effect, the financial sector strangles the real economy. If the money had instead been kept in the real economy, it could have been used to increase wages, been invested in productive ventures, or used in other ways to increase the wealth of society as a whole.

But there is a new twist to this story. While the banks have become parasites living off the real economy, the executives have become parasites living off the banks. There are still honest bankers with integrity around, of course, but too many of them are running a scam, similar to the way “Fred the Shred” was allowed to run RBS. Bankers like him take enormous long term risks showing huge profits in the short term, because no provisions are taken for the eventuality that their gambles will fail. Based on this, they are paid huge bonuses. When the bubble bursts, they resign, get to keep their past bonuses, and to top it off, they retire with an outlandish pension. The shareholders and the taxpayers are left behind to pay the bills.

Human society is a society based on laws. Today we have created laws that allow the financial sector, and in particular the executives who run the banks and other financial institutions, to legally steal from the rest of society. Unless this is recognized, and changed, we will continue to see more, and even worse, financial crises in the near future. And we, the taxpayers, will continue to bail out more people the likes of “Fred the Shred.”

The Bank that Broke Britain
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It’s Time to Grow a New Economy

In the new book Growing a New Economy: Beyond Crisis Capitalism and Environmental Destruction authors Roar Bjonnes and Caroline Hargreaves present a compelling case for the current predicament humanity is facing: the environmental crisis, the authors claim, cannot be fixed until we also fix our economic crisis.

Endorsed by world renowned environmentalist Bill McKibben, author of Deep Economy, the book presents comprehensive solutions to the interwoven crises of our times: the debt, inequality, resource and environmental crises. A seemingly daunting task, but the authors pull it off remarkably well. They do so by critically analysing each issue, then by coming up with both short and long term solutions.

As McKibben points out in his own book, the rapid increase in local green businesses and organic farmers markets in the industrial world is a laudable phenomenon, perhaps even a sign that a more sustainable economy is emerging. Likewise, Growing a New Economy is also a hopeful book, but it ploughs much deeper, and it certainly turns over more enriching soil than the standard book on sustainable economics.

Futurist Sohail Inayatullah writes that the book not only “challenges neo-liberal thinking, but also socialist and even green narratives, creating a new discourse for a post-capitalist future.” In addition, it takes a historical look at capitalism itself, and shows, in great detail, how our economy and the market that sustains it, has fundamental flaws. It also goes through our economy’s main problem areas. But it’s not all doom and gloom. According to McKibben, the book is a “hopeful account of the possibilities contained in our current crisis.”

In a layman’s language, the authors analyse the complex history of our market system, the origins of the European Union, with an emphasis on the last economic crisis, and they also take a critical look at the bedrock of modern capitalism and the neoclassical economic theory it is built upon. They also describe the many pitfalls of green capitalism—how and why today’s versions of sustainable economics are not always as green or as deep as they sound.

In the first part of the book the authors, both from Norway, characterizes four distinct planetary problems they predict are now coming together in a perfect storm. The first is the economic crisis of 2007. And if you think this devastating crisis is already over, think again. The superficial efforts to save the world from a complete economic meltdown has simply left the financial system even more vulnerable. The worst is yet to come.

In the next chapter, on the inequality crisis, they draw heavily on the work of French economist Thomas Piketty, who has shown that extreme inequality is not only growing but is also “useless” and “harmful” as well as a fundamental threat to our democratic institutions.

“All human beings deserve to have a decent living standard,” they write, “but when resources are poorly allocated, the few take an ever-increasing share of the world’s wealth.” While there has been progress in bringing millions of people out of poverty, inequality in rich countries, and in the world as a whole, is increasing at an unprecedented rate, and if not checked, it could destabilise the entire free market. After all, in order to have a functioning free market, the book argues, the people on Main Street and in the world’s villages need enough purchasing capacity to buy what is essential to lead a good life.

The resource crisis is the third crisis described in the book. The authors paint a vivid picture of how non-renewable resources are being destroyed at an alarming rate because “they have been taken for granted, or if scarce, it has been assumed the market will find a ready alternative to replace them.” But as we know, that is generally not the case. Indeed, we have, according to many scientists, reached a state of “overshoot” and if we do not alter course, the global eco-system, which our economy is an integral subsection of, is predicted to collapse somewhere in the middle of this century. In other words, we are facing an environmental crisis of unprecedented proportions: we are in fact in the process of destroying the capacity of nature to support life itself.

In the section on the environmental crisis, the book describes six of the most serious threats facing our planet today. With clear and logical facts, it lays out the bare bones reality we are up against. If we do not face these problems head on and safeguard a sustainable environment, there will simply be no sustainable economy. Therefore, it is time to change course so that we can start “creating a more sustainable, ecological and resilient economy.”

The second part of the book deals with the history of economic thought. Here we are introduced to the main economic thinkers throughout history, from Adam Smith to Karl Marx, from John Maynard Keynes to Joseph Stieglitz, from Karl Polanyi to E. F Schumacher. Here they paint a fascinating story of how the various economic ideas have clashed over time and how classical economists like Adam Smith, the very father of modern economics, would probably turn in his grave if he knew how far away capitalism has evolved from his own ideas.

This part of the book also looks at how the European Union was created, and analyses the “Four Freedoms” that lays the foundation of the EU’s constitution as well as its troubled economic and political system. A situation which the authors think is predictable and can only be solved if the entire union is reorganized along a con-federate system of more localized political and economic regions.

The third part critiques the very foundation of the capitalist system, namely free markets and neoclassical economic theory. This part, which may be a bit heavy on theory for some will nevertheless be highly rewarding for those who’ll take the time to go through its detailed analysis of the flawed “mathematics” and “science” of modern economics.

It is in the fourth part of the book, “Economic Solutions for People and Planet,” however, where the authors “put on their visionary glasses to look into the future of economics.” And what a future it is. In the section on resolving the financial crisis, they first ask the question many of us have pondered and been frustrated about: why should the people on Main Street be responsible for the crisis created by those on Wall Street? But they do not stop by asking questions, they proceed by introducing alternative solutions, including progressive wealth and income taxes, steps to reduce monopoly profits, and creative ways to overhaul the banking system.

But that’s not all. They also give suggestions on how to overhaul the financial sector, which has “grown out of proportion to the real economy” and thus changed from a “necessary tool to a destructive weapon.” These changes include the banning of naked short selling to preventing foreign exchange purchases for speculation. And then from there they tackle new reforms in free trade, patents and capital movements. In simple and clear terms, the authors create the case for how to reduce speculation and how instead to stimulate the real economy.

The important process of making poor countries rich and prosperous is also discussed. Here we learn that many of the policies that are now imposed on poorer countries are exactly opposite to those that rich countries used to become rich themselves. In addition, economic inequality within nations is also addressed, with a far reaching proposal to introduce a deeper economic system they term “economic democracy.”

In the final part of the book, we learn that the previous policies are transitional, and that more permanent economic policies are needed to create a new economic system. It is here that we are introduced to an entirely new economic theory, the Progressive Utilization Theory (PROUT), which incorporate both capitalist and socialist ideas while going beyond both these traditional systems of economics.

According to PROUT economics, capitalism functions best on a small scale and becomes dangerous once corporatized and monopolized. These corporations must therefore gradually be turned into worker-owned coops. In place of the old market system controlled by corporate giants, a new, regulated market economy will be guided by a benevolent government structure that will lay the rules for integrating society, the economy and the environment in a new system that transcends the old left-right political spectrum of ideas.

Growing a New Economy is a landmark book. Thought provoking, rich in content, deep-ploughing in its analysis, while at the same time presenting new and remarkably sound alternative solutions to our current crisis in economics.

It’s Time to Grow a New Economy
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