Articles

The Next Economy (Part II): The Solutions – Economic Democracy Advocates Study Circle

Interview with Roar Bjonnes, Author of Growing a New Economy

January 11, 2018

George:           So Roar, I’m really glad that you’re here again and thank you so much for being willing to do this with us once more.

Roar:               Oh, thank you. Thank you, George.

George:           In the first interview, we went over the nature of the problem posed by the current neoliberal, capitalist economic structure, and in this interview, we want to concentrate on the solutions to those problems that are suggested in the book. But before we get into those solutions, it seems to me that it would be a good thing to just review the essence of the problem that we’re trying to solve. So my first question would be, in a nutshell, what’s wrong with capitalism?

Roar:               Okay. That’s a good question and also a big question, but I think that in the framework of PROUT, I think it is important to acknowledge the difference between PROUT and capitalism. I think a major difference is that PROUT acknowledges two broad human sentiments. One is the sentiment of selfishness, of selfish pleasure, and the other is the sentiment of sharing and cooperation. PROUT economics is based on those two sentiments, we could say. Capitalism, on the other hand, is based on the first sentiment primarily and not the second. In fact, Adam Smith, the so-called Father of Capitalism, he said in so many words that if the individual makes profit, we will all profit. We will all benefit. In other words, capitalism is based on this idea that we have a selfish gene so to speak and this selfish gene is the main driver of economics, of inventions and of productivity and in capitalism in general. And as we all know, capitalism is what we think of as economics in many ways. So if the individual is successful, according to capitalism, then the group will also be successful, but as we also know, this is not always the case. In fact, it’s often not the case. In economic terms, the selfish human gene leads to profit, yes, but that is also the problem according to PROUT with capitalism because this profit motive, when that is the main driver of economics, then that is the sole focus.

 

It leads to inequality and exploitation of humans and nature. That single focus of the profit motive or the selfish gene is really the main problem of capitalism as I see it. The need to accumulate and create and innovate leads to competition, which to some extent is healthy, but only up to a point. When competition is the main driver of economic trade, it eventually leads to inequality because some will get very rich and some not so rich. A stark example in our economy in the United States is that the average fast food worker makes about $19,000 [which is barely enough to survive] a year while the average fast food CEO makes about $23 million in annual salary, so that’s a huge difference, some 1200 times difference between the lowest pay and the highest pay, so an incredible inequality. And as we have seen during the growth of capitalism, unfortunately, the inequality has risen, has grown, rather than shrunk. It has not, as Adam Smith envisioned, benefitted the masses, at least not in the global sense. Even in the United States, we know that there’s a lot of inequality and a lot of issues regarding this. So that is the reason PROUT says that we need to limit capitalism to small enterprises because if capitalism is allowed to fulfill its basic philosophy then it grows too big and turns into monopoly capitalism. We end up with a few people controlling the economy to the detriment of the masses. So because we don’t have unlimited resources, though we may have unlimited needs, or unlimited wants, there are not enough resources or money to fulfill those unlimited wants. The book and the film The Secret says that if you have the right spiritual intention, then there’s unlimited amount of everything for everybody, but in reality that’s not the case. So that point needs to be part of the equation in economics, as the basics of economics, but it is not part of capitalism. It hasn’t been recognized by capitalism. And so in a sense, capitalism is based on a myth and we are trying to demonstrate in the book that this myth has been explained away by economists using mathematics to try to justify this myth. That’s one major problem. So that reality is not built into the capitalist economy, but that is the main problem to take into account, that we have limited resources on the physical level. Private enterprises need to have a ceiling on growth and on expansion. That is one of the points in PROUT, and that basic issue is not accounted for in capitalism. Reformed capitalism, of course, has tried to deal with this through taxation, by taxing the rich, taxing corporations and so on. In some decades in the ’50s, ’60s, we did quite well doing that. Corporations were taxed heavily. The rich were taxed heavily and the wealth was spread around in many different ways in a much more just way than we see today, but since the ’70s, that has again changed with trickle-down economics, neoliberalism, and so on. This has again changed and we see this now with Trump. The tax package that Trump presented is doing the same thing, basically giving incentives to the rich to become richer.

 

This has also benefitted of course the speculative economy as we talked about last time. The speculative economy is now the largest portion of the economy. In other words, speculation produces more money than the real economy, much more money. Private accumulation of wealth needs to be limited. Otherwise, we won’t create a healthy economy. It’s as if someone is overeating. We become unhealthy, and all of our accumulation is unhealthy for the system. It creates a few winners and many losers. The second problem with capitalism is that it views nature as a free commodity, something to be exploited, that nature only has value if it is turned into a commodity. Again, using Adam Smith as an example. He imagined nature as a field, as a fallow field, and it is of no use to the economy until you start plowing and cultivating that field. According to PROUT again, nature has both value as a commodity and it also has an existential value. It has value in itself. It has life and that life has value and the right to exist. So for human beings, we could say that nature has a value for the economy as a resource, but it also has value in the form of recreation and peace, a place to meditate, to enjoy. It has value as an ecological system and that ecology is again the source from which all life and economics comes from. Without nature, there wouldn’t be any economy at all. So this is a vital, important aspect that is not acknowledged by capitalism. However, again, we see that green capitalism is taking this into account and is trying to reform capitalism. That’s a good sign, but still the profit problem with capitalism is not dealt with by green capitalism, and that is why I think we need a new system. We need to restructure the economy and not just keep reforming it. So if we focus on these two main problems with capitalism, the selfish gene which leads to accumulation of profit and the fact that nature is seen as a free commodity, then we get the kind of world we have today, one with material inequality on the one hand and environmental destruction on the other. Some other problems with capitalism are the dynamics between centralization and decentralization of the economy. Capitalism tends to centralize economics, again because of the profit motive. It leads to a centralized economy, a more monopolistic economy, with large corporations, since it does not put proper value on decentralization or the local economy. We could use American agriculture as an example, which has killed small farming over the last few decades. Although it is coming back through the environmental movement, with an increase in small, organic farms and farmers markets, but on the whole, that is a drop in the bucket. The big agribusiness farmers have competed with small farmers, the family farmers. They’re no longer able to compete with the big agribusinesses and now these agribusinesses are competing with China. An example of that is that China has become the major garlic producer for American garlic lovers. Honey from China is more common in the US than American honey, so these are just some simple examples of the problems with capitalism when we don’t take care of the local economy.

 

The Chinese now also own large interests in American food giants and food companies making food production into a global business and a global competitive market. Capitalism, due to the sole emphasis on the selfish profit motive, leads to destructive competition and therefore to increased inequality and increased environmental degradation. The shallow view it has on nature as a free commodity leads to the destructive exploitation of the environment. So those two issues I think are the main problems with capitalism.

George:           It’s fascinating to me to hear this, Roar, and when I think about it, I realize that it also partially explains why capitalism has had such a good run for 150 years or so because these problems really just emerged with time. It’s almost like early stage capitalism was relatively benign, but now in its more mature stage, we really run into the problem of this single motivation of profit, profit, profit. It’s created these tremendously rich, self-centered people who are controlling more than they really should be and who are apparently not very concerned about the rest of the world. Is that an evaluation or a way of looking at it that you would agree with?

Roar:               In some ways, that is true. On the other hand, if we look at the beginning of the Industrial Revolution when capitalism really took off, we would see factories with child laborers and adult laborers working 12 to 14 hours a day. They didn’t have holidays. They were working on Saturdays and sometimes on Sundays, so there was tremendous exploitation I think from the very beginning of capitalism. However, on a global scale, we didn’t see the problems at that time. It started in England with the industrial revolution, and then it spread throughout Europe and then to the United States. What we’re seeing now is that the economy on a global scale, in the form of global warming, is one issue. You were just mentioning the floods and the fires, so we’re seeing these effects that global capitalism has on the environment. We’re seeing it in terms of the inequality on the planet where we have the north relatively rich and the south relatively poor and tremendous economic exploitation in so many ways. So I think that capitalism has been a mixed bag since the beginning, but it has been justified by a philosophy that was embedded in the system itself and held up by, for example, the justification of social Darwinism, the survival of the fittest. That is really, we could say, the source of the philosophy behind capitalism. And so it was justified that this is how nature works: you have to be strong, you have to be tough; thus discounting the fact that nature is also very cooperative. I think it was Peter Kropotkin, a Russian anarchist, actually, and also a biologist, who was one of the first to point out that nature is also very cooperative. But again, the philosophers, the spokespeople for capitalism, has not taken that into account. They focused on the competitiveness in nature. In sum, I think yes, you’re right in many ways that it has become worse, but as I said earlier, the systemic defects of capitalism have been there since the beginning.

George:           That makes really good sense to me, and I’m convinced by that argument that right from the beginning there was a flaw in capitalism.  And part of me wants to think that that’s a flaw that has to do with human nature, that there is this kind of greedy aspect of every one of us, the selfish piece of ourselves that’s worried about our own survival first and foremost. And then once that part starts getting oriented toward taking care of me first, it never knows when it’s done enough of that and just keeps going.

[0:20:02]

And then there’s this other voice in all of us, that’s relatively quiet in many, but nevertheless cares about the good of the whole and is interested in some kind of cooperative model where everyone does in fact benefit from what we do. I guess I’m hoping that the reality is that humanity is evolving to the state now where that second voice is gaining strength. And though it may not seem that way when we just look at the United States right now, maybe in reality that voice is in fact getting stronger and more and more people throughout the world are coming more and more to an awareness that yeah, we don’t just want to be singly myopically focused on taking care of ourselves. We need to be thinking about taking care of everybody and taking care of nature as well. Is that something you’d agree with? Do you see a kind of gradual evolution of consciousness toward a kind of state wherein we’re more willing to bring in the second aspect of PROUT around the sharing principle?

Roar:               Yes, I think that that is well put. I do think that there is an evolution, and I think that is our hope. I think that we’re seeing a groundswell of consciousness rising around these issues. At the same time, as I said earlier, it is also getting worse in so many ways. We are in a very interesting situation now where, yes, the consciousness and the awareness, the need to share the wealth and to share the habitation and utilization of this planet with our friends, animals and plants, that consciousness is on the rise, for sure. At the same time, we see also a backlash of a degenerative consciousness of nationalism, me first, and a tremendous growth of the corporations as well. But I’m very hopeful that the cooperative consciousness of sharing, that that awareness will win out in the long run.

George:           Yes, I’d say everything depends on that at this point. It’s perfectly clear around the globe that we can’t just keep competing and competing because we’re going to end up where everyone is going to lose ultimately at that game. Let me ask you a more practical question around education. Economic Democracy Advocates is ultimately an advocacy organization, so ultimately we’re going to be advocating for specific changes in laws and practices at national state and local levels. But before we get to those specific changes, it seems to me anyway, that a great deal has to be done to introduce people to all the ideas that you’ve been discussing tonight and all the ideas that would stand behind economic democracy. So I’m thinking of a kind of two-step or at least two-tiered process that we’re going to have to pursue: one being a major educational effort and another being the advocacy effort. Is that a breakdown that makes sense to you?

Roar:               Yeah, absolutely. I think that education is so important. Creating an awareness, a change of consciousness, I think that is absolutely important. So yes, I would think that that’s the right way to do it, to educate, to study, to learn and spread the awareness about these issues. That is very important, because when you do advocacy then you can explain the reasons behind the advocacy so much better. And it is also very important to study the situation on the ground. Let’s say for example if you’re working in a local area and you want to improve the local economy, it is very important to study and learn and to be educated about what’s going on in the local economy. What are the resources, for example, here in Western North Carolina where I live? What are these resources in terms of water, in terms of land, in terms of agricultural sources, and so on? So yes, this kind of education is very, very important. And then when you go out and do advocacy work, activist work, you’re so much better equipped to convince policymakers about what you’re about, and also the voting populous, so yes, I would agree with that way to do it.

George:           What you’ve said actually also brings in the third leg of Economic Democracy Advocates, which has been developing, which is our research wing. And you’re so right that there’s a lot of research that goes into good education and then goes into good advocacy. And there are plenty of things which needs to be known and understood which aren’t yet obvious to anybody, so we’re hoping that our research effort will provide some insight there.

Roar:               Yes, research is very, very important.

George:           Good. I’m going to change a little bit now and digress for a minute into a different line of talk for a minute. And as I do this, I just want to remind everybody who’s listening to raise your hand if you have questions that you want to be asking, and we’ll get to you probably right after this question.

George:           Roar, what I want to do next is to digress for a minute into the work of George Lakoff, who’s a cognitive scientist at Berkeley who addresses the importance of framing conversations in a way that supports one’s core values. The thing I like most about Lakoff is that I think he’s got a really good insight into the models of life that separate conservatives and liberals in our country now. This is a question I’ve been scratching my head about pretty consistently over the last year. I just want to run his model by you and see if it makes any sense to you and then, if it does, what does that have to do with all the things we’re talking about. So, in his model, Lakoff says that what conservatives really seem to endorse is a model with a strong male leader and it’s a model of family and of life in general. So their model is based on a strong, dominant male who knows what is right and what is wrong, and it’s his job to direct the rest of the family. Children are seen as inherently pleasure-oriented and need to be disciplined into a moral and productive approach to life. And with this view, morality and productivity go together. In fact, producing a lot, being prosperous, is seen as the highest form of morality. And it’s believed that if everyone maximizes their own personal gain, just like what Adam Smith said, that will create the optimal society.

 

You can see how this model would strongly oppose all entitlement programs to

those who have not earned their benefits by being producti. It

would also foster a view of international relations in which the most prosperous

and powerful country — that would be us — is expected to impose its superior

moral vision on the rest of the world. And so Lakoff is saying that conservatives in general basically come from this mindset, and that’s how the world and

family should be ordered. And then he says that liberals, on the other hand, favor

what he calls a nurturing parent model of the family and life in general. And

within this view, children are good and need to be supported in developing their

unique capabilities. Underprivileged populations are seen to be deserving of

whatever support they need to have a fair chance in life, and the aspirations of

the so-called developing nations needs to be understood and supported by the

wealthy states. This conceptualization makes a lot of sense to me, and I think it

explains a good deal about the inability of liberals and conservatives to respect

one another in this country right now. I’m thinking that whatever progress

is going to be made in our country going forward is best coming out of an

informed awareness of this possible underlying difference in world views. So I’m

wondering if you have any thoughts about that way of thinking about things and

how it might fit into your model.

Roar:               Yeah. Well, I do think that it makes a lot of sense, what Lakoff was saying, that there definitely are these two ways of looking at the world. Certainly here in America, I think that these worldviews are very, very strong. I think that if I’m not mistaken, Paul Ray, who developed the idea of cultural creatives had a similar idea and he was saying that it is the cultural creatives, the liberals that will bring about the change and that’s where the change is going to come from.

 

In many ways, I would agree with that. On the other hand, it may be a little more complex and I would like to throw in a different model coming from India and from Sarkar, which are four different types of psychologies. One is the warrior, one is the intellectual, one is the merchant, and one is the worker. Sarkar said that society is often controlled by either one of them or at least either one of the three. The worker rarely controls society, but the warrior often does, the intellectual and the merchant, and now we are in this merchant era, the capitalist era. So this is of course a different way to look at it, but I think it is important to acknowledge that there are different archetypes and I think that what is important for liberals to acknowledge is perhaps that this patriarchal — we could maybe call that the warrior, is an archetype that is real and that we need to acknowledge and that it has a role, but the problem becomes, Sarkar says, when the patriarch or the warrior becomes an exploiter or becomes the only leader in town. That’s the problem. The same thing if you have an intellectual leadership and we see that — for example, Sarkar talks about the evolution of society. From the worker society, which was the society that Karl Marx actually studied and became in many ways the inspiration to his idea of communism. In other words, early societies were living together in large families, in large tribes, sharing everything together. And as we know, Karl Marx also studied American Indians and learned from them about the idea of sharing and what he envisioned as the perfect communist society without the state and all that. So yes, I do think that the cultural creatives or the liberal mindset is very, very important. At the same time, family values are important. Morality is important. Working hard is important.

 

So rather than pitting one against the other, I think that we need to try to see the positive aspects in the different models and find ways to collaborate and to appreciate each other’s strengths and of course also acknowledge some of the weaknesses. For example, I live in a part of the country where the conservatives are maybe not in the majority, but there are plenty of them around here and many of them are my neighbors. I have to deal with them, and so I face these issues on a daily level and I think it’s very important for America to build bridges. And so going back to trying to put all of this together, what Sarkar was saying that the future of humanity belongs to the person that has an integral personality that embodies the warrior, the intellectual, the merchant and the worker, but who is not embedded in either one of them fully. In other words, it’s a kind of wise person, a kind of detached person that knows how to fight if that’s necessary, knows how to stand up for his rights, knows how to study and knows how to create a business and knows how to work hard.

[0:35:04]

So I would hope that the future of humanity and the future of America is more of a hybrid personality, or you could say — Sarkar called this person  a “sadvipra”, which is a Sanskrit term, but it basically means a person that has an integrated personality. Actually, Ken Wilber has — I don’t know if you’re familiar with Ken Wilber, but he had a similar concept of the integral leader. So I think that rather than pitting the liberal and the conservative against each other, I think we need to think about where is a common ground. However, when it comes to the uses of economics and what we talked about earlier regarding selfishness and all that, I would say that the conservatives have definitely something to learn and some issues to overcome. That is for sure, and that is one of the challenges in America. For example, in Norway where I come from, the people living in the countryside and the people living in the city have a much closer relationship. They’re not so much pitted against each other. Their values are much more similar, so I see that this kind of an integration is possible, and I think that that is the future.

George:           Nice. That makes a lot of sense, and we certainly hope to move in that direction. Before I go on, I want to check in with Annida. Annida, do we have anyone who wants to ask a question now?

Annida:           We do. John’s hand is raised, so I’ll go ahead, John, and unmute you, and you have the microphone.

Participant:     Thank you, Roar, and thank you for taking the time to talk to us.

Roar:               You’re welcome.

Participant:     I’ve heard a lot of people that share what’s happening with capitalism in terms of what you’ve talked about in your book. There are a lot of people who want to do something. So I really have two questions. One, how do we reach all these people, and secondly, what can we have them do? They all want to do something, but they don’t know what to do to bring about this change, and I don’t either. We talk about it, but what do we do? What do we tell this mass of people that are getting onboard slowly, how can they be involved and how they can make a difference?

Roar:               Yeah. These are important questions and also very big questions. I ask myself the same question. What do I do? What can I do? You could say that I’ve written two books about this, and I’m trying to reach people that way. So each person, each individual will have to ask themselves, “What can I do? How can I reach people?” so that’s one important thing, I think. For example, if you are a writer, you can write letters to the editor of the newspaper. If you are more of a hands-on person that likes to do activities, you could do activities — let’s say, for example, if you are into growing things, you can maybe form a farm community or do something in a local community around that. So I think the first question to ask is what can I do and how can I contribute? Now, on the larger level, I think that what you are doing at the EDA, I think is important. You’re into education and advocacy, so every organization starts with something, has a goal, has a certain set of values that they want to follow and so on. So education and study is very, very important. I think that’s the first step. And then find some way of being an advocate, and you’ve already started that by forming a website. You’re studying. You’ve been studying my book. And then the next step will be to create some kind of advocacy or some kind of movement.

 

Taking an issue for example in the local area, if there are certain issues that are pressing in your local area then take up that issue and form a committee and a movement around that. That is one way to go. And then the next phase would be to involve politicians, local politicians, to see if policies can be changed and so on. So I think a step by step way of doing things is important and to accept that failures will be made, mistakes will be made, and at the same time, accept that small incremental changes may be as important as the big changes, because the big change is going to come from the small incremental changes. And lastly, what is really important, I think, is that we walk our talk as much as we can. So if we are into local food, organic food and we are able to grow something — like for example here where I live, we have some land, so we grow a lot of our own vegetables. Those are small activities that we can do, but we can also be advocates and be writers and be spokespeople for the bigger vision and the bigger activities as well, so acknowledging the importance of making small changes that can lead to bigger changes and work with that in as many ways and as creatively as possible.

George:           I’d like to step in here, Roar, and point to a few of the specific things that are advocated in your book and through PROUT that, when I really think about it, create partially an answer to John’s question.  I’m just going to name two of them now and allow you to comment on them if you want. One is that it seems to me one of the foundations of PROUT which really comes right out of its philosophy is this idea to try to get cooperatives to be the most common business structure, worker-owned cooperatives. It’s amazing to me actually how many of them there are now in the United States. Someone recently sent me an article about two women who are so sold on the idea of cooperatives that they’ve left very good corporate jobs to just push, push, push the development of cooperatives. That’s something that we can be looking for ways to implement in our own lives, and we can certainly be thinking about what are the kind of legislative changes that would be necessary to make it more possible for cooperatives to thrive. The other one that really jumps out at me when I think about PROUT is this idea of full employment. I think that that is really an achievable, important ideal: that there’ll be full employment at a living wage. These two strike me as very concrete steps in that direction which speaks to the value of PROUT.

Roar:               Right, yeah, exactly. As I mentioned earlier, if we want to change capitalism, if we want to change the economy, we need to restructure the economy. And so as we mentioned in the book, PROUT has a three-tier structure, which is in many ways the best of capitalism and the best of socialism. So there is the state, from Washington down to the local level, that controls certain key industries such as electricity, water and so on, to make sure that these vitally important features of the economy are available for everyone. And then the largest part of the economy will be, as you said, George, cooperatives. In other words, the corporations will be turning into cooperatives and then capitalism will be on a small scale, so that’s the three-tiered structure of the PROUT economy. And part of that, as you also mentioned, is guaranteed employment at a living wage. That is very, very important. For example, here in Asheville, North Carolina where I live, we have in the city a living wage campaign, so for example, there is an Asian restaurant that doesn’t accept tips because they’re paying their workers well.

 

And so you can go there and eat at a reasonable rate and you also know that the workers there are paid well. So many initiatives like that are taking place throughout the country, so yes, I would agree with that. Also, cooperatives, there are quite a few cooperatives in this area as well. And as a matter of fact, on the land that I live — I live in a small eco village, and we are now working on starting a farm cooperative. Prama, where I work, is itself a kind of a cooperative, so yeah, I think that those two issues are very, very important. Developing a cooperative spirit in business is very, very important. And then there’s the second issue of a living wage, because everybody should have the right to earn enough money to have the basic necessities. That is also a foundational issue in PROUT.

George:           It’s such a different view. I’m really glad you began this whole interview by talking about the additional piece that PROUT brings to the capitalist view, capitalism being just focused on profit and that PROUT is saying, that no, there’s this other motive, which is the sharing motive—that making-it-work-for everyone motive. It could be called the cooperative sphere of society. That’s why we’d want a living wage, because we care about everyone having a chance.

Roar:               Exactly.

George:           I myself, I keep thinking about whether there’s some phrase which the liberals could latch onto which we could use as our catchphrase, sort of the equivalent of the flag-waving part that’s used by the right wing. It occurred to me that there’s  a thing called The Pledge of Allegiance to the American flag, which you may not be familiar with, but all of us probably had to say it with our hands over our hearts as school children, and it ends with an amazing line. It ends with the line “with liberty and justice for all,” and I’ve recently thought that’s actually what we’re all about. We’re about liberty and justice for all. We want real freedom, the kind of freedom which you can only have if you have enough money to support yourself. And we want justice for all, real justice, not just a kind of punitive and legalistic justice, but the sort of justice where everyone’s getting a fair shot. So I see that language is right there within our system, and maybe we just need to bring it to the fore and make it actually happen somewhere.

Roar:               Yes, exactly. I think that that’s very, very important to point towards those issues in the American society and the American mythology that represents these values. I think that is very, very important and the best way to bring people together. Yeah, that’s a wonderful point.

George:           Let me ask you another big question, which has to do with strategies going forward. You’ve advocated these incremental changes in the last half hour here, and there’s also a thought that I think exists to a certain degree in PROUT, and it also exists in the minds of many people, which is that there is some big crisis coming and that during a post-crisis is when people are really going to be open to systemic change. Do you have any comment on that?

Roar:               You mean whether change will happen through crisis? Is that your question?

George:           Yes, or incrementally. Lots of us feel like this capitalist system must crash at some point. It can’t just keep going the way it is. Maybe it’ll take the form of a major economic crash or a currency failure or something like that, and then people are going to be ready to look at different models. I guess it doesn’t have to be an either/or. It could be both/and, but I’m wondering if you have any thoughts about that dichotomy.

Roar:               Right. Yeah. I think that it is very likely that we’ll have some kind of a crash, because of the way that capitalism is structured and is inherently dysfunctional. And often when we are in a dysfunctional state, we need some kind of a crash in order to get out of it, and so I think that that is very relevant to the economy as well. However, if we’re just sitting around hoping that the crash will come and then everything will be hunky-dory after the crash; that is a false way of looking at it.

 

That’s why I think it is so important that we study, that we educate ourselves about the issues, and most importantly, that we become active. We must advocate for these same issues and these same values, but even more importantly, we must try to walk our talk, engage ourselves in starting cooperatives or working cooperatively. For example, in your own organization, looking at those issues, are you working cooperatively, how much do you value the values that we talk about and how much do you actualize them in your work, and so on. So I think both are important and that’s why I think that examples are important. Let me give one example. Last year when I was in Denmark at a PROUT convention there, we had invited some people from the global permaculture organization. As you know, they work with land use and how to bring a small scale farmers together in developing permaculture farms. In other words, creating or recreating a farm the way it used to be, when you had chicken and pigs and cows and corn and vegetables all growing together, and also utilizing the forest for harvesting and so on. So the people active in permaculture are very good at doing that, but when we came together, we both realized that well, we in PROUT, we are not so good at developing permaculture farms or permaculture villages, but we’re really good at seeing the big picture. We had some very interesting meetings and interactions, so I think that it is important that we see the big picture; that we study the issues; that we do the research, but at the same time, that we also engage with people that are active on the ground. So both of those things are important, because then we are creating examples of thriving economies, cooperative economies, and hopefully also enable people to earn a living wage through these economies, so that when there is a crash, we already have good examples of what is about to come.

 

Another way of explaining this is in an evolutionary sense, and going back to what we talked about earlier, I believe that what we are seeing is the evolution towards a more cooperative economy. This is something that is in our genes and it is an inevitable result of the global breakdown that we’re facing. It is going to be the way that we will save ourselves, so the growth of cooperatives is already happening. All the systems that Sarkar talks about — and that’s why I believe that more than Marx, who was very good at pointing out the defects of capitalism, that the strength of Sarkar is that he also pointed towards an alternative vision. And when we look at it, when we take it apart, for example, the three-tiered economy, it already exists. It is not something that Sarkar invented in the attic when he had a bright day, but rather he’s putting the pieces of the puzzle together, the pieces of the puzzle that are already existing as an outgrowth of human evolution. So that, when I look at that, when I see that, when I contemplate those issues, it gives me tremendous hope and tremendous inspiration to move along, because I know even if it doesn’t happen in my lifetime, it is bound to happen at some point because this is the way that we need to move in terms of human evolution.

George:           Perfect.

Betsy:              My question has to do with some of the examples that you were talking about as far as economies where things are being effectively done along Sarkar’s lines. In Norway, for instance, is the agriculture more like local family farms or more like American agribusiness? Let’s start there. From the agricultural standpoint, is that an example of what we could point to?

Roar:               Okay, good question. Yes, I think that compared to the United States, Norway has done a much better job of taking care of its farmers because Norway is a mountainous country. It’s interesting because now that we are developing this farm co-op here on our land, we ended up buying some equipment that –I actually studied agriculture in Norway and worked in agriculture in my younger years, and those machineries have been used on small farms in Norway for the last 50 years probably. These are small, two-wheel tractors that are very good at working at steep hills because it’s very dangerous to drive a regular tractor on steep hills. So it just dawned on me that one of the reasons why Appalachia is poor is because they don’t have that kind of equipment here. They’re not used to using these kinds of tractors. But if they did, you can actually grow a lot of different things here. The climate is relatively warm, much warmer than the Norwegian climate. So yes, I would say that Norway has done a much better job than the US in terms of taking care of its small farms, but because it is a capitalist economy, it’s not good enough and that’s very frustrating because when I studied the economy in the mid-’70s in Norway, I could already then see the change for the worse, and I wrote some articles in some of the national newspapers at that time about this. I was seeing the writing on the wall of what was coming to happen, coming to be. So yes, Norway has also had those changes, but not to the same extent as the US has. Another example of a PROUT economy and probably the best in terms of a cooperative economy is the Mondragon economy in the vast region of Spain where you have 80,000 people engaged in several hundred cooperatives and I think that is probably the best example of a functioning, very effective and very successful cooperative economy. As I understand, nobody has been laid off since the 1950s. What they do is, they retrain people and they basically bring the worker from one co-op into another co-op whenever there is a problem with labor, so these are some examples. In Denmark, you have a strong cooperative housing movement where people live together cooperatively. For example, they may share a meal once a week, the rents are lower, they may have a kindergarten in their housing complex and so on and so forth, so that’s a very strong movement in Denmark. These are some examples.

Betsy:              Great! Thank you.

Roar:               You’re welcome.

Annida:           Next I’m going to move on to Greg’s’s question. You’re now live. You have the microphone.

Greg:               Hi! One of my big fears is when we get some form of collapse, a vacuum, that this country has a tendency for violence. Is there sort of a formula, but can you see a best path for us during, say, a heavy transition phase from capitalism to where we want to go – making the transition the least violent? I know we need to educate in terms of what we need, and people to understand education systems, but there’s also the psychological aspect of how we’re going to behave in the middle of a transition when people don’t get their needs met. I haven’t really read much on this. Do you have any kind of opinion on the best way to keep violence to a minimum?

Roar:               Yeah. Well, that’s an issue that I’ve thought a lot about, but I’m not sure I have a very good answer. I think that the United States is in a very unique situation, that here is this potential for violence. In the rural areas here where I live, everybody has a gun and there is a tremendous fear of the government, and many of the people that are my neighbors, they say they have guns because they’re afraid of the government. Of course, in a situation where there is a collapse of the economy, where the infrastructure falls apart and so on, there will unfortunately be a tendency towards violence of safeguarding one’s own resources, and then other people who don’t have them will want to steal and so on. A kind of civil war might develop. That is very possible in the United States, unfortunately because of the history of the country and also because of this love affair with  guns, and so on, and also due to the lack of infrastructure. I think that something like that would be less likely in Canada or in Scandinavia where there is a better collective economy, and a sense that the government is not such an evil empire and so on. How to avoid that? I think again, we need more education. Sarkar said that the more intellectual a country is, the more aware and the more educated they are, the less violence there will be in a crisis situation, when there is a collapse. So again, I think that what you guys are doing, raising people’s awareness, educating people, doing advocacy is a part of that solution. I think it is important to educate people and to do outreach in the community. For example, here where we are, we are kind of strange people, yogis, meditators who moved into the mountains, and so we do as much outreach as we can, mixing with the local population, going to concerts and activities, farmers markets and so on, so that we can make friends with the local people here. That kind of outreach is very, very important.

John:               Thank you. I have a quick question. It’s kind of the central issue of capitalism. How do you bring capital into a co-op? For example, I want to build an inn and it’s going to cost $1 million. Now, how do I bring capital in and still create a co-op?

Roar:               Okay. Capital, we talked about this a little bit the last time. Capital is important. There needs to be a banking system. We can also have a cooperative bank. For example in the Mondragon system, they have a cooperative banking system. So yes, we need banks, we need capital in order to create businesses. Cooperatives also needs capital. So in that sense, it is not that different from we could say a simple capitalist system in which you’d borrow money from the bank to develop your business, so that will also be part of a cooperative economy. You borrow the money, but the percentages can be lowered because the need for profit is less, so there may be better terms in terms of the loans and so on. Also, the profit again will not be used for speculation as in the capitalist economy, but in many ways, the system of loans to raise capital for a business would not be that different.

John:               Okay, but most banks require some equity like if I did a project for $1 million, it would require $300,000 of equity, which I have to get from some investor. How does that investor get pulled in in a cooperative venture?

Roar:               Well, the investor will have to see if this is a viable business? Is this cooperative going to turn a profit? Because an investor will not invest in something that is not going to be profitable and successful, so again, you have the basic — the same rules will apply for an investor as well.

George:           I think the problem, Roar, here is one that really has to do with the nature of the hotel industry, which is that what we hope for are worker-owned cooperatives obviously, and most of the people who work in hotels are people who are changing beds and aren’t going to have any money to actually invest in terms of becoming owners of the hotel itself. I actually have heard of some businesses that allow their workers to gradually, gradually earn shares in the business, which seems like a good model to me. Is that something Sarkar addressed at all?

Roar:               Yeah. That’s another model where, as you say, the workers in the business, as they stay in the business let’s say after five years, they can have a certain share in the business. Yeah, that’s one model, but if you’re starting a business from scratch, the money will have to come from somewhere. John was creating one specific scenario, but another scenario could be that ten people have $10,000 each and they put that into a pot and they start a cooperative with $100,000 as capital, so that’s another way of doing it where the workers bring in the capital, so that can be the starting capital. And then because the business plan makes sense, then they could loan the rest from a bank, for example, so there are many ways that this could happen.

George:           Right. It’s such a great example, John, and thank you for raising it because it so points to the inherent psychology of American business because I am willing to bet there’s not a single hotel owner of a hotel of any size who actually works in their hotel in any practical, normal way, certainly not changing the beds and probably not even staffing the front desk. It is probably the model most of us hold and pretty unconsciously take for granted: Someone who has all the money is going to own this thing and then there are a bunch of other people who are actually going to do the work to make it happen. And we see those as two completely different sets of people with two completely different roles in life. That’s just what capitalism has given us. There’s nothing fair or just about it.

Roar:               Right.

George:           And that leads to a question I’d really like to get you to address regarding the very first principle of PROUT, which is this idea of putting limits on individual wealth, or at least the idea that no one would be allowed to accumulate a lot of wealth without the consent of the collective. Can you address that a little bit? Why is that the first principle, and could or would that ever happen?

Roar:               Well, I think it’s already happening in different ways. Earlier, we talked about taxes. Taxation is one way of limiting wealth. And so a progressive tax system, which we had in the United States in the ’50s, ’60s and then it started to go away in the late ’70s, when Friedman became the main economist or inspiration for modern American capitalism. Then Reagan brought his ideas into his trickle-down philosophy, reducing taxes for the rich. But progressive taxation is not a foreign concept, even to capitalism. The idea behind it is that when the purchasing capacity of the middle class is strong, then you have a more balanced and a more thriving economy. This we have seen. This we know is what is happening when we tax the rich. So one of the reasons why we have a weak and unstable economy now is because the purchasing capacity of the middle class is falling, and that’s why we have all these speculation bubbles. Everybody wants to get in on the race, and then we have a crash, and then we never learn and then we start over again. But to limit wealth creation, and thus to minimize speculation, I don’t think is a foreign concept. For example, if we look at the example I made earlier, that the average fast food worker makes about $19,000 a year while the average fast food CEO makes $23 million a year in salary, that’s about 1200 times difference in income. Let’s say we don’t create a complete economic revolution, but we make a moderate change and reduce that difference in income to 500 times. I’m just using that as an example. But if we compare Norway to the United States, for example, I’m not sure of the exact numbers, but as far as I remember, the difference between the average middle class person in Norway and the top CEO in Norway is not more than 25 to 30 times. It’s much, much less than in the United States. The average CEO in Norway makes maybe a couple of million dollars and then the worker in that business may make $70,000 to $80,000 or whatever it is. I’m not sure about the math. In other words, who decided that? Well, the Norwegian society decided that, the collective decided that. And similarly, PROUT is saying that that’s a fundamental principle that needs to be part of the economy.

 

We need to talk openly about what the richest person should have and what the poorest person should have. That needs to be on the table because both are eating from the same table. We’re all sitting around the same table. We are a society. We are not a group of individuals trying to compete with each other. And because there are limited resources on this planet, in every society, there’s a limited amount of land, there’s a limited amount of water and so on, that’s why we need to share it all. That is, I think, one of the genius aspects of the PROUT system, to acknowledge the scarcity of resources and the fact that we need to share them all. That we need to have a discussion about how to share the pie.

George:           Right. It makes good sense. When I try to think about why is it that in the United States we’ve allowed our CEOs to get paid $20 million to $30 million and then in Norway, they’re around $2 million, I think it gets back to the American notion of freedom. I believe this country has a very specific notion of freedom, which is “I’m free to do anything I want and no one is going to interfere with me.” It comes from the frontier mentality. I actually have a friend who is a fellow therapist here in California who wants to move to New Hampshire, and I asked him, “Why New Hampshire?” and it comes down to the fact that he basically likes their license plates, which says, “Live free or die”. And New Hampshire backs that up a little bit with their taxation system. But my point is that Americans, at a deep, deep level, really want to be left alone to do whatever they want whereas Europeans seem to be more willing to regulate their sense of freedom to incorporate the common good. Do you have any insight into what to do about that? How are we going to get Americans to be more willing to embrace a different notion of freedom?

Roar:               Yeah, you nailed it. Well, the historical difference is that Europe had a long-term socialist evolution. The workers were fighting for their rights in Europe at a much higher rate than in the United States, so socialism came in to balance capitalism to a much larger extent than in America, and that is the main difference historically. For this to change in the United States, we need to have a similar evolution, or maybe even a revolution, for that to change. And that’s why again, talking about these issues, educating and advocating for these issues is so important. The United States needs to have a similar evolutionary development. And in that sense, Lakoff is right on. That is something that the conservatives need to be educated about, need to learn. But that is, as we know, not so easy. But when we think about the fact that Bernie Sanders became so popular and may run again, and maybe other candidates are coming onboard with similar values, then there is hope. Bernie Sanders talked about Scandinavia as being the model that he was aspiring to, so I see changes happening in the United States. Most of the people living here in the mountains where I am, they’re mostly democrats. And so I don’t see that it is impossible to change them. I think that part of the problem in America is the value system, the Christian values and the lack of the Democrats to speak to those values and support those values, and at the same time, speaking about an economic value system that is really to the benefit of the people. Many Christians have turned their backs on Democrats simply because they’re not seeing any cultural value in their programs. They feel the Democrats don’t really support them anymore. That they don’t stand for their needs.

 

Also there is the perception that Democrats and liberals don’t believe in God, and so I think that that’s been a huge problem in the United States. We need a party or a group of politicians that can really stand up for the middle class and the poor and to speak their needs and to support their needs. That has been missing in the United States, but it existed in Europe for a long, long time. It is fading and that’s why we see these strange situations with Brexit and the return to conservative, anti-immigrant values and so on. That is a backlash and it’s an unfortunate backlash and the reason is because of neoliberalism in the EU taking over the economy and the value system.

 

George:           It’s a pivotal moment. It seems so clear to everyone now that the world is imbalanced. Obviously we need to do everything we can to shift the balance in the direction of a system that works for everybody. That’s my final thought. It looks like we’re close to a wrap-up point. Do you have anything you want to say, Roar? Is there any last point you’d like to make about your book or about EDA or anything else that’s on your mind?

Roar:               Well, I’m very thankful that you invited me into this conversation. I really enjoyed it and I feel very honored to be part of your work. I wanted to mention that and at the same time, I want to emphasize that I’m very hopeful, very inspired by the fact that thinkers like Sarkar has presented ideas like PROUT. I’m inspired by all the activists throughout the world that are standing up for change. They may never have heard of a system like PROUT, which I think is going to rise up from the ashes, so to speak, because it makes sense, and because I think it is the direction that humanity is moving in. But those people that are working on the ground, these activists are truly inspirational and an important part of the change that we need to see. And so intellectuals and activists, positive warriors and active workers need to come together and create a better, healthier and a more balanced society, and I see it happening in spite of all the negative things going on. I see great hope. And as I mentioned just a few minutes ago with the Bernie Sanders movement, I see great hope for America as well. In many ways, my heart is more Norwegian than American, but I am in many ways inspired by America. I’m inspired by people like you guys. I’m inspired by all the alternative people here in Asheville that are into organic farming and community living and so on and so forth. There’s a lot of positive energy in America, and so I have great hopes for the future. I think that the good will overcome the bad, and I think we will do well in the end.

George:           Thank you so much for that, Roar, and thank you for writing the book. It’s become kind of our textbook for EDA. As you may know, we’re actually going to run a second book study on it for people who want to do it again and there’s a fair number of people in that category. We’re hoping to attract a whole new group to join with them, so the second time through, we’ll get into it a little bit deeper.

Roar:               That’s great.

George:           Yeah, it really is great and it really has helped us as an organization tremendously, I think. So thank you again for this evening and the book.

Roar:               Thank you so much. Thank you. That’s really nice to hear.

 

The Next Economy (Part II): The Solutions – Economic Democracy Advocates Study Circle