Articles

The Next Economy (Part I): Understanding the Problem – Economic Democracy Advocates (EDA) Book Study Group

Interview with Roar Bjonnes, co-author of Growing a New Economy

 

George: Hello everyone, this is George Catlin, and this is the first of two conversations I’ll be having with Roar Bjonnes, the coauthor of the book Growing a New Economy. This conversation could be called, “Understanding the Problem.” After one big picture question, I’ll begin with some very basic questions about how our economy works and then move on to a few more about the kinds of problems the system is currently creating for the planet and most of the people who live on it. The second conversation, which we’ll have in January after we’ve finished reading the book, will be about solutions to the situation.
So, welcome Roar. I want to begin by giving you a chance to set the stage. When you pull way back and look at this moment in history and the current economic situation, what do you see? I’m asking for a broad look at the cycle and where the paradigmatic break down, or breakdowns, is or are taking place. Can you just address that very big-picture question to begin with?

Roar: Thank you so much for inviting me on this call. As many of us have noticed, we’re living in a time of great polarization, as well as a time of great economic, political and cultural turmoil. Some economists, such as the German economist Wolfgang Streek, the author of How Will Capitalism End, said that, “The finance sector will very soon implode in a crash.” Incidentally, P. R. Sarkar said something similar–that capitalism would eventually “explode like a firecracker.” When this will happen, is, of course, anybody’s guess. But it could happen soon, or it could happen in a decade, or two. As we all know, the beast of capitalism, is very resilient.
So, as you said, let’s step back and take a brief overview. I want to first start by looking at the four crises we mention in our book: the finance, inequality, resource, and environmental crises. Each one of these crises are quite severe on their own, and they cannot be solved in a piecemeal fashion, by reforms. We opened our book with a quote by Naomi Klein. She wrote that, “We live in a time of overlapping crises, and we need to connect the dots. We need to solve each crisis sequentially. We need a movement that addresses all of them.” And that’s essentially the essence of our book, as well.
We are offering our solutions in the third part of our book. We need solutions. The times for reforms are over. That’s why it’s likely we’re in for a big crash, because the reforms are not working. We’ve been, in a sense, taking a reform pill for decades. The acid reflux of capitalism has turned into heart disease. But the good news is that this capitalist heart disease can be reversed. But only if we throw away the reform pill and change our lifestyle, our way of living, our economy. As we say in the book, we have to restructure the entire economy, step-by-step.
As we have also seen recently, there’s a growing discontent. Both from the right and the left. The right is reacting in many reactionary ways, and sometimes even in ugly ways. But nevertheless, many of the reactions are justified, as many people are frustrated, grasping for answers, for solutions. There is great instability and uncertainty from the growing precariat, a term used recently by James Kurth, when he spoke at the Festival of New Economic Thinking, in Edinburgh, Scotland. Some members of the PROUT movement were there, and one of my friends sent me some notes from that conference, and he said that James Kurth, who used to work for the Council on Foreign Relations, surprisingly sees hope in the restless precariat, the underemployed, and those of us working three jobs to make ends meet.
He also sees hope in the Bernie Sanders movement. And again Sarkar said something similar, that the change would come from the “disgruntled intellectuals”, those with a “revolutionary spirit.” At that same conference, Joseph Stiglitz was speaking as well. The former chief economist of the World Bank, who in many ways has made a complete turnaround, as he is now very skeptical of neoliberal policies, of deregulation, [corporate] free trade, and so on. These are all policies, which he once supported, but now he says, “We need to create a Nordic model of economics everywhere.”
But in Growing a New Economy, we ask: is that going to work? Does the Nordic model hold the solution to our problems? This is an essential issue, I think, because many progressive people, many people who talk about economic democracy, they are seeing great hope in the Nordic model. And the environmentalists sees hope in sustainable capitalism. But are these models good enough? I don’t think so. Instead we need to pose some more fundamental questions. The main question, which E.F. Schumacher also talked about, is the following: what should be the philosophical underpinning of our economy? Then we need to ask what economics is all about? If we go back to the roots, to the Greek word Oikos, economics then literally means to take good care of our Earth household. Oikos is thus the common basis of both economics and ecology. That idea, to combine ecology with economy, needs to be our basic economic philosophy.
So, first, we need to bridge ecology with economics. Then we need to bridge ethics with economics. And we need to bridge science with soul, or with spirituality. These vital links are totally missing in our economic system today. But this is something we need to address. We are not doing that on any big scale. Finally, we need to ask what “progress” means. Capitalism says that progress is equal to material growth, to making profit. Sarkar, on the other hand, says, “That material progress is not real progress because there is always side effects to any kind of material progress. You can never create perfection on the material level.” So he says that “real progress is found in creating a good society and in creating great culture.” In other words, in finding inner meaning, in a society that supports the spiritual growth of humanity. This is fundamental. And again, these are all issues missing in mainstream economics and in capitalism in particular.
There’s a fundamental failure in materialism, because materialism can only give us some physical comforts, but not inner peace and happiness. Fortunately, there are a few economists focusing on this today, which is very heartening. But because of this failure in modern, mainstream economics, the capitalists try, but have failed, to turn economics into a pure science. They are operating in a theoretical vacuum, and Karl Polanyi pointed this out already in the ‘40s, that society and our ethics and our basic philosophy of life, and not some abstract mathematical theory, needs to guide economics. We can’t just assume that economics is some sort of numbers game. And he also pointed out that capitalism tends to commodify everything, to make everything into a commodity. And finance capitalism has made economics into a speculative game. In a sense, I think today’s speculative economy is an outgrowth of this commodification.
Capitalism is also based on the selfish pursuit of greed, the freedom to earn as much as you like. But also on the freedom to exploit, the freedom to have the power to deny other people their fair share. This freedom is totally ignored by conservatives. They simply justify exploitation and great inequality, as if that’s normal. The Marxists criticize this aspect of capitalism, but they haven’t really come up with a real alternative.
Then we have the reform movement, which again points towards the Scandinavian model. Incidentally, I grew up in Norway, and I’m quite familiar with that society as an alternative to the more hard core capitalism of the US. John Maynard Keynes, the economist, with his reform policies, and the European left in general, struggled to soften the blows of capitalism, to redistribute wealth through higher taxes and wages, and so on. And this created a European welfare state, and many economists are today looking towards that as the model of the future. Paul Krugman, Joseph Stiglitz and Bernie Sanders, they all love that model, as well as many other economists.
But, I think that this model also has serious flaws. For one, it’s not environmentally sustainable. It also wastes enormous resources on propping up a welfare system that has many flaws. I can go into great detail about that, but in short, I agree with some of the criticism on the right about that model. And again Sarkar has, I think, an answer to that: not to create a welfare model, but rather a full employment model, to utilize people’s inventive spirit and strong work ethic. And again, the EU is a reflection of this flawed welfare model. And in the book, we are quite critical of the EU, mainly because the EU is fundamentally based on a neoliberal economics model with the four freedoms: the free movement of goods, capital, people and services. And I think because of this neoliberal economic foundation of the EU, we’re seeing a crisis in the EU right now. Both a political crisis and an economic crisis.
So, the reform movement, supported by Stiglitz, Sanders, and so on, is in many ways a very positive sign, but it is also a limited vision. Then we have the environmental movement, which again is very important and very positive. But it has certain weaknesses also. And we’re trying to reveal some of those weaknesses in the book. The main weakness is that they haven’t really understood the fundamental flaws of capitalism. We are also seeing that these reform societies are leading us toward increased inequality, and into speculative finance capitalism. Every time I go home to my mother in Norway, I see more rich people, more and more materialism, more and more wealth and inequality, and a general movement away from the decentralized economic system that I grew up with in Norway in the 60s and 70s.
On the other extreme, we have the American model of less regulation, less reform. An extreme neoliberal economic model, which has created a speculative, rentier economy, with large monopoly companies, and so on. Banks controlling the economy and the rest of us, who are, in a sense, economic slaves. Many of us have become part of that precariat, the educated underemployed. And as a fellow PROUT economist said, we’ve created a “casino capitalist economy.” We’ve got increased inequality. We have created an inverse welfare state, welfare for the rich. Or, as Ralph Nader put it, we have socialism for the rich and capitalism for the poor. And, as we have written in the book, we have created a resource crisis, we are on the way to live out our means. As some researchers have pointed out, we are literally using the resources of one and a half planet, and soon we will double that usage.
We’ve created a tremendous global ecological crisis. On top of the debt crisis, and the inequality crisis. And again, the green movement has been a great response to that, but I don’t think it is enough. We don’t need a reform system, or a sustainable capitalist system. We need a new economic structure. And I think that this is emerging, even though hardly anybody knows about PROUT, I think that such an economy is emerging from the underground. I think that people on a massive, global scale are sensing the need for that new society.
So I don’t think the next economy will be the Nordic model, or the EU model, because, as I said earlier, these economies are also based on neoliberal economic values, on deregulation. They are not really about true economic democracy. I also think that it will likely get a lot worse before it gets better. It is possible, and quite soon, that the finance sector will implode in a great crash. So, yeah, as Bob Dylan sings in one of his songs: “Everything is broken.” I think, in many ways, that is true, and on a global scale. At the same time, more and more people, both on the left and even on the right, are realizing these fundamental issues. I was surprised, for example, that the biographer of Margaret Thatcher wrote in Fortune magazine some time ago that he thought that corporations should be turned into worker enterprises. Quite a surprise, and this was printed in Fortune magazine!
Of course, one article like that, is not going to create any revolution by any means. But I think it is important that some people on the right are also waking up to some of these new possibilities and realities. I also think that more and more people are realizing that nationalism is not working, that we need to both protect the local and the global at the same time. This is a very important point, which is also very much emphasized in PROUT. We need to bridge economics and culture. We need to bridge science and spirituality. And we need to solve all of our crises in an integral way. That is very important. We can’t just tinker with the system any more, which a lot of the so-called sustainable capitalist ideas are doing, simply tinkering with a system that really needs to be restructured completely.
The positive thing is that people need to, and will, at some point, rise to the occasion, and hopefully very soon. But before that, it is likely that we will have more economic turmoil, more international turmoil, and so on, on many different levels. Different crises, both economically and environmentally, will take place. But finally, I think that these crises together will give us the critical mass of people, of awakening, which we will need for creating real change.

George: Thank you, Roar. Great, great introduction. And that’s exactly what I was hoping for, that kind of big picture take on what you see and how you see it. I appreciate so many references that you made going along, and I’d love to pick up on lots of them. But I’m going to try to stay with a discipline, at least at the beginning of the call here, and go over some of the questions that are pretty real for those of us who are obviously way less informed than you are. I’ve got a series of 4 questions here, which are all just about the here and now of capitalism as we experience it. They are mundane, but they still matter to me, and I think that they matter to most of us on this call. So I want to just walk you through these things and just get your response to some issues. Where I want to begin is going over the distinction that comes up repeatedly in the first chapters of the book between the real economy and the financial sector.
The real economy is the easier part for me to understand. I think of it as old, basic capitalism from maybe 40, 50, 60 years ago. And in that system, someone has some money which they put into building a factory, buying machines, purchasing raw material, and hiring workers. All of that goes into producing something that is presumably sold at a profit. The workers get their salaries. And, the original investor, the capitalist, gets whatever additional profit there is. And the basic idea is that now this wealthier person will then use some of his new wealth to buy more machines and hire more workers. In this way, his profit keeps getting turned back into the real economy, helping it grow in a way that benefits everyone. Is that an essentially accurate description? Anything you would add or subtract from that?

Roar: Yeah, I think that your analysis is basically correct. I think the real economy is, in a sense, economic activity that adds to the amount of wealth in the world. So, yeah, I essentially agree with that description of how the system works, which also more or less corresponds to Marx’s MCM formula: money, commodity, money. In other words, money is invested to produce commodities and then sold for profit. In this system, as you said, the capitalist ends up with more money than what he had when he started. And then at the same time, he is producing something with that money. Prior to that system of capitalism, in the more feudal system, they used what Marx would term the CMC model: commodity, money, commodity. In other words, a farmer had land, and that’s a commodity, and he produced something from that land, and he sold it, and then made money, and then with that money he purchased more commodities, another horse, or some more cows. So that’s a very simple model of economics.
So in this style of capitalism, where there’s profit, that profit can be used for good, by investing it back into the real economy. Or it can be used for speculation, in what we call a Rentier economy, or the Rentier system. And this is very much what is happening today. This Rentier economy, this speculative economy has grown tremendously. But essentially, the way that you describe it, is basically right. That is how “good capitalism” functions. And in the PROUT context, this would be the small-scale capitalist in the private enterprise system, where the profit margins are not allowed to become huge. And where inequality is not allowed to expand to an unhealthy level. So, PROUT is saying that rather than taming the beast of capitalism with taxes and so on, it’s better to keep capitalism on a small scale. And when capitalist firms become bigger, then we turn them into cooperatives. So that’s how PROUT would deal with this issue.

George: I think I remember that Sarkar suggested once a business had expanded to a certain number of employees, that that’s when it would need to become a cooperative. But, we’re not in that world yet. So let’s switch now into the world that we are in, and let’s pretend that the capitalists that I just described in the first piece there has a fairly substantial manufacturing industry. And let’s pretend he’s made a million dollars that he now has. And in this new financial sector, what are his options? What are the kinds of things he might do with that money that don’t actually create anything in the real economy?

Roar: Yes, so he can invest that money in the stock market, into what we call the speculation economy. He can become a casino capitalist, if you will. If he is lucky, he can turn that $1 million into 10 million, even more. You know, many people have, for example, invested in the bitcoin market, 10 years ago, or whenever it started, and they are now multimillionaires. So this is happening more and more. This part of the economy, ironically, is now the largest part of our economy.
We can also lose all of that money in the stock market, in a stock market crash, which I’ve also seen. I studied agronomy, and I was very inspired by John Robbins’ book Diet for a New America in the 1980s, a book on factory farming. And then I learned recently that he became quite rich, after he first gave up his fortune as an heir to the Baskin-Robbins ice cream company. He made quite a lot of money writing books and having speaking engagements. He became an environmental activist. And then he lost most of that money in the financial crash of 2008. So this can happen to people like him, who basically gave up a financial fortune for ethical reasons, as he was a vegan and wanted to have nothing to do with his father’s company, and then he made his way up again. So these kinds of restless, economic crashes, these kinds of boom and bust cycles are very much a part of the American system. And we see it more and more, how the financial economy has taken over.
So in a sense, this system, or this economy, isn’t producing much tangible wealth. Yes, you may make a lot of money, and you may build five houses. So there is some spill over into the real economy, but very little. You may start another business, and so on. Yes, some tangible wealth is created, but most of that money is just sitting there somewhere and doing nothing for the real economy. So, in a better economic system, or a more ideal society, the wealth would be the oil in the machinery of the economy to produce more real wealth. We need financing. We need some debt to create more money, to produce something, to create some profit. But this financial system has become so pervasive, so powerful, that it literally controls the whole system that it was designed to serve.

George: Right. Let me ask you a follow-up question on that. You mentioned that my hypothetical millionaire could invest in the stock market, and go the speculative route there. And the question I have now is this: Would everyone agree that that’s not a really productive, useful way of investing, or of using that money? You mentioned that obviously there is a need for financing and using that to make capital available for people to do things. This may not be exactly fair, but I’d still love to try it anyway. So, if we brought in a center-right businessman at this point, what would he say about investing in the stock market and all of this kind of financial sector? Would he argue that that’s actually good for the world? Or would he pretty much say, “No, no, this is really just money trying to expand, and it doesn’t have much of an effect in the real world?”

Roar: Yeah, I think so.

George: Okay.

Roar: I think that this is very much what is happening now. In that way, the conservatives, the right, has done a fantastic job of explaining away the exploitation of capitalism. And we have all become caught up in it, more than ever. Yes, they will explain that away. This is what we hear from Trump. This is what we hear from the Republican Party. Even to some extent from the Democrats, we hear this, that more wealth creates more jobs, and so on. But it isn’t necessarily so. The financial system is necessary for the real economy to exist, because it enables human beings to cooperate in complex ways, and so on. It increases productivity. So the problem isn’t necessarily with the financial system, but due to the fact that this system has taken over the control of the real economy. That it’s siphoning off too big a portion of the profits, which could have been reinvested into the real economy instead. So today, the rentier economy has become very pervasive, and it is a system of economics which we are all caught up in.
Tom Goodwin wrote in an article recently that Uber, the world’s largest taxi company, basically doesn’t own any taxis. Facebook, the world’s most popular owner of media, doesn’t create their own content, like a newspaper does. We create the content. And the same thing with Airb&b, the world’s largest provider of accommodation, they don’t own hotels. We own those accommodations. And so we have this strange new economy that creates tremendous amounts of wealth, but most of that wealth is going to the top. And this has been illustrated by the recent research by Oxfam. When we first began researching the book, some 359 people had as much wealth as half of the world’s population. Today that same number, of extremely rich people, has dwindled to only eight people. To me, that is really astounding. That is incredible.
Similarly, Thomas Piketty, the French economist who wrote the bestseller Capital in the 21st Century about inequality, pointed to the fact that inequality is increasing. When we study his statistics, we understand that this is happening on a massive scale. But at the same time, as I said, the capitalist system is cleverly bringing us all into this very same system. We are all on Facebook. We are all buying from Amazon. We are all part of it. And I think this cleverness is part of the reason why we are all asleep at the wheel and not standing up and saying: “Enough is enough!” So this is a very odd realization, I think, but an important one. And I’m heartened by seeing that more and more people are waking up to these insights, and speaking the truth.

George: Yes, I agree with you. It’s disheartening on the one hand that all of us are increasingly used to these giant corporations, from Airb&b, to Uber, to Facebook, to Amazon. And they are increasingly part of our lives. And they seem to serve us well. I completely experience that. I use them all actually. And yet, we are primarily producing massive amounts of wealth for those at the top. And so in a way, we’re integrating them into our normal. The new normal is more of us are more connected to more services, which do in fact serve us somewhat. But they also are creating this incredible wealth for a very, very few people. And what those people do with that wealth, of course, will create our world going forward.
And that leads me to the next question I’d like to ask, because of the picture I’m getting when I think about the way our world’s going – particularly the picture I get when I think about the 2007, 2008 crash, that started with the speculative real estate market here in the US. What I see is that our entire life is so entirely based on the economy, that all of us, from individual citizens to the government itself, are now essentially slaves of the economy.
It’s not like the economy is working for us. Rather, we’re working for the economy at this point. And so we pretty much have to do whatever the bankers tell us has to be done to keep the whole system going. And, this was dramatically evident after that crash, because the bankers said, “Oh, what you need to do is to bail us out.” And the government said, “Okay, we’ll create a huge amount of money for you.” And so, the bankers got to dictate the solution to that problem, which they had in fact created. And their solution made them even stronger. Anyway, so that’s what I’m seeing, the tail that’s wagging the dog. But I’m not sure it is the tail anymore. It’s beginning to feel more and more, like it’s the brain, or some demonic part of the brain that’s telling us all what we have to do. Would you comment on that?

Roar: Yes, I agree very much with what you’re saying. The Norwegians and the Swedes, they are practical people in many ways, even though, as I said earlier, they have become part of this speculation economy as well. We saw that with Iceland also. Iceland became a hotspot of investing, prior to the economic crash. We write a little bit about this in the book. However, when the stuff hit the fan, so to speak, then Iceland did something that other countries should emulate: they let the banks fail.
Some economists, such as Eric S. Reinert, the Norwegian economist, which we quote quite a lot in the book, he said: “Let the banks fail. Let them go down and take the ship down with them, because they created this problem.” And that’s essentially what Iceland did. They let the banks fail. They didn’t allow the taxpayers to bail out the banks, which is what happened, as you so wonderfully stated, in America. Here, we let the taxpayers pay for the massive failures of the banks. We paid the people who created the big mess. On top of that, they themselves cleverly created a new financial speculation system, which gave them even more money. Sometimes more money than they previously earned. This is an outrageous system of economics, and we need to stop it.
At the same time, as I said in my introduction, I think that it is a system that will eventually implode because it is so unhealthy. It is so unbalanced. And I think that this quote by Sarkar that “Capitalism will explode like a firecracker” implies something about this. I think there are many economists and PROUT activists that have wondered, what does he mean by that? And I think that it relates to this part of the economy, because it is so an unhealthy. It represents the essence of capitalist greed. And again, this system of rewarding greed is the essence of the problem of capitalism. And we cannot just keep reforming this system, keep propping it up. We are seeing the elephant in the room, but we are not really talking about the elephant in the room. What we need to do, is to start talking about that elephant in the room. We need to do something about it.

George: That leads me to exactly the next question that I want to ask you. There’s a wonderful line in the book that says, “Capitalism has, in a sense, a self-destructive gene in its DNA.” Oh, and before I go any farther with this question, I want to remind everyone to ask questions, or send in comments, or do something just to bring a few more voices into this conversation. We’re not seeing any questions showing up to Annida yet. But Annida, if you are there, I would love it if you would just come on one more time, and remind people how to send in a question or a comment to you so that it can become part of this conversation.

Annida: If you have a question or comment, you can send it to my personal email address, which is xxxx@yahoo.com. That’s my name, @yahoo.com.

George: Great, and so it would be wonderful. If anything comes to mind, it doesn’t have to be on exactly what Roar and I have been talking about. It can be anything that you’d love to hear him address. You know just type that up, send it off to Annida, and we’ll get it into the conversation. So, now I’ll go back to where I was. I was just saying that there’s this great idea in the book that capitalism has a self-destructive gene in its DNA. Would you talk about that for a little bit?

Roar: Yeah, as I said earlier, I grew up in Norway, and I was part of the leftist movement in Norway. My father was a communist actually. And I was part of the Communist Youth Movement for a short period. And I remember my father, he said that, “People’s consciousness is tied to their pocketbooks.” He said that, “People need to understand that the essence of capitalist economics is profit.” Even though he didn’t understand all of the context of Sarkar’s ideas, who also came from a deeply spiritual tradition. He didn’t understand the spiritual side of Sarkar’s ideas, but he understood his economics. Because Sarkar said the same thing, that the problem with capitalism is that it is based on “the profit motive.” Capitalism is based on Adam Smith’s idea that selfishness is good. The idea that, because selfishness breeds inventiveness and creativity, ultimately there will be enough profit created, enough good for everyone. But Sarkar said, in essence, that this gene is the real and essential problem with capitalism, this profit motive.
So this selfish gene is also capitalism’s own self-destructive tendency. And this tendency needs to be curbed. We have tried to curb it, through tax reforms, and so on. But over and over, we see that these reforms have not been enough, as I said in my introduction. And this is now being reflected by two very essential problems. One is the environmental problem, and the other one is the inequality problem. In a sense, we’ve created two planets, one rich, and one poor. And inequality is not decreasing, even though we, ourselves, may have better material lives than our parents had, and so on. But essentially this system keeps going. It keeps going on and on. So this is what we mean by the selfish gene. It’s an essential issue.
Capitalism is very complex. If we speak within an Indian context and use Ayurveda, the health system of yoga, as a metaphor, which is also very complex, but at the same time also very simple. Capitalism is also very complex, but also very simple. And economics, the essence of economics, is also very simple. But we have let mathematicians and economists get away with making it seem very complicated. They have been getting away with murder, in a way. And this needs to stop.
And so the very system of capitalism needs to be balanced by cooperation. Capitalism says selfishness is good, it is inventive, it is creative; it creates positive things; and it’s based on this idea of the survival of the fittest, as its social outlook. PROUT, on the other hand, is saying that we have two tendencies as humans. Yes, have this selfish tendency. But we also have something that Sarkar calls the gene of cooperation. The gene of helping others, of altruism. And this is the gene that needs to balance the gene of selfishness. And the way to do that is through creating economic democracy.
That’s why in PROUT, private enterprise will be allowed only on a small scale. If it is not, the capitalists will always want more profit, more domination, more control. And eventually, no matter how many reforms we have, we will eventually end up with the system we more or less have today. And because of this gene, the whole capitalist system is geared towards increasing concentration of wealth, of making some people super-rich and the general population poor. So that’s basically what that gene perpetuates. And instead we need to create more balance.
Because of this gene, on the environmental level, capitalism also tends to deplete natural resources, to destroy the environment, to take nature for granted, see it as a free lunch. And that is something that the environmental movement and the environmental economists have been very good at pointing out. They have documented this problem very well, and I think that this is something that more and more people are waking up to, this insight, and this wisdom.
So, what we are suggesting in the long-term solutions section of the book, is that we need to redesign the system itself. Not simply to reform the system, but rather to restructure the entire economy. So that the economy and the ecology are part of the same system of economics, and thus to remove the inherent weaknesses of capitalism altogether. And this is what I believe Sarkar has done in developing his new economic model.

George: I see that we keep gravitating towards solutions, which is exactly where obviously we’re all want to go, and where the end of the book actually does go. And we have gotten a question which refers to how you see the transition happening. But before we get to that, I want to ask you about the last time I think that capitalism was really challenged. It was back when Marx was writing, and then the eventual Communist Revolution. At that time there was none of the kinds of financial excess which characterizes capitalism today, right? I mean there were bad things. There were no unions; there was a lot of child labor, and there was an obvious divide between the rich and the poor. But it wasn’t as bizarre as it is now. So Marx wrote, accurately it turns out, that workers would not stand for the system as it was operating then. And so what I’m wondering about is if you have any insight into why are we so tolerant of the system now? I mean why aren’t we rallying in some way?

Roar: As I said earlier, I think it’s Facebook’s fault. It’s Mark Zuckerberg’s cleverness that got us all, made us lazy and complacent. I’m saying this as a joke, but as my math teacher used to say, “There’s always something serious in every joke.” So, I think that the capitalist system has been very, very clever in covering up its tracks. And that has been achieved in so many different ways. At a conference in Norway a few years back, a friend of mine, a historian and also a member of the PROUT movement, was invited to speak. It was a conference of leftist leaders who wanted to start a new movement, because they felt that the leftist parties didn’t have any solutions any more. And so they had basically left various progressive parties in Norway. There are seven or eight parties in Norway, and about four of them are on the left, even to the left of Bernie Sanders. So they had all come together to start a new movement, and he started to talk about PROUT. And after his talk, they said, “Wow, this is what we’ve been looking for. We have run out of ideas, and we like these new PROUT ideas.”
The system of capitalism has become so clever in designing a system that makes us all into slaves. We have all become invested in this system. We have all become its sleeping slaves. During the housing crisis in the early 2000, I had friends who “flipped” houses. They bought a house in February and sold it in April, and they made $50,000. You know, I was tempted to do it also, because I saw the potential for making money. But then I thought, this is just crazy, this will crash very soon. And that’s exactly what happened. Yes, more money is good, but at the same time, it did not seem right making money that way.
The capitalist system has developed a very clever, very robust, very resilient system, and it’s very good at covering up its own problems, and in making us believe, it’s okay. You know, if we vote for Obama, everything will be okay. Or, if we can get Trump out of office we’llhave a better world, and so on. But, it isn’t that simple. Therefore, I am heartened by movements such as yours, by people that you have in your group who are asking the tough questions, looking for deeper answers. This is what we need more and more of now. And I think so many of the answers are there already. And I think the next thing is that we need to create that movement which says, “Enough is enough.” And I think that that movement is coming.
Paul Hawken is, in a sense, a green capitalist. And even though he has many good ideas, I basically disagree with his reform policies. But he said something important a few years back. He said that there’s a growing movement throughout the world, of millions of people, a grassroots movement, which is never covered by the mass media. And that movement is quietly working on all of these issues, asking the right questions. And at the same time, building an alternative economy, an alternative environmental movement. Ecologists, local economy movements, and so on. They are discussing the commons, and they are using the resources properly. So that movement is there. And I think when the right time comes, when there is a deeper and more fundamental crack in the system; then I think we will see a massive change.

George: Wonderful, I’m going to pause there. Thank you for that one. And Anita I’m going to just ask you to come on with any question, that looks like a good one. We’ve now gotten quite a few questions in, and many thanks to everyone who is writing them. Annida, can you pick one from the pile, and read it to Roar, and see where he goes?

Anita: Sure, I have a question from Janet, and this is on the theme of the changes that are coming. And specifically, she’s asking, “How you see the change to the capitalist system coming, and what can we as interested parties do to help bring about change?” And speaking to that, I think when there’s a crack in the system, there’s an opportunity for change to happen. If you could speak to that and anything now that we can help bring it about.

Roar: You know, Leonard Cohen has this beautiful line, where he says, “There’s a crack in everything, and that’s where the light comes in.” And I think that is what is happening, that the light is coming in through the crack. What can we do, and what is being done? I think that on a personal level, it is very important that we walk our talk. If we speak up about saving the environment, then we need to also live according to those values as much as we can. So on a personal level, I think that it is very important, that we shop at the farmers market, and support the local economy in a very direct and complete way. And that we boycott companies that we think are not healthy and not sustainable, and so on. So on a personal level, it’s very important that we live our values. I also think that it’s very important that we join groups, such as your group, Economic Democracy Advocacy (EDA). I also think it is important that we educate ourselves; that we become activists; that we start to speak out.
At the same time, as we are doing right now, it is important to study alternative ideas, to study PROUT, to study alternative economics. But the major change will come through some form of crisis. Unfortunately, that is often how change happens. However, it is very difficult to say when, and how it will happen. You know, Karl Marx thought that the communist revolution would happen in England, or some industrial country in Europe, but it actually happened in Russia. And so, again, it is difficult to say how and when the next economy will be created.
Some people in the PROUT movement think that Scandinavia is very ripe for this change. And I think that there is a lot of truth in that. And so when Stiglitz says, “Let’s look towards Scandinavia,” there may be something deeper in that message. That it is likely countries such as Norway and Sweden, who in many ways are halfway there in creating a PROUT economy, will be the countries who convert first. This is very likely. But I don’t think it will happen without some kind of crisis. On the individual level, sometimes we need a crisis to make change. We may have become complacent, or we have suppressed something, or we deny something. And, in a sense, we have been living in a great political and economic denial, and we need to wake up. And when enough people wake up, then real change will come.

George: Thank you. Annida, I want to just keep going, with what you’re seeing on your screen there. Do you have another question that would be good for Roar to address?

Annida: Sure, I’ve got a couple of questions that are really about who we are as human beings and our values. One of the questions here is can we change the economic system to economic democracy without first changing people’s values from separation and selfishness, to unity? And in that same theme, someone else is asking, “In the new economy, how much more do you think we will need to focus on the essential basics? For example, do we have each other’s backs on economics for how we take care of each other, or how we don’t? Who are we, and what is our relationship to each other?” So really questions about how we relate to each other as human beings, and can we really transform our economy, without first looking at that or somehow integrating that into the conversation?

Roar: Wonderful question. It contains an important issue, which so far has been missing in the leftist movement, or the progressive movement. It is addressed to some extent in the environmental movement, the idea that we need to live our values. And, we could say, to some extent in the spiritual movement. However, in each of these movements, there are some missing links, some loopholes. In the spiritual movement, there’s a tendency to think that, it if we all become spiritual, then everything will change. In the environmental movement, there is the idea that if we all become environmentalists, there will be change. I think it is very important and fundamental that we walk our talk as much as we can. And so this integration of our own values, the value of corporation, the value of caring for the environment, taking care of our neighbors, and all of those community values—these are all fundamentally important. And at the same time, we need to practice deeper spiritual values, finding peace within so that we don’t blame others, don’t scapegoat others, and so on. All of those values and practices are very important.
So yes, I do think that real change will come. Sarkar spoke to this very clearly. He had a Sanskrit term, since he came from India, for a personality type he called a Sadvipra –and this personality, Sarkar said, is an integral personality, a leader type, who has integrated all of the different qualities of being human. It is a person that is spiritual, but who also understands the real world, who lives in the world, who is a warrior, and who understands injustice, economics, and social change, but who also deeply values spirituality and ethics. This type of a person, hes said, will be the leader who will bring us the new economy, who will inspire us into the new world.
And this idea deeply resonates with me. I became very frustrated with the leftist and progressive movement in Norway, because I didn’t see these values in that movement. And I left it in frustration, and became an anarchist, and thus went to another extreme. Then I got involved in more spiritual thinking, I went to India. And that’s how I met Sarkar and got involved in his work. So, yes, I think that, as the questioner pointed out, there is an essential need in integrating the personal and the economic. The internal with the external, the subjective with the objective, I think this is key. But I don’t think that we necessarily need half the world to convert, or to become a Sadvipra-type leader, because change generally happens through small numbers of people, those who are the vanguards, the pioneers. So when we have enough of these pioneers, these integrated personalities, then the change will come.

George: Fascinating approach and I get it. I think that many of the people on the call are pretty involved in their own value-based living. And I think on lots of refrigerators that we have in our homes there is the quote from Gandhi saying, “Be the change you want to see in the world.” I suspect Gandhi had in mind another sentence that would come after that: “Be the change you want to see in the world, and then go out and make it happen.” Which is what he obviously did so wonderfully. So Annida I think we’ve got probably time for one more question, and then there’s a final one I want to ask Roar. So do you have another one that you’re seeing there that would be good for Roar to address now?

Annida: Yes actually I see there are a couple of them here. So I’m just looking through to pick one. There’s another question here: “You state that capitalism is clever at disguising its problems. Do you think this is a concerted effort on purpose? Does Mark Zuckerberg really know what he’s doing long-term to the economy? And are these people, perhaps asleep slaves, as we are, just with more money?”

Roar: Wow, great question. Yes, I think that there are some capitalists, that are very devious, very aware of the exploitation and the damage that they are doing, because this, we have seen throughout history. We saw it in the early industrial era, when we moved from the mercantile economy into the industrial capitalist economy. The way that factory owners would treat their workers, you know child laborers, and so on. And this is in many ways still happening today, in many corners of the world. There are capitalists that are basically criminals. And so you have people like that, who are in a sense demons in human form. Yes, there are capitalists like that, but I don’t think that Mark Zuckerberg is one of them. I don’t think so. I think that many of the people in Silicon Valley, and in this new creative bubble, they are, in many ways, well-meaning. But at the same time, as the questioner mentioned, unconscious about their own reality, about what they are creating. There is an unconsciousness about what they create, and there is denial.
Take Amazon, for example. There is a new book which just came out called Nomadland: Surviving America in the 21st Century. It’s about people in their 60s, who travel in motor homes. A kind of underclass of people, who move from town to town. They work three, four months here and there, in an Amazon facility. And they live paycheck to paycheck. And so these kinds of workers are part of the economy which Amazon has created. The bosses of Amazon may not think very deeply about that. But at the same time, we know that they are not really concerned about it either. So there is a conscious awareness of the problems they are creating, but it may not be as demonic as the actions of a capitalist engaged in child slave labor. So I think that capitalism can express itself in demonic and terrible ways, but it can also be unconscious, just part of an unhealthy system. As I said earlier, we have all become part of this unhealthy system.
And we need to speak to that, to that fact, that we have become slaves of the system. And Sarkar also spoke about that. He said that, in many ways, the capitalists are also slaves of their own system. And we need to reform them both—to restructure the system and also to reform the capitalists themselves.

George: Thank you once again, great answer. With apologies to many people, who I know have written in good questions we’re not going to get to, I’m going to turn to the last question I want to ask Roar because it has to do with the particular piece of EDA which the education group is responsible for. And I want to make sure Roar has enough time to answer this.
Roar, if you could magically educate the American people on just three points… and I’m asking this because I really think that’s about the number of points we might be able to get through over the next decade. So if there were three essential messages, which you really wanted the American people to get at it deep conceptual lived level, what would they be? So I’m really asking you to think about if you were the education wing of Economic Democracy Advocates, and we want you to take on three messages here, what three do you think are the most three places to direct energy?

Roar: Do you mean in terms of how you would want to educate the public?

George: Yes. It’s how you would want to educate the public really? If you could get the American people to know three things, that they don’t presently know, that might help this whole process along, what three things would they be? What three things might motivate action, might change how they see things, might change their behavior? It’s whatever three things you’d love them to suddenly know. Can you think of three in that area? It doesn’t have to be three, maybe two or four, but something like that number.

Roar: Okay, I haven’t thought it through completely yet. But let me try. There is one issue that comes up clearly for me. And I hope you’ll be happy I came up with that idea. It’s about economic democracy. I think it is essential for people in America to understand that the power of people, lies more in economic democracy rather than in political democracy. And this is not just for Americans, this is for people all over the world. And again, I think that this is one of the beautiful insights of Sarkar. This understanding that, on the local level, we engage in economics more than in politics, on a day-to-day basis. If we want to take the power back, we need to emphasize that the real power lies in economic democracy.
So that’s the number one thing. To say it another way, in order to balance the often futile endeavors of political democracy—and we see this in America again and again. How futile it is to think that the next president is going to create a better America. It is not that easy, of course. And so to emphasize this need for economic democracy, and to educate people about that, this is very important. To let people know that the real power lies in creating economic democracy. This is the way that we can take back the power from the corporations, and from the politicians that are paid and bought by these same corporations.
Secondly, and this is part of economic democracy also, this idea that we need to create a vibrant local economy. We cannot have economic democracy if we don’t have a vibrant local economy. And that means that we need to emphasize the importance of a decentralized economy. That people in the local areas take back economics into their own hand and develop the infrastructure from the bottom up, on the local level. That means producing food locally. That means having industries in rural areas, and so on.
So for example, in the Southern Appalachia area where I live, there is a lot of poverty. Still, this area has tremendous potential. There is labor potential. There is vast amounts of land available, and so on. But it is largely unutilized. If this area had been anywhere in Europe, it would’ve been a flourishing agricultural area. So there’s tremendous potential in America. But so much is wasted on this belief that if I work hard enough, I will become as rich as whoever. This myth of individualism is so ingrained in people. I think that this is something that is very difficult for many Americans to grasp and to speak to.
So, maybe that’s the third point, to emphasize the need for a more communitarian culture in America, for values that are community-oriented, rather than individualist. This rugged individualist, this myth is so strong in America, and it needs to change. This is perhaps the biggest challenge in America, to change that myth of the rugged individualist, because it is part of the culture. And I think that is perhaps why in Scandinavia people are more community-oriented. For example in Denmark, if you would ask someone if we should have a single-payer healthcare system, they wouldn’t think it’s even a question. They would just take it for granted that this is how it should be. That everybody should have healthcare, and everybody should have free education, and so on.
These issues are, in the PROUT system, fundamental. In PROUT, we say that all the basic needs, such as housing, education, medical care, etc., should be guaranteed for everybody. Not through welfare handouts, but through guaranteed employment and collective shared wealth. So perhaps those are the three main issues: economic democracy, the importance of a decentralized economy, and changing the American cultural mythos from individualism to a more communitarian spirit.

George: Perfect, and that last point you addressed connects to the last question that came in that we didn’t get to. I’m not going to ask you to go into fully, but it was about the role of government. Just this question of, okay so we’ve got these governments, and what are they supposed to be doing for us? Because your first two points didn’t have much to do with the government’s role. But, you’re so right that obviously government has responsibility for whether or not there are basic rights within a country, like housing, education, medicine. And at the very beginning, you mentioned full employment also, which is one that I think is so doable and would make such a difference. Do you have any comments on any of that? And then will just wrap it up.

Roar: Yeah, on the function of the government?

George: Yes.

Roar: Okay. Yes the role of the government is very important. Again this is another problem in America, that there is so much suspicion about the role of government. As someone said in the Michael Moore movie, Capitalism: A Love Story, “In Europe, the government is afraid of the people. In America, the people are afraid of the government.” So, I think it is very important to understand that the government has a very good and important function.
And again, speaking in PROUT terms, when we talk about the government, we are not just talking about the federal government in Washington. But rather on the state and local level, as well, even down to the city level. So again, government needs decentralized politics as well. So the government’s role is to set policies, good policies for the country. Good policies regarding the environment, regarding economics, regarding healthcare, and so on and so forth. So that is the role of government. And at the same time, it is important that the government sets rules for the economy, but also stays out of the economy, out of meddling with things on the local economic level, so that there is a clear separation there.
Sarkar also thinks it is better to have a party-less democracy than a party democracy. He thinks that it would be better if politicians were not affiliated with parties, but rather affiliated with policies. In other words, that they stand for policies, and not necessarily any certain political party. And this is something that many, such as Václav Havel in the Czech Republic, also talked about. But that’s for the future, a party-less democracy.
But yes the role of government is very, very important. If we look at the Scandinavian model, we see a very different attitude towards the government, because people there feel that the government is doing good things for them. And even the right-wing party, the party that is equal to the Republican Party in the United States would never think of ever saying that we should take away universal healthcare from the people; that people should just fend for themselves, and find the best healthcare deal on the market. The right wing party of, let’s say Norway, would never suggest that as public policy. So, with a change in consciousness, we will also see a change in understanding the proper relationship between government and economics and good policy. And by giving people the freedom to implement good economic policies on the local level, then I think that there will be a shift towards the possibility of good government.

George: That would be a welcome shift in this country. It just amazes me, when you think about the change from my parents’ generation to the current time. We really kind of trusted and respected our government not so many years ago. I mean, maybe 50. And boy, has it ever changed. It’s really remarkable.
But, with that, Roar, I think that we really do need to wrap up. We’ve used every minute our time. So I know if we could unmute now, we would hear everyone saying thank you. And truly everyone has hung in for the whole length of the call because you’ve been giving us really useful insights and thoughts. On behalf of everyone, I want to thank you for that. And I also want to thank everyone who showed up for the call, for giving time and attention to these hard and challenging thoughts, which have everything to do with what EDA is trying to understand and pursue. Thanks to all. And Roar if there is any last thing that you want to say, just go ahead.

Roar: Well I, I want to thank you so much for inviting me to this. I enjoyed it. I was very stimulated by the questions, and I learned a lot by rethinking the work on the book and delving deeper into many of these issues. So I really appreciate it and thank you so much for inviting me.

George: It’s been our pleasure. The thing that’s unsaid here, which I hope you really understand, is that all of us thank you for writing the book. It’s a wonderful book, and everyone who is reading it agrees that it’s a wonderful book. I’m sure that lots of us are going to be giving it to friends and relations through the holiday season and just saying this is a good book. So thank you for doing the work of putting that together.

The Next Economy (Part I): Understanding the Problem – Economic Democracy Advocates (EDA) Book Study Group