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Archive for the ‘Sustainable Economics’ Category

My goal is get people to think about what  would engender financial health (at least) in society as a whole.

Today:

What does the economy of a healthy neighborhood look like? What projects are appropriate and essential/desired at that scale?

Food

Shelter

Home heating

Small household needs

Household services

Transportation

Health

Education

Electricity

Communications

Clothing

Insurance

Entertainment

Exercise

Charity

Governance/law

Spirituality

Friendship

Deaths

A wide range of concerns. Its obvious to me that unless I intentionally meet my neighbors and form arrangements about each of these issues, they won’t form by magic. Its also obvious to me that much that needs to happen in the world, must happen at the neighborhood scale.

Some neighborhoods have actual associations to facilitate these needs. Lets also talk about how to start them.

Please comment. All comments will be moderated, so there might be some delay between when they are submitted, and when they appear on the site. Only comments associated with a valid e-mail address (not shown publicly), will be accepted. Any personally offensive or off topic comments will not be accepted.

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I’ve noted that there are eight economic scales that I am a part of. Each of the economic scales have economic activity that is natural to that scale, and constitutes its health At each economic scale there are three modes of economic interaction: compulsory contribution, exchange/market, commonwealth.

Individual

My individual health is measured by my physical condition, free from disease, ability to function physically, clarity of mind. Economically, I require minmum necessities, some entertainment, some spiritual life, access to transportation and communications, interaction with family and friends, interaction with those I contract with and colleagues, sleep, leisure, good work to do.

Family (Witty’s)

My family’s health is measured by the composite of the individuals within my family (self, wife, children, mother). Within my family, there are some chores and contributions that are compulsory for each individual to contribute. I and my wife are responsible to contribute a minimum monthly amount towards minimum necessities. I and my wife must contribute some household maintenance effort, cleaning, paying bills, errands, shopping. There is an element of exchange in which compulsory efforts we will each do. We each have some self-assigned regular tasks.

Neighborhood (East of High Street, below the Rocky Mount ridge in
Greenfield, MA)

My neighborhood’s health is also measured by the composite of the individuals within the neighborhood. Our neighborhood really doesn’t have a coherent economy or society. I know my neighbors and look out for them a little, but we don’t have any property in common, nor really any exchange, nor any compulsory work.

The neighborhood though is the most intimate social network that is outside of one’s home. It is the area that MANY cooperative ownership efforts should occur. (Cars, leisure, food buying clubs, cooking groups, energy generation, community gardening, etc.)

Community (Greenfield, MA)

Once at the community level, 20,000 people in the case of Greenfield, we are passed the intimate scale, and into the mass, the statistical. Its really impossible to care for every individual (like it is possible to care for every individual within a neighborhood.) The community is still close, and most retailers will know their customers individually.

It is the scope for most retail, groceries, clothes, etc. The town government comprises the extent of actual commonwealth. There are a couple cooperatives, but they are mostly retail businesses, more than shared wealth. We pay compulsory taxes, and realize the collective benefits of schools, police, library, etc.

Micro-Region (Pioneer Valley – Northampton, MA to Brattleboro, VT including Amherst)

The Pioneer Valley microregion is the site of many intentional community linking norms. Years ago, we had a local currency that suggested serving the Valley micro-region. It could be revived or started anew. There is no formal micro-regional governmental entity (now that counties have been dismantled in Massachusetts), and there is no really micro-regional scale commonwealth (except what is under the state umbrella).

There is much more inter-regional trade occurring relative to the Valley, particularly in education, but also in manufacturing. Employees serve the institutions micro-regionally, via 20 or so town residences comprising bedroom communities. The majority of the region’s economy is constructed of these micro-regional inter-regional exchange.

Macro-Region (New England)

According to the best of regional economy theory, New England should be the scale size that serves the majority (literally) of the industrial needs of its residents. Cars, refrigerators, food, building materials, should be regionally supplied, resulting in functional regional economic independence. But that is a ruralist economic model, not the urban.

It is possible in New England. We have excellent farmland, suitable industrial building lots, well-educated populace.

Again, there is really no New England scale commonwealth, though the states may provide that macro-regional function.

Continent (North America)

Some needs can only be met at a continental scale. While the siting of manufacturing plants can be local, the siting of some industry must be continental, or maybe bi-continental (west coast and east coast). The national scale serves what would otherwise be continental in scope. It provides a globe-like marketplace. That the federal scale marketplace swamped regional even before globalism draws a parallel to continental great cities whether American or global.

As conservative as it may sound, we need protection from the mass national marketplaces, as much as we need protection from the mass global marketplaces. States don’t do it well. Federal law regarding interstate commerce, has stripped the ability of states to regulate. And, the giant scale of federal legislation and institutions, corrupt the processes that could otherwise result in universal regional health.

The continental scale say for agriculture should be a secondary insurance against local draught or blite, not the other way around. Similarly for manufacturing or materials availability.

Globe

Its too big for things, great for ideas. Lets leave it at that.

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I don’t know enough about the European Union to comment much. I rely on more knowledgeable people to explain what is going in Europe and in international banking.

I do know that Europe formerly had strong divided nation-states, that allied, warred, each with independent governments, tax and fiscal policies, currencies (and defined on very different bases).

Now, Europe has a single market, no customs restrictions, no immigration restrictions, functioning with a single currency. Some countries continue to use two currencies (England), but the Euro is legal tender in all of the European Union.

It is more confederated than the United States was before the US Constitution was drafted and ratified. But, each state’s role in the European Union is more independent and significant than states’ roles are in the US.

There are US states that have larger budgets than some even major European countries, and a default on a state’s debt would be devastating. Many states are stressed financially, and a default on some state’s debt is a strong possibility, especially in a localized or generalized double-dip to the current recession.

The combination of unified currency but independent governments is regarded as the cause of the current global banking crisis (that resulted in 14% drop in the global stock market valuation in 3 weeks, and that was without an actual default). European countries are known to have a strong social welfare orientation. There is some racial and regional division though, as the northern countries are regarded as fiscally confident siting the combination of “strong work ethic” with social welfare state, in contrast to the accusation of Greece, Italy, Spain, Portugal, Ireland, as not having a strong work ethic, but only the social welfare expectation.

I don’t know if it is true or not, or how anyone could assess even.

The accusation is that the south borrows without hope of repayment, without hope of working their way out of debt, while the north borrows with the hope of working their way out of debt.

Europe is in a state of tension now though. There are times when it looks like the whole European Union could devolve or even dissolve.

If each country reestablished their own national currencies, in addition to a strongly backed Euro that can be exchanged back and forth, that might be a good thing, even if the Euro is valued at a premium. (ie statutory 2 -3% exchange premium favoring the Euro over national currencies).

While the integration of Europe is a jewel (international travel is easy, work permission is easy, cosmopolitanism reigns), there are severe problems with the dominance of continental scale economy over an ecology of market scales that includes continental but also regional and local.

The United States is the teacher. When the US Constitution included the “commerce clause” permitting non-tariffed inter-state commerce, the scale of the US economy became continental (after completion of “manifest destiny”). The rationale of economic management determined the scale of market served by different organizations. When the costs of communication and transportation reduced significantly, all limitations to continental commerce disappeared.

There was a natural tendency towards economies of scale, which came to include all facets, not just siting and manufacturing economies of scale. With the implementation of continental media and advertising, economies of scale came to apply to manufacturing, logistics, marketing, ownership.

Now, the supply chains and markets are global. But, it took a long time to even extend continentally, and only culminated at the end of the 20th century, with the presence of ubiquitous global retail. Before then, regional retail was the largest scale.

The consequence was the demise of regional enterprise, regional retail, regional manufacturing. The social consequence of the demise of regional enterprise, is a dangerous economic fragility resulting from reliance on single or very few alternative paths. If there is a bankruptcy, a natural disaster, a war, that affects a fundamental commodity or supply chain, billions of people will go without.

In the finance world, so much is interdependent, multiplied by the valuation process of modern finance (a million dollars profit doesn’t add or subtract a million dollars to a company’s valuation, but ten million), and still reliant enormous leveraging (speculating using borrowed funds). So, the threat of default of one thousandth of the world’s debt, sends the valuation of all financial entities’ stock value down 10%, one tenth.

In contrast, a setting of ecology of currencies, currencies functioning at multiple social scales, encourages the development of intra-regional trade that gets very thick in value-addition and potentially universally.

In the states, that would work by the presence of the national currency – dollar, combined with say a New England currency, combined with a micro-regional currency (Pioneer Valley), combined with local currencies.

Banks would exchange currencies at a premium for the larger scale. For example, although the New England currency would be stated as NE$ and required to be accepted by retailers at the same valuation, it might be redeemed at .96/dollar. Similarly, the Pioneer Valley currency might be redeemable at .96/NE$ or .92/$. And, the Greenfield MA currency might be redeemable at .96/V$ or .88/$.

Banks could then profit on the issuance of local currency, but the local economy would be enhanced far beyond the loss in currency premium, by individuals exchanging very thickly locally and regionally, particularly on value-adding labor-intensive economy that results in enhanced employment.

Just a thought.

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We organize about what is important, and what we can effect positively.

My preference: social well-being. Individual/families/communities/regions/macro-regions.

As I’ve written previously, I’m a gadfly on two prominent modern socio-environmental concerns.

1. Global warming – My feeling is that it is obviously occurring, and human induced, but that there is literally nothing that I or even a globally consented movement can accomplish to eliminate the introduction of excessive carbons into the atmosphere currently, or in the time frame of even my children’s lifetimes. The most that we can do currently is assist in the response to its symptoms, to think ahead, to be of help.

2. Peak oil – My understanding is that current oil price hikes are entirely driven by a near-fully consumed supply chain for oil with bottlenecks in refining and transportation, and virtually no current limitations due to well-head supply relative to demand. In between 20 and 40 years, the wellhead supply limitations might periodically comprise a real bottleneck.

What is the solution to a problem that isn’t in fact relevant? Its not even a question.

And, if the focus of organizing efforts is misguided, then the solution to those stimuli will also be misguided. A difficult example for me is the advocacy of nuclear power by some environmentalists and intellectuals like Stewart Brand and colleagues. They conclude that carbon toxins in the atmosphere are a primary problem, and in putting their minds to solving the problems they come up with what they believe is the least-worst solution – nuclear power.

My own evolution of social-environmental consciousness included first as a late teenager a sense that we were spoiling our nest, that we had made a beautiful world into an ugly one. I joined utopian efforts (real ones) to make a better world. In an attempt to proceed to pragmatism, from a utopian fantasy approach (communes), I sought to learn skills and to articulate arguments against the status quo, to persuade others to participate in creating new institutions with a critical mass to sustain as institutions and systems.

It was ultimately not successful. The needs to continue in the rat race, with existing partially successful options, was a better individual choice than to invest in new principles of economy that were still gambles.

Then the concept of global warming came along. We had already concluded that the world was screwed up, but didn’t have a measurement, a scientifically authoritative declaration. I/we new that car emissions were horrid. The global warming thesis was a global phenomena, not just utopian. It required international policy decisions to implement solutions.

Global warming became the reasoning to support “the world as it is must change”.

I’ve come to feel that the thesis is of a religious nature. Individuals that would achieve a simple life by eating together, carpooling, sharing a large house for their own merits, have been asked to first reference global warming as a conditional credo, a prerequisite to eating together, carpooling, or sharing a house.

So, I prefer a different primary motivation for doing ecological good.

I believe that there are real goals in the world that require attention, summarized as the effort to improve social welfare within an ecology so social scales. (Person, family, community, region, macro-region)

The concentration of wealth in society is a real problem. It renders the marketplace less of a responsive mechanism for optimizing the utilization of scarce resources. It relies on the fancies of a few families to direct capital to provide for all of the “blood-flow” of the economy. As money chases after dependable profits, it tends to invest where services are already developed. The concentrated wealth system is structurally designed to neglect locales and communities where capital is needed. It devalues the contributions of nature to services that humans must benefit from in favor of human-created services, and thereby then devalues rural value addition and life.

The creation of increasing masses of unassimilable toxins in the environment is a real problem. There is no downstream ultimately. In many locales where toxic wastes have been “successfully” dumped, that is no longer feasible. In the oceans for example, toxins have circulated widely, and even in parts per million of some substances have hindered reproduction, caused species-wide dysfunctional mutations, disturbed the food chain, and created larger and larger pockets of dead zones at the mouths of major river systems particularly that affect regional ecologies and the people that rely on them.

We’ve used much of key materials and have not instituted the degree of recycling required to continue to benefit from the use of those materials. Such formerly common materials as copper and zinc, that are used WIDELY in our industrial society are now scarce.

We overconsume. We’ve depleted fisheries, land, water, forests.

We have high fixed costs of living, including high debt.

The solution to these problems resemble the solutions are also solutions to issues of global warming, but solutions to global warming are not solutions to these overarching social problems.

I suggest that we emphasize comprehensive social welfare as our rallying cry, with the spirit of “enough”. When we’re confident that we’ve achieved a critical human need, lets be content individually and socially with enough, and move on.

By “comprehensive social welfare”, I mean the measuring of a person’s/family’s/community’s/region’s well-being per one of the comprehensive assessments systems now “on the market”, and then committedly endeavoring to improve social welfare imaginatively and synergistically.

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I saw Bill McKibben speak this week. A very natural, articulate, funny man.

But, I’m still a gadfly on global warming.

I’m not a gadfly on the fact that there is human induced global warming. That seems to me to be confirmed, true.

But, I’m a gadfly on the significance. In other words,  so what.

20,000 years ago, the site in Brattleboro that I saw Bill McKibben speak was under 6,000 ft of ice. Yes, 6,000 feet.

The planetary sea level was 300 feet lower than currently. Yes, 300 feet.

Between then and now, there was climate change.

All of the symptoms of extensive climate change that is posed as dangerous currently, occurred more severely in those 20,000 years. Mass extinctions from radical changes in habitat. Volatile storm activity. Forced migration of peoples.

The only thing that could be new is if the levels of carbon in the atmosphere will project the planet towards a venus-like positive feedback loop of warming.

I don’t see it. I don’t know of anyone that proposes that that is the case.

The earth is resilient.

Our current social institutions, that are based on a couple thousand years of what appears to be consistent climate, are threatened. Property rights as authoritative are difficult in a world in which hundreds of millions migrate. (Migration occurs from both direct and then secondary causes, a community forced to move displacing another, which is then forced to move which displaces another.)

There is a high likelihood of war. The period of international law asserting that our current borders and international political civil norms is permanent, isn’t in fact. Tribalism will grow in relevance, not decline in relevance.

There is an ecological danger of artificially delaying or eliminating the subsequent period of glaciation, but that has happened in the past, and the earth survived. Our great-grandchildren ^4500 generations could be screwed, if the warming prevents another cycle of glaciation.

The earth’s story is a very interesting one.

5 million years ago, the earth was warm everywhere and the differences in average temperature between equator and Arctic and Antarctic Circles was moderate, maybe 25 degrees F.

In contrast, between 4 million years ago and the present, there have been 30 recurring periods of glaciation, where there had been none for 70 million years.

What happened?

North America merged with South America.

Prior, there was open ocean near the equator leaving three paths for ocean circulation throughout the planet, Arctic, Antarctic, equator. The ocean was effectively open. There were large equalizing currents that transferred heat globally.

When North American and South America came close and then merged, the equatorial ocean exchanges disappeared, and the only places that the Atlantic met the Pacific was at the far Antarctic (at the tip of South America, intense) and at the far Arctic (if that).

Whereas there was limited seasonality prior, at that point seasonality became grossly distinct. The range in ocean temperature was no longer 40 – 65 degrees F, but 10 – 95 degrees F.

So, how did glaciation start? There are three planetary oscillations that effect climate on large scale. The actual affect on annual temperature is slight, but it occurs at the threshold between annual snow melting and annual snow accumulating, and in only a few locales on the planet.

The most pronounced oscillation is a shift in the shape of the earth’s orbit from close to circular to more elliptical. This shift accounts for the 100,000 year cycles of glaciation that have occurred repetitively. The change in tilt of the earth relative to the sun cycles every 41,000 years from 22 to 24.5 degrees, is the recurring stimulus to start the glaciation period within the background of a mostly circular orbit.

Its a little counter-intuitive. One would think that the more elliptical path and the larger tilt would favor a snow buildup, longer winter due to being further from the sun. The opposite is true. The periods when the earth’s orbit is more circular and when the earth’s tilt is less divergent are the times when glaciars start.

Two years in a row of snow cover is not a big deal. Ten years in a row even. But, 1000 years in a row of no full snow melt allows for glaciars to form, and then spread. At some point, the reflection of sunlight off of the snow cover back out to space creates a positive feedback loop (a snowball rolling downhill) that reduces the global absorption of sunlight (the opposite of a greenhouse effect).

40,000 years of full glaciation (varies).

It will happen again. Even if we continue to burn fossil fuels for another 300 years, the atmospheric carbon won’t likely reach the level that would permanently prevent another glaciation, and then we’ll be out of fossil fuels.  Carbon levels would decline again, and we’d have to adjust to another iteration of a glacial world.

It is a truth that if we consume all of the buried carbon (next 300 years) that we will literally NEVER have access to it again. We will have to live within our means of current solar input and current biomass production.

 

I’m not a gadfly on the benefits of a sustainable society and economy. Ironically, the same proposal that results in reduction in global warming, also results in a high quality of life. Sustainability. The complement best of the technological and the natural.

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Are we making progress individually?

  • Our family?
  • Our community?
  • Our region?
  • Our planet?

How do we know?

In order to tell, to compare, to decide how to use scarce resources, we have to measure in some way, and every measurement is going to contain cultural biases, be incomplete and contain some emphasis that becomes self-fulfilling.

For those of us that accomplish more than we rebel, the phrase “what you measure is what gets done” applies.

So, what do we measure and how does it relate to making real wealth, a real good experience with the prospect of real good experience for others in the future?

I’ll be attending the “Slow Living Summit” in Brattleboro, VT this week – June 1, 2, 3  (http://www.strollingoftheheifers.com/slow-living-summit). Come.

I know quite a few of the presenters. Many are visionaries, and doing practical work, trying to cobble together a coherent effort to achieve a sustainable society. To work together rather than disparately, to make something real and dependable rather than utopian and speculative.

Much of it is against the grain of conventional urban/global economy.

(Geography affects our vision of utopian. Specifically, that north of Hartford, CT, on the Connecticut River there are distinct cultural shifts. Hartford and Springfield house the global insurance centers of the world, serving global literally. The global commercial market vision is the utopia.  Springfield and Holyoke house the formerly regional industrial center of New England. When one reaches Brattleboro, the site of the “Slow Living Summit”, the inaccessibility of the stream watershed hollows define a world of rural self-dependance more than community inter-dependance, more than regional economy, or global economy. The shift in worldview in that short 80 mile stretch is distinct, profound, divisive.)

The ruralist consciousness of Brattleboro is the host of the Slow Living Summit. The global economy is what you read about in the New York Times and on cable television. Not surprising.The sustainable rural economy is the content of the summit, and is actually another vibrant source of future visions.

The concepts of living well in nature has gone far (actually cyclically given the degree of wealth and social complexity that Indian society was able to achieve). We have the integrated thinking of permaculture that integrates practical and efficient food and shelter services with aesthetics with personal liberty and with the ecological world beyond our immediate experience and affects.

The rural/urban dichotomy will be a conflict (or negligence) of the summit, inevitably. The rural sustainable solution is more anarchic. The urban sustainable solution is more designed.

That dichotomy will infuse the question of “how do we tell?”, as the question includes the assumptions of differing social values, and particularly which ones are relevant and/or controllable.

As the measure of our success is our experience, my feeling is that the  metric of social welfare must be results based and not preference or strategically based.

In a nutshell, we can tell if we are making progress if we achieve:

1. Current survival and functional minimum necessities for all in the geographic scope that we are investigating. Food, shelter, water, warmth, clothing, health care, transportation, education.

2. Confident survival and safety in the foreseeable future

3. Interpersonal connection, love, friendship, family (society)

4. Work and service accomplishment and basis of earned respect

5. Spirituality in action, spirituality in contemplation/aesthetics

How do we know we are succeeding? What do we measure? How?

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In the late 80’s and 90’s,  farmers, food manufacturers, distributors, retailers asserted that their products were “organic”. There were multiple standards that were voluntarily adopted and hopefully posted as the basis of assertions on product labeling (sometimes).

In the 90’s, the USDA finally realized that distinctly  “organic” food was desired, demanded, by many consumers, and that there was a great deal of doubt in consumers’ mind whether a particular product was in fact “organic”.

They organized stakeholder discussions to formalize a coherent standard. There was a great deal of argument, compromise, and now after the standards have been published and applied, there is a great deal of lobbying and fudging.

Does the term “organic” on a package mean the same thing to you as you imagine, that you desire as a standard. In the 70′ and early 80’s, the rage word was “natural”, and there even was some basis of standards for a time, based on the principles of accuracy in advertising. (“Natural” is no longer assessed. It is just an assertion at this point.) “Organic” assertion was considered special, an unusual degree of care in growing and processing, really natural.

That standard is dissolving as the standards are asked to be relaxed to accommodate industrial organic farming, industrial in method, industrial in supply path (not local), industrial in distribution, industrial in retailing and mass communications/branding.

Currently, there is a great deal of interest in local food (and even some interest in decentralizing economy as a whole, not just food). But, noone knows what the term “local” means.

In conducting test evaluations in preparation of the use of the “locus” designation, many have discovered that they do use a considerable amount of non-local ingredients and packaging to the extent that it is difficult to confidently state that the food is local, if 100% of inputs are incorporated into the assessment (especially if packaging is included in the assessment).

What do consumers think is meant by the term local? If a locally sited company making a corn salad uses locally grown sweet corn, locally grown peppers, imported salt, imported spices, glass packaging from China, lidseals from Chicago, and the non-local components comprise 45% of the cost, is that a “local product”?

If only the food components are considered, and the average sourcing of the product adds up to 100 miles away, is that a local product? If the most local 95% of ingredients adds up to 50 miles away, is that a local product?

Where is it a local product? If a product that is prepared and packaged in Northampton, MA and is a local product in Northampton, is sold in Philadelphia, is that a local product in Philadelphia? How about New Haven?

I want to know, and I’m hoping that other consumers want to know.

There is good reason to emphasize local food and local value addition. And, there is good reason for consumers to be aware of where their food and products/services come from.

The options for disclosure include “off/on” measurements like organic certification (though within three categories of what is “organic”). This product is either local or it is not. (That is misrepresentative to put on packaging as products are sold in other places than where they were prepared.)

Another option is to describe the geographic center of gravity of processing, but that leads to sometimes absurd and incomprehensible results. An example is a food product prepared in Brattleboro, VT with produce from various points in the Connecticut River Valley (near Brattleboro), but other ingredients from Oregon and California. The numeric computation adds up to somewhere in upstate New York, that doesn’t resemble anything coherent about the products. (its a hypothetical example, not real).

In contrast, the option that locus adopts is to define a region in which a product can be sold in which it complies with “100-mile” certification and another larger circle to comply with “500-mile” certification for general products.

If locally made is an important assertion for consumers to consider in their decisions, then the criteria should be clear to consumers, consistently assessed, and rigorously enforced. Otherwise the term “local” will go the way of “natural”, just an assertion, not something that can be relied on.

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