Monday, June 13, 2011

The New Economy Movement

Gar Alperovitz just wrote an interesting article in the June 13 issue of the Nation about how growth economics needs to be re-thought in the face of environmental crisis and distributional inequities.

Here is a link to the article.

This is worth reading as a survey of interesting experiments going on in the US. And there are some very interesting ideas here, e.g. new forms of measuring GDP that measure all the real costs of production, versus allowing many companies to export many of their costs onto society in the form of pollution, abuse of workers, etc. That would be worth funding, and then making a big deal issuing restatements of financials for large international companies every quarter based on this green, sustainable standard. “If you really paid the real costs of your business, you would have lost money” etc. This would infuriate some companies and get others to respond.

I find the article lacking in three important areas:

a. 1. It dismisses the incredibly powerful wealth creation engine of capitalism as if that argument is not worth having. I think it is worth having a serious discussion as to whether a combination of regulation to make production reflect its actual costs (e.g. taxing they type of energy used to cover the costs of global warming), and redistributional taxation (to eliminate inequalities, within countries and between countries), might capture the obvious wealth generation benefits of capitalism, while cutting its costs.

b. 2. It only implicitly talks about the elephant in the room: convincing the top half of Americans to live with less, and the bottom half not to aspire to more than that. I have helped establish and run worker-owned companies. Merely changing ownership doesn’t change motives. There is a fundamental value change that has to happen related to the sizes of our houses, cars and closets. How do we do begin that conversation?

c. 3. Most important, the article is entirely US-centric, and thus North/developed country-specific. It mentions a British group once in passing. A good socialist like Gar needs to remember the International. Seriously, how can we think about the developing world? The answer that poor villagers in India and Mali should be happy with Jeffersonian sustainable rural agriculture won’t fly. That pure capitalism has just delivered wireless communications into the hands of most people world wide might give us pause here. However, that happened in part due to a leap frog (over wired communications). In the same way that we are pursuing leapfrogging the western system in health for these countries, using the new information and communications technologies, maybe the absence of entrenched traditional corporate structures presents an emerging economy option to leap frog destructive, unsustainable practices (although India and China appear to say “no”).

Who are the serious people like Gar Alperovitz working on this for the developing world?


Tom Garnett said...

Thanks for the article. Alperovitz's article IS US centric and so 20th century. It feels out of touch. 2 examples. Change is going to outpace expectations when even types like Brzezinski are waking:

Also, Alperovitz's article doesn't reference the considerable work on ecosystems services. There is a considerable body of research on those services, how to cost model them, and integrate them into serious economic planning.
Your point about the penetration of cell phone technology is very important.

Shelley said...
This comment has been removed by the author.
Shelley said...

Brilliant. Interesting. Right.

Gary Ham said...

The problems in our economy are more to do with regulation than taxation. We need some regulation on our regulations, because our current crop actually do more harm than good; leading to crony capitalism where business makes money off the taxpayer using the Government to regulate away its competition. GE is the primary example for many on the right. Haliburton is a favorite from the left. Other example abound. DuPont used the Government to gain a virtual monopoly on air conditioning chemicals. My favorite example is letting Hasbro and Mattel work together to write the regulation on lead paint in toys in such a way as to force small toy makers out of business with expensive testing requirements for lead (after the china scare) even when the toys were made entirely out of wood and were unpainted and made in the U.S. Simply put, regulation written by big business (often posing as exemplary donors to "worthy causes" )stifles small business, and the economy stalls.