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Newsletter No. 8 - December 2005

Links to other Newsletters can be found here.


1. Editorial

2. Future Wealth: A New Economics for the 21st Century, now on the website

3. Soundings, issue 31, December 2005, includes a new article of mine on The Future of Money: If We Want a Better Game of Economic Life, We'll Have to Change the Scoring System which is now on the website

4. Review of Jonathon Porritt's new book, Capitalism as if the World Matters

5. The South African New Economics (SANE) Network

6. Counting the Costs, a project of the UK Network of the Centre for Holistic Studies (India) and the New Era Coalition

7. Pensions and Citizen's Income in UK

8. Three Legal Items

(1) The Environmental Law Foundation

(2) Climate Justice Programme

(3) Legal Cases About People's Monetary Rights



Last week the Montreal meeting on Climate Change succeeded in getting international agreement, against isolated US opposition, to proceed with the next stage of the 1997 Kyoto Protocol. This week, at the World Trade Organisation meeting in Hong Kong the rich countries of Europe and North America seem likely to fail to secure bigger trading opportunities in poorer countries without sufficiently reducing existing barriers against poorer countries needing to export - especially food - to them.

These events signify that critical shifts are taking place in the balance of power in the world. They are directly connected with the need and prospects for shifts in the structures of economic power (at every level - personal, local, national and global) which are the subject of all the following items.


2. FUTURE WEALTH: A NEW ECONOMICS FOR THE 21ST CENTURY, 1990, Cassell, London. The text of my book can now be downloaded free from this website.

Here are three extracts from reviews at the time.

"'A New Economics for the 21st Century' is an exact description of this very remarkable book" - The Good Book Guide.

"It could well be that Future Wealth will ultimately be required reading for economics students, alongside The Wealth of Nations and The General Theory of Employment, Interest and Money" - Francis Kinsman, Management Today, May 1990.

"With Future Wealth as our guide, we can describe the framework of the living economy... We can show how current initiatives can be enabled and encouraged, and we can show how that framework can be created out of our present, rather warped version." - Perry Walker, New Economics, Summer 1990.

Here are two extracts from the book itself.

(1) From Chapter 3. "The [conventional] theory is that in a pure capitalist economy the market is supreme, with economic activity aiming to maximise monetary profit; that in a pure socialist economy the state is supreme, with economic activity responding to the commands of state planners; and that most actual economies are to some extent mixed, tending towards market or state domination in each particular case.

In practice, capitalist, socialist and mixed economies have all suffered from the same underlying failure —a failure to harmonize personal, organisational and societal goals.... Something is missing. A new approach is needed, going beyond both the market and the state."

(2) From Chapter 14 . "In trying to clarify the new economic agenda for the 1990s, as I have tried to do, it is difficult to avoid a conflict of moods—a tension between optimism and pessimism.

On the one hand, there is an inescapable sense of exhilaration and high aspiration. Making the transition to a new economic order is perhaps the most crucial challenge to action and thought which faces the world today. If humankind can meet this challenge, a new era will open up for much more than just the economic side of life. It is inspiring just to be among those who are working at this new frontier of history.

Against this it is sometimes hard to shake off an almost desperate sense of inadequacy.... This great gap between the scale of the task we face and the capacity of each one of us facing it, reflects the nature of the challenge. I cannot now foresee, and nor can any reader or user of this book, how or with what success the kind of programme it proposes will be realised through the 1990s."

The book provides a clear conceptual framework for understanding the new economic order we clearly need; and spells out the practicalities of basing it on the principles of enabling people and conserving resources, instead of dominating people and using up resources. The obvious relevance of the agenda it proposed (for the 1990s) will be more widely recognised now (December 2005) than it was then.


3. SOUNDINGs is a radical UK journal of politics and culture. Their current issue (issue 31, December 2005) on "Opportunity Knocks: Looking at our relationship to the future" includes a new 5,000-word article of mine on "The Future of Money: If We Want a Better Game of Economic Life, We'll Have to Change the Scoring System".

The article's practical proposals sum up to the following :

  • the democratic national state should perform its monetary and financial functions more purposefully and effectively, with effects that would
  • allow the market economy to operate more freely,
  • enable people to liberate themselves from their present degree of dependence on goods and services and jobs provided by big corporations and the state, and
  • reward people and organisations if they act in ways that conserve natural resources.

It also outlines

  • a new stage in the evolution of international political economy and institutions,
  • similarly based on fairly sharing the value of common resources.

Various of these points are attractive for socialists, free-market capitalists, liberals and greens. When people who are still involved in the old conflict between 'capitalism' and 'socialism' begin to realise that reforming the money system would underpin new policies for both those creeds, ... we will be making progress.

To download the article, click here.


4. Jonathon Porritt's new book, CAPITALISM AS IF THE WORLD MATTERS, Earthscan, 2005, 366pp, £18 (royalties go to Forum for the Future) carries endorsements from many influential people as a "must-read" for policy-makers, business leaders and others.

I recommend it to readers of this newsletter too. Don't be put off, as I was a bit at the start, by the idea that only keen ideological supporters of 'capitalism' should read it. It is a very valuable up-to-date account of the present state of play on sustainable development, from a point of view close to mainstream understandings but critical of them. I am pleased by its references to the work of many friends and co-workers.

As Chair of the UK Prime Minister's Sustainable Development Commission, Jonathon is refreshingly critical of mainstream political and economic understanding and behaviour. For example,

  • "Levels of ecological illiteracy remain so deep as to beggar belief after 40 years of accumulating evidence that all is not well with our dominant model of progress. Symptoms, not systems, remain the political order of the day. There is little, if any, applied understanding among politicians of how natural systems work".
  • "Servitude to detached and indifferent shareholders....has led to a pattern of self-serving, irresponsible and illegal [corporate] behaviour that would beggar belief if it was not such a logical consequence of everything that's been going on."
  • "We've wasted the best part of 20 years pursuing to the point of utter exhaustion a model of capitalism that can only succeed by liquidating the life-support systems that sustain us, and systematically widening the 'inequity gaps' upon which any kind of social cohesion depends in the long run".
  • "The fact that UK Prime Minister Tony Blair, himself a profound and genuine Christian, should find himself so closely aligned politically with an American Administration so powerfully influenced by millenarian fundamentalism is a source of continuing bemusement to those who see him as a strong, moral and decent man. Are his security advisers briefing him properly...on the views of Dick Cheney, Paul Wolfowitz and President Bush himself?".

And there are many other examples.

The case the book presents is that:

  • capitalism is now the "only overarching system capable of achieving any kind of reconciliation between ecological sustainability on the one hand and the pursuit of prosperity and personal wellbeing on the other".
  • But "today's particular model of capitalism is clearly incapable of delivering this kind of reconciliation".
  • So "is it possible to conceptualise and then operationalise an alternative model of capitalism?".
  • That "demands a reform agenda, however radical that may appear to some, not a revolutionary agenda".
  • The vision of a sustainable society would be one in which everyone's human rights and basic needs are met. Forum for the Future's more detailed summary of it is an example of 'work in progress' in 2005.

Thoughtful readers will have constructive comments to offer on a book of this importance on a topic of this magnitude. Mine, based on work since the 1980s on sustainable development, e.g. The New Economics of Sustainable Development, include the following.

Starting to read the book brought the old Irish chestnut to mind - "I wouldn't start from here if I were you". I was afraid the assumption that capitalism is now the only game in town would put some anti-capitalists off the cause of sustainable development. It also prompted a potentially distracting question: in practical, operational terms, what do 'capitalism' and 'socialism', and the old conflict between them, now actually mean?

But I reminded myself that someone has to get the sustainable development message across to today's mainstream political and business communities and their leaders. Presenting it as a radical reform of capitalism, as the book does, may put fewer people off than recognising that it will mark the end of the conflict between 'capitalism' and 'socialism' - and a victory or defeat for both or either or neither, according to one's personal taste!

The book sometimes seem to take for granted the meaning of other dodgy concepts too. One is 'wealth': what is 'wealth'? who are the 'wealth creators'? and how do they 'create wealth'? For example, does it make sense - as often people now do - to describe as 'wealth creators' people and companies who simply cash in on asset values already created by others?

The relevance of well-being to sustainable development is rightly emphasised, but how does 'wealth' relate to 'well-being'? I'm not suggesting the book should have spent more time trying to unravel the meanings of these terms. But it might have pointed out to a business readership that 'wealth creation' is now wearing thin as a blanket validation of commercial activities.

There is a lot of discussion in the book about 'growth': the need to distinguish between different kinds of 'growth'; the ideas that growth of 'economic welfare' is the most important kind and that 'economic welfare' needs to be closely related to 'well-being'; the possibility that reducing the 'material intensity' of economic activities could eventually reconcile continuing economic growth - as measured by gross national product (GNP) and gross domestic product (GDP) - with sustainable development; and further discussion about the inadequacy of GNP and GDP for measuring progress.

It is important to keep banging away at that point until it sinks in. But it remains unclear whether any generalised concept of 'growth' could ever be defined that would equate with progress.

Serious difficulties of definition - meaning how to operationalise a concept - arise from the discussion at the core of the book in Part II. It is on "A Framework for Sustainable Capitalism" based on "The Five Capitals". These are described as Natural Capital, Human Capital, Social Capital, Manufactured Capital and Financial Capital.

Again, very important ideas provide the basis for a very interesting discussion. But, again, the practical question of how to operationalise the ideas is intractable and answers are unclear. (If scientific ideas are meaningful only when they imply specific observable events, are ideas in political economy truly meaningful only when they imply specific behaviour and specific actions?)

Part III is on "Better Lives in a Better World", with chapters full of information and ideas on the state of play on "Confronting Denial", "Changing the Metrics", "Business Excellence", "Civil Society", "Visions and Values" and "Converging Imperatives". It is very high quality reporting and discussion of what is being done and needs to be done. Like myself, many readers will find it very valuable for that.

In case these 'constructive comments' seem less enthusiastic than they might, I ought to end with a personal confession. Perhaps I am becoming lazy-minded or just old, but I did not get a Eureka experience from this outstandingly right-minded, interesting, and powerfully worked out exposition of the urgent need and prospects for sustainable development.

And I wonder how many political and business leaders will. I can't get away from the conclusion I reached some years ago (spelled out in Item 3 above) that the only real-life 'metric' that directly affects economic behaviour is the actual scoring system of the economic game - the way that in practice the money system rewards some behaviours and penalises others.

The book does, in fact, endorse many desirable financial and monetary reforms. But it does not integrate them as elements in a systemic reconstruction of the money system as a whole - which will motivate people and organisations across the board to enable and conserve, by fairly sharing the 'common wealth' - taxing us on the values we take from it rather than on our rewards for contributing to it.

Until we transform the money system that way from being a central part of our problems into a central part of their solution, I foresee the thicket of notional alternative concepts and metrics continuing to grow denser while making little impact on the real world.

I see systemic money system reform as the Occam's razor that will cut through the thicket, and actually help to clear the way to a better world. If they really want to do their bit, business leaders should press governments to change the scoring system for the game of economic life which they - and the rest of us - all have to play. And that's what the rest of us should do as well.


5. THE SOUTH AFRICAN NEW ECONOMICS (SANE) NETWORK (Annual Report, 2004/05) has now begun to attract enough funding to support two serious new local economic projects in addition to its other work:

  • A Municipal Time Bank. The Overstrand Municipality in Hermanus is running this project in partnership with SANE and the Embassy of Finland. It enables poor people in the municipality to reduce their debts or pay for services, and the municipality gains the value of the work they do. The benefits of this Community Exchange System (CES) are that people work for each other and their communities. This encourages people to identify and use their skills to meet local needs, builds the local economy and community, and compensates for cashlessness.
  • "New Economics for Social Change" is an economic education project to spread CES to poor communities.The Ford Foundation of Southern Africa is partnering SANE in this project, which is providing new economics education to NGOs, community business organisations (CBOs), faith-based organisations and local government - using SANE's own innovative CES scheme to help those sectors understand and build a new level of economic literacy.

Margaret Legum chairs the SANE Board of Trustees. Her book, It Doesn't Have to Be Like This, published in 2002 by Wildgoose Books in Glasgow for the Iona Community, gives a first-class introduction to the need for and nature of a new economic order and a new economics. Jonathan Porritt draws on it for several points in Capitalism as if the World Matters (item 4 above).


6. COUNTING THE COSTS is a project of the UK Network of the Centre for Holistic Studies (India) and the New Era Coalition. Its Introductory Report came out in September.

Mark Tully , former BBC India Correspondent, introduces it with the hope that it and others which follow will increase awareness of the downside of market capitalism and challenge the assumption that it is the one truth. "If we were to acknowledge that there is truth in socialism and truth in market capitalism, then I believe we would realise the limitations of capitalism just as we have realised the limitations of socialism".

In "Growing the Economy: Stunting Humanity" Jeremy Seabrook, veteran writer and campaigner, powerfully and movingly diagnoses market dependency as a pathology, with "addiction to alcohol, drugs, sex, escape, perpetual mobility, gambling, hypochondria, shopping, junk food, and junk culture" as aspects of a more general sickness that has "transformed society into an unquiet, violent and restless compulsive disorder". "The capitalist consumer market is no more capable of creating a full human being than its labour market did in the early industrial period".

In "Escaping from Progress" Molly Scott Cato, Social Economy lecturer at University of Wales Business School, takes up the need "to confront global capitalism on its own terms, to challenge it to explain why, if it is so efficient, it has failed to notice that so much of the energy expended is dedicated to repairing damage it is itself creating". With Tourism, Gambling, Smoking, Alcohol, Prescription Drugs, Illegal Drugs, Prostitution, Sexual Exploitation of Young People, and Pornography as examples, she calculates that the total yearly cost of UK government spending needed to deal with the results of people's attempts to escape from the pressures of the present economic system is over £52bn a year.

Future reports are planned on "Counting the Costs: Our Food System" and "Counting the Costs: Our Health System". Copies of the present report and information about the series from: Barbara Panvel, CHS UK (email -


7. PENSIONS AND CITIZEN'S INCOME IN UK. Simultaneously with the official Turner Report, November 30, 2005, recommending a less means-tested state pension system closer to universality, the Citizen's Income Trust (CIT) proposed a "Citizen's pension" as the best answer. Details from Malcolm Torry, Director, CIT (email -

Also see the latest very informative, as always, newsletter from Basic Income Earth Network (email -



(1) The Environmental Law Foundation helps communities and individuals to get legal expertise to prevent damage to their environment and protect their quality of life. ELF held a conference on Climate Change on 26 October 2005, following this year's Annual Lecture which George Monbiot gave on that topic.

(2) One of the speakers at the ELF October conference was Peter Roderick of the Climate Justice Programme. Its list of cases from around the world demonstrates what can be achieved by legal action to enforce climate change law on behalf of people and communities against governments and big corporations.

(3) Legal Cases About People's Monetary Rights

1. A Justice of the Peace in the southern Italian town Lecce recently decided, in a case brought by the consumers association ADUSBEF, that the Italian Central Bank's practice of retaining for its shareholders the profit ("seigniorage") from issuing euro banknotes is illegal and that the money should be turned over to its rightful owners - the citizens of Italy.

Click here for more information.

2. In the biggest class action ever brought in Canada, the statement of claim against various banks alleges creation of money out of nothing, fraudulent misrepresentation, money laundering, fraud, charging of criminal interest rates, and breach of contract. They had been doing what all banks do (in the UK and other countries) - creating new bank account money out of thin air to lend to their customers.

Click here for more information.


James Robertson

16th December 2005


The Old Bakehouse, Cholsey
Oxon OX10 9NU, UK
Tel: +44 (0)1491 652346


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