No. 8 - December 2005
Links to other Newsletters can be found here.
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
South African New Economics (SANE) Network
the Costs, a project of
the UK Network of the Centre for Holistic Studies
(India) and the New Era Coalition
and Citizen's Income in UK
8. Three Legal Items
(1) The Environmental Law Foundation
(2) Climate Justice Programme
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.
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
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.
New Economics for the 21st Century' is an exact description
of this very remarkable book" -
The Good Book Guide.
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.
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.
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."
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
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.
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".
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
the market economy to operate more
people to liberate themselves from
their present degree of dependence on goods and services
and jobs provided by big corporations and the state,
people and organisations if they act in ways that conserve
It also outlines
- a new stage in the evolution of international
political economy and institutions,
- similarly based on fairly sharing the value of
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.
download the article, click here.
Jonathon Porritt's new book, CAPITALISM
AS IF THE WORLD MATTERS, Earthscan, 2005,
(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.
- "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".
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
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
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:
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.
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
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?
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?
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.
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
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.
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
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
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
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.
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
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.
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
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".
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".
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.
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 - firstname.lastname@example.org).
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,
Income Trust (CIT) proposed a "Citizen's
pension" as the best answer. Details from Malcolm
Torry, Director, CIT (email - email@example.com).
see the latest very informative, as always, newsletter
Income Earth Network (email - firstname.lastname@example.org).
THREE LEGAL ITEMS
(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.
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.
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
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.
here for more information.
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.
here for more information.
The Old Bakehouse, Cholsey
Oxon OX10 9NU, UK
Tel: +44 (0)1491 652346
Back to top