1869. The need for economics – if we change.

Last week I wrote:

Would economics be able to shift focus to deal with such shifts in the economy, ….

This week..

Provocation 94 :The opportunities for economics: the need.

Caveat. I see things from my place in and around Silicon Valley where I am in daily conversations about climate, corruption, security, control, and the future of tech and society. . Half of the people are appalled. Half are looking for ways to make money from this. The two halves are intermingled. So this provocation of mine comes from my participation and I think the perspective is already widely shared.

“Stimulate growth”
“keep th economy rising”
“its a job”


Image Copied on 2017-07-16 at 10.40 AM.jpeg

In many of these discussions people are quite clear about the problems we face – climate, inequality, population, energy and automation. Governance is rarely mentioned. Policy plus tech it is assumed can solve any problem. But when it comes to talk of what to do, proposals seem weak. The usually proposed solutions don’t scale to the required effects, and take too long.

Interdependencies are not considered. The talk about what progressives (or democrats) need to do to win elections leaves out the things the population is savvy to, that the economy and the climate and automation are in a complex collision course. Almost everyone sees that the political power is in the hands of the .0001%. If alternatives to Trump (parties, candidates, government officials, press, professions and Universities) do not discuss these (For example stressing growth without consideration of the complexities) it is seen as almost – or maybe in some ways worse – than the Trump destruction machine. (The best current source on this – among many – is Chris Arnade’s Twitter postings from his travels around the States. @Chris_Arnade)

The problems are interconnected. Growth* means, given today’s tech, more pollutants and more climate heating. Renewables will take time to scale up. Do we have the time? Cutting energy now means most people are doing the wrong job. Imagine cutting energy use by 80% as would perhaps be necessary to meet climate goals of “only” a 2 degree Celsius increase. Such an increase is not evenly distributed and is forcing the collapse of some especially vulnerable regions of the world. Increased temperatures mean increased air conditioning means… uh oh. Feedback loops. But the loss of jobs if energy use is curtailed is hardly discussed. (An example of an opportunity for INET). The fate of “stranded assets” , oil in the ground or newly built but already abandoned factories with many more to come,  is also not much discussed. What will happen to the value of the parking lots and extra lanes, garages and supporting infrastructure that Lyft/Uber will “liberate”.

It is hard to imagine a way to cut energy use and not instantly increase unemployed. Joblessness will create more foreclosures. There go the banks. Maybe the state takes over the banks and redirects investments in green or at least greener technologies. Huge struggle taking lots of time.

Food chains are vulnerable, often produced in the hottest place and energy use for transportation my have to be cut.

Will technology help? It might, but tech is also a means to concentrate wealth in the hands of the one percent. That enhances their political power to create lifeboat earth for themselves and dump the rest of us.

Growth. Any increase in demand for product and service will motivate managers to look for automating solutions. No hassle with workers (such as the accounting and legal issues) And the companies will own the machines. A return to slavery. Growth will not create many new jobs but eliminate many that exist by speeding up the substitution of algorithms for employees. Another analytic opportunity for INET?

I think most people are already thinking most of this. Part of the alienation in politics is because people don’t see the politicians, nor the press, nor the universities, talking about these problems.

It is of course very hard to hold the problems in mind in a systemic way, and very hard to imagine solutions. The major resistance to change, I think, is the judgement that people will want their cars, their energy, their on line retail, and resist giving it up. It is assumed that the alternative is imagined to be – nada. The possibilities of cooperation and community are not allowed in to our assumptions about the capacities and the imagination of other.

There are proposals to decentralize to smaller units, perhaps bioregions where with community interest and support, imagination can cope and use the Internet to distribute ideas and opportunities (needs) across the world to learn from each other and distribute surplus. Bucky Fuller said we have few billion people and the globe. Putting them tougher is just a design problem. But doing so is a threat to our egos. We really assume we are better and the number cable of innovation and management are few. This is a limiting and probably wrong assumption.

As it is, we are playing musical chairs. We are engaged in class warfare.

Can we as a species rise to manage the world in a humane way? What is thee role of economics? What would the common sense philosophy of the Scottish enlightenment and Adam Smith have to say?

Perhaps we are facing square on the human condition; given who we are, product of local adaptation to trends over a million years, not systemic planning. Given our DNA we were bound to get an evolving society with technology, opportunities for egos and property, organized in hierarchies, all running as can till the system breaks. Maybe this is just us. No way out. Speed the dance. Musical chairs enhanced. (Fred Hoyle once wrote the reason we are not visited by aliens is because no civilization in the history of the universe has been able to both develop the technology to get here and survive socially)

But I think we can do better – Recognizing that each person is interesting and capable and worth fighting for – and they will help. We need to spread health and education and and the skills to participate in an open experimental economy whose goal is not the one percent but the whole. “Without a vision the people will fail..” Imagine an economic discussion that compares the outcome of this broad participation with the outcome we currently have.

*Growth. “Need to grow to eliminate poverty”. But growth in the last few decades as gone along with wealth concentration at the top and stagnation in the lower 80%. Why will this pattern not continue if we get “growth”? Watch

Third world poverty. People lifted out of poverty. What has happened in much of the world is local elites aligned with multinationals exploiting their own people, People don’t live villages for opportunities in the city. They are driven off the land for state=corporate agriculture and forced to live in dreadful high-rise. Try raising a family on the 50th floor,

Growth accelerates the motives to automate. Some jobs will emerge, but the rate of loss in the “growing” sector will be faster and more, to slower and less.

Growth is a problem for climate. Growth would of necessity use mostly older technologies, at least for a while. Diesel trucks for example.

There is a path to growth with greater equity and as part of a serious break on global warming. But the argument is not being made. We are getting fragmented rather than systemic thinking.

The result will be cancerous rather than healthy growth. More one percent, more global warming. More inequality. Class warfare. Migration wars. Serious inter-state rivalry.

Bronco is arguing “Economic growth is key for reducing global poverty (and even global inequality.” H writes

If one really believed in, and wanted to argue for the incidental nature of economic growth (“whether or not the economies grow”), then he or she should start by trying to change the bases on which our (global capitalist) civilization has been built, namely insatiability of needs and commodification. But these features have become so strongly ingrained that I cannot see how they can be changed in any foreseeable future. All the rest is romanticism.

In http://glineq.blogspot.com/

It will be very useful to watch carefully how these issues play out – or don’t – in the Inequality CUNY conference.

Seventh Meeting of the Society for the Study of Economic Inequality (ECINEQ)
New York City
July 17-19, 2017


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