New Year's Eve Blue Moon

"If we lived back in 1945 and were told of all the marvelous technological breakthroughs of the past half-century, we would imagine that societies would now be living a life of leisure. Why has this not occurred? The reason is largely to be found in the predatory behavior that has enriched the finance, insurance and real estate (FIRE) sectors." Michael Hudson.

Doesn’t this go to the heart of the matter? Not a heart that people typically feel beating in the depths of our multifaceted, slowly globalising World Culture, not the heart of any serious practical expectation or analysis of where we are and whither we might, or ought, to go, but isn’t this the crux of everything? Haven’t we allowed ourselves to become too blinded to what is possible if only ... if only some other things might fall into place, if only others could see things this way? Haven’t we thoroughly over-egged our half-baked cake? Haven’t we failed most miserably to keep things simple?

We are a frantic people running around in ever more complicated and interlocking circles just so we can eat and stay warm. Hunter-gatherers did a better job. With luck some of us get to enjoy it, yes, even enjoy holidays and gadgets. (What joy!) But the freneticism! The emotional exhaustion; the scraped-clean, bone dry, spiritual fragility; the absence of vision characterising our wild ramblings, all ring a discordant hollow, a dead note, a bewildering cacophony. It is in this tangle we are caught, it is this mess of directionless activity which blinds us.

I’ve been at a loss for a few weeks now, unable to put finger to keyboard, word to feeling, but not sure why. Everything is repeating like a drab groundhog day. The mantra-drone we emit almost autonomically has become quietly deafening. I can make no sense of the rattling chaos, like a baby stuck in the early stages of its development incapable of magicking order from the wastes of light and sound it must understand. At a loss, I’ve decided simply to point.

Between us and a proper understanding of wealth lies millennia of cultural detritus. We are so accustomed to measuring “value” monetarily we have mistaken money for the world. Money makes the world go around. It is no longer the Sun that is the centre of our system, it is money. We are enduring not a Copernican, but Goldman Sachsian Revolution. We have become money-tropic, money-centric, and are going mad on this misnoma. We have had, for some long time now, perhaps a century, the technical know-how to prioritise important things like health, dignity, trust and community above monetary wealth, but have failed to implement a change of direction. We fill our time with such inane chaff we hardly know up from down any more. Inflation, deflation, eternal GDP growth, job-loss recovery, job-loss growth. Why? Because money is the sun and moon of our world, its night and day, its turning, its growing, its beginning and end. And Money said, let there be light, and there was light, and it was metered. Money, like all levers to power, coallesces inexorably to itself and corrupts absolutely. Not just those who wield it, but all of us. We are sick in it, with it; breathing it out and in; imbibing, digesting and egesting it, as it rots us all to husks. Let’s get sick of it.

There is another way: Demote money. Demote the high priests of this sick religion. Relearn.

Competition versus Cooperation: the final conflict?

“Mutual Aid” by Peter Kropotkin (1902) and comments I read almost everywhere on the internet put me in mind to write on this topic, which is, I think, one of the most important aspects of the transition we are passing through today. What place competition, what role cooperation? Is one mightier than the other? Is that even a valid question? I think so, if only as a titillating appetizer to draw the reader into the debate. It informs this article.

Kropotkin’s book is a masterwork of well written, erudite and scholarly analysis. Not all questions are answered (they never will be), it is not without controversy and no doubt some of it is out of date, but its core thesis – that cooperation is a more effective tactic than competition in the struggle we call “survival of the fittest” – is sound. This is an important observation; it is not, says Kropotkin, that “survival of the fittest” is just another way of saying “competition,” but that there are alternative tactics which can be deployed by living organisms, as they adapt to, and find a rhythm of living within, the environment of which they are a part, whose composition they help make up. Cooperation is a tactic, as is competition, tactics, furthermore, we can compare, understanding each better by virtue of the exercise.

In the early pages of Mutual Aid Kropotkin recounts an interesting story of a zoologist who took a bag full of ants – a cooperative insect – into a field free of ants, and emptied it there. The ants quickly dominated the territory. All solitary insects – beetles, grasshoppers, etc., dropped whatever they were doing and fled for their lives. Kropotkin, explaining this, observes that cooperative animals are capable of courage and self-sacrifice, complex battle tactics and other skills, unlike solitary creatures. Cooperative animals display higher intelligence too, proving capable of otherwise impossible feats, such as termite mounds which have their own air conditioning. Homo sapiens sapiens escaped Earth and put footprints on its satellite.

My thoughts on the matter are simple. We hear often the refrain that humans are competitive by nature, but compared to wolverines, for example, we are not, not if cooperation is the opposite of competition. We are social first, competitive second (what competition really means I come to later). The evidence that we are social is all around us; families, language, culture, art, cities, nation states, the internet, Facebook and so on. None of this would be possible if we were competitive first and foremost, incapable of cooperation and compromise. That this is quite a controversial statement is not lost on me, but is in fact further confirmation of how susceptible to received wisdoms we are. Group-think, “sheeple,” peer pressure, cliques are all further evidence of our social nature. A consensus is arrived at by various means, and then stuck to, or calcified, by various means also. But consensus can be very wrong, no matter how hard won: the Earth was famously once flat; physics experts used to know manned flight was impossible, until two people who had not read the experts’ books proved them wrong. My belief is that our understanding of competition, the consensus we have achieved on it, is likewise flawed, and needs closer inspection via open and honest debate.

The etymology of the word is latin: com and petere, com meaning “together” or “with,” petere “to seek” or “struggle toward.” The origins of competition are therefore social, and its original meaning reflects this; to strive together toward a common objective. It seems we need not be sociopathic about this competition thing, see nature as a Hobbesian battle field of each against all, after which one creature is left alive on a desolate planet, enjoying its last minutes alive as the final victor of The Survival of The Fittest. Surely this is not what nature is all about. Competition can include cooperation, cooperation can include competition. Perhaps they are not opposites. Perhaps economics has a poor understanding of this most essential element of its theory.

A myth has arisen around the notion of competition which is removed from the complicated reality of how things really work. Nature (and there is only nature; nothing is unnatural) is a complex collection of processes, or systems, dynamically interrelating and exchanging energies, doing work, growing and contracting, digesting and egesting, going in and out of balance. Competition is a part of this, as is cooperation, as are other things, but what it is most certainly not is a total, all out war. If it were, something or someone would have won by now. After all, it’s been going on for billions of years. And anyway, what would “victory” actually mean? What is the point of destroying things on which we depend? What is victory, exactly?

In economics there is the myth of perfect competition, out of which, as well as out of the misunderstood work of Darwin and the foolish “selfish gene” idea, we have a generalized idea of competition, in the economic realm, as selfish, efficient and ruthless, as the fuel that powers The Invisible Hand which ensures its effect is good, despite people always acting on their own self-interest. Were the economic choice between “competition” in this sense, and State run interference, I’d take competition every time, but I think we are erecting a false dichotomy when we make this comparison, when we present ourselves with this black and white choice.

There can be no perfect competition, and there must be a State of some kind. Economic activity is dependent upon humans coming together to exchange stuff. Humans coming together is how States form. Human activity becomes socially organized, rather than staying chaotic and wholly unpredictable, for the simple reason that humans prefer it that way: we are social, so we agree upon rules. But we are “flawed” too, often "irrational," and cannot be perfectly informed about the goings on in the market place, so in the messy hubbub of buying and selling, in that organic and multi-faceted process, dominant parties (aka The Successful) emerge. In that all trade is predicated on the necessary rationing out of scarce resources, and in that a medium of exchange is necessary to enable complex trade, we have here a system – the market – which can only lead to monopolies and/or cartels, which themselves could only be inhibited by perfect competition, which itself is impossible. Therefore the market can develop in no other way. Systemically, inherently, it is about securing differential advantage. There is no other way to play this game, there is no other way this game can play out.

So we are back to competition. For a multitude of very valid reasons human activity gave rise to markets, and markets are supposed to stay efficient and mostly beneficial via competition. And yet, under its remit, on its watch, we have developed built-in and perceived obsolescence, an after-care industry only necessary in its current size because of poor quality construction, highly effective and pervasive advertising to pump repeated consumption of nonsense goods, the idea that shopping is therapy, perpetual GDP growth as a necessity, and other anomalies, all of which cause distortions harmful to the environment in which we operate, and on which we depend for our very existence. Is competition, as we have mythologized it, delivering what it is theorized to? Can a market be other than Hobbesian in its conception? Can it be other than Orwellian in its long term outcome? How do we combine cooperation and competition wisely within economic theory? As I have said elsewhere, economics – as other disciplines – should not allow the walls erected between it and others to stand any longer. Answering these, and other very important questions, obliges us to tear these walls down. Why shouldn’t the fruits, say, of zoology and geophysics, where relevant, influence economics, change it, improve it?

Competition is both real and necessary, but poorly understood. The model I like most is open source software, in which the original meaning of competition, as defined above, seems to find its most healthy expression. That Bill Gates referred to it as Communism is telling, don’t you think? That its product is both “free” and of high quality tells its own story. Economic theory should be paying very close attention.

The madness of crowds

"No warning can save a people determined to suddenly grow rich." Lord Overstone.

I can’t confirm the good gentleman spoke (or wrote) that provocative sentence, but it’s a good one nonetheless (split infinitive aside). It means you can’t do nothing when crowds get mad (double negative aside). Depressions happen. Shit happens. All true, as far as that goes.

But guess what, “rich” has meaning in a particular context, one of differential advantage engendered by an ongoing competition over scarce goods and services. In such a system, any people can suddenly determine to become rich, because society, via various means, makes it very plain indeed that success is measured monetarily. Not all people fall prey to this message, but the vast majority does. Nice guys finish last. Survival of the fittest. You know the story.

My personal reading of this wee pearl of wisdom is that monetary systems are inherently destructive, because they falsely map a philosophy of scarcity over a situation of abundance. The dissonance set up by this false mapping has a number of harmful and unnecessary consequences. One is the calcifying of hierarchies as the “succcessful” secure their positions, the other is a tendency to consume unwisely, to make a passion of consumption because this demonstrates success. To be forced by an unwise paradigm to squabble over artificially scarce goods and services is to ensure cyclical collapse. As we become global in the force of our numbers, the ecosystem is being pulled ever more into our self-inflicted, unhealthy rhythm of overconsumption and collapse. We are now also able to poison it with newly invented chemicals. The abundance that might be sustainably nurtured is squandered because our management of it is informed by the wrong philosophy.

Because we encourage competition over scarce resources, we are obliged to expect the madness of crowds to crave what the “successful” have; riches. We tell ourselves, in all sorts of ways, that this is what life is about. What right does any of us have to bemoan this when it happens!

Wisdom will be finding the right place for competition, and the right place for cooperation. Once we have that, abundance will follow, whereupon we can allow people to be individuals at last, free enough to become whatever they can, with enough space in which to grow up, and make their own decisions. Monetary wealth need have nothing to do with it. Riches need be no carrot, poverty no stick.

But who would make the decisions?

Typically on my blog I don’t like to deal with the nitty-gritty of resource-based economies (I do that elsewhere), but felt it might be worth while having a little piece out there in the blogosphere addressing one particular issue, which has troubled me as it has troubled others. It is this: if a resource-based economy has no nation states, no political parties, no corporations and no medium of exchange, who makes the decisions? The idea that some automated process could make decisions of state, alarms people: That’s not how things are now! Humans do that work, always have done, always will do! Relying on machines or other non-human processes would be a huge, technophile-driven folly, the worst kind of scientific positivism.

So the question is a very important one, since it confronts us with our own ideas about what it is to be human and in control of our lives. Understandably, it is not an easy question to answer. But the reason it’s hard to answer is that the question itself is misleading. For example, if I were to ask: Who makes the decisions in free market economics, or crony capitalism, or casino capitalism, whatever you want to call the planet’s dominant system, what would the right answer be?

Politicians? They certainly put on a great show of making decisions, but what’s behind that show, and how much of it is real?

Mega-corporations? Perhaps, but only in part, and how do they coordinate themselves?

We The People? Not really; voting once every few years is hardly enough influence to say we make the decisions.

Consumers? A little bit, yes.

But maybe we should put all these factors together, call them the Invisible Hand, and say it makes the decisions. That is probably quite close to reality, but also perhaps at some distance from the way we mythologize the idea of leaders making big decisions, and free individuals making little decisions in their billions. Indeed, isn’t the Invisible Hand a blind miasma of various technologies enabling various crowd-behaviours, apparently incapable of true long term thinking? It is also, in a real way, an “automated” or “machine-like” process, beyond purely human, individual control. As such, what sense does it make to say the Invisible Hand “makes” decisions, in the way we think of humans doing so?

And while there is perhaps a certain wisdom in the Hand’s blindness, and maybe too a useful humility in accepting that long term planning is most often doomed to constant revision and change, it is only on paper that the Invisible Hand works this way, due to the impossibility of establishing a perfectly competitive market. In practice the Hand is not really blind, and is most definitely corruptible. Without perfect competition the Invisible Hand cannot function as theorized, serves instead the powerful few to the detriment of the vulnerable many. Only perfect competition can prevent the few from becoming overly powerful, and perfect competition is impossible. (Regarding long term planning, although a side issue to the main question, I do think a resource-based economy would be capable of this, since it would have a completely different set of priorities and built-in incentives.)

In short, this post’s question is not easy to answer, because it is the wrong question. There has never been anyone “making” decisions, nor will there ever be. There is an ongoing process of action and reaction, of various systems dynamically interacting, all giving rise to progress, change, suffering, upheaval, stagnation etc., always some mix of technology and human being. One without the other is almost inconceivable. Technology is, after all, human ingenuity made real.

What we should therefore be asking of all socioeconomic models, as one part of coming to understand them better, is how are decisions made. I here offer humbly an answer which is I think relevant to them all: Humans and their technologies jointly arrive at decisions. In monetary systems the technology we call money, in combination with government, central banks, the IMF, major corporations, as well as other technologies such as computers and database software etc., arrive at the major decisions (such as interest rates and the laws of business) that govern our lives, and steer civilization. The Consumer, by shopping, sends some signals to the listed institutions. The success or otherwise of these decisions is always open to debate – there is no such thing as perfection. Advertising influences very strongly what the Consumer does, so the Consumer is influenced by one powerful part of the status quo just outlined. “Freedom of choice” is illusory.

So who makes the decisions nowadays? Nobody does. The lion’s share of “decision making,” when you really think about it, is made by technology, a particular technology called fiat money. For as we all know, if an idea or plan does not make financial sense, it does not make sense at all. Money talks. Money decides. Money is a technology, a very human invention, not an act of god.

So the only difference between a resource-based economy and contemporary monetary systems would be the technology deployed to partner humans in arriving at decisions. With the scientific method in the driving seat, not money, arriving at decions would be a more reasonable and healthly process than the profit driven, perpetual GDP growth dependent decision making process we struggle with today. Furthermore, as much of societal infrastructure as possible would be automated, making the material side of life as transparent and smooth flowing as possible. Without the hassle of making a profit or earning a decent wage, without the endless complexity of tax law, money supply control, interest rates, exchange rates etc., the range of decisions to be made would be reduced to more functional areas, such as soil health, air and water cleanliness, energy, and providing abundance.

In a resource-based economy, only things that made sense – to the best of our ability to determine this – would make sense, as distinct from their money making/saving potential. The absence of the profit-motive, the freedom from appeasing sponsors and financiers generally, of meeting bogus, money-dependent deadlines, would mean long term thinking would more likely rise to prominence. As today, no one would make decisions, as today they would be arrived at, but as an improvement over today, priorities such as the ecosystem and human dignity would be front and center. There’s nothing wrong with that, and nothing, other than fear of our own ignorance, to be afraid of.

The main obstacle between us and mature, radical change, it seems, is the way we have mythologized ourselves to ourselves, and our reluctance to give these myths up. Putting away childish things is hard, but, I fervently hope, not impossible.

More on growth

As an addendum to yesterday’s post, I want today to throw in a quick thought exercise on GDP growth, in the form of a metaphor. Economics has defined growth in a very clumsy way as expanding GDP. If we see socioeconomic models as subsystems of Earth’s ecosystem, and not as theoretical ivory towers looking down on and removed from the world “out there,” we quickly recognise that economic growth occurs at the expense of other subsystems of that ecosystem. In another system – the human body – when one of its subsystems grows perpetually, we call it cancer. While it depends on perpetual growth of its own produce (goods and services to be consumed by itself), economics can only be “cancerous,” from the point of view of the system which houses it. It can only see perpetual growth as “healthy” if it ignores the ecosystem which hosts it.

Ignoring the ecosystem is flat out stupid. It can indeed be made sick in the way a human body can be made sick, it just takes a bit longer, and is far harder to diagnose. It can “heal” itself though, right itself, find a new equilibrium, at the expense of the cancer that ailed it. This rediscovery of some new equilibrium would likely destroy our civilisation. Reassessing economics’ definition of growth is, for this reason, somewhat of a priority.

A scarcity of unfettered thinking

Economics is not a science, it is an art. Its pioneers may have had noble intentions, such as the most equitable and sensible distribution of goods and services possible, they may have wanted to maximise the good and minimise the bad, but there seems to have been a collective failure in the predictive power of economics in recent years, or at least, perhaps thanks to the internet, such failure is now more famous than ever before. Physical laws tend not to undergo such perturbations (quantum mechanics aside). Economics seems to have become the art of obfuscation in the way philosophy can be, in the way religion can be. Centuries ago great minds debated how many angels could dance on the head of a pin. Today economists debate how many derivatives can dance at the head of an economy.

We have a problem, do we not, when something as simple as direction of price, that is inflation and deflation, cannot be predicted. The experts of this dismal science cannot agree; is inflation coming, or is it deflation, or is it both at the same time, or maybe stagflation? Surely this is a sign that something is very wrong in the kingdom of Denmark.

The typical reaction to this pressure is to prove ever more strenuously that one’s own opinion is the right one, to shout louder in more and more complex terms why it is that one has been right all along. A lifetime of effort and study have been invested. This is not a small matter of betting on the wrong horse at the tracks. These are career defining times for many, and the pressure is intense. The punter wants to know why the experts screwed up. Even the Queen of England has asked her pointed question. Why did economics experts fail?

So what qualifies me to take a stab at this most difficult of questions? Absolutely nothing. I am a two-time university drop-out, a daydreamer, and a poet/novelist of questionable skill. But I am also a concerned and interested human being, who has come to believe, passionately, that it’s up to “We The People” to chance our arms and help the experts out, whether they like it or not. I am prepared to risk opprobrium, or worse, ringing silence, in the faint hope that my own small effort here helps in some tiny way to clear heads, and focus attention on the right areas. This is my take on what is wrong with our kingdom.

Folks, we need to get back to basics. If the big guys and girls can only squabble like children, and make mistake after mistake, when it is unclear what mistakes even are, what latitude predictions must be granted, we’re not going to find the reasons for this chaos at the top end of this discipline. We have to look at its foundations. To my inexpert eyes the whole structure is wobbling. There can only be two possible explanations for this: 1. it wasn’t put together right, or 2. the real world out there is so full of unknowable and uncontrollable variables theory can’t keep up with it. Either way, by my lights we are obliged to focus our attention in the basement. Economics 101 needs to be revisited.

There are two main foundation stones to consider in such an exercise, one is scarcity, the other is ownership or private property. Both are assumptions. My question here is this: are they justified?

I’ll start with scarcity. Economics defines scarcity as infinite wants versus finite resources, which sounds like an eternal problem where there can only be too many people competing over too few things. It’s insoluble. People are greedy, insatiable even, and there’s only so much stuff out there. Hence we need the clean and cold arbitration of a medium of exchange – a prerequisite for the market place – so that a price mechanism can, in a totally impartial manner, distribute the scarce stuff amongst the greedy competitors. The market may well be hard, even cruel at times, but life is like that. Take a look around you. Nature is competition. Unfair in the particular, certainly, but fair over time.

And yet I am not insatiable, and neither is my wife. All joking aside, I don’t know any people so greedy they can’t be satisfied. In short, I don’t think wants can be infinite. Not only can there only be a finite number of people on the planet, this finite number of people cannot exercise the finite total of their wants simultaneously. Wants are brought to the market place in fits and starts, over whole lifetimes, finite lifetimes. The load is always changing. Furthermore, should there be some people incapable of “having enough,” whatever that really means, they are physically constrained from exercising their endless greed, from bringing it to bear on the market place in totality, by the limits of their purchasing power, by the size and number of their homes, by the size of their stomachs, their need for sleep, recuperation, indeed by their very mortality. Wants cannot be infinite. They can change, they can exceed supply, but they cannot be infinite. This, to me, is very important.

It therefore makes sense to define scarcity as finite wants versus finite resources. That sounds like a totally different type of problem to the classical definition. I’m not implying scarcity is not a problem, rather that economics has defined it badly, and this fallacious definition adversely effects the entire structure. The definition needs to be reassessed, and the following types of question asked: Is scarcity a design problem, i.e. solvable? Can humanity’s incredible ingenuity produce goods and services in abundance? What does abundance do to economic theory? Is scarcity a good or a bad thing? For example, technologies such as cold fusion, radiant energy panels, and the STAIR battery could make clean and renewable energy abundantly available to everyone on the planet. (As an aside, this need not be about peak oil, but simply about new technologies making old ones obsolete. The Stone Age did not end for lack of stones!) What effect would clean abundant energy have on the energy industry? On tax revenues? On centralisation itself? Establishing a sensible definition of scarcity, dealing with it thereafter as a design challenge, has profound implications.

On to the second foundation stone. Ownership is an idea, albeit one that seems to be natural; tigers with their territories, for example. But, because ownership is a very old human word drenched in a particular history, a mountain of law, and deep entanglement throughout economics, politics and culture generally, we need to subject it to closer inspection.

Tigers have no clue about ownership as a concept. They simply operate in a particular boundary, inside which the amount of prey necessary for the tiger’s ongoing survival can be sustained. That is not ownership in the legal sense, that is an operational function of tiger-type living. Tigers cannot want more and more territory because scarcity increases value, nor hoard to take care of themselves in their old age. Humans, on the other hand, both understand and are vulnerable to ideas, unlike other animals. This is a crucial distinction. Human behaviours change according to the type of society in which they are raised. A quick look at hunter-gatherers, at the Alouette Eskimos, at the history of the people of St Kilda demonstrates this.

Ownership is an idea that effects human behaviour, not a part of our biology which effects our behaviour. A better word for it might be “access.” Ownership affords exclusive access to a thing. Exclusivity, in this sense, means, at least functionally, “sufficient.” Ownership affords the owner sufficient access to the thing owned. Ownership is furthermore a necessary legal concept because of scarcity. Without scarcity the need for ownership vanishes, transforms into abundant access to that which we need and want. Functionally speaking, it is the access that is important, not the paper actuality of the legal sense of ownership. If you have ownership without access, you have nothing. Access without ownership, on the other hand, is not a problem. Renting a home, for example. Or borrowing a friend’s book, or hiring a car, etc. To collapse the above into one sentence: The idea of ownership has a particular utility (sufficient access) whose importance is dependent upon the conditions (scarcity) in which it operates.

Private property, it turns out, is an anomaly in our biological history. Of course there are for hunter-gatherers issues such as mating partners and the whole “selfish gene” meme (a gene cannot be selfish, it has no sense of self!), and yet doesn’t private property, as a defined and understood concept, really have its roots in farming? Farming is a technological solution to some of the negatives of hunter-gathering, a way of coping with the uncertainty of weather and other natural challenges. My point here is that a human technological development gave rise to the need for the legal concept of ownership. Might further technological development give rise to its demise? If the arc of our development is currently towards abundance and away from scarcity, could ownership become a redundant concept? What effect might this have on economics?

Because I don’t want to write a hugely long tract, I will close with some further, brief points. Technological unemployment is real and not a lump of labour fallacy as orthodox economics posits. It describes the slow, ongoing trend of replicating human abilities via mechanical means. Human abilities are finite. Therefore, due to our technological progress, we are rendering human labour progressively less necessary to the economy. This has a negative impact on purchasing power, and on money itself, since money derives its value ultimately from human labour, whether it be sweat-of-the-brow grunt work, or high level creativity. This is a problem economics must address, unblinkered.

Economics should not lock itself away from physics, sociology, psychology, history etc. Economics is central to society because money is central. It is too important to leave alone, to rot incestuously in its own unexposed juices. Because the things we really value – after the material side of things have been taken care of – cannot be valued monetarily; friendship, trust, the ecosystem, family, community, love; and because money makes revenue generating parts of society more “important” than non-revenue generating, we have a built-in problem with money’s relative importance. That is, it tends to concentrate to itself and cause overly powerful, monopolistic power accrual whereby “business” and “politics” necessarily fuse (as if they were ever separate!). Because perfect competition is impossible (another foundation stone of economics), because rational and perfectly informed market participants are impossible, excessive profits are systemically unavoidable.

Competition over scarce resources is a monopoly-creating mechanism, an inherent property of markets, “free” or otherwise. Economics must address this problem honestly and openly. After all, money is less important than we are; without humans it has no meaning or use. This logic needs to find a place in economics, before we experience global civilizational collapse, due to generations of irrelevant education, eroding topsoil, diminishing drinking water, less and less healthy air, etc. For these reasons and others, money must be demoted. We need a new economics capable of coping with such a concept, capable of coping with reality as it is, not as we theorise it to be. Establishing a new economics is up to us. All of us.

The strange magic of economic growth

What is economic growth? Basically, rising GDP, which means producing an increasing amount of goods and services. But I believe that answering this question properly demands of us that we look at growth generally.

"Out there in the real world" growth appears to be energy exchange. For example, a system has some mechanism (such as eating and digestion) for taking in energy, then converting this energy into growth and/or work, expels waste, and does this for as long as it stays cohesive. Entropy takes its toll, of course, and the system eventually collapses. Another point to consider is that the amount of energy in the universe has not changed one bit since the big bang. Therefore, growth is ongoing exchange of a finite amount of energy circularly between different energy-cycling systems. Growth is part of a cycle requiring "borrowing" energy from "out there", then returning it via waste and work.

Economic growth must surely obey these laws. Economics cannot entertain a definition of never ending growth without defying the laws of physics -- for every action there is an equal and opposite reaction. Economics must take the universe into account, must -- more prosaically -- take the ecosystem which supports all economic activity into account. So, if we hear politicians and economists claiming credit for some growth miracle via the correct handling of the economy, we are obliged to ask at what cost this growth came. Whence the energy that fuelled it? What handles the waste? Where the cyclicality? When will the entropy come, and how?

To my mind, what we have been witnessing these last millennia is humanity's improving ability to do more with less, as Buckminster Fuller used to say. There are no economic miracles, only miracles of human ingenuity, or, to put it another way; technology has been increasing our productive efficiency. Without technology there can be no economic miracles. Where would we be without the plough, or without the domestication of the horse? What use wisely timed changes in the base rate, what function the injection or retraction of money into and out of the economy, how relevant skilled tweaking of the tax code without technology delivering improving efficiencies? Surely economic "growth" is nothing more than the benefits of technological developments distributed (to whatever extent) throughout society! There can be no such thing as perpetual economic growth, there can only be the distributed benefits of technology, be it a plough or a super computer.

Also worth remembering is that the success afforded us by our ingenuity, resulting in our numbers on this planet now nudging 7 billion, has come at the cost of other energy exchange systems, such as rain forests. This is neither a good nor a bad thing until our impact on the ecosystem brings to an ugly halt our ability to sustain civilisation. So, while I believe the planet we were so fortunately born on is abundant in all that we need to live in high quality, we need, at 7 billion and rising, to be very aware of our cumulative effect on it. This awareness should not only include what we consume and how sustainable that consumption is, but also what we bring into existence (I'm thinking of chemicals etc), which the planet is then forced to eat and digest for the first time in its long life. When we create a thing, we are responsible for it, but can only ask the planet to process it one way or the other. Wherever we throw things away, we are doing so on the planet. Are our economic models taking sufficient account of this most obvious truth? Or is their wierd understanding of growth in fact a threat to civilisation?

Should we be learning a new and healthier way of understanding growth? I believe so. Should we strain every sinew to develop a socioeconomic system that does not depend upon growth? Abso-bloody-lutely.