The Pope Francis Encyclical And Its Economics

By Brent Blackwelder

Brent BlackwelderThe Encyclical Letter of Pope Francis is attracting extraordinary attention for its message on global warming, deforestation, loss of biological diversity, and other pressing environmental issues. What is less well known is the extensive critique of the global economy found in his 184-page Encyclical. This blog highlights some of the significant points that Pope Francis makes about the need for systemic economic change.

Although the Pope does not use the phrase “steady state economy” or “true-cost economy” his message provides a comprehensive moral argument for a systemicshift to a new economy.

2014 Pastoral Visit of Pope Francis to Korea Closing Mass for Asian Youth Day  August 17, 2014  Haemi Castle, Seosan-si, Chungcheongnam-do  Ministry of Culture, Sports and Tourism Korean Culture and Information Service Korea.net (www.korea.net)  Official Photographer : Jeon Han This official Republic of Korea photograph is being made available only for publication by news organizations and/or for personal printing by the subject(s) of the photograph. The photograph may not be manipulated in any way. Also, it may not be used in any type of commercial, advertisement, product or promotion that in any way suggests approval or endorsement from the government of the Republic of Korea. If you require a photograph without a watermark, please contact us via Flickr e-mail. --------------------------------------------------------------- 교황 프란치스코 방한 제6회 아시아 청년대회 폐막미사 2014-08-17 충청남도 서산시 해미읍성 문화체육관광부 해외문화홍보원 코리아넷  전한

Pope Francis. Photo Credit: Korean Ministry of Culture, Sports and Tourism

I present a series of quotations to illustrate portions of the Pope’s forceful arguments. If we are to obtain systemic economic change, we need new, motivated allies. The Encyclical is a key tool to motivate religious congregations to be front and center in this economic debate to counter the greed and rapacious behavior of numerous governments and large corporations.

In Section 54 the Pope takes sharp aim at the control of politics and finance that prevent urgent changes from being made:

The failure of global summits on the environment make it plain that our politics are subject to technology and finance. There are too many special interests, and economic interests easily end up trumping the common good and manipulating information so that their own plans will not be affected. The alliance between the economy and technology ends up sidelining anything unrelated to its immediate interests. Consequently the most one can expect is superficial rhetoric, sporadic acts of philanthropy and perfunctory expressions of concern for the environment, whereas any genuine attempt by groups within society to introduce change is viewed as a nuisance based on romantic illusions or an obstacle to be circumvented.

Pope Francis repeatedly questions whether the global economy is furthering the common good. In Section 109 he writes:

The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated…” In Section 189 he looks again at the financial collapse of 2008: “Politics must not be subject to the economy, nor should the economy be subject to the dictates of an efficiency-driven paradigm of technocracy. Today, in view of the common good, there is urgent need for politics and economics to enter into a frank dialogue in the service of life, especially human life. Saving banks at any cost, making the public pay the price, foregoing a firm commitment to reviewing and reforming the entire system, only reaffirms the absolute power of a financial system, a power which has no future and will only give rise to new crises after a slow, costly and only apparent recovery. The financial crisis of 2007-08 provided an opportunity to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative financial practices and virtual wealth. But the response to the crisis did not include rethinking the outdated criteria which continue to rule the world.

Pope Francis waxes eloquent on the subject of externalities in Section 195:

The principle of the maximization of profits, frequently isolated from other considerations, reflects a misunderstanding of the very concept of the economy. As long as production is increased, little concern is given to whether it is at the cost of future resources or the health of the environment; as long as the clearing of a forest increases production, no one calculates the losses entailed in the desertification of the land, the harm done to biodiversity, or the increased pollution. In a word, businesses profit by calculating and paying only a fraction of the costs involved. ‘Yet only when the economic and social costs of using up shared environmental resources are recognized with transparency and fully borne by those who incur them, not by other peoples or future generations,’ can those actions be considered ethical. An instrumental way of reasoning, which provides a purely static analysis of realities in the service of present needs, is at work whether resources are allocated by the market or by state central planning.

Pope Francis talks about product diversification and consumerism; in Section 129 he extols the virtues of the “great variety of small-scale food production systems which feed the greater part of the world’s peoples.”

As Pope Francis points out, he is building on the messages that popes such as John XXIII, Paul VI, John Paul II, and Benedict XVI have given on these problems. For example, Pope Benedict XVI proposed “eliminating the structural causes of the dysfunctions of the world economy and correcting models of growth which have proved incapable of ensuring respect for the environment.” Pope Paul VI wrote: “the most extraordinary scientific advances, the most amazing technical abilities, the most astonishing economic growth, unless they are accompanied by authentic social and moral progress will definitively turn against man.”

My hope is that the Pope’s message will be translated by religious congregations into tangible actions to make substantive changes in the economic drivers of environmental destruction. New allies are urgently needed.

One good place for tangible action is to go after the cheater economics being used by the G 20 nations to push tens of trillions of dollars into mega-infrastructure projects without regard to social, environmental, or climate impacts. (See my January 2015 blog for details on this subject.)

 

Seismic Political Shifts Reveal Desire for Serious Change

by James Magnus-Johnston

If you demonstrate to people that the NDP [New Democratic Party] can win in Alberta, suddenly anything seems possible. —Paul Fairie, University of Calgary political scientist

 

James Magnus-JohnstonOn the problematic political spectrum, neither the right nor the left have become wholesale champions of the steady state economy. Then again, embracing something perceived as ‘new’ has never been the strong suit of the politician. It takes years of ideological evolution among the grassroots before seemingly new and different ideas become politically palatable. Seismic political shifts like the one in Alberta suggest that big ideological evolutions are underway in the unlikeliest of places, and that steady state solutions may not be far behind.

The Canadian province of Alberta—which includes Canada’s oil patch—revealed its desire for serious change in its election of an NDP government last week. While the social democratic NDP doesn’t have an explicitly ‘green’ agenda, some policy shifts acknowledge the limits to growth—growth in the oil patch, growth in debt, growth in inequality, growth in carbon emissions, and growth in overall environmental costs. Growing the oil patch at all costs has left the province vulnerable to swings in the petroleum economy, and it isn’t building a stable economy for generations to come.

Alberta’s newly-elected NDP premier, Rachel Notley. Photo Credit: Dave Cournoyer via Flickr, Creative Commons

Alberta’s newly-elected NDP premier, Rachel Notley. Photo Credit: Dave Cournoyer via Flickr, Creative Commons

The political shift represents a strong movement away from a half-century of Alberta’s Conservative ‘conventional thinking,’ including relaxed regulations for the oil and gas industry as well as an export-first policy designed for economic growth as if there were truly no tomorrow. Time will tell whether or not Premier Notley will introduce measures to supplant carbon-intensive growth with a renewable steady state, but there are signs of movement in this direction.

In March, as opposition leader, Notley introduced a motion calling on the government of Alberta to phase out the use of coal for electric power generation in Alberta. Alberta’s oil sector produces almost as many GHG emissions as do the mining and extraction of oil from the oilsands.

This week, one of the largest oil and gas companies in Canada called upon Premier Notley to introduce a carbon tax, a measure which sits at number two on Herman Daly’s top ten list of steady state policies. The call counts as either a brilliant coordinated manoeuvre on the part of the NDP and the oil patch, or the beginning of a serious change in the way Canada’s oil and gas industry perceives its responsibilities in the face of climate change.

The NDP victory also signals a willingness to tackle point three on Mr. Daly’s top ten list—limiting the range of inequality in income distribution. While Premier Notley has not signalled a willingness to institute a ‘maximum income’ level, she has designs on raising the minimum wage to $15 per hour from the country’s second lowest minimum wage of $10.20. The NDP have also vowed to reintroduce progressive income taxes, and raise corporate taxes.

This is not a promotion for social democracy per se. Social democratic governments in different jurisdictions, like my home province of Manitoba, can sometimes reflect neoliberal economic thinking rather than focus on designing an economy for fairness. But in Alberta’s example, folks have acknowledged the problems associated with half a century of growth in the extractive industry, environmental degradation, and inequality. As the political pendulum shifts in other jurisdictions, there is an opportunity for political parties of various stripes to reconsider how they can respond to growing grassroots frustration with a debt-ridden, environmentally destructive, inequitable economy.

As the costs of uneconomic growth continue to escalate, and as a new generation prepares to bear those costs, we can be sure that further movement in the direction of a steady state economy will not only become more palatable, but absolutely essential.

 

Who’s Going to Lead the Way to a Sustainable Economy?

by Rob Dietz

Dietz_Author_PhotoIn a snarky moment, the late economist Kenneth Boulding said, “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” Unfortunately madmen and delusional economists seem to be running the show. That’s why it’s so refreshing to meet someone who can see through the illusion of perpetual growth. It’s especially refreshing when that someone is in the early stages of a promising career — after all, today’s youth will be in charge of the transition to a sustainable economy (thank goodness, since they’re almost guaranteed to achieve a better track record for sustainability than their parents’ generation).

William Niancen Miao is not the sharpest knife in the drawer; he’s the sharpest knife in the whole kitchen, maybe all the kitchens within a fifty-mile radius. As a Fulbright Scholar studying industrial environmental management at Yale, he is synthesizing lessons from economics, legal studies, public policy, and the natural sciences into a solid understanding of what makes a sustainable business and a sustainable economy. His studies are surely shaping his big-picture view, but two other factors have also contributed: his history of worldly experience and his willingness to go against the grain.

Miao was born in 1990 and spent most of his youth in Shenzhen, a Hong Kong neighbor that was in the midst of a startling transformation from a fishing village to a concrete maze of skyscrapers. According to Miao, Shenzhen was built up in preparation for the handover of Hong Kong from the British to the Chinese. He says, “The Chinese government made it a special economic development zone. Hills and mountains were converted to quarries. The surrounding areas became factories.” The river that divides Shenzhen and Hong Kong got dirtier and smellier, and air quality declined to the point that blue became an uncommon color for the sky. After living under deteriorating environmental conditions and expanding stress from crowding and competition, Miao’s family made the decision to emigrate to New Zealand at the time he was starting high school.

The contrast between the lifestyles in New Zealand and China was obvious. Even though he had to learn a new language and culture, the pace of life slowed after the move. Miao de-emphasized his rigorous study of math and science, and took up art, music, and social studies. He found time to explore the beaches and beautiful landscapes of his adopted country. Miao says, “I was a very hard worker when I lived in China, but I became a more well-rounded person in New Zealand.”

Miao enrolled at the University of Auckland where he considered majoring in economics, but decided to specialize in chemical engineering. From his point of view, chemical engineering is more grounded in the real world, whereas economics resides in the theoretical realm (mainstream economic beliefs about the inevitability of continuous growth are especially theoretical). He also believed that a degree in chemical engineering would provide more job opportunities by outfitting him with a unique skill set.

Beat-up Shell Oil Can

Young people entering the workforce have better options than the antiquated fossil-fueled economy.

He was right about the job opportunities. At the end of his third year, he landed an internship at Shell Oil. By this time he was becoming increasingly aware of the principles of sustainability and green chemistry, and in his time at Shell, he realized his values didn’t mesh well with the company’s mission. Miao had been assigned to help with an offshore oil and gas project, and given the climate crisis, he questioned why he was even doing it. At the same time, he noticed that as supervisors climbed higher in the corporate hierarchy, they became more and more bound to Shell’s mission. They didn’t seem to think beyond production and profits, or consider the negative impacts of Shell’s activities. He asked himself, “Do I want to be like one of these folks?” The “no” answer brought another question to mind: “How can I do something greener, something broader?”

Miao knew he could get a six-figure salary if he took a standard chemical engineering job after graduation. That’s quite an enticement, but he concluded, “It’s more important to do what I actually want to do.” The only trouble: he wasn’t sure what that ought to be! Luck intervened. As a volunteer guide at a bird sanctuary (perhaps also a sanctuary for Miao himself from the Shell experience), he regularly hobnobbed with tourists. One such tourist was a professor who suggested that he look into the field of industrial ecology. That suggestion started Miao on another worldly adventure — this time to his current station at Yale.

He is learning to view industrial facilities and economic processes through an ecological lens. His combination of ecological understanding, grounding in the physical and chemical sciences, and love of the natural world (not to mention his work ethic) give him a unique potential to be an agent of change — to fix the broken parts of our industrial and economic systems. He wants to help firms achieve true systems thinking so that sustainability underpins every decision instead of being tacked on merely to create a better image or provide cost savings.

It takes sensitivity to recognize social and environmental problems. It takes insight to understand the systems from which those problems emerge. It takes integrity to align actions with values in an effort to change the systems. It takes courage to confront the mainstream point of view. And it takes sacrifice to put aside comfort and convenience to strive for something more elusive. Doesn’t it make you smile to know that students like William Miao are on such an honorable path?

Surprises Lurk with Pending Obama Trade Deals

by Brent Blackwelder

BlackwelderPresident Obama is pushing two massive new free trade agreements: the Trans-Atlantic Free Trade Agreement (TAFTA) and the Trans-Pacific Partnership (TPP). These far-reaching agreements, which are being negotiated in secret, constitute major threats to democracy and to the health of the planet and its people. Passage of these new trade deals would make it more difficult than ever to obtain a sustainable, true-cost economy.

Rather than raising all boats, international trade agreements over the past twenty years have encouraged a race to the bottom. If a country has a strong food safety law or a clean energy requirement, you can bet that some corporation is filing or planning to file a trade complaint in a secret tribunal established by a trade agreement.

TAFTA and TPP would give companies the right to file lawsuits against governments in opaque tribunals. The result is likely to be fewer standards against fraud, corruption, and tax dodging, as well as weakened momentum for pollution control, food safety, and clean energy.

Corporate claims of over $14 billion are already pending before three-person trade tribunals that meet in secret to pass judgment on climate and energy policies, medicine patents, and pollution cleanups. Taxpayers have already been forced to pay more than $400 million as a result of trade complaints concerning toxics bans, land-use regulations, timber policies, and other environmental issues.

Secret Tribunals at Work

Texaco’s oil drilling in Ecuador in the 1980s (which was later purchased by Chevron) severely contaminated tribal lands in the Amazon rainforest. The affected peoples filed a lawsuit in New York City, but Chevron had the case moved to Ecuador, under the assumption it would win. In a surprising decision, Chevron lost the lawsuit and even lost an appeal and was ordered to pay $18 billion in damages.

At that point Chevron chose to file a trade complaint in the secret tribunal established by the U.S.-Ecuador free trade agreement. Under this procedure a panel of three (one chosen by Chevron, one by the government of Ecuador, and a third by mutual consent) met in secret and voided the judgment against Chevron.

In 2013 under the Central American Free Trade Agreement, a Canadian gold mining company filed a billion-dollar trade complaint against Costa Rica for denying it a mining permit. Costa Rica was trying to protect a rainforest, but may be forced to pay $1 billion if the secret tribunal rules in favor of the mining company. This case illustrates the way corporations are seeking to undermine the sovereignty of nations trying to protect their long-term environmental and economic interests.

The trade deals and tribunals impede efforts to build a sustainable, true-cost economy by blocking progress in three critical policy areas:

1. Tax Standards

A sustainable economy requires basic reforms designed to prevent tax dodging and reckless speculation with taxpayer dollars. Regrettably, TAFTA and TPP seek to weaken reforms that ensure corporations pay a fair share of taxes. The average U.S. corporation pays roughly 12% of profits in taxes, not the 35% that is on the books. Some companies with billions in profits such as Apple, GE, and Google hide their cash in offshore accounts and pay little or nothing in comparison to their profits.

With the defunding of governments as a result of offshore tax havens, governments worldwide have insufficient funds to enforce pollution laws, protect public lands, or regulate risky hedge fund behavior.

2. Food Safety Standards

Safe and sustainable food production provides the foundation for a sustainable economy. The proposed trade agreements, however, set up conditions that allow countries to undermine one another’s efforts to operate a healthy food production system.

For example, food companies in the European Union have targeted the U.S. Food Safety and Modernization Act of 2011 as a trade barrier. This law gives the Food and Drug Administration the power to recall contaminated food. Remember the meat adulteration scandal of 2013 in which the U.K. was exporting “beef” to the U.S. that was later found to contain horse meat. This sort of scandal could become business as usual if the Act is weakened.

At the same time, the owner of Kentucky Fried Chicken wants to force the E.U. to accept chlorinated chicken. U.S. pork producers also want to eliminate the E.U. ban on ractopamine, a drug used in pork, beef, and chicken production, but this drug has been banned or limited in 160 countries due to risks to human and animal health.

Major food and agribusiness firms are seeking to bring arguments before the trade tribunals to challenge crucial food safety requirements around the globe and to force nations to import foods they have deemed to contain risks.

3. Energy and Climate Standards

Passage of TAFTA has the potential to undermine automobile fuel economy standards, energy efficiency labeling programs, and requirements for governments to buy green in procurement contracts.

Tax credits for wind and solar energy could be affected by the agreement. Under E.U. rules, the Swedish Vattenfall company has filed billion-euro trade complaints against Germany’s phase-out of nuclear power and its regulation of coal power plants.

It’s bad enough that the proposed trade agreements risk undermining these three critical policy standards, but the Obama administration is also working to bypass the U.S. Constitution to fast-track the agreements.

Stop_TPPThe Constitution provides that Congress, not the Executive Branch, must approve trade agreements. The President is given the authority to negotiate trade agreements but must submit these to the Senate for approval by a two-thirds majority. The Senate can amend proposed treaties negotiated by the President. President Nixon was able to temporarily change the approval process for trade agreements by getting Congress to pass “fast-track” authority that permitted the President to negotiate and sign a trade agreement and then send it to Congress, not as a treaty that requires a two-thirds vote, but as a piece of regular legislation. Under this approach both chambers of Congress stage an expedited debate with no amendments and have an up-or-down by vote on the agreement. Obama is seeking to employ the same Constitutional bypass that Nixon did forty years ago.

TAFTA and TPP are major threats to democracy. They undermine the authority of an open, accessible, and transparent court system. They favor corporate wishes over sound trade, consumer, and environmental policies.

You don’t have to connect very many dots to see the rationale behind the proposed trade agreements. They are meant to prop up economic growth and secure higher corporate profits. As usual, few people (including Obama and his trade advisers) are asking the right questions about the utility of further growth in production or profit.  When it comes to trade, governments ought to be asking:

  • What volume of trade is sustainable?
  • Do product prices reflect long-term social and environmental costs, or are pollution externalities being shoved off on the public, nature, and future generations?

Considering such questions opens a doorway on the topic of steady state economics and leads to the realization that the economy can get better without growing bigger. Too bad “bigger” seems to be the only option on Obama’s agenda.

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Ending the Insanity of Ecocide

by Amelia Womack, Villo Lelkes and Prisca Merz

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” –Buckminister Fuller

We live in the age of ecocide. Defined as the extensive damage, destruction or loss of ecosystems of a given territory, ecocide is the result of the way people, corporations, and governments are running their affairs all around the globe. But ecocide doesn’t have to be the status quo. A new law being proposed in the European Union would protect ecosystems by giving them legal standing. Under such a law, the Earth would no longer exist purely as property or a set of resources to be exploited. Instead people and institutions would acknowledge the intrinsic value of ecosystems and accept the legal duty to protect them.

Ending ecocide requires nothing short of a paradigm shift. This shift, in turn, requires a cultural change — a movement away from exploitation and toward stewardship of nature. The cultural shift is unfolding as people, especially the younger generation, internalize the evidence of ecocide and its devastating consequences constantly being issued in reports about global warming, species extinctions, and natural resource depletion. But we need more than just a cultural shift. We need specific and revolutionary changes in two subsystems of society: the legal framework and the economy.

The Legal Shift to End Ecocide

The concept of ecocide has been discussed since the 1950s, and it has even been codified as a war crime. According to Article 8.2 of the Rome Statute of the International Criminal Court, it is illegal to cause “widespread, long-term and severe damage to the natural environment” in acts of war. But the same damage caused in peacetime is legal. In 2010, building on a history of attempts to criminalize ecocide, Polly Higgins submitted a proposal to the United Nations to include ecocide as the Fifth Crime Against Peace.

At the core of the law of ecocide prevention is the idea that decision-makers in business and politics should be held personally and criminally liable for damages caused to the environment. Contrary to the existing system in which fines often fail to cover the cost of cleanup, companies and decision-makers under the law of ecocide prevention would be held criminally accountable and would have to pay the costs of restoring ecosystems to the extent possible.

Today many laws and regulations are in place to protect certain parts of the natural environment, such as soil, water, and endangered species. However, existing legislation treats each of these elements separately, fragmenting the overall body of environmental law. In contrast, the law of ecocide prevention takes a holistic approach by establishing a broad framework for conserving ecosystems and the services they provide.

The main aim of this legislation is not the imprisonment of decision-makers but the creation of incentives and a legal framework for achieving environmentally sound behavior, especially within corporations. Imagine all investments flowing into non-ecocidal activities and the resultant innovations driven by resource efficiency and waste minimization. With strict enforcement, businesses would make the necessary adjustments to comply with the new legal framework. If accompanied by subsidies to facilitate the transition to a new business model, the law of ecocide prevention has the potential to trigger a transition to a different sort of economy — one that operates in harmony with the ecosystem.

The Economic Shift to End Ecocide

Logo (tree) for End EcocideThe economic goal of continuous growth sets the stage for ecocide. With their primary focus on more and more growth, businesses contribute to the global environmental catastrophe by externalizing the environmental costs of their profit-maximizing actions. As moral philosopher Michael Sandel puts it, we have moved from a market economy that is valuable for organizing productive activity to a market society where everything is up for sale. The problem with a market society is that it corrodes or crowds out important, non-market-based values and de-emphasizes public goods at a time when inequality is dramatically rising.

Instead of a growth-obsessed economy focused on maximizing profits and producing more and more goods and services, we need a steady state economy focused on maximizing well-being and producing sufficient goods and services within ecological boundaries. As described by Herman Daly, a steady state economy uses the “lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption.” The idea is to maintain a non-growing throughput of low-entropy resources and energy through the economy. In short, instead of getting bigger, the focus shifts to getting better.

We may have already arrived at a major economic inflection point. The rate of global economic growth is decreasing, and some economists are discussing whether we have reached the end of economic growth and the limits of global capitalism. 2008 marked the beginning of the most severe economic crisis since the Great Depression. With the old system failing, there is potential for the North and eventually the South to make the turn toward a steady state economy that is based on the principles of sustainable development.

Even though the old system of continuous growth is failing, we need to create the conditions for a steady state economy to emerge. Unfortunately, the principles of sustainable development are mostly missing from today’s environmental law and policy. That’s why the steady state economy goes hand in hand with the law of ecocide prevention. It’s exactly the kind of economy that will materialize when businesses are legally bound to protect ecosystems.

The law of ecocide prevention and the steady state economy constitute two paradigm shifts, a legal and an economic one. These two shifts reinforce one another and move society in the same direction — placing people and planet ahead of profit. But how can people who recognize the necessity of this two-pronged shift help make it happen?

A group of volunteers has proposed a law to the European Union to make ecocide a crime if it is committed in EU territory, or by companies registered in the EU, or by EU citizens. The proposed legislation would also apply to the import of any goods or services resulting from activities causing ecocide in the EU and the financing of ecocide by EU banks or financial institutions. If one million EU citizens support this proposal by January 21st, 2014, the European Commission will be legally bound to propose an action. We would like to invite EU citizens to vote today for a law to protect our future. Ecocidal tendencies have no place in either our legal or our economic institutions.

Amelia Womack, Villo Lelkes and Prisca Merz are volunteers for End Ecocide, a European citizens initiative aiming to criminalize ecocide. They need to collect 1 million signatures for a law to be considered by the EU. Amelia is a Green Party candidate for the European Parliament and has completed a MSc in environmental technology — her thesis addressed the impact of the law of ecocide prevention on business. Villo is an environmental lawyer who previously worked for the European Commission as a policy officer on sustainability. Prisca has a background in public policy and human development and heads the End Ecocide team as a volunteer.

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How on Earth: Flourishing in a Not-For-Profit World by 2050

by Donnie Maclurcan and Jen Hinton

WakeUpHappyImagine waking up in a world where you feel good about going to work, no matter the nature of your job. You feel positive and motivated, knowing that your work provides you with a livelihood that also contributes to the wellbeing of others in a way that respects the ecological limits of the planet.

Welcome to Not-for-Profit World, where businesses can still make profits, but any profits are always reinvested for social or organizational benefit, rather than being accumulated privately by individuals. This world emerged because, around 2013, a large number of people came to the realization that any economic system that centralizes wealth and power is, ultimately, socially and ecologically unsustainable. People were fed up with excessive executive salaries, a financial sector divorced from the real world, corporations with more say than people, endless spin from politicians and entrepreneurs about the latest technological “solution,” and the trappings of mindless consumption.

As the mainstream attention on the Occupy movement faded, protesters even started to question whether being fed up was worthwhile.

Then a real alternative emerged. The people already had a business structure that wasn’t centered on creating private profit and concentrating wealth and power; all they had to do was grow the not-for-profit sector, shifting power away from the for-profits. A not-for-profit economy changed the game by decentralizing wealth and power, while maintaining incentives for innovation and increasing people’s desire for meaningful work.

Before 2013, when for-profit enterprise was the main business model, it was contributing to financial inequity and vested interests. This had led to an increase of status anxiety due to drastic differences in material wealth. The majority of people often felt that because they didn’t have as many material possessions as the wealthy classes, among whom the money had been concentrated, they couldn’t be as happy. For some people in the lowest income brackets, this inequality not only meant status anxiety and shame, but even a lack of consumption choices, affecting diet and health. For many, the solution was to consume more of whatever they could afford.

On the global level, this overconsumption went hand-in-hand with production practices that exploited workers in sweatshops to make cheap and plentiful products, while decimating key natural resources. This was clearly unsustainable. As more and more people realized that all forms of capitalism and socialism — grounded in a growth mentality — centralize wealth and power and are therefore unsustainable, they also began to see how a not-for-profit economy offered a way to decentralize power, while maintaining innovation. When a critical mass of people reached this realization and accelerated the shift to the not-for-profit business model, everything started to change for the better.

How on Earth could that be possible?

This scenario of a not-for-profit world is closer to the present reality than you might think. Across numerous countries, the economic contribution of the not-for-profit sector has been on the rise since the late 1990s. In Canada, for example, not-for-profit institutions now contribute 8% of the country’s gross domestic product. This is possible because not-for-profit does not mean “no-profit” or “can’t make a profit.” Not-for-profit actually means not for private profit or not for the primary purpose of making a profit. Across most countries and jurisdictions, not-for-profits can make as much or as little money as they want, they just cannot provide payouts to private individuals from any surplus.

The pioneering work of not-for-profit businesses, from sectors as diverse as construction, manufacturing, banking, hospitality and healthcare, suggests that innovative, sustainable economies, with high levels of employment, can exist without the private profit motive.

Many not-for-profits also understand that generating their own income allows them to fund the good work they do (as opposed to the traditional approach that depends on grants and philanthropy). Take, for example, BRAC, the world’s biggest not-for-profit organization. Since 1972, BRAC has supported over 100 million people through its social development services, but almost 80% of its revenue comes from its own commercial enterprises, including a large-scale dairy and a retail chain of handicraft stores, all of which are run according to a holistic vision of sustainable business.

More importantly, not-for-profit enterprises could regularly outcompete equivalent for-profit businesses in the near future, based on a combination of factors, such as:

  • not-for-profit enterprises better utilizing the benefits of the communications revolution to reduce organizational costs;
  • increasing awareness of the tax concessions and free support available solely to not-for-profits;
  • the trend in consumer markets toward supporting ethical businesses and products;
  • the ability of not-for-profit enterprises to survive and even thrive during years of downturn, given their sustainability does not rely on making profits and that profit margins will continue to get smaller as resource constraints impact business costs.

The potential exists to achieve sustainability and widespread justice in a not-for-profit world, but we urgently need a good map to show us how to get there. Thankfully the cartographers at the Post Growth Institute are drawing up How on Earth: Flourishing in a Not-For-Profit World by 2050. This will be the world’s first book to explore the prospect of not-for-profit enterprise becoming the central model of local, national and international business.

Business as usual is leading to a social and environmental collapse, but the good news is that, within just a few decades, we can make the switch to business as unusual in which profit for the few has been replaced with shared wealth for all.

Donnie Maclurcan and Jen Hinton are principals at the Post Growth Institute. If you would like to learn more about the How on Earth book project and/or contribute to its development, please visit the crowdfunding campaign page on Indiegogo.com. For an outline of the book’s main ideas, see this 2012 talk by Donnie Maclurcan at the Environmental Professionals Forum.

Three Glimmers of Hope for an Economic Transformation

by Brent Blackwelder

BlackwelderEcological economists, top scientists, and even a few financiers have put forth powerful arguments for moving to a steady state economy. Sometimes described as a true-cost economy, a sustainable economy, or a spaceship economy, the steady state offers a positive alternative to the delusion of endless growth.

Viewed from an environmental perspective, the need to transform the U.S. and global economic systems is becoming more urgent by the day — if you scan the headlines about global warming, biodiversity loss, and natural resource depletion, you’ll quickly get the picture. It turns out that the most important environmental policies of any nation are its economic policies. For example, there is no chance of stabilizing the ongoing climate chaos if the major economies of the world continue to reward fossil fuel usage and fail to include pollution externalities in their prices. In a true-cost economy, however, clean energy would be the cheapest, and fossil fuels would be too expensive to use.

Given the severity of the problems we face and the strong potential for steady state policies to solve them, the question is, “Why are nations failing to embrace this positive alternative?” There are many obstacles standing in the way of a sustainable economy. The skeptic would assert, “You are asking the most powerful nations in the world to change the cherished economic system they have been functioning under and embrace an economic system which no modern nation has ever used. It is a wild fantasy.”

There’s some merit to the skeptic’s argument — the suggested economic changes seem like a paradigm shift akin to those seen over the centuries in physics and astronomy. But given the unpredictability of paradigm shifts, we can encourage incremental steps toward an economic transformation.

A number of experts have laid out such steps. For instance, the economist Peter Victor has illustrated how Canada could achieve a sustainable economy. But even with a blueprint in hand, it’s questionable whether Canada or China or the U.S. or Brazil or India would ever start constructing such an economy.

Part of the problem stems from the international economic infrastructure. The continued push for economic expansion from global bodies such as the World Bank, the IMF , the G-8, the World Trade Organization, undermines intellectual support for the transformation from cowboy economies to spaceship economies.

Another obstacle comes from the extractive industries and the way they exert influence within governmental bureaucracies. These industries are propping up a business-as-usual approach to economics. If this approach continues, we can expect collapses around the world stemming from food and water riots, weather disasters, and ongoing erosion of life-support systems worldwide.

It’s tough to come up with plausible ways of overcoming these major obstacles, but three recent developments provide some much-needed hope. They may be long-shots for breaking through the resistance and spurring the transformation to a new true-cost economy, but they offer a chance.

Economic output and energy use are highly correlated. Data shown are for 175 countries in the year 2007. Sources: U.S. Energy Information Administration and the World Bank.

Economic output and energy use are highly correlated. Data shown are for 175 countries in the year 2007. Sources: U.S. Energy Information Administration and the World Bank.

The first glimmer of hope is emerging from the energy changes happening in Germany, which has become the world’s leader in electricity produced from solar and wind sources. Germans are aiming to generate half of their electricity from renewable sources within ten years. If the most powerful economies in the world were to replicate Germany’s energy policy, it would not only be a shift in the energy sector, but also a monumental shift in economics, given the way economic growth and energy consumption are connected.

The second glimmer of hope comes from growing concern about caring for creation on the part of religious congregations from many faith traditions. More and more religious organizations, liberal and conservative, are pointing to the excessive consumption in the global economy as destroying God’s creation. What if Pope Francis surprised everyone and included population stabilization on his agenda. His text could align with Genesis by envisioning a flourishing of all life on earth. That is why the blessing “be fruitful and multiply” is first given explicitly to all the animals on the planet.

A third glimmer of hope is arising from the surge of public outrage over corporate tax dodging and subsidies. Stories of financial fraud and abuse are popping up in the news coverage. The Economist’s Special Report on Offshore Finance (February 16, 2013) highlights the trillions of dollars stashed in offshore tax havens.

It’s scandalous that some of the wealthiest corporations in the world, such as General Electric, Apple, and Google, are paying little or no income tax. It’s equally scandalous that U.S. corporations continue to receive taxpayer handouts. The anger and unrest spurred by this situation offers a good opportunity to change the way businesses operate.

The obstacles to a establishing a true-cost, steady state economy are daunting, but now’s the time to get on board with efforts to overcome them. People are responding to the challenge and taking positive actions all over the world. I’ve summarized three of my favorites here, and I’m hopeful that you know of plenty of other efforts to create an economy that will work for people and the planet.

What Kind of Economy Says OK to Tar Sands Oil?

by Brent Blackwelder

BlackwelderOn Sunday, February 17, I marched in the largest climate change protest in U.S. history. About 35,000 people gathered on the Washington Monument grounds for a rally and then marched past the White House, calling on President Obama to deny permission for the construction of the Keystone XL pipeline that would transport oil from Canada’s tar sands through the heart of the U.S. to the Gulf Coast.

Two of the victims of tar sands development in Alberta, Chief Jackie Thomas of the Saik’uz First Nation and Crystal Lameman of the Beaver Lake Cree First Nation, spoke of the contamination of their lands and people. Even without the pipeline, the gigantic oil extraction operation is already causing plenty of harm.

If carried to completion during the next several decades, over the objections of the indigenous people who have been stewards of this land, tar sands mining will have transformed an area the size of Florida or Wisconsin. A land teeming with fish and wildlife will have been turned into a grotesque zone of toxicity where the lakes will act as predators as they entice unsuspecting waterfowl to land in their polluted waters.

What kind of economy would find such an activity acceptable? At the very least, the economy must be making some perverse calculations to justify such devastation.

As if the direct devastation of the land and water were not enough, the utilization of tar sands oil by the U.S. and other countries means “game over” for the global climate, according to NASA scientist James Hansen. In other words, the energy-intensive extraction followed by the burning of tar sands oil will put so much carbon pollution into the atmosphere that we will enter an era of radical climate destabilization.

The exploitation is proceeding on Cree lands against their consent and in violation of the Canadian Constitution. It represents a blatant refusal to abide by Article 32 of the U.N. Declaration on the Rights of Indigenous Peoples that says: “States shall consult and cooperate in good faith with the indigenous peoples… in order to obtain their free and informed consent prior to the approval of any project affecting their lands particularly in connection with the development, utilization or exploitation of mineral, water or other resources.”

President Obama appears poised to give permission to build the pipeline and contribute to this industrial nightmare. So what can we do in the aftermath of the big protest?

The time has come to reject the premises of today’s economy, because it is not a true-cost economy, and it undermines good governance. It is an economy set up for cheaters and gamblers. It is also an economy that exploits those lacking political clout and that disrespects international law, except when it comes to trade agreements that enable polluters to enter special secret courts (see the Chevron trade case against Ecuador for one recent example).

A true-cost, sustainable economy would not countenance commercial activities like tar sands mining that are tantamount to an all-out war against the natural environment and a form of industrial genocide. The genocide is underway not because of racial hatred, but because tribal people have stood in the way of a major money-making venture. Furthermore, the indigenous people lacked political power to stop the transnational corporations from ruining their lands.

Protests of the Keystone XL pipeline should blossom into protests of our unsustainable economy.

Protests of the Keystone XL pipeline should blossom into protests of our unsustainable economy.

A true-cost economy would exemplify resilience. It would be less susceptible to disruptions from speculation, violent weather events, and terrorism. Such an economy would not pursue activities that generate or are likely to generate irreversible pollution. No one has to worry about a “solar spill” or a “wind spill” ruining their drinking water.

Today’s economy, on the other hand, is permitting all sorts of damaging activities that violate the criterion of reversibility and bequeath a legacy of poison. Consider the contrast between renewable energy projects and coal mining.

If a wind farm or solar rooftop array is causing problems, it can easily be removed without leaving centuries of pollution behind. The roof or the land can be returned to other uses. In fact, wind farms are fully compatible with agricultural production around the wind turbines. One wind farm I visited near Dodge City, Kansas, consisted of 150 turbines in a 20-square-mile area, and the land requirements were just seven acres.

In contrast, coal mining in West Virginia through mountain-top removal is converting biologically diverse, forested mountains into a Martian landscape. In the words of former Congressman Ken Heckler, reclamation amounts to “putting lipstick on a corpse.” Such mining projects violate the principle of reversibility, just like tar sands oil extraction. What will be available to people in the future who want to live in and explore places like West Virginia’s formerly bountiful mountains and valleys?

Whenever concerns are raised over the destructive impacts of big extractive projects, the predicament of joblessness always comes up. But joblessness cannot be solved with the current economic strategy that allows temporary construction jobs to destroy permanent jobs and livelihoods. Big extraction projects cannot create the volume of jobs that can be had by pursuing renewable energy. In fact, the oil industry generates the fewest jobs of almost any industry in the federal government’s database.

It is time to start demanding a true-cost economy that will create diverse jobs without creating no-go zones of carcinogenic and mutagenic wastes.

The Top Three Actions to Fix the Economy

by Rob Dietz

Fixing the economy will require more than tax code tweaks and stock market peaks.  Anyone who’s been paying attention knows that we need big changes to the way we run things on this planet. Even a partial list of today’s social and environmental problems sounds grim:

  • An unfathomable number of people (2.7 billion) live in poverty, scraping by on less than $2 per day.
  • Our penchant for burning fossil fuels has increased carbon dioxide in the atmosphere such that scientists are throwing around phrases like “runaway climate change.”
  • National governments are drowning in debt, while the global financial system teeters on the verge of ruin.
  • The health of forests, grasslands, marshes, oceans, and other wild places is declining, to the point that the planet is experiencing a species extinction crisis.

ResultEnoughIsEnough_Final_LoRess like these arise because the global economy has grown too big for the broader systems that contain it. We have too many people consuming too much stuff. Sure, the engine of economic growth has driven technological advances and provided a dizzying array of consumable goods. But it’s hard to argue that these material benefits outweigh the costs of social breakdown and environmental upheaval.

So we need a systemic change, but what are our options? We could try to increase the size of the planet, or try to find another one that’s habitable. But maybe it would be more prudent to focus on changing the economy. That means shrinking, and then stabilizing, the economy so that it can meet humanity’s needs while conserving and protecting the ecosystems that support life on Earth. The book I wrote with Dan O’Neill, Enough Is Enough, describes policies to do that, but as Peter Victor has noted:

The dilemma for policy makers is that the scope of change required for managing without growth is so great that no democratically elected government could implement the requisite policies without the broad-based consent of the electorate. Even talking about them could make a politician unelectable.

Victor’s statement rings true. For example, in the last U.S. Presidential election, the candidates sparred with each other over who could grow the economy faster and create the most jobs. Suppose that instead of trying to “outgrow” his opponent, President Obama had run on a platform of stabilizing the economy. You can almost hear President Romney’s inaugural address about more oil pipelines, more highways, more consumption, more, more, more. But to the climatologists, conservation biologists, and ecological economists (and even the butchers, bakers, and candlestick makers) who are tracking the limits to growth, it is becoming increasingly clear that we need to make room for our leaders to discuss economic stabilization. It’s time for them to begin working on an economy that aims for enough instead of always chasing more.

Victor_Managing_wo_GrowthFrom Victor’s quote, we can deduce the top three things we need to do to begin the transition to such an economy.

1. Achieve widespread recognition that our planet is finite and that our economy has to fit within ecological limits. Politicians can’t talk about the limits to growth because most of the electorate remains unaware of the limits. Even with increasing attention paid to climate change and other developing crises, the conversation rarely turns to overconsumption in the economy. Schools are not teaching ecological economics, and people are too distracted by the routines of daily life to pay much attention. We need compelling stories and broad public education to get people discussing critical topics  such as the relationship between environmental and social systems, humanity’s place within nature, and the benefits of a steady-state economy.

2. Provide a set of practical policies for achieving a steady-state economy. All citizens (even the politicians) need to understand what can replace the growth-obsessed policies in use today. As soon as people begin to get a feel for how a well-conceived set of steady-state policies can outperform the obsolete policies of endless growth, politicians will gain the broad-based support they need to overhaul the system. The heart of Enough Is Enough describes this set of policies, but even a quick glance at them confirms Victor’s point: the scope of change required is indeed great. That’s why we need more than just awareness of the problem and a set of policy proposals.

3. Cultivate the will to act. Economic changes won’t materialize on their own. People have to want out of the current system, and they have to demand the transition to a new one. Without such pressure, entrenched elites (in both politics and business) have no incentive to overturn the status quo. There’s an awful lot of networking and organizing to be done.

With these three actions, we can get the economy we want and the planet needs. The unelectable politicians will be the ones who cling to the wishful thinking of perpetual growth. It’s time to take a stand, to put aside the destructive mania for more, and let our lawmakers know that enough really is enough.

Confessions of a Closet Football Fan

by Brian Czech

BrianCzechIf you’re an American or just familiar with the American scene, you know what’s brewing. We’re not talking about the inauguration, sequestration, or Secretary of State nomination. No, something much bigger. We’re into the NFL playoffs and the biggest sporting event in the world is right around the corner: the Super Bowl!

I suppose those rabid European soccer fans would argue that the World Cup beats all, and in my ignorance of worldwide sports I’m probably missing a few rivals from other continents. Bully for them, but surely no other sporting event attracts the media coverage, the movie stars, and the tag lines of the Super Bowl, where the highest-paid athletes in the world compete to hoist the Lombardi Trophy.

As a kid growing up on the edge of Green Bay, Wisconsin, I was engrained with a culture defined by its professional football team, the Packers. Born in 1960, my first decade was spent while Coach Vince Lombardi’s Packers put their indelible stamp on American sports. Tiny Green Bay, the David among NFL Goliaths like the New York Giants and Chicago Bears, won an unprecedented five NFL championships in one decade, culminating with their dramatic victory in the “Ice Bowl.” On the frozen tundra of Lambeau Field, with the temperature plunging to -20°F, good ol’ Bart Starr snuck it in on the Dallas Cowboys with 15 seconds left.

Wouldn’t you know, I didn’t get interested in this stuff until the year after the Ice Bowl. At the football-fanaticizing age of 8, I was ready to add my voice to the collective howl of “Go Pack!” But the Pack wasn’t going anywhere except the loser column for the next 20 years.

Meanwhile television was spreading like the flu through the American household. Coverage of the NFL became the state of the art. Epic clashes were replayed in slow-motion, narrated by the best voices Hollywood had to offer, accompanied by orchestrated, adrenaline-pumping brass music.

Unknown to the NFL, during those same years books like The Limits to Growth, Small Is Beautiful, and Steady-State Economics appeared. My own research ended up focusing on the conflict between economic growth and biodiversity conservation. I got my Ph.D. in 1997, the year the Packers finally won another Super Bowl.

My interest in the Packers was rekindled, but I never started wearing a cheesehead. In fact, I hardly even mentioned the Packers in public. Instead, I became a closet football fan, and these are my confessions.

First, to my cultural kin back in the home state, as well as the general Wisconsin Diaspora, my confession is… well you read it above. I’m reduced to an abashed Packer fan, which is practically an oxymoron. But it’s not because of the embarrassment of the cheesehead phenomenon. And, I swear, it has nothing to do with the fact of the Packers being soundly defeated in this year’s playoffs (just last night, uncannily)! This piece has been on my mind for some time.

Now there’s nothing wrong with the sport of football, not in my opinion. The problem is the commercialization, industrialization, and non-stop growth of football. The NFL has a huge and growing ecological footprint. Players are routinely paid in the millions, and many drive Hummers and build mansions. Scouts, agents, and football reporters spend more time in the air than Hilary Clinton. And the owners; let’s not even get started on the owners!

We have to remember that the expenditure of a dollar is a solid measure of environmental impact, and the NFL sector exceeds the budgets of half the nations on the planet, the Environmental Protection Agency, and a bazillion school teachers. That’s why you won’t see me hollering “Go Pack.” I don’t want to be seen as supporting things like the Lambeau Field Atrium, which takes approximately 30 million dollars a year of air conditioning, much less the $1.4-billion Cowboys Stadium or the $1.7-billion Metlife Stadium. After all, I’m the same guy who called for an end to conspicuous consumption in Shoveling Fuel for a Runaway Train: Errant Economists, Shameful Spenders, and a Plan to Stop Them All. I don’t want to be the shameful spender and a hypocrite to boot.

Well, I said “confessions” (plural) so here is the other one. This one is even more difficult, but I write on a Sunday and what better time to confess? So… (gulp)… I confess that, albeit in the closet, I have been watching football. Quite a bit this year, in fact. And I don’t mean just a high school game here and there. In fact I don’t mean any of those, but rather full-bore NFL.

Yes, it feels hypocritical, but I can rationalize it ’til the cows come home. To wit:

  • If I’m watching a football game, I can’t be driving anywhere.
  • If I watch it at home on TV, I won’t be spending money in a sports bar.
  • I’m a fan of the Packers, the only community-owned team in the NFL.
  • The NFL does have a salary cap, which makes it one of the very first “cap-and-trade” precedents in the United States.
  • At least I’m not supporting NASCAR, by God.

I better stop there, before I burst from the confessional blurting “Go Pack!” But no, if you’re reading this, I’ve gone ahead and confessed, and perhaps you’re reading an epiphany as much as a confession.

Even a community-owned team huddles around the strategy of growth (photo credit: Elvis Kennedy)

Even a community-owned team huddles around the strategy of growth (photo credit: Elvis Kennedy)

Like many fellow fans, my habit may have started innocently, going to Lombardi Junior High, playing a bit of football (not very well either), selling coke at the Packer games, cheering on the Pack through thick and thin. But things have changed. More than me or any fan or any player, the world has changed and the NFL has changed. This isn’t the days of the Ice Bowl when folks wore their ice-fishing coveralls to the game and the players went back to work in a regular job during the off-season. No, the NFL has gotten way unsustainable, maybe not as much as with NASCAR, but way unsustainable nonetheless, and growing with no end in sight or in mind. Although the NFL has a salary cap, the NFL as a whole is rabidly pro-growth, constantly seeking expansion of teams, stadiums, and schedules.

The culture of professional sports illuminates a major challenge to achieving a steady state economy, namely the soul-searching task of curbing one’s own appetite for unnecessary or over-the-top goods and services. In this case we have an entertainment service that for many has deep cultural roots and may even invoke primal instincts to fight and to win. Perhaps the only way to curb such an appetite is to dwell for awhile on the fact that the level of unnecessary consumption associated with a perpetually growing NFL, NBA, MLB, NHL, and worst of all NASCAR no longer fits in the days of endangered species, climate change, and economic meltdown. The only way a professional sports league will fit, going forward, is with limits to its growth, all in the context of a steady state economy.

Limiting the growth of professional sports won’t happen if the owners and leagues can help it. This has to come from the consumer side of the ledger, perhaps with the help of some steady statesmanship. I remember writing a letter, published from afar in USA Today, exhorting Packer fans in Brown County to vote “no” on the Lambeau Field Atrium due to the gaudy air-conditioning bill and environmental impact. I must have seemed like a Martian to the cheeseheads. Winning that vote would have taken more leadership from state and county officials – that’s what I mean by steady statesmanship.

But for now it’s mostly up to us fans. We can’t keep letting the lure of these professional sports turn us into drunken fools at the Coliseum, fiddling while Rome burns. We’re the consumers, and if we watch fewer games the sports leagues will have to stop bloating.

I’ll do my penance in 2013. I’m taking the year off of professional football watching, Super Bowl and all. I have more important, fulfilling, and even enjoyable things to do Sundays.

Amen.