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A healthy economy should be designed to thrive, not grow | Kate Raworth, economist

 
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I liked this TedTalk about economics, the impracticality of endless growth - even endless green growth, and a new economic philosophy that sounds like an economist's version of permaculture.  I was impressed by how Raworth's concepts resonate with permaculture concepts; it was basically like what I would envision a permaculture economic philosophy.  And that's why I've stuck it under "ethics and philosophy".

I don't actually think this video or topic is very "cider press-y", but I can see how incredibly easily it could become so... so this is where it seemed to fit.  I apologize to those who won't be able to comment because of this placement.  Get some apples! :-)

Here is the video on youtube:


And here is the TedTalk link that has a written transcript in six languages: Kate Raworth TedTalk - A healthy economy should be designed to thrive, not grow

See what you think.
 
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I don't know....my father was retired, had 160 acres with a large garden,some chickens, and a small herd of Highland cattle.
He liked to boast that, even though he earned below the poverty line, he was still able to eat steak every night.

Currency is merely a medium to facilitate the exchange of goods.  Yet poverty is measured by the "relative" value of an
average of income.  Income is the capitalist system's way of keeping score.

If the American government gave every one of the 40-odd million Canadians a flag, a Colt 44, and a million dollars US....
and said, "You are now have dual citizenship".....wouldn't that raise the average value of the level of "poverty"?

Conversely, if due to high taxes many US billionaires decided to flee the country and take their money with them, wouldn't
that in fact lower the average value of the level of--again--"poverty"?

Unless there is a distinction between "relative" and "absolute" poverty, with a definition of what is considered "wealth" thrown
in, the donut [doughnut?] model is just "pie in the sky"
 
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Poverty isn't always measured by it's relation to average wealth in the country. There's other metrics, too, such as having to spend more than 50% of ones income on housing, or the inability to afford food or clothing, or the percentage of one's income one has to spend on food.

Slightly related, but fun, here's a spiffy interactive (from 2005...which was 13 years ago but feels like yesterday--I'm now old. So, of course, the income comparisons are off, as people make more now than in 2005). But, it does a good job of showing different metrics that can define lower class (poverty) and upper class (rich), such as education,   and wealth https://archive.nytimes.com/www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/

Anyway, thinking about poverty as the amount of one's income one has to spend on food or housing, changes whether someone is poor or not. Say a permie owns their own home, and so only spends $2,000 on property taxes, and they grow almost all of their food, so they only spend about $50/month on food, which equates to $600. So, they're spending $2,600 on necessities. They might make only $7,000 a year, but their necessary spending takes up only a third of their income.

But, someone else might have to spend $1000/month ($12,000/year) on their apartment, and--because they have no where to grow food--they have to spend $800/month ($9,600/year) on food. So they're spending $21,600 on food and rent...and they make $30,000/year. So while they make over three times as much as the "poorer" person in the last paragraph, they're spending 72% of their income on food and housing, versus the 37% that the other person is spending. They are, in fact, poorer than the person who makes far less than they.
 
R Jay
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I'm not sure how a lifestyle decision relates to poverty.

The permaculturist is trading a "real" asset called time to grow his own food
and is willing to live an "absolute" lifestyle of being content with his circumstances.

The apartment dweller has made the choice of trading his time to work for someone else
for currency. Poverty, and perhaps resultant bankruptcy, will be because of the immersion
into a "comparative" society. The fear of falling behind...not keeping up with the Jones....do
they have a better car?larger house?, a boat on a trailer in the driveway? whiter teeth? bigger
breasts? longer penis?...

Edward Bernays,a nephew of Sigmund Freud, took the concept of the use of wartime propaganda
and turned it into peacetime concept of "public relations".  Among many of his "accomplishments,
he ran a campaign convincing women that smoking cigarettes was soothing to the throat and
good at keeping the waistline slim.

In his book "Propaganda"  [http://asset-4.soupcdn.com/asset/0324/0984_4ce7.pdf] he basically
changed it from the manufacturer asking the consumer "Won't you buy from me", to the
consumer saying"Please sell that to me."

Peter Barnes, in "Capitalism 3 ["http://www.plancanada.com/capitalism3.pdf], proposes that in
order for the open membership of democracy be able to merge with the closed and exclusive membership
of capitalism   that first off:the price of nature--forests,ocean,lakes, etc--is given an economic value, and
then be put into a form of "commons" that are managed in a sustainable manner yet return value to every person
[not just the corporations]

To manage the commons in a sustainable manner, the prime rule will be the "precautionary principle"....when in doubt,
err on the side of safety...

Pretty unlikely to happen...unless there is a massive propaganda...or should I say public relations....campaign.

It is more likely,using the example, that the permaculturist will be told that he is allowed enough food to sustain
him and his family, and he will share his excess with the apartment dweller.

A dark view of sustainability in a future world:  Billions of people receiving their allotment of pressed
nutrient-dense algae freely on a daily basis....and not caring that somebody is yelling out "Soylent Green is people!!"



 
Nicole Alderman
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R Jay wrote:I'm not sure how a lifestyle decision relates to poverty.



Both people in the above examples are poor (at least, they are by most metrics of poverty, if not the official poverty line). Yet, the person who is in the city often has less to fall back upon than the person in the country. If the person in the city loses their job, they would likely not have enough for food--especially if they have kids. They might lose their apartment. Meanwhile, the person in the country has certain resources to "make-do." They might have timber to cut for firewood, room to grow more food, natural resources they could repair things with, and they often have the knowledge to do so.

The differences between rural and urban poor really show up in subsequent generations. Many who are urban poor (like my husband was) grow up never having knowledge of how to grow food, or even what food is (my husband thought spinach was green mush that came in a can, and that everything was poisonous outside), they often feel like they have no power or ability to change thing. Whereas, a person who is rural poor and raised by people who know how to grow food and fix things, feels more assured in their ability to fix things. My family was never wealthy, and my parents and grandparent were all rural poor at one point, but they never felt the inability to change ones life that my husband or his parents did. My family knew to save money and fix things and that they could improve their lives. My husband grew up with the thought that he couldn't change anything and he would always be poor.

The thing is, a lifestyle decision of one person, carries on to their offspring. If one person does not teach their kids life skills of money management, how to cook, how to set goals, etc, that child might not know those things...and their children probably won't as well. It become what is called, "Generational Poverty." The children have less resources (money management, reasonable goal setting, healthy eating, a supportive community, educated parents, etc). Certainly, many innercity people can and do teach their children these skills. But, those that make the lifestyle decision to live in the city and not pass on those skills, leave their children at a disadvantage where it's harder for them to deal with hardships.

....But, I'm kind of rambling now. What I mostly meant by my previous reply to "Yet poverty is measured by the "relative" value of an average of income," is that poverty does not have to be determined by medium income and comparisons to the wealthy, but as one's ability to meet one's needs and have enough money to save up for emergencies and buy a few Christmas presents. There could be, in theory, a place where no one is poor, even though there are those who make more, because those earning the least still have enough money to meet their needs with a little extra on the side.

If, for instance, one went to a "rich" suburb. Within that suburb, you would likely not find any poverty, though there would be those that make more, and those that make less. You could also go to a low-income area, and you will find those with more and those with less, but no one is "rich" because everyone is struggling just to have a roof over their heads and food on the table.

(Just adding a note here to say that I'm not able to watch the video in the original post. as I have really slow internet and a data plan. So my comments only relate to what I've read in this thread!)
 
R Jay
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Nicole Alderman wrote:
(Just adding a note here to say that I'm not able to watch the video in the original post. as
have really slow internet and a data plan. So my comments only relate to what I've read in this thread!)



You may not be able to watch the video, but you should be able to read the transcipt:

https://www.ted.com/talks/kate_raworth_a_healthy_economy_should_be_designed_to_thrive_not_grow/transcript
 
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The video is really frustrating for me. She does seem to identify symptoms, and the donut things is interesting - although I might disagree with some of the categories she uses therein. But then she ignores the biggest underlying problem while not really proposing anything solid, just feel-good platitudes. And whenever someone blames capitalism for problems, I know their biases have fooled them.

When she mentioned how the currency system is based on loans that have to be repaid with more than was loaned I thought she was heading in the right direction. After all, the currency being used underlies virtually all transactions in an economy. And when a currency requires inflation, then everything built on that currency also must inflate. That is the primary source of unnatural growth. Sure, an economy might grow naturally, of its own accord. But when it is artificially forced to grow then things really get out of hand.

When we (my U.S.A. centricism is showing here) were on a gold standard (or a silver/gold standard) then the economy grew at a more natural pace. As we went away from that, inflation forced the economy to grow faster and the necessary corrections got worse. We had recessions and depressions under the gold standard, but they were short and small. As we moved towards an inflationary currency they got worse, eventually leading to the Great Depression. And since that bastard Nixon took us totally off the gold standard inflation has only gotten worse. That inflation underlying the monetary system is the primary driver of excess growth. And the controllers of the currency have learned better how to prevent the corrections from happening, which will make the eventual correction much worse. Gotta take your medicine!

And that is the main reason why the economic growth is unsustainable: because we have an unsustainable currency.
 
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I just want to add a comment regarding growth. I learned this back when I used to listen to the news, and I heard this from an economist on NPR (the guys name is long forgotten, but the statistic stuck with me). An annual economic growth rate of 3% means it doubles every 23 years. If we turn back the clock to, say, 1900, then in 1923 the economy has doubled (assuming 3% was met each year), then it's 4x the original in 1946, 8x in 1969, 16x in 1992, 32x in 2015 and so on. According to the economist being interviewed, this rate of growth is absolutely unsustainable on a planet with finite resources that are dwindling.

I really believe that a sustainable thriving economy can last, and the pursuit of this kind of growth is futile.
 
R Jay
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President Trump has made references to the Gold Standard in the past





 
R Jay
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Ron Helwig wrote:
When we (my U.S.A. centricism is showing here) were on a gold standard (or a silver/gold standard) then the economy grew at a more natural pace.



Why is it that people feel currency is "valueless"?  

Until the housing crash of 2008, the speculators, hedge funds, and banks played their zero-sum game off in the corner, so to speak.
There were buyers that believed that the item they bought was about to go up in price, and there were sellers that sold because
they believed that item was going to drop in price...so they wanted to take whatever profit they had made and sell.

Sometimes the buyer was right, and sometimes the seller was right.  One lost while the other won.  No actual loss or gain,,,just a
transfer from one ledger to another.

Then they designed a derivative, which is based on the value of a real asset.  In this case, it was based on the value of a
house mortgage.

Every speculator was a buyer.  Nobody wanted to sell, since the belief was that house prices would continue to climb.

What the speculators overlooked was the fact that the asset that the derivative was based on had a "flaw".  It was designed for
the real-estate flipper.  Low interest for the first few years,which would give the time needed to increase in value, and then sold
by the flipper just before the large "balloon" payment or a much higher interest rate came into effect....thus giving the flipper a profit.

What actually happened was these mortgages were given to ordinary people at what they believed was a low, affordable rate of
interest.  Low monthly payments....until the time came to pay the large balloon payment/higher interest rate....

People couldn't afford it, so thousands of homes suddenly were repossessed by the bank.  The houses lost a lot of value, and so
did the derivatives that were based upon them.

It stopped being a zero-sum game.  The group of speculators were in real trouble.  So the Federal Reserve and the government
stepped in and bailed many of them out.

The government then made the choice of making the bail-out money part of the national debt and cut back their programs--the
PR word used, I believe,was "austerity"--to help decrease their debt.

What if  they made the choice of simply printing more money and simply giving it to the speculators?

They couldn't....because the rest of the world used the value of US currency to base their currency on.

If the US dollar became 50 cents, the rest of the world might have difficulty basing their currency on it.

The International Monetary Fund is made up of nations with many unfriendly to the US and is set up to replace the American dollar
with "Special Drawing Rights".  SDR is a collection of currencies,with China being one of them, that could be used for trade between
nations.
 
Interestingly, China has made direct currency trade agreements with almost 30 major trading partners....bypassing the need to
use the US dollar.

Another interesting thing is that just before WW2, China issued bonds backed by US dollars to help fight the Japanese invasion.
China has yet to pay back the estimated 800 billion.  Speculation is that China is waiting for the "right time" for payback in
order to negotiate for Taiwan.

Would it matter is the US lost it's place as the world currency.  Look back on history regarding the British empire and the pound
being the trade currency before WW2.  Look again at Great Britain as it is today.

So the US dollar does have a value.  To be reckless regarding this value could result in depreciation, seen only
before WW2 where people roamed the country just for food to eat.

And with reference to the original post, the worldwide interlocking of the present system combined with the use of "public
relations" will make the donut model almost impossible to implement.  The simplistic view that all you need to do is be able
to curb the power of corporations in order to set everything right is just not realistic.






 
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I tend to agree that voluntary cooperative action to implement the donut model of economic thriving instead of growth is vanishingly improbable. However, eventually something like that will occur because it has to on our finite planet, and it may well be because economies trying to grow endlessly break down and slowly collapse, with massive disruption to every measure of wellbeing, until the world perforce retreats to a sustainable level of activity. I think it likely that this will coincide with a dramatic drop in human population to a globally sustainable level, by all kinds of unpleasant means.

It is true that decreasing population does not necessarily have to be catastrophic; as someone wrote, if each year two out of a hundred people you know died instead of one of a hundred, the total population would become a small fraction of the original in a century.
 
R Jay
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Glenn Herbert wrote:
It is true that decreasing population does not necessarily have to be catastrophic; as someone wrote, if each year two out of a hundred people you know died instead of one of a hundred, the total population would become a small fraction of the original in a century.



So....if there is 7 billion people in the world....and only 1 out of every 100 die.....then means 70 million people die on a yearly basis.

With 2 people per hundred dying every day that would mean 140 million people per year.

With 7 billion people that means around 55% are women....3.85 billion.

Of course, not all of them are of child-bearing age....OK....so 2 billion can have children....2 billion babies per year

50 per cent mortality rate....so only 1 billion babies survive each year.

Net gain in a year....860 million people.  It will take 6 years of 140 million people dying each year to counteract that increase.

Meanwhile, in that period, the women could have babies every 2 years...approximately an additional 2.5 billion....

That sort of increase can even handle a continental catastrophe....use as an example the lava formation under Yellowstone
Park turns "Old Faithful" into a mega-volcano that devastates the entire Middle America with 50 million people dying immediately
....and another 200 million starving to death... not just because the electrical grid is destroyed, but additionally,there is no
sunlight for a couple years until the dust settles.

Not big enough...so take India and Pakistan...came close to nuclear war in 2005....if they decide to launch even half of their
purported nuclear arsenal...using 50 missiles each....final death toll--maybe a billion?,,,,,,the fallout that would ensue would put enough
light-weight graphene in the air to block sunshine for at least 18 years....over an area big enough to force over another billion people
to either evacuate...or starve....

Now...."someone" did write that on this world a population of 500 million people could live like Europeans and North Americans do
now.

It was further proposed that a population of 1 billion people could live "comfortably".....but a higher population than that?....?

Correct me if I am wrong, but isn't around the year 2100 the time when the population doubles from the present
7 billion to become over 14 billion  people? At present level of population.....a doubling rate of approximately 64 years

I think it likely that this will coincide with a dramatic drop in human population to a globally sustainable level, by all
kinds of unpleasant means.



The drop would only be temporary....and it doesn't matter....whether it is due to evolution or creation....a woman is "designed"
to be able to have close to 20 children from the age of 12 to into her early 40's.....making it hard to keep population levels down....

For a real eye-opener on population growth...and the subsequent rise in cancer....download : "How Many Times Has the Human Population
Doubled? Comparisons with Cancer" Published in the year 2000, this paper ends with the following:

    Humans can kill neither the Earth nor the global ecosystem.  But we can modify the ecosystem  in  which  we  live  to  the  point  that  it  
    will  no  longer  support  us  or  other  complex  forms  of  life.    Whether  this  point  is  ever  reached,  or  whether  it  is  reached  
    before  the  human  population  has  doubled  as  many  times  as  a  malignant  tumor  at  the  time of host organism death, remains to be seen.  

    http://www.drhern.com/pdfs/doubling.pdf













 
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