We keep leaving unaddressed that political will is just not enough
to overrule the power of money.

It’s in the interests of money to change course, to use profits to offer services to the commons rather than exploit it till it fails.

Even spending on astoundingly expensive arts an crafts, like “building pyramids” to ourselves, may not be an ideal service to the economy and the earth, but is a far better one than investing profits to multiply demands on it.   It would generate earned income, which would then relieve debt.   It would keep profits from being used to extract ever growing unearned income, for ever growing inequity and debt.

Political will won’t have a chance otherwise

Posted to Climate Code Red 7/20/12

Yes, there’s a very solid case to be made to “do something”.  We’ve also been fooling ourselves from the start about political will being able to overtake and control the behavior of money.  Because for the past 40 years even discussing that subject has been avoided…,  now if we don’t face the need for a more comprehensive approach our efforts are clearly doomed to fail.

There’s also a readily visible, but somehow counter-intuitive, strategy that works for lots of businesses large and small, and for self-organizing systems throughout nature.  It’s for “the bosses” to recognize the system needs them to change roles, and become “service provider in chief” rather than “exploiter  in chief” for the system to survive and thrive.   A CEO of a large corporation or the managing partner of most professional corporations,  needs to be the lead service provider to their network of resources, not an authoritarian ruler demanding ever growing profits.

How to apply that same principle to the economy as a whole is for the financial fund owners (retirees, NGO’s, governments & the super rich) to use their profits to heal the earth, managing their funds like endowments.   Some already do, and that just needs to become universal.  That reverses the traditional practice using profits to multiply your exploitation of the earth for more.

Rearming a rag tag gang with guns that shoot straight…

On the Systems Thinking World, Helene and others had been discussing the sustainability strategy now called “circular economy” aka “cradle to cradle”.  That is a name change I was unfamiliar with that threw me off guard at first.   In theory, the economy would be “decoupled” from depleting non-renewable resources if they were 100% recycled.   That vision and intent are great.  It needs to respond to the past great failures of the same purpose, though, how “sustainability” was turned back into “business as usual”(BAU), to become a strategy for maximizing growth.  

Sustainability becomes BAU, if led by businesses maximizing growth,
all reducing their visible impacts to multiply their hidden ones…
while failing transform the system

I had first pointed out in (1) that “circular economy” seemed to have the same tragic flaw that “sustainability” has proven to have, being marketed to profit oriented growth businesses.  That effectively reverses the meaning of the word.  Such businesses are maximizing their expanding economic impacts not reducing them. That’s the most non-renewable economic activity of all.

H. then insightfuly commented (2) asking if my “endowments” proposal** (also designed to make business more lastingly profitable) would fall into the same trap.  I replied (3) how it was protected from that by design, and that even “astoundingly expensive arts and crafts” would be a better use of business and investor profits

**“The next big challenge” a biomimicry for a self-regulating financial commons“

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3) posted by Jessie Henshaw 7.7.12

@H – The general principle I mentioned

“It’s whatever businesses use the term, and grow the fastest, that take over the conversation and define the real meaning of the term.”

would indeed also apply as you say “Isn’t that true for any term? Even your own endowment proposal?”

The idea is to get the meaning of words for sustainability **not to be reversed by how they’re used**. If you let profit maximizing businesses (rather than resource maximizing businesses) use the “circular economy” term, their use of it WILL alter the meaning of the term to the opposite of your intent. That’s how profit seeking sustainability changed the meaning of that word into into creative strategies for global growth and development.

My “endowments proposal” would have businesses and investors **use their profits for good purposes other than growing themselves and their investors**, and so creating funding for otherwise unfundable good works. It wouldn’t go to stimulating more development.

That way of switching the use of the profits from one thing to another is the biomimicry proposal, a kind of business engineering.

The resource they have normally used for expanding their businesses stops being used for that, and is diverted to good works instead, as an endowment fund does.

The example Keynes gave was that as over-expanding businesses started to make the economy as a whole less profitable, to maintain their profitability business owners should spend the profits rather than reinvest them. He pointed out it would even be better for the economy for the rich, at that point, to just build monuments to themselves, at least employing people instead of put them out of work.

Certainly it would be still better if the rich spent their profits on much more useful things than that. That might be durable infrastructure or converting businesses to using renewable resources, or research on “circular” resource management, etc.

There are two great civilizations of the past that seem to be the post card examples of that.

I think once it is studied economic history is likely to show that ending their growth with “wasteful splendor” was the secret of longevity for both the Chinese and Egyptian dynasties.

They seem to have grown like capitalist societies using high productivity complex organization, which at their peaks produced more surplus capital than they could make productive use of.   Then they appear to me to have done the next best thing with it, spending it on astoundingly expensive arts and crafts.

7/8/12  P.S.  –  Of course… by that comment I intend no pitch for dynasty… not even as a way for us to live at peace with the earth.  It just shows one of the things an informed “philosopher king” can do that uninformed free market choices can’t.

So I mean it as yet another pointer to “what would change how free market economies work”.   Market economies go the way it’s popular to make market choices. That’s a “bummer” for people inclined to feel good about blaming someone else for things.. but not for people who want to know how to change them.

It’s the answer to the “mystery” of how “the system works” and no one seems to have a choice.   What’s popular is sometimes wise and other times quite misguided, so we all then pitch in on doing the wrong thing.

Markets have been entirely misreading how business profits are invested, which either multiplies their impacts on the earth or reduces them.

Since modern economies need markets to make efficiency choices, to correct their steering mistakes they need both the new information and for us to pay attention to how businesses are changing the earth, reading their “ecobalance sheet”, not just their financial balance.    A business still needs to make a financial profit, that doesn’t change.   If their bottom line doesn’t show an ecoprofit, though, they’ll keep changing the earth toward making it uninhabitable.

The uniformly most misguided market choice people make today is to favor businesses that are multiplying, financially, with no comparable information on their net impacts on the earth.   What we still need is to have a popular business culture take over… but, a different one from what we have.  If we keep using the same way to judge them, though, it’ll keep giving us the same old things.

That is “The next big challenge” a biomimicry for a self-regulating financial commons“, how market forces can give us businesses with a new bottom line.  We need to measure things differently to get businesses operated to take care of the business and natural environment to stop getting ones guided to just multiply their impacts for generating growing financial profits.

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2) posted by H 7.6.12

Jessie: “So it’s whatever businesses that use the term, and grow the fastest, that take over the conversation and define the real meaning of the term.” Isn’t that true for any term? Even your own endowment proposal?

The circular economy is a way to end or reduce the exploit, transform, trash ‘cycle’ – see story of stuff- which is actually linear. If it is used to perpetuate some current undesired behaviors is a totally different issue! Any innovation or thing can be used in harmful ways! So what needs to be developed is the sense of judgment and discernment of how it should be used and what philosophy is behind it, so that abuses can quickly be denounced…

Have you looked at Ken’s talk? He mentions a variety of things to complement or implement along side the circular economy. There is no silver bullet… and you can’t reject something because it is no silver bullet…

I mean, if you make money without negative impacts (having brought the invisible ones to visibility) and you add finance mechanisms that prevent money to be hoarded for the sake of multiplying itself, then what is the problem?

So the issue I would say is to stop presenting solutions as silver bullets, and always show them as part of a group of things that must be put in place for a systemic effect to operate.

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1) posted by Jessie Henshaw 7.6.12

@K & @H –  One of the problems is that statements of purpose and theoretical models are not the same thing as observing how the organic processes of the economy work.  That’s also the difference between the principle “what growth the fastest takes over” and “what grows the fastest” (the best player angling for dominance).    I’m trying to point to that as how any new game, such as Stahel’s “one where stock management is the game”, can be just turned into “the old game” by people continuing to play the old game.

If some new idea makes a profit, people who think of profit as a weapon to use (for increasing their competitive advantage) then use it to take advantage relative to their competition, also doing the same thing.   That strategy of taking any advantage to gain advantage = “BAU”, and steers their choices toward maximizing their increasing command of resources, to produce growing profits to stay ahead in the competition.

So a problem for advocates of some idealistic opposite “circular resource economy” is how the economy will use that concept, greatly altering the original meaning.   Creating a new socially acceptable way to make profits doesn’t change the socially unacceptable ways the system uses any opportunity for profits, also says it.   It ends up being used in a way that is counter intuitive to the people advocating the ideal use.   They get misled by having others tell them it can be profitable, i.e. “good”, not realizing that profitability is what will be used to turn the original meaning on its head.

Maybe the way to think of it is to understand profits as the universal competitive weapon of choice.  Profits are an uncommitted fungible resource.  They’re free to use for buying the best weapon of the moment for opposing your competition.   So from the view of business they’d be crazy to give up their main weapon, like choosing to capitulate to their competition.   Their investors would abandon them too!   They need profits to stay in the battle of escalating competition, even when the battle as a whole is increasingly unproductive…

To get the culture of business out of that trap, fearing for self-interests to use profits for the common interest, might be compared to how physicists speak of particles “tunneling through a potential well”.   The conceptual well for business is appearing to have no choice but to intensify an increasingly unproductive struggle.  So they need a vision of everyone dropping their weapons at once, as a relief from the escalating warfare the whole community is possessed by, and then look how to not disadvantage the early adapters.

Only then will they look around and ask “What –would- pull the plug?”   The attraction is the vision of producing a “peace bonus”, that while reliving the escalating conflict also provides resources for other more useful things.   The potential well we’re caught in seems to be an obsession with defending our own self-interest.   I think seeing that as becoming a grand exercise in futility might be how we find a way across.

jlh