Category Archives: Natural Economy

how economies can work comfortably within ecologies

Natural Economy, What to do

Prick or Bleed, drain the bubble or burst?

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The problem is not exactly with the banks.

It has to do with society asking the banks to permanently stabilize a system for multiplying financial returns.

So when the economy can’t generate growing earnings the banks multiply its debt instead, creating “a debt bubble” and promises that won’t be fulfilled.   The promises that won’t be fulfilled grow without limit until there’s a collapse of confidence (‘pricking the bubble’), unless 1) the economy finds totally new ways to expand ever more rapidly, 2) a “Jubilee” is declared to write down the debt, or 3) investors start spending their profits to create earnings rather than lending them to create debt (‘bleeding the bubble’) to relieve the pressure so the economy can return to health.

The Jubilee idea, to write down all the debt (something like a global bankruptcy) is much more disruptive than needed, and is just a temporary fix.  How natural economies solve the same problem, so they can smoothly pause their growth when needed, will also cure the problem for all time and give us a healthy free market economy in the end.

……

I responded to Joachim Sturmberg on the NECSI Linkedin Forum regarding  The Eurozone as a complex network: New analysis shows connectivity as a problem and a solution.

JS 11/20/11 – All of this is really interesting.  However, isn’t there another fundamental point being lost, the core attractor of the whole system? It is all well and true to understand the interconnectedness, if the core aim of the game is all about making ever more money by whatever means, the system network will exactly do that. It may be dumb to have an exponential growth attractor, but if you have one a necessary outcome of the workings of systems is unsustainable exponential growth with all its consequences. 11/20/1

The solution is a change of attractor, and “common sense” would suggest that sustainable economic development would be a better attractor than greed – thinks a non-economist.

Let the bubble inflate till something pricks it, or relieve the pressure??

PH 11/20/11 – Well, yes of course.  That’s why I termed my first paper on the subject “The Infinite Society, growth induced collapse”.   I don’t think that’s an “attractor” you’re talking about though, but a “procedure”.  Procedures can be changed. Keynes and Boulding also came to the same conclusion, that at the limits of productive investment it was necessary to have investors stop adding as much of their earnings to their savings, to spend more of them instead. Continue reading Prick or Bleed, drain the bubble or burst? →

For teachers, Natural Economy, Natural systems

What tests societal madness???

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Living by a social construct of reality at wide divergence from the physical one is a good working definition of “societal madness”.  Of course no social network will admit to that, but evidence of communities not getting along because they live by starkly different realities does develop.

In America today we seem to have a wide variety of mad social realities to choose from.  It might even be a perennial human condition…   Now they’ve come to clearly interfere with our adapting to changes in the physical world confronting us.

We debate conflicting realities as society burns

Continue reading What tests societal madness??? →

Mail & Comment, Natural Economy, Natural systems

The problem with plentiful solar energy.. or any other

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Over the past 50+ years there have been regular announcements of limitless affordable energy soon becoming available, such as Paul Krugman’s recent article “Here comes Solar”, with the consequences of that happening never getting discussed.   The following is as posted to the more cautions Washington Post article yesterday 11/12/11.

One of the most overlooked drawbacks of creating affordable and plentiful solar energy, or ANY other form of energy, is what we’d do with it, the consequences of mankind having access to continually doubling amounts of energy.   What if the improbable “cheap energy” solution were actually discovered?

Would cheap energy eliminate or worsen our other impact problems?

Energy is far from our only constraint on economic growth.   Energy is actually what let us do the destruction of our environment as we have already done, none of which yet result from the CO2 and other GHG’s.    Because we are already at the destructive threshold of many other environmental impact pressures we could expect growing energy use to cause even faster growing impact repercussions than we’ve experienced.   They will not come with a neat technological fixes, either.

The core unrecognized problem is that growth is a construction process.   It’s a mechanism for using the profits of a system to build a bigger and bigger system.   That involves our using our (limited imagination) to take ever expanding control of our environment to do ever more things to our environment. Continue reading The problem with plentiful solar energy.. or any other →

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The Uroboros mistakes her tail for lunch.

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Uroboros is the symbol of a system that consumes itself, either literally or symbolically.  There are many kinds of feedback processes you could liken to a serpent eating its own tail.  The compost from one generation of plants nourishes the next, for example, so the new generation is partly consuming the decay of the last generation, the “tail” of the cycle of growth and decay.

You definitely would not call plants growing in their own compost “self-cannibalistic”.   Consuming ones’ own living parts, however, is quite an apt description of what happens at the natural limits of a growth system that ends its growth only because it exhausts its free resources.   In economies the more competitive parts may then find nothing more interesting left to consume other than their own system’s weaker or less familiar living parts… (discussion contued at end)

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The Uroboros mistakes her tail for lunch.

a short children’s picture book project 1) to print out, cut and paste up, fold up or decorate, 2) label each picture with the names of loop stories of your own to go with each picture, 3) retell your loop stories, elaborate on them or add new ones as you read your book at bedtime. © J.L.Henshaw
It may happen in the driveway
When she does it on the lawn

Continue reading The Uroboros mistakes her tail for lunch. →

among best, For teachers, Mail & Comment, Natural Economy, Popular

the Story of Broke – Part II (the end of broke)

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The authors of “The Story of Stuff” published a nice little update called “The Story of Broke”, about the vast sums of money the government spends on subsidizing private business….   This sequel “Part II (the end of broke)” was first posted in a comment, on how the still bigger story of broke, debt piling on top of debt, both was missing from the list of now overwhelming government costs, and has a … very natural end. Government debt provides guaranteed growing returns, whether the economy grows or not. Lenders take government interest payments and add them to what they lend back, multiplying their lending and returns.   It builds up, slowly at first then explosively, as the world’s debt burden

grows on little but the good faith and credit of government guarantees.

You’ve heard of government debt called a “safe haven”. It’s where investors put money to be “safely assured of ever multiplying returns” when they can’t find even better growing returns elsewhere. Where that debt spiral comes from and goes to has been a subject of many have tried to explain.  The view Keynes came to, that I think is the most clear headed of all, outlines the necessities for surviving a debt spiral for a market economy.  Nature would surely not shape her facts of life on earth for our approval, but most people react to the facts of life for surviving debt spirals as if to reject nature’s requirements as “socially unacceptable”, … apparently not seeing Keynes’ elegantly clear logic.   So this is written in the story telling style of Free Range Studio in their Story of Stuff. —

The End of Broke, the True Whole Story of Debt!

The BIGGER “Story of Broke” is one that starts quite small, but is designed to actually keep growing ever bigger.   As it does so it also casts its own vote in the story of business influence in government and demand for subsidies and preferential services, persuading government that’s the way to get money to pay its ever growing debt!   It’s the story of how a small amount of debt naturally grows relentlessly big, with no natural end other than either creditors spending it or both government finance and economic collapse.

the spiral of dreams
Drowning in the spiral of dreams

The whole story of debt is a very very simple little thing.   It’s that some of us earn by $units and others by $%’s… and by providing guaranteed returns to lenders, in an economy you can actually earn by $%’s till the economy collapses.  What seems like a totally innocent “little difference” in measurement, between units and ratios, makes AN INFINITE DIFFERENCE over time in life. Some people have called it “our misunderstanding of the exponential curve”, others simply call it “greed”.   The problem with this kind of greed is how very addictive it is and that it grows explosively, making a “little greed” become SO.. GREEDY, with its promise to multiply the rewards of greed forever. Continue reading the Story of Broke – Part II (the end of broke) →

Mail & Comment, Natural Economy, Natural systems

Ethics for Economics in the Anthropocene, life on a world changed by man

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(this is a concept for a part of a longer collaborative work)

The human quest for love, improving our lives and finding understanding, pursue human values that are not inherent in nature.  Their pursuit requires reliable knowledge of nature, though, and the kind of values exhibited in her designs of natural systems.    So ethics for using the earth is partly a matter of learning to notice the way nature makes complex relationships that work beautifully.   It’s also a matter of observing how our having changed the earth alters our own ability to live by our own values.

A world of ecologies converted to monocultures

Nature offers myriad examples of how complex communities can live together, demonstrating many kinds of competition, collaboration, conflict and tolerance, etc., that do or don’t work.   They offer something like a set of natural ethical principles for “what works”.   In nature all living systems need to produce a profit of surplus energy, for example. Continue reading Ethics for Economics in the Anthropocene, life on a world changed by man →

Natural Economy, Natural systems, What to do

As Physical Growth Slows, Finance Demands Don’t

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The elementary problem of our economic system’s design

The problem arises because finance operates by a cultural belief system of multiplying forever,…  That once seemed to be how the physical economy worked.   Now it’s become obvious to most people that it was an illusion and never corresponded to the physical reality, and doesn’t allow the real economy to operate with its real resouces.

In a way it’s a very natural confusion, because people for thousands of years have thought of nature as their cultural belief system, run by Gods, theories of the future being like the past, or “Urban myths”, whatever.     It’s an “easy” way to look at a natural world, that has too many independently working parts to quite fathom.  So in our minds we get in the habit of substituting an imaginary world that pleases us… and confuse the world we invent that “we see” for the world we don’t invent that “we’re looking at”.

The simplest idea of what needs to change is to stop finance from continuing to grow its claims on the resources of the physical world economy.   The real economy has already begun to converge toward the natural limits that will allow it to continue.  Conceptually the task is:

— now that we’ve hit the tree, first take our foot off the gas —

That means that investing needs to change purposes, to stop being for multiplying investment, to being for the purpose of having money to spend.    Spending from savings reduces financial capital.  The right amount of spending from keeps the demands of finance on the economy and the earth at a stable sustainable level.  At least, finance needs to restrain its demands on the economy to match how the economy is naturally responding to its limits.   It might mean finance has to “give back” half or more of the economy’s wealth.

Otherwise the resources the physical system functionally needs to operate will continue to be increasingly claimed to serve the continual growth of finance, undermining the physical system.

Physical growth slows, Debt doesn't
For teachers, Natural Economy, Scientific theory

Keynes saw through his fears… by facing them.

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An OP-Ed in today’s Sunday Review section of the NY Times, by Sylvia Nasar, Keynes: The Sunny Economist missed the real source of Keynes ability to see silver linings where most others saw failure.   Keynes faced economic failures having studied how nature uses the end of one thing to begin another.

He saw sunshine by seeing through the darkness,

not by denying it.

Sylvia,

It’s fun to play up myths, but yours would be spoiled by the reality of a strange intellect like J M Keynes.    In order to see the “sunny side” of things Keynes unabashedly faced the deepest darkness behind what ailed the economy.   He smashed or poked holes in the darkness he saw, as a way to find the light, rather than by clinging blindly to some faith in optimism, as you suggest, a kind of sunny silliness.

Starry Night
To be alive in nature is itself, a world of bright light in a vast darkness

You have not read Chapter 16 of The General Theory.    It’s quite obvious.   You’re in good company, of course, as virtually no one has.    In Chapter 16 Keynes steps right into and through the deepest darkness, the end of the road for his own growth theory.    Of course, there is also an extremely sunny side too, but if you don’t face the “darkness” of the natural facts at hand, you won’t see it. Continue reading Keynes saw through his fears… by facing them. →

among best, Natural Economy, Natural systems, Popular, Scientific theory, What to do

Can we shut down the system for repairs?

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My response to George Mobus’ last reply to me, got a little long, so I only posted the first few paragraphs as a comment on his discussion of “The Goal – Episode I: The Basic Requirements”
++++++++++

Can we shut down the system for repairs?

The first learning steps beyond the impasse, on a new path.

Well, shutting down the world for repairs would be conceptually neat, but does not seem to use the path finding mechanisms that nature typically uses.   She offers myriad examples of how run-away growth systems can change by maturing to become stable self-managing ecologies.  That’s what we need to do, and learn how to mimic, that our culture knows little about, importantly because science has avoided studying the opportunistic learning of natural systems all but entirely.

I know this approach is problematic for someone accustomed to representing systems with equations.    Real ecosystems are niche making learning and development processes, though, largely involved in “rule making” not “rule following” .    The far better conceptual models for them are of collective learning and environmental development.   Collective learning and development systems can cling to one systematic behavior while it is useful, and the break from it to find and cling to another model, when that is opportune, because the parts are actively learning as they go. Continue reading Can we shut down the system for repairs? →

Mail & Comment, Natural Economy

Sustainability by design

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John Ehrenfeld’s nice blog post on the ethics of sustainability, “On the Merits of Fishing“,  prompted this short response.  It leads to a good way to describe economic sustainability by design, as Keynes envisioned:

“this more favorable possibility comes to the rescue”.

It’s curious that the metaphor of growth has yet to be connected with nature’s general process of making things that reliably work by themselves. Her process invariably involves systems become comfortable with themselves at the end of growth, something like the fisherman’s ethic described here. Continue reading Sustainability by design →