Thursday, 27 December 2012

Restructuring society -- by Alan N. Connor

Why we need a circular economy 

Al Connor speaking to QEW
If nothing else persuades us that we need a new model for the global economy, the present recession should. A number of people reached that conclusion a few years before the “meltdown” in 2008. John Cobb and Herman Daly [1] advocated for it before the turn of the century. David Korten has called for a new economic paradigm in an Agenda for a New Economy.[2]

It is obvious to many of us, who are studying and concerned about the present economy that the present system of the industrially developed world is not sustainable. It is based on perpetual economic growth and perpetual supply of natural resources that the Earth does not have. Those resources--fossil fuels, minerals, pure water, fertile top soil, timber -- are being used, extracted, converted to goods much faster than nature can reproduce them. And they are discarded at a rate that is faster than nature can absorb them.

Such a system requires ever increasing consumption to maintain ever increasing production by industries simply to continue to maximize profits that are shared by the wealthy investors who own most of the shares of stocks. Rather than meet need, it produces goods and services that are not necessary for a good quality of life. It creates demand for non-necessities via advertising that values individual and household opulence rather than the “good life”. It is a system that prices a significant portion of the population out of the market for necessities by limiting supply to keep the effective demand price high.

Aggregation of luxurious goods and assets designates the winners in our competitive economic game. The wealth gap between winners (investment bankers and corporate executives) and losers (workers) increases inequitably. Costs of essential goods and services, such as healthcare, shelter, transportation, education food, fuel, utilities, are inflated above their intrinsic value. And necessities are priced at levels many low paid workers, doing work that In addition, our present economic-industrial system emits gasses and micro particles into the atmosphere and pollutants into our water and soils that degrade them and are hazardous to the public's health. There is empirical evidence and consensus among atmospheric and eco-biological scientists that industrial and agricultural emissions and pollutants are changing the Earth’s climate and its ability to sustain existing life.[3] According to a number of economists a limited or even a no-growth economy in which a majority of people prosper is possible.

Economists and atmospheric and biological scientists have claimed that such an economy is necessary for human and most other life forms that inhabit earth today to continue to exist. James Hansen, chief atmospheric scientist for the National Aeronautics and Space Administration (NASA), has said and written that CO2 in Earth’s atmosphere must be limited to 350 parts per million (ppm) to avert a future catastrophe. Some regions now have over 400 ppm.
Given the above information, plus the extreme weather and catastrophic events the Earth and its inhabitants have experienced this decade, an economy that is not driven by depleting fossil fuels and other minerals is worth trying. Hansen and a few other Earth and atmospheric scientists, recently, have said that much of the Earth’s altered eco-systems cannot be restored to their original condition and function. Since we cannot restore them to their original condition, human and other life will have to adapt to the extant ecology and perhaps regenerate the damaged and degraded eco-regions.

Probably many of us have a vision of how a new economy might be structured. A few have written books and scholarly papers describing their vision or some of the elements of what they believe a viable, sustainable economy include.[5]There are variations among the visions cited, but there are similarities also. Korten and McKibben envision an economy that is local community based, rather than globally based. Jackson, Daly, Brown and Garver envision global governances and cultures that enable nations, regions, municipalities to establish and operate institutions, polities and economies in which all citizens participate and have access to the essentials of the “good life”. All of them see the necessity for an economy that is not reliant on and driven by non-renewable resources such as fossil fuels, present state of the art nuclear power, minerals that are converted, used and discarded at rates faster than they can be renewed. In order for an economy to be sustainable, the ecological environment in which it exists and of which it is a subsystem, must be sustainable.

My vision

Seek the shalom of your community - montage by J. Fowler

My vision of a worldwide social system is one that consists of local communities that are economically, ecologically and socio-culturally sustainable. They are self organized primarily to increase the probability that the settlement will persist into perpetuity.[6] According to Parsons and Smelser the original, primary function of an economy was to harvest and extract local natural resources and convert them into useful goods and services that enable the local settlement to persist into the future. The goal and purpose or mission of the economy is to sustain the community not amass individual wealth. They defined the function of the polity – organized politics – as acquisition and control of resources so the inhabitants of the settlement can perform its economic functions. The local community culture then functions to create and promulgate values and behavioral norms that enable its economy and polity to perform community-sustaining functions.[7] 

Communities are social systems that cannot persist very far into the future in isolation. Closed systems become entropic.[8] For any system to persist, be it social, biological, mechanical or physical, it must put out some utile good into one or more other systems and must input one or more utile good from beyond its boundary -- i.e. from one or more neighboring systems. All systems are interdependent. Primitive settlements knew that.In order for communities to persist into perpetuity, they must be parsimonious in the extraction, harvesting, conversion and output of local natural resources, particularly those resources that require centuries to regenerate or renew themselves.[9] Natural resources, whether renewable or not, are a community‘s natural capital assets. They need to be conserved. Throughput (extraction, harvesting, conversion allocation, distribution and consumption of a resource) needs to be durable, reusable and recyclable. Extraction should be at a rate that is not faster than the rate at which resources can regenerate and reproduce themselves.[10]

Internal Community Systems 

For a community to be sustainable for seven generations or longer, its internal systems must function to sustain its inhabitants. A community is a social-ecological system. It is social because it consists of people who settle in a more or less proscribed environment and relate to and interact with one another. They collectively develop behavioral norms and rules for relating and interacting in ways that do not harm one another and the environment that sustains them. It is ecological in that these particular people have settled in a place that provides them with natural resources that support and sustain lives.
We can consider the community or settlement a system of subsystems: the economy, the polity and the socio-culture.[11]  Daly maintains that the economic system is a subsystem of the eco-region or ecological system.[12]  For purposes of this discussion, let us consider community system and its subsystems: economy, socio-culture and polity as subsystems of the local eco-region in which the community is located. Each of those subsystems can also be thought of as composed of a set of subsystems.

Within a community economy there could be the following subsystems: manufacturing for producing and distributing products that are essential for a decent quality of life as defined by the local socio-culture; food production, allocation and distribution; banking (the allocation and distribution of credit, accounting and managing of local currency) and the exchange of goods and services within the community and with external communities. 

The socio-cultural subsystem includes: families and other household forms, religious, service and civic groups and organizations, educational institutions, friendship groups. Those groups and organizations, formal and informal, develop and model the community’s ethic, values, behavioral and social norms and develop informal means to reinforce compliance and punish noncompliance.

The polity consists of the institutions that make or enact community public policy decisions and enact ordinances that conform to the community’s norms and values, allocate and regulate access to the community’s natural capital assets,[13] and enforce compliance to local public policy. It might include such institutions as police and fire departments, healthcare, social and legal services, conflict resolution organizations, overseeing the commons and infrastructure building, management and maintenance.

A Community Economic System

A community economic system would produce for all the community’s inhabitants such goods as safe, healthy and tasty food; shelter; pure, fresh water for local agricultural, industrial, and household use; tools, energy and technology that enable inhabitants to produce sustaining goods and perform sustaining services. It would include the organizations and institutions that effectively and efficiently allocate and distribute those goods and services to all the community’s inhabitants consistent with their need. Those organizations and institutions form the communities’ polities. Because each inhabitant would function in a social role the community values, a sustainable supply of goods and services would be his/her right. 
The goods produced from non-renewable resources or resources that take years to regenerate or reproduce themselves, must be long lasting, reusable and recyclable and could pass through a number of users. That would reduce waste, hopefully, to the capacity at which the local environment can absorb it. Tools and technology used in any specific community would be appropriate for the local ecological environment and for the tasks they are to perform. To the extent possible, the materials to produce them would be found locally. 
What is not available locally can be imported. Technology can be designed that is appropriate to the function it is to perform. Some materials needed but not found in the local community and its environs may need to be imported. The communities involved in the transaction would seek to develop an exchange that would be advantageous to each. They would be cooperators not competitors.

The means of production would be locally owned and operated. Community businesses that required substantial investment could be owned by local working and consumer investors. Such operations could be cooperatives or locally owned limited liability partnerships or corporations. That would insure that the business’s product and its profits benefit the community and its inhabitants, primarily. If incorporated, the corporation’s mission must be to provide a good or service that is for the community’s common good. If its product or service ceases to benefit the community and its inhabitants, the corporation should be dissolved. Local family and individual entrepreneurial ownership should be encouraged and supported.

Locally owned and operated banks, venture capital funds and business incubators could help provide startup and operating loans to local businesses based on the Grameen micro loan model.[14] Community individuals, families, banks, institutions, mutual insurers and the local government could purchase shares in such funds and incubators. Banks operating in the community would be owned by community depositors. They could be credit unions, cooperatively owned banks and building and loan associations. Wall Street bankers and brokerage houses and equity investors should be prohibited from purchasing shares in community owned financial institutions. They tend to suck wealth from the community and exacerbate local poverty rather than create and spread prosperity.[15]  No matter how the financial system is structured, its policies should be determined by a board of directors consisting of local residents, blue and white collar workers and small business operators as well as lawyers, accountants and local business administrators and financiers. 
Neighboring communities and urban neighborhoods within the same watershed, or a portion of the same large watershed, can organize regional banking and credit systems. Theycould provide backup to local systems and help establish fair exchange rates between different community currencies. For broader exchanges and transactions, a national currency would be used.

Community government can deposit all its revenue in the municipally owned bank, if the municipality elects to charter its own bank, or one or more of the local depositor owned cooperative banks. Then revenue would be available for community sustainability and development purposes. Municipal and cooperatively owned community banks would charge interest only the net profit earned on a loan.[16]

A Community Polity
Montreal political demo 2012
Parsons and Smelser define the polity or political subsystem as one that functions to acquire resources.[17]  For our purposes we can reword that to, functions to access and control natural resources. In a community where the local socio-culture has adopted an ethic that considers all natural resources in the community and its environs public property or the commons, those natural resources are controlled by the people of the community through its democratically elected local government. That government allocates access to residents on the basis of benefit to the community’s common good and the applicant’s need.

The polity, via its participatory democratic legislative and administrative subsystems, monitors the public behavior of the community’s residents and visitors while in the community and enforces compliance to those behavioral norms and values that have become rules and ordinances.

It also monitors the public behavior of local businesses, organizations, institutions and employed members of the local government. It judges the outcomes of those interactions and positively sanctions those that benefit the common good of the community and its inhabitants and negatively sanctions interaction and behavior that is not so beneficial. The polity enacts ordinances and rules that regulate how persons occupying certain community roles should interact with members of the community as well as what behaviors and functions are expected of them.

A Socio-cultural Subsystem

A socio-cultural system functions to develop community values and norms by which residents, institutions, businesses and organizations interact with one another, the local and surrounding environment and its natural and human resources. In so doing, the system defines roles that are of value to the community. The performance of those roles that benefit some or all members of the community, the community’s structure and functions, become valued. Some behavioral norms will be legislated by the polity as ordinances or rules.

Some will be implied and unwritten – i.e. the community’s mores. Most will be passed down from elder to younger by word of mouth, written and oral stories and role modeling. That is an expectation of the family, the church, synagogue, mosque, etc. and the school. Some of the roles performed in the community are publicly and legally defined, such as mayor and town council, fireman, policeman, public works director and town clerk. Others are defined in contracts as job descriptions – e.g. school principal, teacher, minister, rabbi, imam. Some are defined by employers by contract and in some cases by oral agreement. In all those cases the expected interactive behaviors and role functions are explicated or understood implicitly. The responsibility and authority of the role occupant are also understood, although implicit expectations are not always clear. For many roles, there may not be a clearly written or explicit definition. The roles of parent, child, neighbor and employer are seldom explicated. Nevertheless, compliance with role expectations is positively reinforced and there are penalties if persons assuming those roles perform them in ways that harm one or more community members.

Local socio-cultures also can establish norms regarding the allocation of access to and control of the natural and human resources of the community and environs. Nowadays, how individuals, local governments, institutions, local and transnational businesses harvest, extract and utilize local resources is determined by state and national legislatures and agencies that often have little knowledge of how their decisions and policies affect communities and the eco-regions in which they exist. Since those resources are the communities’ common property, those are policy decisions which should be determined by the communities in which those resources are located. 

Integrating Community Systems with Regional, National and Global Governance

Neighboring municipalities within a prescribed area can cooperate and collaborate with regard to certain functions, thus forming a region. A logical prescribed area is a watershed or sub watershed. Each watershed forms an ecological region (eco-region). It has a unique set of natural resources--i.e. natural capital: water, timber, minerals, soil, wetlands, topography, flora, wildlife. 
Each municipal community with its unique polity, economy and culture, determines to whom access to land within its political boundaries is to be allocated and how it is to be used. Some municipal lands will remain common – publicly owned. Access to and use of that land and its resources will be determined and monitored by the local polity. Each municipal community will need to monitor use of privately held land to insure that the holder does not use it in ways that harm neighbors and other members of the community. However, control of access to, allocation and use of land in the region not within any municipality’s boundaries, could be the joint responsibility of the polities of all the municipalities in the region. So a regional polity or governance would need to be formed. Preferably, all governances would be democratic, impartial and operate in the best interests of all persons and institutions within their jurisdictions.

Such regions already exist as counties in the United States. Their boundaries are usually determined by survey lines and surface waterways. Those determined by waterways divide eco-regions. Those divided by surveys into sections and townships often include parts of watersheds and eco-regions. Where watersheds and eco-regions are split among municipalities and counties, some form of joint governance seems logical. In making public policy regarding allocation and access to and uses of eco-region resources, knowledge and consideration of regional social culture is a requisite.

Within a region, even a small municipality such as village or rural township, there is likely to be conflicting social cultures. Different socio-economic, ethnic, religious and age groups may value community and eco-region resources differently. Those value conflicts need to be negotiated so that regional resource policy for the common good is established. There are three ways to resolve such conflict without third party intervention: conquest, compromise and consensus.[18] In conquest, one side wins and all others lose. In compromise all give up something, thus all sides lose some, but less than they might in a contest. In consensus or synthesis a new solution is developed and all sides win, at least no one loses.

Other functions that would benefit by inter-community regional planning and policy-making, ordinance monitoring and enforcement -- are public transportation, power generation and distribution, banking and trade.

Municipal and Regional Healthcare Systems 
Primary and much secondary healthcare, for the most part, are local community concerns. That is especially true for disease and injury prevention. Geology, geography, topography and climate vary from community to community. Thus the prevalence of disease and injury varies from community to community. Local health service providers and consumers are most knowledgeable about the diseases and injuries that are most prevalent in their communities. They also tend to be most knowledgeable about treatments that are most effective in their communities.

So the mission and functions of a community based and controlled healthcare system would be to assure that the highest quality care is accessible to all residents of and visitors to the community as promptly as possible. 
The system also is to assure that the most effective treatments are available when needed. To assure that all members of and visitors to the community have access to top quality care from the local system when needed, the system probably would need a significant amount of local public funding. A source of funds for such a system could be local taxes on real property or other taxes that fund other necessary local services such as police, firefighters, infrastructure construction and maintenance, waste pickup and disposal, snow removal and other forms of emergency assistance that may be needed from time to time. If such a service were administered and delivered by the community’s regional health department or a community agency established specifically to deliver healthcare services, a progressive premium payment system could be designed to operate a prepaid healthcare delivery service. Or a community might opt for a combination of local tax and premium payment funding. 
Policy regarding where and by whom treatment and support services should be delivered should be made by a democratic body of local service providers and knowledgeable local consumers. Policy regarding funding such a local community system and costs of treatment and support and ancillary services also would be determined and monitored by such a body. A local body authorized to oversee ethical practices of local providers will need to be established. Such a body could also determine how local health service providers would be paid and how much they would be paid.

Not every municipality has a population large enough to support a secondary or tertiary care medical facility with state-of-the-art diagnostic and treatment technology. A group of neighboring communities with well administered primary care facilities could form a network to jointly fund, develop policy for and oversee a secondary and tertiary regional health care service. An entity consisting of representatives of local community health care delivery agencies and knowledgeable consumer advocates could oversee and administer such a system. 

Municipal, Regional and Interregional Public Transit
Efficient, convenient, inter-municipality, region wide public transit can have a lot of payoffs for all the people in the region and its communities. It reduces commuting use which:
  • Reduces commuting costs to households
  • Reduces the need for acres and acres of impervious parking lots and expensive multi-story and underground parking structures thus reducing polluting storm water runoff.
  • Makes more space available for residential and commercial use of in-town land thus supporting non-motor and pedestrian scale development.
  • Reduces the amount of impervious roadway needed which further reduces polluting storm water runoff and the cost of street, road and highway construction and maintenance.
  • Reduces the amount of greenhouse gasses emitted to the atmosphere, which improves the quality of local air and the threat to local and regional public health and the rate of global climate change.
  • Reduces costs to municipalities and regions that are external to transportation operations.
Transportation systems, including public right-of-way for private vehicles, are not self-supporting. They require taxpayer support. Public transit requires less subsidy than streets, roads, highways and bridges for millions of private vehicles. As use of public transit increases and private vehicle use decreases, costs for infrastructure and maintenance are reduced.
External costs are also reduced. Inter-region and inter-urban public transit systems can have the same positive consequences as region-wide public transit systems. They need an inter-regional governing and planning institution with authority to match their responsibility that understands the socio-cultural and ecological values and ethos of the regions involved so they can make transportation policy with those values and ethos.

Municipal and Regional Power Generation and Transmission 
To the extent space permits, each community or neighborhood within a city can have its own electric generating and transmission system. On-site generation combined with net metering, should be encouraged, particularly for public facilities. Solar, wind and low-head hydro-electric generation and combinations thereof could be used where practicable. Using local renewable energy to produce energy for local industrial, commercial, municipal and household use increases energy efficiency, reduces cost and the local carbon footprint. It also reduces external costs such as mitigation of environmental degradation an healthcare costs. 
Non-profit municipal and cooperatively owned systems can reduce the cost of power to consumers and increase generation and transmission efficiency. Efficiency is increased because transmission distances from local generation plants to local consumers are less than distances from monopolistic. Corporation owned centrally controlled power generation plants that transmit electricity over long distances that much of the electricity is lost as stray voltage. Costs to consumers are reduced because of increased efficiency and small local systems’ mission is to provide a local service rather than maximize profits and enable executives and principal shareholders to amass wealth. 
My vision of a restructured economy is one in which local community citizens cooperatively make decisions that effect their community’s environment, its unincorporated environs and the social lives of its residents. Community is defined as a self-organizing settlement consisting of families and individuals living in households that interact with one another for the purpose of sustaining that settlement and its inhabitants into perpetuity. 
Members of the community—i.e. citizens--perceive their community as a subsystem within a natural, ecological system that contains the natural assets/resources that provide the necessities that support lives. And the community in turn organizes a number of interactive subsystems that need to function collaboratively to increase the probability that the community and its inhabitants are sustained into perpetuity. 
The three major community systems are the socio-culture, the economy and the polity. The socio-cultural system develops values and interactive norms that, when adhered to, enable community residents to occupy and perform community and eco-system sustaining roles. The economic system produces and manufactures goods from locally grown and extracted natural assets that help sustain the community. It also imports needed resources that are not available locally from other communities in exchange for local resources and goods other communities may need to sustain themselves. The economy develops means for local investment, establishing credit and intra-community exchange. The polity’s functions include: controlling access to the community’s common natural assets, organizing entities consisting of local citizens that monitor access to and use of such assets, in compliance with interactive social-cultural norms.

Examples of functions of community services, considered here as subsystems of the above three are discussed briefly. We also try to show how each of those subsystems needs to develop networks with systems of neighbor communities for local community subsystems to function with optimum effectiveness, efficiency — i.e. sustainability.

We argue that local community systems designed by community residents, owned in common can operate to sustain communities and their environs into the distant future. In such communities valued social roles can develop for each resident. Those roles enable them to contribute to the welfare and sustainability of their communities.

  1. See Herman E. Daly, Beyond Growth (1996), Toward a Steady State Economy (1973) and Daly and Cobb, For the Common Good (1989.)
  2. David Korten, Agenda for a New Economy: From Phantom Wealth to Real Wealth 2nd ed. (2010)
  3. IPCC report (2007), Paul and Anne Ehrlich, The Dominant Animal: Human Evolution and the Environment (2008)
  4. Daly, Beyond Growth (1996) and For the Common Good (1989), Tim Jackson, Prosperity Without Growth: The Transition to a Sustainable Economy (2009), Korten, Agenda for a New Economy (2010), Bill McKibben , Deep Economy: The Wealth of Communities and the Durable Future (2007), Robertson, Transforming Economic Life: A Millenial Change (1999).
  5. Tim Jackson, Prosperity Without Growth (2009); Peter Brown and Geoff Garver, Right Relationship (2009),;J. W. Smith “Full & Equal Rights: providing all a quality of life while reducing labor and resource use by Half.” Institute for Economic Democracy. Mar. 22, 2009; David Korten, Agenda for a New Economy (2010), Lester Brown, Plan B 3.0: Mobilizing to Save Civilization (2008); Bill McKibben, Deep Economy (2007), Daly, Toward a Steady State Economy (1973).
  6. Talcott Parsons and Neil J. Smelser, Economy and Society: A Study of the Integration of Economic and Social Theory (1956).
  7. Ibid.
  8. Ludwig Von Bertalanfy. General Systems Theory: Foundations, Development and Applications (1968)
  9. Herman Daly “The Illth of Nations and the Fecklessness of Policy: An Ecological Economist's Perspective.” Nov. 2003 Post-autistic Economics Review. No. 22 (pp1-4) and Beyond Growth (1996), Lester Brown, Plan B 3.0 (2008), McKibben, Deep Economy (2007)
  10. Daly, ibid.
  11. Parsons and Smelser, Economy and Society (1956).
  12. Daly, Beyond Growth (1996).
  13. Parsons & Smelser, Economy and Society (1956).
  14. Michael Foley, “Microcredit: The Good, the Bad, and the Ugly,” Yes magazine. Jan. 23, 2011.
  15. Ibid.
  16. Ellen Brown, What a Public Bank Could Mean for California,” Yes Magazine May 16, 2004.
  17. Parsons and Smelser, Economy and Society (1956).
  18. Arthur Dunham, The New Community Organization (1970) pp. 241-243.

No comments: