10 Common Sense Principles for a New Economy

I would love to see these ideas debated on some popular economic blogs to help strengthen or weaken there veracity. Overall they sound well thought out, but I'm just a student of the so called dismal science.

1. The proper purpose of an economy is to secure just, sustainable, and joyful livelihoods for all. ...

I agree with first sentence, but I think you needlessly demonize Wall Street financiers, few of whom profit from or desire the items on your list. A positive expansion of the opening statement would be more effective and convincing.

2. GDP is a measure of the economic cost of producing a given level of human well-being and happiness. ...

This is a very intriguing twist on the gross domestic product as an indicator of progress. Of course, what you are implying by this is the need to follow a new indicator which has two parts, the GDP as numerator and the GHI (gross happiness index) as denominator. (GHI/GDP). This would measure how efficiently a society can produce well-being and happiness. This would also make a nice proxy to measuring the sustainability of the national economy.

3. A rational reallocation of real resources can reduce the human burden on the Earth’s biosphere and simultaneously improve the health and happiness of all. ...

I realize that you’re using “Wall Street” as code for the current economic, political, and social realities in America, but I don’t think it serves you well here. It just doesn’t make that much sense. War is not a unique feature of the modern American economy. Our penal code has more to do with the way our democratic political system works than how our economy is structured. High advertising expenditures result from the interplay of freedom of consumer choice and firms competing freely in the open marketplace - two freedoms that society will continue to value. Some advertising certainly leads to higher quality of life - consider the advertisement that will make readers aware of your book.

4. Markets allocate efficiently only within a framework of appropriate rules to maintain competition, cost internalization, balanced trade, domestic investment, and equality. ...

I mostly agree with this, but I think the efficiency framework is inaccurate. Market regulation almost always implies a trade-off with market efficiency, but we do it anyway because in return we gain some social benefit. I would rather this principle be housed in a justice framework, as in: “Markets allocate justly only within a framework of appropriate rules...” I think the most important rule you’ve listed here is cost internationalization. The failure to accurately allocate the costs of negative externalities (or spillovers) is the primary culprit that makes our current economic system unsustainable. The least relevant rule is balanced trade. (And equality would be redundant in a justice framework.)

5. A proper money system roots the power to create and allocate money in people and communities in order to facilitate the creation of livelihoods and ecologically balanced community wealth. ...

Wall Street would say that it reallocates money from over-financed and underproducing entities (rich investors who otherwise keep their money stuffed in a mattress) to under-financed and highly-productive entities (e.g. Apple Inc., SKS Microfinance, etc.) But, given recent history, the expropriation of real wealth from the rest of society sounds more plausible.

7. Money, which is easily created with a simple accounting entry, should never be the deciding constraint in making public resource allocation decisions. ...

Disagree. You can create money with an accounting entry, but not wealth (i.e. new resources). Populist leaders have tried this and discovered that it leads to the devaluation of money (i.e. inflation) and, when taken too far, leads to hyper-inflation, which is catastrophic to society at all levels, but especially the poor. If you increase the money supply without some real underlying growth in the economy, you end up looking like Bolivia in the mid-80s, Yugoslavia in the mid-90s, or Zimbabwe a couple of years ago.

Rather than increasing the money supply (adopting an expansionary monetary policy), a more appropriate tool is an expansionary fiscal policy (of course investing in things with a real financial and social ROI like education and infrastructure), which implies running a deficit, which means it can’t be overused or our grandkids are screwed...they may already be.

7. Speculation, the inflation of financial bubbles, risk externalization, the extraction of usury, and the use of creative accounting to create money from nothing, unrelated to the creation of anything of real value, serve no valid social purpose. ...

You unfortunately contradict yourself here. You just suggested in principle #6 that we should use creative accounting to create money from nothing to serve a valid social purpose. That said, I agree that this sort of activity should be and can be reduced through appropriate regulation.

8. Greed is not a virtue; sharing is not a sin. If your primary business purpose is not to serve the community, you have no business being in business.

Amen, and amen! Maybe your list of principles should have just been this. Seriously.

9. The only legitimate reason for government to issue a corporate charter extending special privileges favoring a particular enterprise is to serve a clearly defined public purpose. ...

I want to agree, but economies of scale could never be reached if all the financial and legal risks had to be carried personally by business owners. The ability to reach an economy of scale to produce things like airplanes and computers that common people can afford could be seen as a public purpose.

10. Public policy properly favors local investors and businesses dedicated to creating community wealth over investors and businesses that come only to extract it. ...

Good.

I am a recent subscriber and am enjoying the magazine. I found YES after participating in the Trinity Institute, where you were a speaker. I bought your books and especially like the principle of "change the conversation," which leads me to a request.

What are the chances of inviting progressive cognitive scientists and linguists to a YES blog routinely . . . like every issue. If we are going to "change the conversation" effectively, we are wise to embrace the latest insights of the brain.

Experts that come to mind are George Lakoff, UC Berkley; Joe Brewer, Cognitive Policy Works; Roy Eidelson, Eidelson Consulting; Eric Haas, Cognitive Strategies; to name a few.

They are powerful allies, whose values align with yours, and ARE changing the conversation. Please consider giving them a soap box next to yours.

Caring citizens are the solution for building trust for effective governance.

I have also started reading the yes magazine articles recently and am finding them very thought provoking.

Those open to new ideas, intrigued by words like sustainable development, application of scientific method for social concern, technological unemployement etc, can also visit www.thezeitgeistmovement.com
www.thevenusproject.com

The author, while well-meaning, has not presented us with a mechanism to get from here to there. He is basically calling on people to stop being selfish and greedy, which the people making all the money and calling the shots, have no reason to do.
Instead, we must make some basic, simple, but profound changes to how the economy works:
1. Set up a State Bank in all 50 states, as we have had in North Dakota since 1919. Author/advocate Ellen Brown has written extensively in these pages, so I won't rehash the argument here. Check out the public banking group here: http://groups.google.com/group/public-banking
2. Replace all taxes on production: Sales, Wages, Capital, with taxes on Natural Resources, especially Land. As Henry George recognized in Progress and Poverty (1879) it is speculation on Land that ultimately leads to all major economic busts, causes the bulk of poverty (since Man cannot live, even a second, without Land, he must pay whatever the Landlord commands), stifles innovation, and despoils nature by holding good land for speculation, while marginal lands get exploited under urban sprawl.
3. Directly fund vital needs with U.S. Notes, not Federal Reserve Notes, as Lincoln did to fund the Civil War, when NY Bankers wanted 35% interest. Greenbacks can be used to fund infrastructure, healthcare, education, and even, carefully, be used to pay off the debt - all without causing inflation, since we have too little of these things now (i.e. we have DEFLATION).
DO these 3 things and you won't need to change human nature. The economy will work for the betterment of all, and solve our problems on its own.
- Scott Baker,president of Common Ground-NYC, a Geoist organization that wants to lower taxes to the Ground, and tax bads, not goods. http://groups.google.com/group/common-ground-nyc & http://commongroundnyc.org/

Building a Bridge to a New Global Culture - http://www.nxtbook.com/[…]/index.php?startid=46

In a ground-breaking effort to overcome our global problems, Sustainable Land Development International (SLDI) has released the world’s first comprehensive sustainable land development best practices system. The SLDI Best Practices System helps to structure a triple-bottom-line (people, planet and profit) decision model - The SLDI Code™
http://www.sldi.org/images/[…]p%20system%20introduced.pdf

Im pretty sure in the Intro to the page, these 10 points are identified as "guiding principles" not internal mechanics.Sort of a preamble. You should read the mans' books I think his idea of a 50% tax on advertising is a great one. That would really reduce the incentive to saturate the minds of citizens with propaganda (since i suspect you are a libertarian you cant disagree with the desire to reduce propaganda, no?). I looked at your 3 proposals too, and YEP! you are a Libertarian. Its all so simple. We get rid of all taxes, except taxes on land! then only the wealthy will own land and we can simplify a messy culture all the way back to 1066 BCE.

First, I am NOT a Libertarian. One look at what happened to that family in Tennessee who lost their home as firefighters stood idly by, because they had failed to pay a $75 annual fee, will tell you why.
A tax on Land, not on structures, would put more land into use, not less. It would free land from people who sit on it and make no productive use of it - that is, the landed gentry. There is half a trillion in land in NYC alone (based on UNDER assessments), enough and to spare, to pay for everything New Yorkers need, without taxing their production.
It's just the opposite of what you fear. Read Henry George to find out the true result of the Single Tax.

...can be summed up in one word--EXEMPT.

Back in my hometown, there is a private school that buys up land and buildings all over town. Because they are a "non-profit" (HAH!), they pay ZERO taxes on their holdings. Meanwhile, they have priced everyone else out of the market while not contributing to the tax digest. It wouldn't take much to get that exemption extended all over the place with the right amount of "political contributions".

So, unless the idea of tax-exempt is done away with, it wouldn't take long for most property to move to "non-profits" or become "places of worship" even if the owner rents one closet or small room in their building out to a religious group and allowed them to advertise the location as being a church property (as one resourceful person I know did).

Yes, I agree with you that exemptions are used to gain the system and should be abolished. In fact, it was these exemptions to the landed universities that helped undermine the argument for Land Value Taxation and Henry George's Single Tax in the early 1900s itself, as well as the concurrent stocking of the education ranks with anti-Georgist professors. Anyone who doubts that should read "The Corruption of Economics" by Mason Gaffney and Fred Harrison.

Any system is doomed to failure if you have people who’re determined to game that system. Corruption is one human nature that needs to be changed, and changed first before any other changes are possible.

Human Beings have a wide range of behaviors. The true application of economics is the study of incentives/disincentives to make a just and good society. a Land Value Tax is a big change and we can expect a corresponding big change from it. Adam Smith and his later-day partial adherents are responsible for the Selfish Man. It does not have to be that way, nor do we need to reform the basic human model, just change the incentive structure.

I share some of Dr. Korten's frustrations with our current eco-political system.

To begin, I think we need to first address some basic needs, such as food and energy. If we can do that locally, then we can start with a strong and independent foundation to change the political landscape.

David Blume's work on multifeedstock ethanol, Community Supported Energy (CSE), and Community Supported Agriculture (CSA) may provide enough traction and a plan to get things going.

alcoholcanbeagas.com

Cheers, John Miao

David, while I appreciate that this is an abbreviated piece, I think it misses or misunderstands a few points.

I've posted my comments here:
http://mises.org/Community/[…]for-a-new-economy-quot.aspx

Loved your ideas and Yes!
See my article on Purging the Phony Pillars of Power Politics

Your ten points are spot on!

Hey. Sure. It all sounds great. But the little detail you are missing is which freaking politicians do you want ENFORCING your little golden rules?

Do you want George Bush doing it?

What you need to be fighting for is a reduction in the size of the federal government to its intended size.

Behind the nice words is a GIANT FIST that will crush the little people using you as the polite excuse for doing it.

Freedom, Free markets, Capitalism are synonymous. They are the TRUE champion of the poor, the down trodden and even the environmnent.

The answer is NOT with Government. Period.

Sir. Please. REPENT of your cruel freedom hating tendencies and read about freedom.

I DARE ANYONE TO READ THIS SITE.

http://www.hawaii.edu/powerkills/welcome.html


POWER KILLS.



Then you should be fighting for each state to implement the kinds of things you want so I can be free to move to a state that fights for FREEDOM.

Where is the FREEDOM in this article/

Government is just one avenue of power in this capitalist system, and more freedom in this context will only hand more power to the Banksters and the Corpocrats. I’m afraid Freedom is only another “little golden rule” that, as you said, is only as good as the people employing it.

You say "Freedom, Free markets, Capitalism are synonymous."
—The tidy formulation of debased, ideological utopian free-market fundamentalism.

"They are the TRUE champion of the poor, the down trodden and even the environmnent."—Sheer delusion. A cursory look at the history of the last 400 years belies this.

Yet market fundamentalists will go on telling us that the free market system has only failed because we won't give it complete free rein — or free reign.

"[R]eduction in the size of the federal government to its intended size" is hard to square with "The answer is NOT with Government. Period." You're not for anarchy, you're not for government. You've just latched on to the most bankrupt idea in a landscape of bankrupt ideas.

"POWER KILLS."—And a society of people governed by nothing but their own greed will be a society without abusive power? As I said, pure ideological utopianism.

Your ideology has blinded you. Korten's ideas are not statist. He wants a return to local power where people are more able to govern themselves.

Freedom is not the individual's single-minded pursuit of capital. In other words, freedom is not greed. Freedom is not hostile to "little golden rules." Freedom comes with justice and charity.

In looking at Principle #6, that money should never be the deciding factor in public resource allocation decisions, the 1st thing that comes to my mind is Florida Governor Rick Scott's decision to kill High-Speed Rail from Orlando to Tampa. He turned down Federal money for a shove-ready project that was years in the planning. What he should have focused on was finding a way to pay for it, such as vehicle user fees that would deal with one of the problems created by Point #3, traffic congestion.

When a cabinetmembers said-on News that "Its not federal governments fault -were all in debt." OMG.
Congress has had years to help in implement changes to the system, and americans taxpayers -we all have been blinded.
Raise taxes sm. percent % on all paychecks of 150,000.00, would put a break on Medicare for now. Question is Why are all the GOP against it. Also is they mess up Social Security(has they have by Borrowing from it again) that will worsen economices for businesses and medicine. Question??= Why doesn't the congress-government-cabinetmemebers-Petagon use there Retirement Penson Plan Money for there War plan Budget Free AID or get ther own Budget Surplus account by selling few planes,supplys, get a return interest then earn profits-then spend what they have earned, therby -NOT stealing americans healthcare-ssa moneys.

Here is another set:

New Economy from Nineteen New Educational Principles
Concepts for Economic Empowerment by Robert Pearson

1) We need to focus on educating each other. Adult education is actually where the biggest change can come which can prevent disaster. Unfortunately, television is what has been educating most people in the last several years, and it has only gotten worse and worse in many ways. These forces have combined with popular music, and have created much culture without any wisdom or beauty.

2) We need to see people as "asleep" instead of evil. If we see them as merely asleep to what bad they are doing when they harm others, even economically, then they may have a chance to be educated towards a possibility for change.

3) Not appreciating all that one has, puts things in a state of entropy, and then these things lose their value. One has to always "polish" what one has, take care of what one has, organize one's belongings, or things lose their potential.

4) Not seeing the service aspect of working, and not putting into full practice the idea that we have to give before we can get. This creates a "vacuum" and the universe abhors a vacuum and seeks to fill it. If we carefully create the right service or value, wealth can flow in. If we do not create any true vacuum of service or value, nothing will flow in.

5) Aim to end planned obsolescence, and by doing so boost American or any other country's economy. If we could outlaw the sale of cheap products that are sold without warranty, we would create a new industry in America of making high-quality goods. Cheap products are essentially, or eventually, worthless. If there was legislation that one could not sell a product without a minimum three year warranty, this would be considered a green law, since products that soon turn to garbage would end up in landfills. We could build new small industries in the U.S. or other countries. Think of what this would do to the U.S. morale, or the morale of any other country.

6) We have to get out of the "specialization" field. Most of us have a vested interest in the modern world to be "seen as a specialist" and charge fees based on that. In some, way, shape or form, virtually everyone's resume reflects this, from a dishwasher to a airplane pilot. However, that has no longer allowed most of us to have the money, leisure, or other standards of living which we want to live.

7) Buy from those who will buy from you. For example, many ethnic groups in the United States empower each other by forming economic networks in which each person does a different type of business and they all buy from each other. This prevents money going outside the network into anonymous large corporations.

8) Befriend and humanize by repeated consistent and loving effort, all the bureaucracies. Even bureaucracies are composed of people who have backroom office talk and talk there just as normally as everyone else. The bureaucracy is the face that they have to show to the public. Don't say, that they have to show that face to keep that job. That is determining the future based on imagination. A major principle in mind to keep is that any organization can be in danger of acting like a big bureaucracy.

9) Things only blossom if there is enough knowledge to fertilize these new things. We will not as easily shift into alternate energies, unless there is a threshold of people who understand these new technologies, or understand the marketplace aspects of them. This is one important part of public energy. Already, the solar sector in the U.S. has shown huge profits and Europe is far, far ahead of the United States.

10) The energy problem affects us more than just at the gas pump or paying the electric bill. For instance, in 2008, those in the United States who sold on eBay could no longer ship things surface rate in international shipping. This reduced their sales by a substantial amount, especially if there were wealthier people in other countries who may not be as affected by a recession. This truly would have a trickle down effect, if those sellers would have more money.

11) Many new jobs only need be responsible for creating value, because a system of barter has already worked in many economies. Think of senior homes/low income home improvements. Seniors could help with baby sitting as younger parents could help with home repair.

12) Not connecting to the greater sources of money (corporations, high paying clients) for some of our business sales, and instead focusing on the general public. The general public's eyes are owned by big media and big corporations. It is very hard to sell a new product no matter how valuable and good it is. We have to see where we can use these big groups, and where they are using us.

13) We are always wealthier if we do what we are able to do in our own part. If we have excuses that involve other people, that someone should do for us what we can do for ourselves, that somehow we were the victim of someone else, then we are always playing the child or victim role and things cannot improve.

14) We should be focusing on "creating value" not only "earning money." For example, imagine digging up some of one's lawn area and preparing the area for a nut and fruit tree orchards and other gardening area. This will create a substantial amount of "wealth" each year for one's household without having to bring in more money to buy things. There are many such improvements one can make and even invent for other people. There are low income but ready now electric car conversions that people have done for virtually every make of car.

15) Corporations and large institutions like governments, universities, hospitals and so on, are the part of the world that has the money, and that is where we can focus on professionally. If we focus on selling to the smaller business community, there may not be as much money. It is also harder to reach a large amount of the general public today as bigger corporations have the main eye of the public due to advertising money.

16) One can do philanthropy without any money by tocusing on educating other adults. One can do this online by going into areas such as social networking, traffic exchanges, safelists, toplists, webrings, and so on. This circulation of knowledge is free and also stress free.

17) Networking, and creating work collectives to achieve a common purpose, is a great idea, and no one can call such small groups derogatory names in a free market capitalist system. It is hard to network with the "general public" in America today, but if you focus on networking with your interest groups, you can more easily find people that you can form some kind of lasting connection with. For instance, groups that like to be together are musicians, people who like fishing, antique, coin or any kind of collector, seniors, teenagers, and so on.

18) We need to see our romantic partnerships as "creating new families" where even two people are a family. Then these two people are for each other, operating as a team, two heads can are better than one, and two can live as cheaply as one, and if they are both employed, they can be more wealthy. The media marketplace tends to only be able to show the romantic aspect, and condition people to believe in imaginary aspects of human perfection. Whether or not there is a planned marketing plan to try to get people to think independently or not is irrelevant, especially if we take the position that people are asleep to the harm they do to others and ultimately to themselves.

19) Need to remember all the high paying work we have done successfully If we are continuously looking at self-help material instead of focusing on and doing our work, then how can we provide any value in the community?

I do not believe in a competitive society that is really based on dog eat dog or survival for the fittest. I believe in a cooperative society that is base on sharing and caring which is perpetual and will bring increase for everyone.

This is a new age of brotherhood and sisterhood which is our true connection with each other and our Source of being. I believe in a society where everyone a has a equal piece of the pie and a government that supports sustanainability for everyone. This is the age for service to humanity as a whole and not just for the few. It is about inclusiveness and not exclusiveness. It is the time for the end of the haves and the have nots. As long as we have a competitive society we will have those who want more then others and will take from others through competition to get it. This is the time or age for giving and sharing then getting. That is why our resources are being used up, because our society is based on personal profit and not the needs of the greater good humanity. It is about our motives and values and if we are not going to be altruistice then we are are choosing to be selfish and separate which makes for independence and not interdependence. We all need each other. No man is an island. We are all connected by the self same spirit that is in each of us as a spark that unites the whole.

"The proper purpose of an economy is to secure just, sustainable, and joyful livelihoods for all."

How incredibly daft. An economy has no "purpose". An economy is what results from the fact that certain things are scarce--like money, for example, and food, and labor. The idea that you can somehow commandeer an economy to make things joyful and happy for everyone is just nuts.

Is this a old or new or crazy idea: encourage business to incorporate and investors to invest, on the basis not of growth but of dividends only. A company could stay the same size and keep making a profit and keep giving dividends. If more people buy in, would that mean dividends go down or what. dummy on economics.

Dividends as per the social credit system of C.H.Douglas, if a private company turns bankrupt, the employees will not lose their pension fund, but form a cooperative to keep the company running back, so who is dummy on economics.

___The ONLY way to get out of the crisis is to install the social-credit system of the economist Clifford Hugh Douglas, and apply the Tobin tax on all stock market transactions.__ Limit salaries, commissions, bonuses, of all banksters, traders, brokers, lobbeyists, administrators, speculators, multinational leaders, from this non productive casino type market economy. __ Prohibit fiscal heavens, hedge funds (registered in no-tax fiscal heavens) to have money reinvested in the real non virtual economy.

__For poor countries or disaster areas, the way to get out of misery is communism evoluting after a few years to social-democracy (the perfect communist system is a religious community, example, the Amish and the Mennonite communities) _______There are TWO kinds of Democracy __The Representative (fake USA style, by the oligarchy) -- and -- The Participative (with citizens comittees regional or municipal, participating in all government decisions, including military by vote or referendum).