Economics of Life in Balance


Pegge Hopper
Pegge Hopper - Manako Nei, Acrylic on Canvas 36" x 72"

For several years I studied the economics of decolonization in the Pacific Islands. I came to the conclusion that what is really needed is the decolonization of economics itself.

Pacific Islands culture (and indeed most indigenous cultures) is based on values that simply do not fit the neoclassical model of "economic rationality," based on materialism and individualistic self-interest as the main motivating forces. This culture—in particular its communal land tenure and lack of individualistic go-getting spirit—is often referred to as an impediment to economic "development." The thinking seems to be that since the realities of Pacific societies do not fit the development model, the societies should be changed. But of course the reverse is true: the model must be changed to suit the society.

I call the more appropriate model "Pononomics," from the Hawaiian word pono, meaning goodness, righteousness, balance. Apart from being more culturally appropriate, it is more ecologically sustainable as well.

An imaginary conversation between Adam Smith and "Bula Vinaka," a typical islander, illustrates the difference:

Smith: The magic of the marketplace is this: Each person, acting in his own self-interest, maximizes total welfare. The butcher provides you with a pork chop, not because he likes you, but because he wants your money. And you give him money because you want the pork chop. Both of you are better off—otherwise you would not have made the trade. This is replicated throughout the economy, and everyone is better off.

Vinaka: Each person acting in his own self-interest is stingy behavior. In our culture, when somebody has extra, they give it away. We even give away whole pigs, not just pork chops. The way to maximize welfare is to redistribute things, so that goods and money flow like water to where they are most needed.

Smith: Another magic of the marketplace is that supply and demand are always perfectly balanced. If there is a shortage, the price will go up. Higher prices encourage producers to produce more, and so the shortage is alleviated. For instance, when the price of coconuts goes up, you produce more, right?

Vinaka: No, when the price of coconuts goes up, I produce less. Last year I had to cut 70 coconuts to pay my children's school fees. Now the price of coconuts has gone up, and I only have to cut 50! Somebody else can cut the others, and pay for their children's school, too.

Smith: But the magic of the market allows you to accumulate great wealth. It converts land and natural resources—which are in themselves worthless—into valuable goods.

Vinaka: Land is not worthless. It's priceless. It's where the spirits of our ancestors live. It's what we pass on to our children. We don't own it, we care for it. The "owners" of land are the spiritual rights vested in people, not the people themselves. When we say vanua, which is a piece of land, it means the land and people together.

Smith: But our system is so much more efficient. One man working all day can make, say, 14 pins. Now, by working together, each man doing a separate task (one man cutting wire, one man putting pinheads on), 14,000 pins could be produced each day.

Vinaka: Who needs 14,000 pins? For me, division of labor goes like this: Alone, it takes all day to make 14 pins. Working together, we can make 14 pins in about 20 minutes. Then we can all go home and relax! Or go catch some fish for dinner. When you have mass production you take too much, you eat up the earth and make the species extinct, like the sandalwood and the whales. You fill up our lagoons with trash from McDonald's.

Smith: But cleaning up that trash makes jobs, so everyone is wealthier. Every single transaction contributes to the gross national product, or wealth, and creates jobs. Aren't you worried about unemployment?

Vinaka: We are not particularly eager to work hard all day every day. We are content to earn what is needed for basic necessities. You need a concept of enoughness. You need to value freedom and leisure. People don't want jobs, they want food and a roof. And if you can grow your own food and build your own roof, you don't need a job.

It's a pity that your "education" has educated our children away from knowing how to live. It is unfortunate that your economics defines our happy life—which has survived thousands of years—as a state of unemployment.

As the rest of the world begins confronting the hazards of overdevelopment, you may find that the indigenous cultures of the world, like the Pacific Islanders, know something about how to live.

Regina Gregory is an ecological/political economist living in Honolulu, Hawai'i. Current projects include and the Hawai'i independence movement.