Wealth and Want
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Lindy Davies: Land and Justice

We can analyze the ecological footprint in terms of its three distinct components:

  1. the subsistence footprint (what we must have to stay alive — which, as I said, tends to shrink with human progress)
  2. the wealth footprint (the resources needed to make the stuff we want, over and above what we actually need)
  3. the illth footprint ("illth" is a very useful term coined by ecologist and social philosopher Ralph Borsodi. It refers to the resources that are squandered on things we neither want nor need: pollution, waste, weapons, crime, preventable disease and malnutrition)

It is indeed possible to provide for the subsistence of more people, and to create more of the things we want — while cutting back on the output of illth. Compare today's London with the foul and unhealthy place it was in the nineteenth century. Or, consider the surprising re-emergence of the ivory-billed woodpecker, one of many threatened species whose habitats have returned in the United States. Indeed, it appears that environmental protection does not come at the expense of development — but rather gains strength as a society reaches a certain level of prosperity.

If we just look at the "ecological footprint," it's easy to be scared of the seemingly unavoidable damage we are doing to the earth. But seeing "the footprint" in terms of its components — subsistence, wealth, and illth — makes it clear that the fact of persistent and growing global poverty is not the inevitable result of population growth. I believe it’s true that the world cannot long support current levels of pollution, waste and habitat destruction — but these problems spring not from production itself — and certainly not from trade, itself — but from privileges, granted to individuals and corporations — things that we can correct, if we choose to. ... read the whole article

Mason Gaffney: Geoism, Recession and Control of Monopolies

Recessions (and depressions) may occur when there are massive shocks to the system (e.g., the OPEC producers withholding supplies and doubling and tripling prices of a commodity that could not be readily substituted for). Recessions may also be prolonged and accelerated by unwise public policy choices made by people who have no idea of the consequences of their actions or inactions. Now, in the activist area where I am working, there is still a strong cry for a Constitutional amendment to balance the U.S. Federal budget. Some of the economists in and out of government are saying this would be a disaster, using the same sort of "if GDP is growing, don't worry be happy" pronouncement you refer to above. When GDP is adjusted for the dollars spent on the criminal justice system and clean-up costs for preventable environmental disasters, then I might have some faith in this as a bellwether of wellbeing.

Peter Barnes: Capitalism 3.0 — Chapter 1: Time to Upgrade (pages 3-14)

More than a century ago, English economist John Ruskin observed that the same economic system that creates glittering wealth also spawns what he called illth — poverty, pollution, despair, illness. It makes life comfortable for some, but does so at considerable discomfort to others.

Modern economists’ term for illth is negative externalities. By this they mean the costs of economic transactions that are “external” to the parties involved. The classic example is a factory that dumps effluent into a river. Unlike homeowners who pay for garbage pickup, the factory’s owners pay nothing for disposing their waste into the river. But humans and other creatures living downstream do pay a cost. Plants and animals suffer and die, while cities have to build expensive treatment plants. From the standpoint of the factory owner, none of this matters. But from the standpoints of nature and society, these are negative externalities. (There can, sometimes, be positive externalities — for example, if your neighbor repaints her house, that may increase the value of yours.)

For a long time, economists assured us that the wealth spewed out by our economic machine was so great, and the illth so trivial, that we didn’t need to worry about negative externalities. If this was ever true, it’s assuredly true no longer. Contemporary climate change is, quintessentially, a problem of negative externalities. We pay owners of land beneath which fossil fuels lie. We pay drillers, refiners, transporters, and retailers. But we don’t pay nature, or anyone else, for dumping heat-trapping gases into the atmosphere. We shift this cost to our children, and take a free ride. We party, they pay. ...

All thought processes start with premises and flow to conclusions. Here are the main premises of this book.


Each generation has a contract with the next to pass on the gifts it has jointly inherited. These gifts fall into three broad categories: nature, community, and culture. The first category includes air, water, and ecosystems. The second includes laws, infrastructure, and many systems by which we connect with one another. The third includes language, art, and science. All of these gifts are immensely valuable, and need to be preserved if not enhanced.


Poverty, pollution, despair, and ill-health — what John Ruskin called illth — is the dark side of capitalism. This dark side needs to be addressed.


If we want to reduce illth on an economy-wide scale, we need to change the code that produces it. Ameliorating symptoms after the fact is a losing strategy. Unless the code itself is changed, our economic machine will always create more illth than it cleans up. Moreover, illth prevention is a lot cheaper than illth cleanup.


If you disagree with any of these premises, you’re unlikely to fancy my conclusions. If, on the other hand, these premises make sense to you, then welcome to these pages. I won’t bore you with statistics, or tell you, yet again, that our planet is going to hell; I’m tired, as I suspect you are, of numbers and gloom. Nor will I tell you we can save the planet by doing ten easy things; you know it’s not that simple. What I will tell you is how we can retool our economic system, one step at a time, so that after a decent interval, it respects nature and the human psyche, and still provides abundantly for our material needs.

Perhaps capitalism will always involve a Faustian deal of some sort: if we want the goods, we must accept the bads. But if we must make a deal with the devil, I believe we can make a much better one than we presently have. We’ll have to be shrewd, tough, and bold.

But I’m confident that, if we understand how to get a better deal, we will get one. After all, our children and lots of other creatures are counting on us. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 2: A Short History of Capitalism (pages 15-32)

Enclosure, in which property rights are literally taken or given away, is half the reason for the commons’ decline; the other half is a form of trespass called externalizing — that is, shifting costs to the commons. Externalizing is as relentless as enclosure, yet much less noticed, since it requires no active aid from politicians. It occurs quietly and continuously as corporations add illth to the commons without permission or payment.

The one-two punch of enclosure and externalizing is especially potent. With one hand, corporations take valuable stuff from the commons and privatize it. With the other hand, they dump bad stuff into the commons and pay nothing. The result is profits for corporations but a steady loss of value for the commons. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 6: Trusteeship of Creation (pages 79-100)

Think, for example, about carbon. At present, our economic engine is emitting far too much carbon dioxide into the atmosphere; this is destabilizing the climate. We desperately need a valve that can crank the carbon flow down. Let’s assume we can design and install such a valve. (I explained how this can be done in my previous book, Who Owns the Sky? It involves selling a limited quantity of “upstream” permits to companies that bring fossil fuels into the economy.) The question then is, who should control the valve?

Unfettered markets can’t be given that responsibility; as we’ve seen, they have no ability to limit polluting. So we’re left with two options: government or trusts. Government is a political creature; its time horizon is short, and future generations have no clout in it. Common property trusts, by contrast, are fiduciary institutions. They have long time horizons and a legal responsibility to future generations. Given the choice, I’d designate a common property trust to be keeper of the carbon valve, based on peer-reviewed advice from scientists. Its trustees could make hard decisions without committing political suicide. They might be appointed by the president, like governors of the Fed, but they wouldn’t be obedient to him the way cabinet members are. Once appointed, they’d be legally accountable to future generations.

Now imagine a goodly number of valves at the local, regional, and national levels, not just for carbon (which requires only one national valve) but for a variety of pollutants. Imagine also that the valve keepers are trusts accountable to future generations. They’d have the power to reduce some of the negative externalities — the illth — that corporations shift to the commons. They’d also have the power to auction limited pollution rights to the highest bidders, and to divide the resulting income among commons owners. That’s something neither the Fed nor the EPA can do.

These trusts would fundamentally change our economic operating system. What are now unpriced externalities would become property rights under accountable management. If a corporation wanted to pollute, it couldn’t just do so; it would have to buy the rights from a commons trust. The price of pollution would go up; corporate illth creation would go down. Ecosystems would be protected for future generations. More income would flow to ordinary citizens. Nonhuman species would flourish; human inequality would diminish. And government wouldn’t be enlarged — our economic engine would do these things on its own.

One final point about valves. It’s not too critical where we set them initially. It’s far more important to install them in the right places, and to put the right people in charge. Then they can adjust the settings. ... read the whole chapter

Peter Barnes: Capitalism 3.0 — Chapter 10: What You Can Do (pages 155-166)

What’s particularly nice about Capitalism 3.0 is that we can install it one piece at a time. We needn’t shut the machine down, or delete the old operating system, before installing the new one. Indeed, we’re not even replacing most of the old operating system, which is fine as it is. Rather, we’re attaching add-ons, or plug-ins, that allow for a gradual and safe transition. A formula for describing this is:

Corporations + Commons = Capitalism 3.0

Like the governor of James Watt’s steam engine, these add-ons will curb our current engine’s unchecked excesses. When illth of one sort gets too great, the new bits of code will turn the illth valve down, or give authority to trustworthy humans to do so. If money circulates too unequally, the new code will alter the circulation, not by re distributing income but by pre distributing property. It will make similar adjustments when there’s too much corporate distortion of culture, communities, or democracy itself.

What’s also nice about the new operating system is that, once installed, it can’t be easily removed. That’s because it relies on property rights rather than government programs that are subject to political ebb and flow. If you have any doubt about this, consider the staying power of Social Security and the Alaska Permanent Fund, both of which distribute periodic payments that have attained the status of property rights. Social Security is over seventy years old and has never been cut once; in 2005, it survived a privatization campaign led by President Bush. Similarly, the Alaska Permanent Fund, now more than twenty-five years old, repelled an attempt in 1999 to divert part of its income to the state treasury. ... read the whole chapter




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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper