Externalities and Valuing Non-Market Goods

A Steady State Economy will need for us to value our externalities as best we can in order to take into account every impact we have and move towards a sustainable scale. It will also require us to create policies that protect us when these externalities cannot, or should not, be factored into market forces.


Externalities With Value
Externalities With Value

Our accepted model provides us with a free market – one that is omniscient and omnipresent – that allocates resources, goods and services. Neoclassical economists generally assume that when a consumer (that’s you – got to love that label, huh?) makes a decision, he/she does so with all the information required.

When you buy those pants, neoclassical economists assume that you take into account not only the price, but the material the pants are made from, its scarcity, environmental damage, labor associated with its creation, et cetera when you decide to purchase them. In this way the market is perfect at managing scarcity. We all know that reality is far from this picture, however; consumers make decisions with limited information and often without consideration of the far-reaching effects and “externalities.”

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Carfree Day Leading to a Carfree Lifestyle?

Free Yourself From Your Mobile Prison
Free Yourself From Your Mobile Prison

This morning I awoke a bit earlier than usual, rubbed my eyes, and moved slowly about my morning routine. My usual morning involves sleeping past my alarm clock wake-up call, hurrying out the door, grabbing food and coffee on the way. Today I was more intentional. I managed to drag myself out of bead early enough to make my own breakfast and catch the bus to work.

I work on the north end of Seattle, and my typical commute via car is about 20-25 minutes. Because of the location of my work I go opposite of traffic, so I can sail through the 11 miles watching the other direction back up. Today was different, though: today is Worldwide Carfree Day. Today I took the bus, but what benefits my car-commute time hampers my bus-commute time.

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Age of Stupid Premier

Tomorrow is the worldwide release the much talked about climate change drama/documentary staring Pete Postlethwaite “as a man living alone in the devastated future world of 2055, looking at old footage from 2008 and asking: why didn’t we stop climate change when we had the chance?” The Guardian calls it “the first successful dramatisation of climate change to reach the big screen.”

There are tons of evens coinciding with the premier around the world, from Thom Yorke playing at a premier to Greenpeace live at the Himalayans. Check out the preview if you haven’t hear of it:

The same people who bring you this great film also helped to start the 10:10 campaign and run the climate-change action site Not Stupid. Please take time from you busy schedule to go see this movie tomorrow (or Tuesday, depending on where you are – look for screenings here).

Blueprint For A Better World

New Scientist Sets Out To Make The World a Better Place
New Scientist Sets Out To Make The World a Better Place

New Scientist‘s next three issues will follow up on what this week’s issue started: defining world problems and finding solutions. I have been continually impressed with New Scientist, from their articles on economic growth, endorsing the steady state economy, and their article about the nature of greed. I am one of the few Americans I have met that actually subscribes to this great weekly UK periodical, though I hope more will follow my lead.

Their ambitious premise on this four-part serious entitled “Blueprint For A Better World” is to “explore diverse ideas for making the world a better place, and the evidence backing them.” [emphasis added] It is one thing to talk the talk, but now it’s time for decisive action. We can no longer wait around for the change to self-manifest, we have to deliver it ourselves.

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Wealth & Poverty

A system that takes from the poor and gives to the rich is the system we have created in the growth economy. Our focus forever on profit over life, and increasing those profits, encourages less and less life. Those with the money can afford to take the natural capital that was once commons from the poor and sell it back to them. While this encourages the ever worshiped growth, it does not encourage prosperity – most especially with those in poverty.

From The Ecologist this article “New Emporers, Old Clothes” by Vandana Shiva is something I want to share with you. A contact in the CASSE Volunteer group passed this along to me, and I feel it is worthy of a dedicated post. [emphasis added]

“However much we choose to forget or deny it, all people in all societies still depend on nature. Without clean water, fertile soils and vegetable genetic diversity, human survival is not possible. Today, economic development is destroying these onetime commons, resulting in the creation of a new contradiction: development deprives the very people it professes to help of their traditional land and means of sustenance, forcing them to survive in an increasingly eroded natural world.

A system like this, one that creates denial and disease while  accumulating trillions of dollars of super profits for agribusiness, is a system for creating poverty for people. Poverty is not, as Sachs suggests, an initial state from which to escape. It is a final state reached when one-sided development has destroyed the ecological and social systems for maintaining the life, health and sustenance of people and the planet.

The reality is that people do not die for lack of income. They die for lack of access to resources. Here, too, Sachs is wrong when he says: ‘In a world of plenty, 1 billion people are so poor their lives are in danger.’ The indigenous people in the Amazon, the mountain communities in the Himalayas, peasants anywhere whose land has not been appropriated and whose water and biodiversity have not been destroyed by debt-creating industrial agriculture are ecologically rich, even though they do not earn a dollar a day.

On the other hand, people are poor if they have to buy their basic needs at high prices. Because of dumping and trade liberalisation, farm prices in India are tumbling, meaning that the country’s peasants are losing $26 billion each year; this at a time when ‘development’ is all the while creating markets for costly seeds and agrichemicals. Unable to exist in the world that has been created for them, these now poverty-stricken peasants are committing suicide in their thousands.

Patents on medicines increase the cost of Aids drugs from $200 to $20,000, and cancer drugs from $2,400 to $36,000, for a year’s treatment. Water is privatised and global corporations profit to the tune of $1 trillion by selling once free water to the poor. So, too, the $50 billion of ‘aid’ trickling North to South is but a tenth of the $500 billion being sucked South to North thanks to interest payments and other unjust mechanisms in the global economy imposed by the World Bank and the IMF.

If we are serious about ending poverty, we have to be serious about ending the systems for wealth creation which create poverty by robbing the poor of their resources, livelihoods and incomes. Before we can make poverty history, we need to get the history of poverty right. It’s not about how much more we can give, so much as how much less we can take.

Standing ovation for Vandana Shiva, well done! Read the full article here.

Work and Leisure in a Steady State Economy

I'd Rather Be Here Than At Work
I'd Rather Be Here Than At Work

Leisure is the thing we so often aspire to gain more of in the US. The irony is apparent in that we have the smallest amount of leisure time in the world. Workers in the European Union have anywhere from 6 to 10 weeks of vacation a year and work about 6-8 hours less per week. Their standard of living is often considered greater than ours. Why? The Growth Economy wants more and more production and consumption.

We work in the US to fuel more and more growth. It is prevalent in other countries as well, but we are definitely the pioneers of the industry. I could rant on and on about this, but in the spirit of working less (and more efficiently) I will not re-invent the wheel. I invite you to watch this video from Workers of the World Relax. Also check out the Work Less Party, this blog post, this article, and this article.

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Climate Change Follow-Up: Wake Up!

I know I promised my next post would be back on the topic of the Steady State Economy, but I have another word on climate change first. Seriously, this is important stuff – survival of life on Earth sort of stuff. Creating a sustainable economy is crucial to stopping runaway climate destabilization. They go hand-in-hand, as you will see in Leo‘s last point about growth in this video…

I’ll be short and sweet: WATCH THIS VIDEO. Please also support the Age of Stupid by watching the film (when it debuts in the US) and above all being Not Stupid. It is high time we Wake Up and Freak Out:

Wake Up, Freak Out – then Get a Grip from Leo Murray on Vimeo.

Rationing Carbon: A Solution to Climate Change?

Heat: How To Stop The Planet From Burning
Heat: How To Stop The Planet From Burning

George Monbiot‘s book Heat covers the limits of our climate-changing actions and the actions that need to be taken immediately in order to avert catastrophe.  Here’s the skinny: there is a limit to the amount of CO2 in the atmosphere before we set into motion devastating, irreversible consequences. If we reach this limit we will go past the “tipping point,” the global point of no return.

Malte Meinshausen, a climatologist at the Potsdam Institute for Climate Impact Research quoted in a ScienceNews article, says “If you want to limit the risk of exceeding 2 degrees C global warming to one in four, or 25 percent, then total CO2 emissions over the first half of the 21st century have be kept below 1,000 billion tons.” We’ve already emitted half of that, but that does leave a decent amount left to fill the gap (though we don’t need to fill the gap).

We’ve talked about this limit before: a concentration limit for atmospheric CO2. We want it back to 350ppm from the current level of 389ppm. There are other guesses to this number: some say 400ppm or 450ppm, while others insist we’ve passes it (remember 350ppm). If we continue on our current path without serious emission cuts we’ll hit this upper limit in just a few decades.

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