Ten Things That Will Build The New Economy

Out of the Old Economy of big-business, inequality, wall street over main street, oil & gas, environmental destruction and social degradation will rise the New Economy of small business, fair distribution, local systems, renewable energy, environmental restoration and protection, social renewal and strong communities.

The term “new economy” is broad, but its definition is gaining a more solid footing in the grass-roots of localism, communalism and post growth(ism). When I hear the term I think of an economy based on people and planet, not greed and growth. It is one that focuses energy on resilient local communities and businesses. It embraces the knowledge that small is beautiful. The New Economy is not just a rebooted version of the Old Economy – it is a drastic reshaping of the economic landscape. (I also believe that the New Economy is a post growth economy)

Out of the Old Economy of big-business, inequality, wall street over main street, oil & gas, environmental destruction and social degradation will rise the New Economy of small business, fair distribution, local systems, renewable energy, environmental restoration and protection, social renewal and strong communities.

The path ahead is not entirely clear, there are many opportunities to improving our social fabric and strengthening our local economics, but I believe that certain ideas will shine above the rest. Most of the change will come from the bottom up. This is true not only because the viability of anything getting done at the top of the political spectrum is practically non-existent, but also because the local movements will out-pace the movement of congress any day of the week. Here is my list of Top Ten Things That Will Build The New Economy (in no specific order):

  1. Local Currency – Keeping the economy local, supporting the community businesses, and creating wealth within your region are all side effects of using a local currency. Local currency has really seen a boom in the last decade, too. From the Ithaca Hours to the Berkshare to time banks, there’s even a transition town book on the subject.
  2. Distributed Renewable Energy SystemsE.F. Schumacher was right when he said “Small Is Beautiful.” Community and home scaled energy systems not only help create resiliency, but when connected to a smart grid can easily amplify that resiliency to the system as a whole. Distributed energy systems encourage local green jobs and in most cases utilize otherwise wasted space (rooftops, for example).
  3. Co-ops & Employee Owned Businesses – What could be more empowering than employee ownership? It unifies a company from the base employees to the CEO. Instead of putting stockholder profit ahead of the actual people who make a company (employees), it puts in power those very employees – allowing them to decide what’s best for the company. When economic downturns hit, perhaps they will decide to collectively take a paycut instead of putting people on the street. When times are good they can invest in employee-supporting programs or back into the company. I’m willing to bet these types of corporate structures will outlive and out-thrive the stockholders in the long run. Why? Because they put the power in the hands of the people.
  4. State Banks – When the economy crashed banks put there hands up in the air and said, “sorry, no more loans.” Every bank except for a state-run bank in North Dakota. This state run bank wasn’t out to make huge profits on high risk loans or derivatives – it is owned by the people to serve the people. A banking institution that is owned by the people it serves is more likely to be thinking in the interest of the people and not the shortsighted, profit interests of shareholders.
  5. Fair Wage Distribution & Reduced Work Hours – I put these two into one because I think they will work hand-in-hand in the transformation of our working standards. In order to employ everyone we cannot afford to trust in GDP growth – it actually, will not happen. Equally important is the realization that GDP growth is unsustainable. To both maintain a sustainable economy and eliminate our staggering unemployment we must reduce our average work hours – spread the available work around, while increasing our personal and leisure time. But, we must not allow unfair wage distribution to continue in this restructuring or many will be pushed into poverty. Increasing base wages and decreasing the ungodly wages of CEOs is not only socially just, but necessary to maintain a middle class with a shorter workweek.
  6. Alternative MetricsGDP is a grossly inadequate metric of prosperity. It is literally a measurement of total economic activity, not a measurement of well being or even of positive economic activity (oil spills tend to boost local GDP). A more comprehensive metric that takes into account both good and bads on a multitude of levels – economic, social, environmental, happiness – is necessary for us to better gauge the progress of our economy.
  7. Sharing, Bartering and Trading – Returning to the basics is not necessarily a bad thing. Non-monetary based transactions like sharing, bartering and trading are becoming more common place and will be the basis of a more resilient, local economy that will emerge from the wreckage of our current globalized, liberal disaster of an economy. We’ll still have currency (mostly local, see above), but we’ll be using a lot more of these basic non-monetary means as well.
  8. Cycling & Trains – Transportation is a fundamental part of our daily lives. However, we cannot continue to rely on oil and coal for cheap fuel anymore. Besides the problems of crossing over the peak of oil production, we must transition to a sustainable means of travel to avert runaway climate destabilization. Bicycling provides a great means of self-propelled transportation that is widely available, zero-emission, efficient and one of the few types of transportation that improves your health! Coupled with public and mass transit powered by renewable energy, cycling is a great small distance alternative to the gas-guzzling cars of the past. In the new economy we will see a larger emphasis on alternative means of transportation and I’ll bet money the cycling community will boom, especially when trains are bike-friendly.
  9. Backyard Gardens & Farmers Markets – A stable of our existence, food is no laughing matter. During the war efforts of the world wars “victory gardens” were rampant – everyone was supplementing their food with homegrown variety. Today’s local, resilient economies are seeing a resurgence of the backyard garden because they just make sense. And when we have reduced work hours, we’ll have more time to devote to growing our own foods! It is a simple way to connect with family, the Earth and become more self-reliant. Couple victory gardens with local farmer’s markets that keep your community farmers in business and you’ll have an even more prosperous economy. This is the future of food: sustainable, organic, community-based production.
  10. Transition Towns – The Transition Town movement takes pretty much everything I’ve just discussed and places it in a manual for cities to become resilient to the shocks of climate change and peak oil. But these are not simply measures taken to prepare for some horrible, looming future. Far from it. In fact, all of these measures connect the community, enhance the personal spirit, encourage sustainability, and improve our general well being. Sometimes thinking outside of the box and looking back to some of the simple things that worked in the past out larger dividends than business-as-usual.

21 thoughts on “Ten Things That Will Build The New Economy”

  1. Have you heard of the Netherlands low work time and job sharing? It’s really innovative and far better than what’s here in the US: http://bit.ly/ajgk12

    Switzerland, Sweden, France, and Germany for example have similar laws and regulations to guarantee a more comfortable and flexible work environment.

  2. At the risk of an eleventh thing being in bad form, I propose radical transparency as a builder of a new and hopefully better economy. By this I mean mitigating the informational advantages and asymmetries behind activities such as market research and ‘business intelligence.’

    1. Lori,

      Not bad form at all! This is a list that can totally be added to, I am eager to hear more ideas. Isn’t “business intelligence” an oxymoron? Or is it just a synonym for devious behavior?


      1. Not an oxymoron. Entrepreneurs are nothing if not intelligent. May be devious behavior, depending on the yardstick used. Knowledge is power. They know that. We should, too. As I see it, a transparent economy means large data sets on everything from product spects to transactions are in the public domain.

        1. Lori,

          You’re very right. My comments were a little tongue-and-cheek. 🙂

          This reminds me of Herman Daly’s view on advertising, one that I strongly agree with: “Instead of treating advertising as a tax-deductible cost of production we should tax it heavily as a public nuisance. If economists really believe that the consumer is sovereign then she should be obeyed rather than manipulated, cajoled, badgered, and lied to.”

          A little more transparency, as you say, would go a long way to removing the “need” for advertising. Smarter business, and educated populous could help us make better decisions with our (hopefully small amount of) consumption.


          1. Daly is both right and wrong. In that advertising drives consumption, he is right. Taxing it is a huge mistake because that will create incredible resistance to steady-state. Going head to head with the status quo is a non-starter. Best to change undermine from within. Tactics need to be beneficial both to what is and what will be. For example, while advertising drives us to consume, credit fuels the consumption. Credit card debt and in particular, excessive credit card debt is viewed as a problem, as something undesirable. It’s one thing to say live within your means but something entirely different to do so. Let’s change how we determine credit limits. Let’s tie total credit card limits to some % of after-tax income. To make the transition manageable and acceptable, the initial threshold will have to be higher than it should be but the threshold can be scaled down over time. The goal should be to eliminate credit cards, ie, eliminate debt-based consumer consumption.

          2. Mike,

            I think you are right in the respect that going head-on against the status quo will likely be the hardest way to change such an established paradigm. However, I think there is room and requirement for both the head-on approach, to spark debate, and the “changing from within” approach as well. Advertising is considered by most to be a nuisance, but once you bring up taxing it the conversation changes to an odd defensive position. If you bring up taxing banks and working to remove the amount of debt in the system, usually that’s an easier conversation. I agree that we should strive to eliminate credit cards and remove the requirement for interest-based, debt-money system.

            Ultimately I believe that the largest problem will be education versus misinformation. It seems to be everything in the media-political spectrum comes down to those few who actually understand the issues and the many who are swayed by misinformation. Advertising plays are large role in the misinformation department (and “news” outlets that will remain nameless).


          3. Spark debate????????? Screw debate. Debates have winners and losers. You need only look at the kind of debate that occurred around climate change once the corporate spindoctors got into gear. With all due respect, you’re making the same mistake that was made in that debate – being right is not enough to make the case. If you think that it’ll be a fair and rationale fight when you go up against the corporate bottom line, you’re dreaming. I can think of a beautiful opening volley for them: “In attacking advertising, you are violating the First Amendment right of free speech.” And I somehow doubt that your lobbyists (if you have any) will outgun their lobbyists so you will have little meaningful access to Congress.

            Ignore the misinformation. Ignore the need to educate. Those were tried in the climate change debate to no avail. While they are valid and laudable goals, they will take you into quicksand. It’s time to stop talking and do. And doing has to be something that stands a chance of happening. Targeting the plight of the consumer and helping him get his financial house in order by making his debt more manageable is something that will fly. Credit availability is already controlled. It’s just not controlled tightly enough or systematically enough. Start to limit the ability to consume on credit and you start to slow the system down. You’d even have an impact on advertising.

          4. Mike,

            Sure, the prospect for debate and education might seem laughable in some respects, but your argument could be equally applied to “targeting the plight of the consumer.” In just the same way that the corporate lobbyists would scream “first amendment” to the idea of taxing advertising, so might they also triumph the modern economists viewpoint by say that eliminating or limiting credit will slow or stop growth. Then, heaven forbid, we might end up in a recession or worse! They have convinced the majority of Americans that there is something called “good debt” and that you should always have some amount of debt or you’re not successfully utilizing your ability to generate wealth.

            Now, of course, I think that the concept of “good debt” is a crock of shit, but that is they way it is taught to us by the media and political pundits. Encroaching on our ability to spend money willy-nilly will have a back-fire from the people, just as much as any other tactic to help those people realize the economic growth is unsustainable – whether it be taxing advertising or removing the power for banks to create money – it can all be spun by those powerful people oppose to it.

            I think we’re arguing about nearly the same thing – we need to campaign against this from multiple fronts, because the current system in entrenched so deeply that any foothold we can gain is a good one. So, yes, if convincing people to reduce and ultimately eliminate credit card debt is a way to get in, great! But I still think putting our eggs in as many baskets as we can is worth it – because if we can win even one or two of those “debates” we’re ahead of the game. In the end, Mike, you and I are on the same side and it appears we’re arguing semantics.

            Thanks for your comments!


    2. Lori,
      What do you mean by “radical transparency” and “mitigating” someone else’s hard earned business intelligence advantages? How are these things to be achieved in your view? Do you propose that the level of insight attained by those who worked their a$$es off to acquire it has no value? Or perhaps you agree that it has value but that it should be taken from those who earned it and given to those who didn’t, perhaps by governmental decree and force of law? How about we adopt a law that says people who produce things of value should just hand them over to people that don’t?

      I hate to tell you but everyone has the same chance to gain insight and intelligence. If they haven’t done so it’s because they weren’t motivated enough yet. At some point those who were motivated will have such an advantage that those who didn’t work will decide to get into the race or become the slaves of those who actually think and produce. This is as it should be.

      1. DaveT,

        I think you’re getting a little out of proportion with the comments, and if you’re looking for a free-market, everyone-for-themselves attitude this is the wrong forum for you.

        “I hate to tell you but everyone has the same chance to gain insight and intelligence. If they haven’t done so it’s because they weren’t motivated enough yet”

        The idea that determination is the only thing missing from those that “fall behind” or fail to succeed is a condescending and complacent view of reality; it also shows a lack of understanding of the real world and ignorance to the majority of the population that suffers at the hand of our free market system. The market is not as efficient as people believe, it is mostly flawed and fails not because of lacking motivation on the parts of the people in the system. The free market system without regulation and safety nets “succeeds” only by advancing self-interest and greed – two features of human behavior we all recognize as base traits of evil – and in that very same way, it fails to be a system conducive to a flourishing human society. It is glaringly apparent that not everyone has the same change to gain insight and intelligence simply through motivation in a system like this.

        A system built on cooperation, community, resilience and trust is one that will succeed. There are ways in which we can keep some semblance of a market system, one that is not government run or detracting from the creativity of individuals. We just need to recognize that greed and self-interest shouldn’t be the soul motivators in the operating system of a free society. Transparency in business is one way to build trust and encourage cooperation. Perhaps you’ve heard of open source? Crowd source? Co-operatives? These are all more transparent means of doing business that do just fine from a profit perspective. Google wouldn’t be where it is today without some of these concepts.


      2. Actually, Dave, the “how” that I propose consists of people working their asses off, admittedly in reverse engineering efforts, but very much earning whatever insight is gained. Where there is “intelligence” there is counterintelligence and countercounterintelligence on and on down the line, whether or not government is involved. This is actually a natural side-effect of everyone having the same chance to gain insight and intelligence. Whether people leverage whatever they come to know for advantage, or publish what they know, is a matter of choice. Certainly you wouldn’t want to place restrictions on such choices, would you? Then there’s crowdsourcing. If I “know” a few data points, and so do you, and so do numerous other people, combining these may in some cases yield further insights. The question is whether opportunities of this sort can “motivate” the gaining of “insight and intelligence,” or does it take the prospect of having fungible informational advantages over others (whom they intend to enslave??) to motivate such effort? There are real signs that such advantages are not the only effective motivation for such efforts.

  3. As a renewable energy campaigner in the UK, I read your comments with interest and would like to assure all ‘steady state’ supporters that we are well advanced in our efforts to secure legally binding targets for clean energy. Further economic measures should trim the wasteful capitalist ‘growth dogma’ into the past (hopefully). My credo is the Brundtland definition of sustainability, which I’m sure you all know well.
    Thanks to all contributors for this excellent discussion forum and to the site’s own foresight for providing it.

    1. Grahame,

      Thanks so much for the comment! I love to hear news regarding the advancement of clean energy – an issue that is urgently needed to combat climate change and the coming effects of peak oil.


  4. You talk of employee ownership, and the examples you give are great. But have you heard of Co-determination? It’s the law of the land in Germany and in other countries that requires large corporations have a number of the members on its board of directors have to be employees. It’s one of the reasons European countries have a larger level of economic and social democracy.


    1. ProgressiveAudio,

      This is another great example. I think that is right in there with the employee ownership and co-operatives. It definitely sounds like a good idea to have employee voices on the share-holders board.

      Thanks for the comment!


  5. Laughable? Absolutely not. I said laudable not laughable.

    It seems to be that the free speech argument carries a tad more weight than using economists who aren’t exactly the most respected or credible right now. I was not suggesting that the tactic should be to say up front that we should eliminate or slow credit. That’ll attract exactly the response you describe.

    Without a doubt, it will not be easy to to after credit cards. It will all depend on the approach taken. If you are concerned about a back-fire from the people, take a populist approach and call it credit card reform that deals with credit granting beyond peoples’ economic ability to pay. Call it credit card reform that reduces the level of interest charged because defaults are reduced. Don’t make the introduction painful; make it gradual. I don’t want to go any further into the mechanics. I only did so here to illustrate the kind of packaging that will be needed. Suffice it to say that tackling credit cards needs to be advanced as something that is positive and beneficial to consumers. That makes it tougher for corporations to get a handhold.

    My concern is that we avoid the mistakes of the climate change struggle. It was believed that the facts would speak for themselves. It was not anticipated that there would be a well-funded and organised campaign to create doubt and confusion. The positive momentum of Kyoto was lost and now we have to deal with the negative momentum of Copenhagen.

    Given the experience of the climate change debate, I think tactics are critical, are everything. Taking a moral position without first assessing the possible responses is a mistake that we cannot afford to make again. The passage of time makes the stakes too high.

    Nitting, I think we’re arguing tactics rather than semantics. In any event, I think that we’re moving beyond the philosophical discussion level into the ok-so-how-do-we-do-this level which is great. Thanks for helping to get the next level of discussion started.

    1. Mike,

      I agree. “Don’t make the introduction painful; make it gradual” is great advice for formulating tactics, which as you mentioned are critical to think about. The direction of climate change “debate” is definitely frustrating to say the least and you’re right in asserting we should learn from it. Glad we could hash it out, I’m excited as more of the conversations out there transition to tactics over philosophy as well!


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