{"id":93528,"date":"2017-06-12T12:00:57","date_gmt":"2017-06-12T11:00:57","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=93528"},"modified":"2017-06-09T12:10:02","modified_gmt":"2017-06-09T11:10:02","slug":"a-general-solution-to-economic-problems","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2017\/06\/a-general-solution-to-economic-problems\/","title":{"rendered":"A General Solution to Economic Problems"},"content":{"rendered":"\n\n\n
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I refer to the unsolved ones, not to those that are pretty satisfactorily solved already.\u00a0\u00a0 I focus on our two acronyms SF1 and SF2, where SF can be read as Staggering Fact or as Structural Fact.<\/em><\/p>\n

In the terminology of John Maynard Keynes SF1 generates a chronic shortfall of the inducement to invest.\u00a0 Once a society comes to depend on investment-for-the-sake-of-production-for-the-sake-of-sale-for- the- sake-of-profit to meet its needs, investment becomes its drug.\u00a0\u00a0 It can never get enough of it.\u00a0\u00a0 SF2 generates a chronic insufficiency of effective demand.<\/p>\n

A low-level equilibrium of supply and demand has become our normal fate. Trading stops even though people who need to work for a living remain unemployed.\u00a0 The structurally humiliated go hungry.\u00a0 They feel unwanted.\u00a0 Unused capacity coexists with unmet needs.\u00a0 All this happens because production is for profit, and because what is needed does not always coincide with what can be sold for cost-covering prices with a margin left over to reward the entrepreneur and the investor.<\/p>\n

The rich are ungovernable because everyone physically depends on their decisions to invest, and on their refraining from shutting production down by disinvesting.\u00a0 The threat of capital flight cows even the bravest government.\u00a0 Anything whatever -including saving the biosphere- is sacrificed when it conflicts with the overriding-imperative to preserve the always-precarious inducement to invest.\u00a0 The poor are ungovernable too.\u00a0 These same dynamics normally generate widening inequality, thinning the ranks of the middle classes while swelling the ranks of the ungovernables.<\/p>\n

The general solution is to meet needs because they are needs.\u00a0 It is to meet them in harmony with nature because in the really-not-so-long run, humanity must either learn to live on nature\u2019s terms or go extinct.\u00a0 Bypass profit when you need too, like a good pragmatist who sticks with an ideology only as long as it works, while not being too moralistic or too dogmatic to accept the benefits that the profit-motive does generate.\u00a0 Feed the hungry because the hungry are hungry.<\/p>\n

At an organization level, the general solution means being mission-driven, where the mission articulates one or more ways the organization serves the common good.\u00a0 It means creating value to share it.\u00a0 It means leaders who practice inspiring leadership, delivering to the team members something that in their biologically hard-wired hearts they really want and need: a sense of purpose, a sense of serving a cause greater than themselves, producing goods because they are good and services because they serve.[1]<\/a><\/p>\n

At a personal level the general solution means vocation, calling, meaningful living, reviving old religious understandings and cultivating new psychological understandings.\u00a0 It means relational selves, being-with-others, community.\u00a0 But having said this we must also say -true to pragmatic principles of unbounded organization- that what motivation will get a given job done is not to be postulated in advance for all persons, cultures, times, places, and tasks.\u00a0 Motivation is discovered.\u00a0 It is created.<\/p>\n

At a money level, the general solution means transfer payments.\u00a0 Anthropologists say redistribution; economists say transfer.\u00a0 Dignified livelihoods for the sisters and brothers who are redundant in the labour market can be funded, generically speaking, in two overlapping ways: from rents and from factor income.\u00a0 Rents by definition can be transferred without damaging production \u2013although in practice, this often cashes out to mean trading off some diminution of production for the greater good accomplished by the transfer.\u00a0 Voluntary transfers from factor income do not damage production at all because they happen when production is over.\u00a0 For example, if I choose to donate part of my pay to charity instead of spending it on travel, the organization that paid me will not even know what choice I made.<\/p>\n

Involuntary transfers taxing the middle classes to fund public goods have a bad reputation in the modern world.\u00a0 Why?\u00a0 Because nobody accepts responsibility for the social safety net but the government.\u00a0 And because the government has no source of income but taxes.\u00a0 The result:\u00a0 Taxes are onerous, while at the same time the public goods financed by taxes are underfunded.\u00a0 The general solution makes meeting human needs everybody\u2019s calling, not just the government\u2019s legal duty.<\/p>\n

It repeals the no-no forbidding the government having other sources of income. The transfer of rents means, among other things, the public capture of rents.[2]<\/a>It means public banking, or if not public banking then in any event banks devoted in one way or another to green need-meeting (Several such banks were described in Chapter Five).\u00a0 The huge rents that accrue from the power to create money now exercised by private banks should flow where they are needed, and not flow where they are not needed.[3]<\/a><\/p>\n

From an ethical point of view, the general solution revives traditional ideals like ubuntu, dharma, <\/em>service, and zakat. <\/em>\u00a0These are kinship ideals, often expressed in terms like sister and brother.\u00a0 In the Christian vocabulary of Martin Luther King Jr., the planet earth is the World House where the human family dwells.[4]<\/p>\n

The general solution changes the social structure. Structure establishes material positions.\u00a0 Mission-driven and vocation-driven action to meet needs, changes the meanings of the rules that constitute the structures.\u00a0 Along with their meanings it changes their powers.\u00a0 It gets material real fast. The homeless drunk gets a place to sleep.\u00a0 The denuded mountain is replanted with seedlings.\u00a0\u00a0 Speaking generally, property can no longer mean suum cuique <\/em>in the sense of dominus <\/em>as it tends to mean in the civil law traditions derived from Roman Law.\u00a0 It has to mean trusteeship for the sake of social function, in tune with traditions that construe ownership as stewardship.\u00a0 Far from being a superficial change that leaves the social structure in place, meeting needs because they are needs is a sea-change in the cultural norms that constituted the social structure in the first place.<\/p>\n

None of the points offered above as a general solution to economic problems depends for its validity (or for its desirability as a myth or construct) on the vocabulary I have used here. \u00a0\u00a0The same thoughts \u2013and similar thoughts leading to similar actions\u2014could be and have been articulated with different words.<\/p>\n

NOTES:<\/strong><\/p>\n

[1]<\/a> Jim Collins and Jerry Porras, Built to Last.\u00a0 <\/em>New York: Harper Business, 1994<\/p>\n

[2]<\/a> Leon Walras advocated the public ownership of land, believing that land rents would fund the government so well that taxes would be unnecessary. Renato Cirillo, The \u2018Socialism\u2019 of Leon Walras and his Economic Thinking, The American Journal of Economics and Sociology.\u00a0 <\/em>Volume 39 (1980) pp.295-303.<\/p>\n

[3]<\/a> Ellen Brown, Web of Debt.\u00a0 <\/em>Baton Rouge:\u00a0 Third Millennium Press, 2007; and other works on public banking by the same author.<\/p>\n

[4]<\/a> See the World House chapter in Martin Luther King Jr. Where do we go from Here: Chaos or Community?\u00a0 <\/em>Boston: Beacon Press, 1967.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

____________________________________________<\/p>\n

\"\"<\/a>Prof. Howard Richards is a member of the TRANSCEND Network for Peace, Development and Environment<\/a>. He was born in Pasadena, California but since 1966 has lived in Chile when not teaching in other places. Professor of Peace and Global Studies Emeritus, Earlham College, a school in Richmond Indiana affiliated with the Society of Friends (Quakers) known for its peace and social justice commitments. Stanford Law School, MA and PhD in Philosophy from UC Santa Barbara, Advanced Certificate in Education-Oxford,\u00a0 PhD in Educational Planning from University of Toronto. Books:\u00a0 <\/em>Dilemmas of Social Democracies with Joanna Swanger,\u00a0<\/em>Gandhi and the Future of Economics with Joanna Swanger, <\/em>The Nurturing of Time Future, Understanding the Global Economy (available as e-books),\u00a0<\/em>The Evaluation of Cultural Action (not an e book).\u00a0 <\/em>Hacia otras Economias with Raul Gonzalez, free download available at www.repensar.cl<\/a>.\u00a0<\/em>Solidaridad, Participacion, Transparencia: conversaciones sobre el socialismo en Rosario, Argentina. <\/em>Available free on the blogspot lahoradelaetica.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

I refer to the unsolved ones, not to those that are pretty satisfactorily solved already. I focus on our two acronyms SF1 and SF2, where SF can be read as Staggering Fact or as Structural Fact.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40],"tags":[],"class_list":["post-93528","post","type-post","status-publish","format-standard","hentry","category-transcend-members"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/93528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=93528"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/93528\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=93528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=93528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=93528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}