Introduction to Complementary Economics
Arthur Warmoth, Ph.D.
Sonoma State University
Skaggs Island Foundation
Copyright © 2005
The Epistemology of Economics
Economics is the universal language of the integrated global economy of the postmodern world.
The purpose of economic systems is the satisfaction of human needs and desires (to maximize human wealth and well being).
The essence of economics systems is mapping ecologies (social and natural) onto accounting systems.
The mission of economics as a social science is to explore the structure and dynamics of economic systems so that they can be redesigned to maximize human happiness (human wealth and well being)
In my view, the most central concepts of complementary economics are simple:
· On the financial/monetary institutions/accounting side of the equation, we need to look at what money is, not just at what it does: Money should be created as a public utility supported by a service charge, not as a commodity funded by interest.
· On the ecology of real wealth side, we need to look at institutional and ecological arrangements for constructing sustainable local economies, with global commerce as the icing on the cake: We need to look at the economics of assets, not just the economics of trade.
Five Basic Principles of Complementary Economics
1. Money is an agreement, not a thing.
“Money is an agreement, within a community, to use something as a means of payment.” (Bernard Lietaer, The Future of Money, 2001, p. 41)
It should be noted that the “something” needs to be countable, and that “means of payment” is one of the two major functions of money generally recognized by economists: money serves as a medium of exchange. This definition describes the function of money at all times and places
There is a second conventionally recognized function of money: a store of value.
Thus money is actually an agreement by a community to use a unit of account as either or both a medium of exchange and a store of value. If that unit of account is “something,” then the currency is “backed.”
2. The purpose of economic institutions is the efficient, sustainable satisfaction of the full range of human needs
The function of economic systems is to enhance human wealth and well-being while managing the interface between human and ecological systems. Abraham Maslow’s hierarchy of needs (Motivation and Personality, 1954) offers a useful schematic model of the full range of human needs:
· Physiological needs
· Safety needs
· Love & belongingness needs
· Need for esteem and self-esteem
· Need for self-actualization
Maslow and others have also postulated a transpersonal or spiritual realm of various higher needs, including truth, beauty, justice, and transcendence. The conventional economics of commodities and markets deals only with the lower levels of human needs that are addressed by material consumption, making greed the only path to security and self-esteem. Complementary economics deals also with the economics of higher needs, including the economics of the “commons” which includes both social and natural resources. Thus complementary economics recognizes that the economic systems needed to satisfy different levels of the hierarchy of need may operate according to different system properties in which the price-auction market may play only a partial or limited role.
3. Accounting systems must be based on a close relationship to the ecology of real wealth in real time.
The tendency of contemporary corporations to create wealth by manipulating legal and accounting systems, rather than by producing real wealth in real time, was labeled “paper entrepreneurialism” by Robert B. Reich (in The Next American Frontier, 1983). Fueled by the seductive complexifying power of information technology, this trend culminated in the financial scandals of Enron, Arthur Anderson, Global Crossing, K-Mart, Tyco, Merrill Lynch, Adelphia, WorldCom, and AOL-Time Warner. Those members of the middle class who saw their 401(k)s evaporate in this fiscal trainwreck—and those of us who are concerned about the future of our investments—might well look to alternative investment models such as microlending, stakeholder ownership (Jeff Gates, The Ownership Solution, 1998), and Natural Capitalism (Paul Hawken, Amory & L Hunter Lovins, 1999).
4. Human resources are relatively more abundant than natural resources in relation to their utility in satisfying human needs; therefore the economics of human labor should be an economics of abundance, not an economics of scarcity.
Chronic social problems such as education, health care, and social services for the working poor primarily require the mobilization of local human resources to solve. This would “prime the pump” in the current stagnant economy as well as contributing to the sustainability of local economies, making them more recession-resistant. To do this means investing more in education and less in paramilitary social control.
5. The economics of price-auction markets, which is suitable for goods and services that can be produced and consumed by individuals, requires a complementary “economics of the commons,” which includes all resources, goods, services, and assets that must be produced and/or consumed (used), at least in part, collectively.
“The commons” includes all social system and ecological system assets essential to, or useful for, human wealth and well-being that cannot be produced and/or distributed to individuals operating in price auction markets. Today we find that most aspects of the commons, ranging from the integrity of the environment to the social fabric of our communities, are in a state of crisis. This is because we simply do not know how to think about the economics of these critical systems, including elements of the commons such as politics, health care, education, public safety, retirement security, employment security, energy, transportation, environmental quality, land use, affordable housing, and culture and the arts.
Complementary Economics & Sustainable Economies
"Complementary economics" deals with those areas of economics that are ignored or inadequately understood by conventional economics (and economists), which is essentially the economics of markets, of manufacturing and trade. Conventional economics pays insufficient attention to the question of the nature of money as such. Furthermore, it ignores or provides a distorted image of a large arena of economic activity that cannot be traded in markets. This economic arena is sometimes referred to as public goods and services. However, there is no widely accepted term to refer to these collectively consumed goods and services, as well as our collectively held assets. Recently some commentators have begun to refer to this economic arena as "the commons."
The creation of sustainable economies requires creating economic theory that deals with the economics of public goods and assets as fully and robustly as price-auction market economics deals with the economics of private production and trade. The key elements of complementary economics are:
1. Complementary currencies (Bernard Lietaer, Thomas H. Greco, Jr.)
2. Investment in sustainable bioregional and city-regional economies,
2.1. Stakeholder ownership, microinvestment (Jeff Gates, Grameen Bank)
2.2. Ecological Economics, "Natural Capitalism") (Paul Hawken, Amory and L. Hunter Lovins; Lester Brown)
3. Economics of the Commons: A comprehensive systems model of the social and ecological commons that will support the mobilization of regional human and natural resources to solve social problems, and will provide sustainable models for funding social and environmental services by integrating philanthropy, tax reform, and the management of the government services and nonprofit sectors. (Jonathan Rowe)
These three elements offer progressively more complicated stages in a strategy to address our current economic and fiscal crisis by creating recession-resistant regional economies. From a public policy perspective, the most fundamental conclusion of complementary economics is the need to shift the basis of our public and personal planning for economic security from unsustainable growth based on the control and exploitation of energy and other natural resources to sustainable regional economies based on the optimal utilization of human resources.
There is nothing wrong with growth as such. However, sustainable growth is not possible if it is based primarily on the exploitation of natural resources. Furthermore, it is not possible within the institutional architecture of contemporary global capitalism. Trickle down effects will never be adequate (particularly in the context of the political trend away from progressive taxation), and the expectation of compound interest creates unsustainable expectations for fiscal performance on the part of corporations and financial services institutions.
Sustainable regional economies do not preclude the importance of global trade in manufactured goods and natural resources. Adam Smith's theory of the differential productivity of regions and nations is valid within the domain of trade goods, and all regions are not equally endowed with natural resources. However, most of our chronically unsolved social problems, including education, health care, social welfare, public safety, and environmental stewardship primarily require the mobilization of human resources at the local and regional level. The core strategies for mobilizing human resources are education and participatory democratic politics. The primary focus of complementary economics is on the redesign of economic systems and institutions so that they support sustainable, education-based economic development.
It is important to note that "the commons" should not be equated with what conventional economists often mean by "public goods." The commons is a much larger concept that includes public goods (which is why we need a new vocabulary). The commons includes the ecological commons that makes life possible, the gene pool that underwrites our adaptation as social primates (the behavior that Maslow called "instinctoid, and which is of particular interest to sociobiologists), and the cultural commons, which is all of those useful social arrangements that are managed by tradition.
However, when the commons gets into trouble and therefore requires our conscious attention, it becomes a matter of political economy. That is, it becomes grist for political processes and economic theory.
Income = Expense
W + S + T = C + I + G
(income to the factors of production) = Consumption (purchases)
However, when we introduce the use of money (and financial instruments) as a store of value, the simple form of Say's tautology no longer applies. Many of the systemic problems of modern economies can be accounted for by the slipping and sliding that goes on in the transfer of money from the first (exchange) to the second (savings) function. And the situation is further complicated by the ability of governments to manipulate their income and expenditures at the macroeconomic level (by printing money, engaging in deficit spending, etc.). The logic of economic systems design requires that all three elements of the macroeconomic equation be in balance. In the real world, they often are not, and that leads to predictable systems problems that are associated with each of the elements of the basic tautology:
1. The liquidity (currency) problem
2. The savings-investment (asset) problem
3. The "problem of the commons" (public goods)
Adequate solutions to the problems in each of these areas will require more than he application of simple minded economic nostrums. They require rethinking and reinventing deep structural aspects of our economic thinking and economic institutions. The first and third problems were explored in Part I. We now turn our attention to the savings-investment problem
In making regional, community-based investment decisions it is useful to identify three separate domains of investment, each with separate goals and economic system properties.
1. Investment for economic security; sectors include:
· Monetary & financial institutions
2. Investment for economic growth; sectors include:
· Information technology
· Information management
3. Investment for “Quality of Life”
· The key strategy is mobilizing local/regional human resources in order to maintain and grow the social commons.
· Eventually, progressive taxation at the local level is essential; however, in the meantime, progressive philanthropy can play a key role. (See attached.)
· Key sectors include:
o Health care
o Environmental systems management
§ Land use
§ Natural resources use
§ Transportation infrastructure
o Culture and the Arts
o Public Administration
The Limits of Prosperity in Sonoma County
The recent release of the New Economy, Working Solutions (NEWS) report ,“The Limits of Prosperity,” was an important event. Researchers Dan Acland and Nari Rhee thoroughly documented the “hourglass economy” in the North Bay. Income growth has occurred at the high wage end of the work force and job growth at the low wage end, with middle class job growth remaining stagnant. Commentators led off by Congresswoman Lynn Woolsey supported the report’s recommendations, which ranged from accountability for job creation in publicly funded projects through affordable housing to support for the organizing efforts of the low wage work force.
However, some further implications of the study should be noted. The lack of middle class job growth boxes in the low wage work force, which aspires to upward mobility, at least for their children. But it also impacts middle class workers who send their children to college believing that this is a ticket to a middle class lifestyle.
Furthermore, increasing the minimum wage is not sufficient in itself to provide affordable housing, education, and health care. Acland and Rhee argued persuasively that the minimum wage can be raised significantly without threatening competitiveness or endangering job creation. However, these necessities cannot be adequately provided for the middle class, let alone the low wage work force, entirely by the free market. Public subsidies are needed for these necessities, and we must find better ways to collect the taxes needed to provide them. The concept of “progressive taxation” was notably missing from the discussion. The mixed fate of recent parcel tax proposals suggests that there is some willingness on the part of the public to pay for education and perhaps other essential services. However, parcel and sales taxes are regressive and unfair. What is needed is the ability to implement progressive taxation at the local level.
Furthermore, we need to consider where good middle class jobs can logically be created in a globalizing information economy. We need to identify the most likely growth sectors for the foreseeable future. Since any job that can be outsourced to a cheaper labor market eventually will be, we need to look critically at our hopes for export-based growth. Unlike high tech manufacturing, high tech engineering probably still has a future in Sonoma County. Engineers willing to have their creations manufactured in India still prefer to live here. But engineering mostly creates additional wealth, not additional jobs. The most robust export industries are currently wineries and tourism. These industries mainly produce export income and low wage jobs. But failure to provide an adequate standard of living for the growing low wage work force has quality of life implications for all of us, including creating public health and safety hazards. For one thing, lack of opportunity encourages the spread of gang activity.
There are some interesting opportunities at the high end of tourism and hospitality, including eco and cultural tourism, and retirement living. The Green Summer Music Festival could become a tourist magnet comparable to the Ashland Shakespeare Festival. Other cultural resources at Sonoma State and elsewhere in the county could also be developed. Furthermore, retirees who move into the county bringing income from elsewhere have a balance of trade effect similar to that of tourism.
However, a healthy, sustainable regional economy in an area as rich in natural and human resources as the North Bay should depend less on export–driven growth than on the mobilization of local resources to meet local needs. There are crying needs in the areas of education, health care, ecosystem management, public safety, transportation infrastructure, and public administration. However, these unmet needs are in the public sector. It is unrealistic to expect sufficient growth in the commercial economy to be able to meet these needs with current tax policies. This brings us back to the need for progressive taxation at the local level, as mentioned above. But it also suggests the need for more creative innovations, such as the regional currency concept currently being developed by the Sebastopol Economic Forum and the Skaggs Island Foundation, as well as a variety of "smart growth” or “sustainable development” options being promoted by various local organizations.
The Four Big Stories In Complementary Economics
There are four big stories in complementary economics, of which complementary currencies are only one. The stories are:
1. Complementary currencies and local/micro banking.
2. Taxation and public spending.
3. Savings, Investment & Ownership
1. Complementary Currencies and Local/Micro Banking.
Complementary currencies are designed primarily to serve the market sector of the economy. Complementary currencies treat money as a public utility financed by a service charge, rather than as a commodity financed by compound interest.
Complementary currencies deal with the instabilities of the business cycle by providing sufficient liquidity during periods of a shortage of national currency commonly known as recession or depression. In addition, because they are not based on compound interest, complementary currencies address the excessive competitiveness of the present system and the ecological destructiveness of near term-focused planning. (Bernard Lietaer, The Future of Money, 2001; Thomas H. Greco, Jr., Money, 2001, Lietaer & Brunnhuber, in press.)
Another recent invention is microbanking, which was pioneered by Muhammad Yunus' Grameen Bank in Bangladesh. Microbanking provides access to liquidity for persons usually considered too insignificant for conventional banking to deal with. Since microbanking invests in real wealth-based economic development, it also represents a very grass roots approach to ownership issues (see below). Credit unions might be an interesting market to approach to implement alternative models of banking.
2. Taxation and Public Spending.
This and the subsequent stories get into the economics of the commons. The public seems to be forgetting that taxes are actually designed to pay for valuable, often essential, public goods and services. According to Lietaer and Brunnhuber (2005):
Almost everywhere the proportion of income from capital income (income generated through investments), is increasing, while the proportion from wage income (income generated through work) is declining. Furthermore, the ability and will of governments to tax and redistribute capital income and assets has been weakened, a fact which is linked both to potential capital migration and the internationalization of business groups. As more states worldwide compete for direct investment, the threat of a trans-national group closing down a facility is ever present and feeds a continuous "race-to-the-bottom" among states, with potentially ruinous consequences. (p. 71)
This had led to the chronic underfunding of public services including education, health care, public safety, transportation infrastructure, and environmental protection. Ultimately, as long as democratic decision-making mechanisms are in place, public policy failures reflect a lack of understanding on the part of the electorate. At the present time, various instances of venality and corruption and the widespread experience of stagnant real income—contrary to the popular expectations of the American Dream—have played into the American populist tradition of distrust of government to further erode public confidence that taxpayers are getting value for their money. This has tended to elicit a nostalgia for simple fundamentalist solutions in politics, economics, and morality, including the skepticism about any kind of politics that has been part of the American tradition since the time of the Revolution and an over reliance on the charisma of anti-politics political leaders. However, a deeper analysis would see the problem as the lag time involved in the political process responding to the huge and rapid structural changes in our economic institutions that are being driven by communications and information management technology.
In an information economy, the information commons is probably the most valuable asset of all, and it will be the main basis for quality of life in the future. Sufficiently available money--which is made possible by complementary currencies--can lessen some of the temptations for venality and corruption. Information technology and institutional system redesign can greatly reduce the overhead cost of government and offer greater accountability. The governator is moving somewhat in the right direction, but his thinking is hobbled by his commitment to a business-focused ideology that embraces free market-fundamentalism and the outdated notion that ‘business creates wealth and government spends it.’ David Osborne and Ted Gaebler’s Reinventing Government (1992) offered a good recipe for separating the legislative priority setting and the service delivery functions of government that could lead to the realization of these efficiencies, if only legislatures were inclined to reinvent themselves.
3. Savings, Investment & Ownership
This may actually be the biggest story right now. Enron, WorldCom, and Arthur Anderson have recently made big headlines by their abuse of stockholder and employee ownership. But the bigger story is the fact that the shift from defined benefit to defined contribution pension plans (including the proposed ‘privatization’ of social security) is precipitating the crisis predicted by Louis Kelso. Kelso predicted that as technology increasingly replaces labor in the production of manufactured goods, the concentration of the ownership of productive capital would squeeze out jobs as the basis for claims on the output of productive capital. (Kelso & Adler, 1958,1961; Kelso & Hetter, 1967) This ownership crisis represents a Malthusian twist on Marx’s analysis of the surplus: the owners of the means of production can accumulate surplus to the point where the increasingly unnecessary workers starve.
Ownership issues can be broadly sorted into two types:
Issues related to shareholder ownership can be sorted into monetary and financial institution issues and issues of ecological economics. The former are problems created by the way that contemporary monetary and financial services institutions are designed. The latter relate to institutional arrangements linking ownership and stewardship to the real wealth ecologies of the social and natural worlds.
However, there are problems with the contemporary design of money and associated financial institutions that make our current institutional arrangements unsustainable. These have been well summarized by Lietaer and Brunnhuber (2005).
Seven characteristics of today's financial system reveal that it is not neutral in terms of sustainability. These characteristics are briefly summarized below. The rest of the chapter provides some of the evidence that supports these claims.
1. Instability of the international financial system itself
The international monetary system itself has become unstable. This instability creates major problems not only for the financial industry itself, but for the entire economy as well. Any investment in the future invariably has a component of speculation, as it requires a prognosis now about an uncertain future. However, monetary and banking crises are adding an entire new layer of uncertainty to investment decisions. The "contagion" effect whereby a crisis in one country can trigger a series of crises in other countries adds to this uncertainty, as entire continents may be affected in a completely unpredictable ways. Furthermore, the dramatic social consequences of such monetary or banking crashes linger much longer than the purely financial ones.
2. Pro-cyclical money creation process
The instability mentioned above is in fact an exacerbation of a much older systemic problem - namely, the process by which the banking system creates money is pro-cyclical. That is, it tends to amplify the fluctuations of the business cycle. Indeed, banks simultaneously tend to either make credit available or restrict it for a given country or group of countries. Specifically, when business is good in a particular market, banks tend to be more generous in terms of credit availability, thereby pushing the "good times" into a potentially inflationary boom period. Conversely, as soon as the business horizon looks less promising, banks logically tend to try to reduce their exposure to the perceived risks and therefore restrict credit availability, potentially pushing a business dip into a full-blown recession. Central banks attempt to counteract such fluctuations by giving counteracting interest rate signals. Nonetheless, the net effect remains clear: collective actions of the banking system tend to exacerbate the business cycle in both boom and bust directions.
3. Short-term orientation
Our present financial system systematically introduces a bias towards very short-term results, thereby discouraging concern about long-term implications.
4. Compulsory growth pressure
Particularly in the case of debt-laden individuals and companies, the present monetary and financial system exerts systematic pressure to achieve economic growth at all costs. For developing countries for instance, this translates into coercion for export-led development. This kind of growth pressure, particularly when it combines with short-term priorities, provides incentives to overexploit resources and disregard sustainable practices.
5. Unrelenting concentration of wealth
Wealth is concentrated in increasingly fewer hands as the disparity between rich and poor increases in all countries throughout the world. This is true both within most countries and between developed and developing countries. It will be shown how our monetary and financial system is one of the key underlying mechanisms of this process.
6. Devaluation of social capital
George Soros, who cannot be suspected of an anti-capitalist bias, concluded that: "International trade and global financial markets are very good at generating wealth, but they cannot take care of other social needs, such as the preservation of peace, alleviation of poverty, protection of the environment, labor conditions, or human rights - what are generally called 'public goods'." [On Globalization. (Oxford Public Affairs, 2002) p. 14] Consequently, as market mechanisms are introduced into ever-greater areas of society, social capital begins to erode. We can observe social capital in the readiness of citizens to help each other spontaneously, to form self-help groups, clubs, trade unions and parties, through membership of religious communities, or through the organization of charitable events. Social capital has proven fiendishly hard to measure quantitatively, but is nevertheless a critical ingredient to create a robustly sustainable society.
7. Mobility of capital vs. mobility of goods
We know since David Ricardo (1772-1823) that trade is beneficial between two countries whenever there is a comparative cost advantage in the production of the goods or services they exchange. Every economic textbook elaborates on this thesis. Ricardo's arguments in favor of international trade are the main justification for dismantling protectionist measures worldwide and for the globalization efforts of the past decades. However, one of the conditions specified by Ricardo himself is that the comparative advantage theory works only if capital doesn't become mobile as well. If Ricardo is right, we have to choose between freedom of movement of capital or of goods: we can't have both and still derive the benefits of international trade. Because of a lack of empirical studies on the benefits of free capital movement, the jury is still out on this issue. (pp. 48-49)
Full-ownership policy. Today's full-employment economic policy needs a counterpart ownership policy. We need both widespread employment of our labor resources and widespread ownership of our capital resources.
Ownership impact reporting. Every policy pronouncement should be accompanied by an ownership impact report. We have a right to know when those we elect pass laws that make the rich richer. An international effort should compile and maintain a detailed global ownership registry.
Fiscally foresighted investment practices. Today's $8 trillion-plus in retirement-plan assets must be invested in a way that fosters broad-based ownership. Pensioners need to retire into a fiscal environment characterized by widespread financial self-reliance. Anything less endangers their retirement benefits.
Private wealth from public assets. Government contracting should favor broadly owned companies. The same should hold true for government-granted licenses (broadcasting, etc.) or anywhere private access is granted to public assets, such as commercial access to minerals, timber, and oil on public lands.
New ownership possibilities. Ongoing commercial relationships (supplier, distributor, customer, contractor, bank depositor, service provider) should be the priority focus for an array of policies designed to broaden wealth while improving enterprise performance by "ownerizing" those relationships.
Customer-owned utilities. Investor-owned utilities should become partially owned by their customers, gradually transforming bill payments into customer-owned equity.
Corporate localization. Today's megamergers should be restructured to ensure broad-based ownership, particularly within those communities where corporate operations are located.
Ownership-pattern-attuned tax policy. Fiscal foresight requires a tax policy ensuring that more of the nation's income-producing capital finds its way into the accounts of those now undercapitalized.
Monetary policy. The Federal Reserve's indifference to fast-widening economic disparities is destined to undermine long-term price stability as more people become dependent on the government. Both monetary and fiscal policy must be made more sensitive to ownership patterns.
Antitrust policy. Ownership patterns should be considered a key factor in assessing both the structure and the conduct of monopolistic firms.
Populist foreign policy. U.S. foreign policy should set as its top priority the worldwide alleviation of poverty. Plutocratic ownership patterns, now the global norm, pose a clear danger to global stability, to the environment, and to the continued advance of democracy.
Foreign assistance. Foreign aid, including assistance provided by the World Bank and the International Monetary Fund (IMF), should adopt ownership-pattern-sensitive development techniques.
Capital commons user fee. Global capital markets are a commons. An international effort should impose a capital commons user fee, directing the proceeds to fund human needs in the developing world. International law should extract a "freeloader's levy" from those who've hidden $8 trillion in the world's tax havens.
Resource productivity policies. All public policies should be designed to multiply the productivity of natural resources.
New assets for new owners. Limits should be placed on hydrocarbon emissions, property rights created in emission permits, and those permits used to capitalize households nationwide, linking energy conservation to income generation.5
Socially responsible investing. As with the antiapartheid screening of investments a decade ago, the investor community should screen for equity and sustainability.
Prosperity corps. A prosperity corps should be established to train Americans for missions abroad that implement best-practice development programs.
Culture corps. Americans should be sent abroad to share our diverse cultures with others while showcasing the world's cultures here.
Just say no to values-free free trade. Free trade, yes, but no more values-free free trade. Democracies must oppose injustice and un-sustainability, whether here or abroad. (Gates, 2002, pp. 8-10.)
The recent trends toward defined contribution, rather than defined benefit, pension plans is combining with President Bush’s initiative to privatize Social Security to force the public to consider the possibility that Kelso’s prophecy may be coming to pass. This situation could lead to the pension fund socialism predicted by Peter Drucker (in The Unseen Revolution, 1976; also see Jeff Gates, The Ownership Solution, 1998.) Pension fund managers could become more important than legislators as shapers of public policy in the near future. Investment in ‘miracle’ technologies and investment in sustainable regional technologies (including social systems, natural capital, etc.) are important areas to study. Co-ops, land trusts, etc. will become increasingly important. New investment institutions taking advantage of the cheap information processing (including cheap accounting) made possible by technology are on the horizon. Philanthropy is in for a radical revisioning.
The ecopsychology story is actually many stories, or perhaps more accurately a metastory. Ecopsychology integrates ecosystem issue with the questions of values and ethics than can only be addressed and managed by telling ourselves and one another appropriate stories built around images of sustainability. (The neo-Jungians call this imaginal psychology, and Susanne Langer called it “presentational symbolic forms.”) This is the realm that humanizes the theoretical idea of “system” by embedding it in concepts like sustainability, stewardship, caretaking, social justice, compassion, Gaia and green. It shows up in phrases such as life, liberty and the pursuit of happiness; liberté, égalité, fraternité; Mother Earth-Father Sky; and In God We Trust.
This is a domain of a multitude of stories because any story that connects does so because it fits into a historical stream of cultural ideas, images, attitudes, and values. Thus ecopsychology, with its bioneers, fits into a stream sometimes labeled “the cultural creatives,” which in turn is a branch of the great river of the Judeo-Protestant liberal imagination. But other cultures have their own stories. There are instructive debates with the Native American community as to whether those who are willing to share sacred traditions and practices with cultural creatives are traitors, or simply representatives of traditional values of sharing and hospitality
Postindustrial interconnectedness has created a historically unique situation in which spiritual or religious narratives are no longer the cultural underpinnings of cultural organization and ecological adaptation. In the global society, the discourse that manages humanity’s interface with the natural environment and operationalizes human values is economics. As I stated at the beginning, economics is about mapping ecologies onto accounting systems. The rules governing the mapping and the design of the accounting systems are necessarily essentially political.
Therefore a new understanding of politics, particularly democratic politics, becomes essential. Politics is no longer, as in the liberal democratic tradition, only debate and agreements about social contracts among individuals. It also become debate and agreements about the management of ecological systems and the interpretation of human values that occur among cultural communities that speak different languages and operate out of differing historically evolved worldviews.
Thus, as the Buddha knew, the idea of a universal metastory is an illusion. There is only a perennial dialogue among art, science, and the dreamworld to create narratives and images that construct ecologically adaptive social realities that embody virtue and the good life.
Acland, Dan & Rhee, Nari. (2005). The Limits of Prosperity. Santa Rosa, CA: New Economy, Working Solutions (NEWS) .
Drucker, Peter F. (1996). The Pension Fund Revolution. New Brunswick, NJ: Transaction Publishers. (Originally published as The Unseen Revolution, New York: Harper & Row, 1976.)
Fitts, Catherine Austin. (2002). Solari & the Rise of the Rule of Law. Http://courtskinner.com/solari/rise.htm.
Gates, Jeff. (1998). The Ownership Solution: Toward a Shared Capitalism for the 21st Century. Reading, MA: Addison-Wesley.
Gates, Jeff. (2002). Democracy at Risk. Cambridge, MA: Perseus.
George, Henry. (1879, 1979). Progress and Poverty. New York: Robert Schalkenbach Foundation.
Greco, Thomas H., Jr. (2001). Money: Understanding and Creating Alternatives to Legal Tender. White River Junction, VT: Chelsea Green.
Hawken, Paul, Lovins, Amory & Lovins, L. Hunter. (1999). Natural Capitalism: Creating the Next Industrial Revolution. Boston: Little, Brown & Co.
Kelso, Louis O. & Adler, Mortimer J. (1958). The Capitalist Manifesto. New York: Random House.
Kelso, Louis O. & Adler, Mortimer J. (1961). The New Capitalists. New York: Random House.
Kelso, Louis O. & Hetter, Patricia. (1967). The Two Factor Theory. New York: Vintage.
Keynes, John Maynard. . The General Theory of Employment, Interest and Money. New York: Harcourt, Brace & World.
Langer, Susanne. Philosophy in a New Key.
Lietaer, Bernard. (2001). The Future of Money: Creating New Wealth, Work, and a Wiser World. London: Century.
Lietaer, Bernard & Brunnhuber, Stefan. (2005). Our Future Economy: Money and Sustainability–the Missing Link. (EU Chapter of The Club of Rome, in press.)
Osborne, David & Gaebler, Ted. (1992). Reinventing Government. Reading, MA: Addison-Wesley.
Reich, Robert B. (1983). The Next American Frontier. New York: New York Times Books.
Reich, Robert B. (2001). The Future of Success. New York: Alfred A. Knopf.
Introductory Bibliography on Complementary Economics
A manifesto for complementary economics is contained in:
David Bollier. (2002). Silent Theft: The Private Plunder of Our Common Wealth (Routledge)
Lester Brown. (2001). Eco-Economy: Building an Economy for the Earth. New
Edgar S. Cahn. (2004). No More Throw-Away People: The Co-Production
Imperative (2nd ed.). Washington, DC: Essential Books
Jeff Gates. (1998). The Ownership Solution: Toward a Shared Capitalism for the 21st
Century. Reading, MA: Addison-Wesley.
Jeff Gates. (2001). Democracy at Risk: Rescuing Main Street from Wall Street
Cambridge, MA: Perseus.
Thomas H. Greco, Jr. (2001). Money: Understanding and Creating Alternatives to Legal
Tender. White River Junction, VT: Chelsea Green Publishing Co.
Paul Hawken, Amory Lovins & L. Hunter Lovins. (1999). Natural Capitalism:
Creating the Next Industrial Revolution. Boston, Little, Brown & Co.
Hazel Henderson. (1999). Beyond Globalization: Shaping a Sustainable Global
Economy. West Hartford, CT: Kumarian Press.
Bernard Lietaer. (2001). The Future of Money: Creating New Wealth, Work, and
a Wiser World. London: Century.
Bernard Lietaer & Arthur Warmoth. (1999). "Designing Bioregional Economies in the Context of Globalization." In Joseph Kruth & Andrew Cohill, Eds. Pathways to Sustainability, published online by Tahoe Center for a
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