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Another Economy Part I The shadow cast by the global economy of the modern era is a long one, and it falls first and hardest on the small. Over the last 15 years New Zealand has been treated as a country sized test-tube for monetarist and free-market economists who unreservedly advocate the need to be immersed in the global economy. The experiment has been a failure for all but a tiny minority, most of whom either never lived in New Zealand or have since departed these shores. A tiny minority who might one-day face prosecution for `crimes against economy' no less devastating than the recently recognised court for prosecuting crimes agains humanity. The vast majority of Kiwis have and for some time will continue to depend on a wage or a small business income. Over the last 15 years real incomes have gone down, work hours have gone up, poverty has increased, health statistics have deteriorated and indebtedness has spread like an epidemic. The last hope of the unrich, the election of a government to represent their interests, has been almost taken away by the sale of substantial chunks of New Zealand's assets to foreign investors. Over the next five programmes I examine the background, the foreground and two possible futuregrounds for the New Zealand economy in particular and economies in general. The background for all economies is the `global economy'. Fifty six years ago a conference at Bretton Woods attempted to prevent for ever the economic collapse that precipitated world war two. Twenty seven years later the Bretton Woods conference of Western States reversed the noble aims of the post-war years when under great pressure from the USA they agreed to take the centuries old gold standard out from under the value of money. Ever since the world's currencies have been left to float or sink, largely dependent on the fortunes of the US dollar. The pivotal role of the US dollar has given North American corporations a leg-up in the competition for dominance in a new global economy and they have used that advantage to place themselves in leading postions in all the new organisations setup to direct a so-called new world order. The names of the corporate-government alliances are now familiar; the International Monetary Fund (IMF), the World Bank (WB), the World Trade organisation (WTO), the World Economic Forum (WFO). Certainly these organisations are not shy about their pretensions to run the world. However the images presented to PlaNet when the IMF or WB or WTO or WEF hold their meetings are not ones of men in suits making key decisions for the globe. The latest images are now of young people playing drums and waving banners, often lost in smoke and tear gas fired from riot police. As the IMF and World Bank meetings got underway for 2000 in Prague's former Communist-era Palace of Culture, around 8000 people were on the streets to disrupt the meetings, taking inspiration from the actions in Seattle in 1999 and Washington DC this year when for the first time in fifteen or more years people demonstrated en masse against what protestors in the 60's called `the system'. The demonstrators were not united by a common aim, but they were united by a common complaint - the ravages of the global economy on billions of people and on the environment. It appears the propaganda free-ride is over for free-marketeers, privateers and the monetarists. II Part two of my four part commentary on free-market ideology backgrounds the global economic experiment that has darkens the lives of billions. The two founding institutions of the global economy - the World Bank and the International Monetary Fund - were born in 1944, with a simple and praiseworthy mandate: to fund post-war reconstruction and development and lend hard currency to nations left bankrupt by a war economy. The only country in the world that made money out of world war two was the USA. Subsequently, the USA almost single handedly funded the World Bank and the IMF. The Korean war and the Vietnam war both ended in economic and political defeat for the United States. By the mid 1970's the US government-corporate alliance was viewed with great suspicion. Corporations planned and executed a massive global propanda campaign with the aim of changing their image. By 1980 they'd largely succeeded and the global economic and political institutions responded with a sharp turn to the right. In the early Eighties, Third World nations, their economies bleeding from five-fold increases in oil prices and a similar jump in dollar interest payments, brought their begging bowls to the IMF and World Bank. But instead of debt relief, they received `structural assistance plans' listing an average of 114 'conditionalities'. The particulars varied from nation to nation, but in every case, they had to remove trade barriers, sell national assets to foreign investors, slash social spending and make labour flexible, i.e crush the trade union movement. The apparently sophisticated free-market global economy has a simple design at its heart. To remove barriers to corporate business whenever and wherever they occur and at whatever the cost to people and planet. The World Bank and the IMF have been joined by the World Trade organisation and the World Economic Forum in an all-out push to manage the global economy in the interests of private corporations and banks. New Zealand has always been unduley influenced by foreign ideas, especially of the rich and powerful in the UK and USA. Lead by the opportunistic mind of Roger Douglas and weakly opposed by prime minister David Lange New Zealand was launched onto the uncharted seas of the free-market in 1985. Fifteen years later a few would still say free-market policies have 'brought about an unprecedented increase in world living standards', very few would say that about New Zealand, the most devoted disciple of free-market global economics. The few who have got rich still applaud, but mostly they have followed their profits out of the country. Recently, the IMF admitted that 'in the recent decades, nearly one-fifth of the world population have regressed'. I'd go further. Free-market ideology is one of the greatest economic failures of the twentieth or any century. The positive spin corporations put on themselves in the 1970's has worn thin, demonstrations against the advocates of free-markets and un-regulated globalisation have started again. The response by the World Bank and IMF is to talk about reforming themselves. The structural assistance plans have been renamed poverty reduction strategies'. But it's just more spin around the same sickeningly familiar axis. Free-market economics is pro-corporate and anti-everything else. Next, alternatives. III Part 3 of the this report on the free-market global economy looks at the foundations of alternative economics. The dollar-first so-called Information Economy has already been termed "post-industrial" and "the new economy". But that's not right, there's nothing new or post about it. The real new economy does things differently, it: * redefines wealth * expands the measure of value beyond monetary units * shifts focus from accumulation to regeneration AND * evolves from negative oppositionalism to positive promotion of alternatives. The other/new economy is more visible these days but still not visible enough to replace the dinosaur that the free-market global economy has become. Speaking of dinosaurs, the huge overbearing size of international commerce should not put us off tackling it. On the contary, it's the size of companies and banks that is the great danger to society and environment. It was small adaptable warm-blooded mammals that replaced the huge reptiles and so too can small, warm-blooded businesses replace huge multi-national corporations. Lets not be put off by complexity either. Scratch the surface of even the most knowledgeable commercial operator or economist and you find a specialist with a very narrow frame of reference. The other economy does not need specialists and legions of managers. Information technology enables people to communicate directly and this in turn has given economic alternatives the tools it needs to coordinate and cooperate on the global stage. After identifying foundation stones and gaining the confidence that a new economy can and is already challenging the old we can make our investigative task easier by identifying the main zones of interest and focus. * money * energy * manufacturing and resource use * government * building Now we put the essential together by integrating foundation principles, zones of interest and practical activity, which latter doesn't have to be invented by experts or visionaries... it's being invented daily by people who are practising personally, socially and environmentally sensitive business. For example: * Businesses that use raw material sourced from waste to supply raw material for other businesses * Fair trade businesses that enable products and services from locally owned cooperatives, even in so-called third-world nations, to compete with exports from sweat-shops run by corporates * People's banks, green funds, socially responsible investment, micro-finance; all based on low interest loan money invested by people who want to see social and environmental added value as well as a fair monetary return. Alternative financial institutions allow money to be loaned to people who have little or none of the usual security but do have group support, a cooperative attitude and personal skills. * Lifestyle business which point the way forward because they start out on a very firm premise; business should support life, life should not have to support business. * New money trading, often called green-dollar communities where state-backed currency is replaced by local community backed currency * Eco-housing and eco-villages as built environments that fit business into life-styles rather than the other way round. I've not mentioned the usual things that people associate with a new economy - often called the green economy - such as organics, a focus on healthy non-toxic products etc, because I believe these alone do not necessarily reflect the deep changes in philosophy needed to make a new economy. It is not good enough to focus only on the end product. Alternative economies are alternative from the bottom up, not from the top down. The current commercial environment is a a master of packaging and PR, sales and spin. Next week I'll look at how to get through the hype and advertising to the places where people are changing channels in the economy game. IV Part 4 of the my report on the global economy and the alternatives finds businesspeople who have looked hard at the free-market philosophy and have rejected it, opting instead for pro-people and pro-environment philosophies on which to base their business. Innovative and forward thinkers know that the most important thing in making decisions in life is to identify then question the basic assumptions underlying each option and to critically examine the ground that others are trying to lead us onto. So lets do just that. First, list the four unstated but fundamental assumptions that free-market commerce stands or falls on. * Success can only be measured in dollars * Big is better * Competition beats cooperation * Perception is reality Now lets question those assumptions as to their strength and solidity. First, success is all about money. Its a cliche that money isn't everything, and most people will agree that it isn't. And yet faced with personal tragedy the majority of people cope and cope well. But faced with financial ruin those same people will feel unable to cope and will turn helplessly to a so-called financial advisor. Its a fact of modern life that we are induced in childhood into an addiction to money. We have been hooked into a terrible dependency and we fear the loss of a money supply in the same way a drug addict fears the loss of their pusher. The first step in rehabilitation of the economy is for individuals to kick the money habit and its attendent motivators fear and greed and adopt an attitude of integrity and respect which neither elevates nor ignores the role of money in a healthy society. Second assumption, size is everything. Many businesses prey on our insecurities. Its an unstated assumption that the bigger a business is the more solid and secure it is. But the facts don't support this assumption. A business that stays debt free and grows only as fast as re-investment of income will allow will be more secure because it will leave control and decision-making in the hands of its owners. The building industry furnishes us with ample evidence, a debt-free small builder stays in business while the over-capitalised building company collapses at the first industry down-turn. Assumption three, competition beats cooperation. This is the most cynically peddled of all the assumptions because even those propagating the idea don't believe or practice it. An unbiased observer quickly notices big businesses doing everything they can to get out of a competitive environment. Competitions true usefulness is as a tool of big companies in their destruction or absorption of the small. Smaller local businesspeople know this and get together for mutual defense, best termed cooptition, a combination of competition and cooperation where people work with those in their market, not against them. Assumption four, perception is reality, that is, belief equals truth. The interesting question is not does advertising work, it is, works for who? A business that doesn't know its philosophical base will go with the flow and end up believing its own propaganda. Faced with a health and/or environmental disaster it has caused the money-first business will not clean up its product, it will simply attempt to change people's perception while continuing with business as usual. For the world-view framed by the boundaries of a mall car-park, perception is reality. Such a limited view is perhaps the most damaging aspect of the consumer-society. A sustainable business that supports quality of life focuses on its products and services fitting into a truly global economy, the economics of social and natural systems of the world. The new economy, barely visible as yet but growing fast, is there to serve the ever increasing number of people who want to vote for environmental justice and a fair society. The sort of people who support buy nothing days. The people we will look at next week. V Part 5 of this report on free-market global economics turns the spotlight onto you, the consumer, and the person with ultimate power to make economic and political change. That ultimate power is embodied in your dollar vote, cast everytime you go shopping. In commerce its perfectly legal to vote thousands of times every day. The uncomfortable fact is that the encumbent economy of industrialism is bringing people and the rest of nature to its knees. An alternative is needed urgently, but any alternative economy has to be framed by environmental justice and a fair society and it has to have new consumer awareness, new shopping lists that the planet can live with, selective shopping capable of acting as an economic tool for change. The big shifts taking place in the world today are ones of consciousness and Human Nature, and the most important of all in terms of economics is an updated perspective of individual economic strength. True, when you look at society, the natural environment and business, you're looking at the global systems which dominate our lives: the natural systems and the commercial-industrial systems. Can the individual, disenfranchised by years of indoctrination with the money-first way of life realistically redesign the world? The answer is yes, and the new context in which we act is rooted in 5 points of consciousness on which is based an evolved decision-making process over what and what not to buy. 1. Reduce consumption and the throughput of production. The question has to be asked before buying, is this purchase for mine and my dependents quality of life or am I being manipulated in the interests of others monetary gain? 2. Improve the quality, amount and meaninglfulness of work. Instead of continuing to buy products produced by jobs which maintain the unbalanced power and control environment of employer-employee relationships we buy from producers who have and demonstrate they have power balanced cooperative workplaces which believe in fair-play and a fair-go. Producers who have multiple bottom lines that includes people-centered values. 3. Promote the economics of restoration. Sustainability cannot be calculated. It cannot be measured because it's a dynamic system. Our buyer relationship to commerce should be a restorative one which imitates the efficient practices of nature. Instead of turning raw materials into products that are thrown away as is the practise of money first commerce. Products can and will themselves become the source of materials for future goods. As consumers we can examine the package just as closely as the product and become more aware of and act on increased knowledge of the full life-cycle of products and services. 4. Help create a renewable energy base. Instead of buying from industries that rely on a finite and heavily polluting supply of fossil and other fuels, the new economy will use clean sun-powered renewable energy sources. These new energy sources need to be bought if they are going to take their place in the sun. 5. Instead of buying from businesses that aim to deliver ever larger volumes at ever lower prices, we buy from businesses that produce small volumes and aim to add not volume, but value to their products and services. Our consumer consciousness can cut through the ego-driven hype that promotes size as equivalent to importance. It is the many small businesses that keep New Zealand alive, not the few foreign-owned giants. 6. Producers can capture a larger percentage of the consumer's dollar instead of unproductive third parties. That means bringing the producer and consumer together in a more direct marketing environment. While it may be more or less impossible for small producers to crack the major food chains, there are an increasing number of food buying coops, direct distribution, and burgeoning mail order and online ordering systems. Independent grocers have also shown some interest in an evolved form of retailing. As intelligent, future aware individuals we make the ultimate vote, the dollar vote, the greatest influence on economics and politics. The choice we can make many times each day to consciously directing dollar votes in favour of pro-people, pro-environment local producers will change not only economics, but our own nature. .
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