What does Bathtub Economics say about green growth?

Writing in the Swedish daily, SVD, on 7th July, Johan Rockström set out some bitter truths (my translations):

  1. Green growth – that is to say the economy grows whilst extracting less from and reversing damage to natural systems – is nigh on impossible.
  2. It is questionable whether the goal of maximum 1.5 degrees increase in global warming can be achieved.

Let us examine these points from a circular economy and bathtub economics point of view.

Continue reading “What does Bathtub Economics say about green growth?”
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Towards a circular economy vision

I believe we need to start to envision what a circular, low-impact, bio-based society will look like in order to usher in the fossil free era.

Indeed the Swedish Government have already declared in January 2019 that they aim for Sweden to be circular and bio-based and resource effective.

I guess we need the circular vision at four levels:

  • The circular house
  • The circular neighborhood
  • The circular municipality
  • The circular country
  • The circular nation

Below is a first sketch of what a circular house might look like:

  • Close to the necessary services (Cycling – ebike – distance?)
  • Part of a circular neighborhood
  • Captures energy, water
  • Is energy effective
  • Recycles nutrients
  • Is part of food provision, too

Find out more about the circular economy by reading articles here or visit our circular economy school online at the Academy of Investors in Peace.

The Academy of Investors in Peace Launches

Starting this week the Initiative Investors in Peace, founded by the Swedish Sustainable Economy Foundation and several other institutions, is launching its online Academy of Peace. The first courses centre on circular economy as a way to approach peace with the Earth.

For the opening period, all courses are offered free of charge.

Visit the online Academy here academy.investorsinpeace.com

A simple macroeconomic model based on Modern Monetary Theory (and published in 2014 in a peer-reviewed journal)

Excellent mathematical treatment of MMT and why it is fully viable. Enjoy this from Dirk Ehnts.de

econoblog101

There is a lot of talk about how MMT would lack a “model”. Some commentators on Twitter even claim that MMT would have “no model” and that they just created one themselves. Others believe that stock-flow consistent (SFC) models are basically SFC models. All of that is not quite right!

I think that the only model that can really claim to be a “MMT model” is the one I published in a peer-reviewed journal in 2014. The article in the International Journal of Pluralism and Economics Education (IJPEE) was named “A simple macroeconomic model of a currency union with endogenous money and saving-investment imbalances” (link). With hindsight, it was not a good title, since there is nothing specific about “currency union” or (private!) “saving-investment imbalances” in the model. It is really a replacement of the IS/LM-model and nothing else. The working paper version is accessible freely and was…

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Opinion: AI will do away with capitalism as we know it

Stephen Hinton 2016, photo Maj-Lis Koivisto

Some investment visionaries are rubbing their hands in gleeful anticipation of what AI (artificial intelligence) can do and what they can earn from it. AI has already shown that it can, cheaper and better, do the jobs of warehouse workers, doctors, lawyers and so many other professions. We ask the question what if it could do the job of investing better than capitalists themselves? How would that work? Would capitalism as a way of providing what we need become outdated?

For a long time now, the liberal attitude is that private enterprise, driven by greedy but well-meaning people with money they want to see grow is the best in class problem-solver. Transport? Enter the Henry Fords. Internet services? Enter Googles. Shopping online? Enter Amazons. A sustainable, equitable society? Enter … well we are waiting.

It only takes a short flight of the imagination to see the potential. Already, city developers and other experts are painstakingly developing the workings of something that could change the very logic of investment forever: cities that work for people, owned by people, supported by AI.

City infrastructure – power, transport, waste handling, commerce, water etc., key to creating sustainable cities, cannot be left to individual contractors and private investment to get the city quickly on the path to sustainability. Consultants like Resilience.io are offering infrastructure design applications that optimise infrastructure, use the latest and most sustainable solutions available, and end up often reducing investment needs by as much as 40%.

It is only a short step away to applications like those from Resilience.io can begin writing requests for tenders and indeed legal agreements. In fact, AI could start to propose whole company structures with business plans accompanied by full financial analysis.

So how about planning a city? One not just with an infrastructure that is eco-friendly, circular economy, but one that affords all citizens a decent life? And that includes the city’s vast hinterland. If AI can write songs, stories, design products, prepare legal cases it could well design not only spaces but ownership patterns, investment instruments, jobs, organisations, indeed whole cities.

Now, the wealth created from investment seldom trickles down to the poorer inhabitants. Current capitalist or even social democratic approaches are simply not cutting it.

Suppose, then, that this AI system gets tasked to design optimal sustainable infrastructure along with the optimal ownership pattern of the companies building and running the infrastructure and benefit for residents.

This is new. Under capitalism and social democracy firms produce primarily for profit rather than need. In this proposal, the firms should produce primarily for need. Obviously, one driving force, the possibility to earn money, should be there for private enterprises.

I imagine the AI system might come up with some form of Public Private Partnership. The firms building and operating the infrastructure are 50% owned by private interests, and 50% owned by an investment firm where every city resident is an investor and has equal voting rights.

In this way, not only does the city get great infrastructure, but the better the firm runs, the more dividend goes to residents (and private investors). And citizens get to have a say. One share gives one vote. They might even want to buy more shares if they believe in the company.

As they own part of the infrastructure residents might even be interested in looking after it, reporting faults, handling it with care, etc.

Maybe AI can be the force to help us get past the current impasse of capitalist/socialist – left/right outdated thinking?

The world’s scariest economist?

Reposting sharp analysis by Economist Micheal Roberts of the role of government in capitalism and talk of a scarey economist who thinks government investment can make capitalism.work better.

Michael Roberts Blog

Mariana Mazzucato is one of the world’s most influential economists, according to Quartz magazine.  She has won many awards for her work.  She is an adviser to the UK Labour Party on economic policy; she “has the ear” of radical Congress representative Alexandria Ocasio-Cortez, she advises Democratic presidential hopeful, Senator Elizabeth Warren and also Scottish Nationalist leader Nicola Sturgeon.  And she has written two key books: The Entrepreneurial State (2013) and the The Value of Everything (2018).

Mazzucato is considered radical, even ‘scary,’ by many mainstream economists and conservative politicians.  This is because she has highlighted the important role that the state and governments have played in delivering innovation in technology and in advancing productive investment.  The idea that the state can be a leading force in innovation and investment in useful activity is anathema to the right-wing neo-liberal ‘free market’ views of the majority of mainstream economists and…

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An investment framework to create a society that works for all

Having just started as Chair of the Sustainability Committee of Re-Equity partners I have had the opportunity to get involved in the question of how to invest to drive the good things we want like sustainability, resilience and fulfil the aims of doughnut economics. This article shares my learning so far and explains the thinking (as I understand it) behind what Re Equity Partners are aiming to do. I hope you find it as exciting as I do.

Continue reading “An investment framework to create a society that works for all”

Recent Assignments: the Swedish Circular Economy Delegation

Stephen Hinton Consulting recently completed the compilation of a database of Market Based Instruments that have been thought of, proposed or applied to stimulating the economy to circularity. The list is far from comprehensive but was put together as a first step for the Circular Economy Delegation to gain an initial insight into the opportunities for politicians and authorities to use these instruments to introduce full circularity into the Swedish Economy.

Continue reading “Recent Assignments: the Swedish Circular Economy Delegation”