What exactly about capitalism means it extracts and exploits?


Not crony capitalism, not raw capitalism, not capitalism in the hands of wrong people but capitalism itself is the cause of the environmental degradation and social misery we see around us. Capitalism offers the rules if you like, the players play by those rules, and the results are what we see. If I am going to say something this bold, I need to be really specific and present good arguments. Let me attempt that, but you will have to bear with me through some details. This is not rocket science, but the whole subject area has many branching ideas so you will need to look hard to see the path through the subject matter.

Continue reading “What exactly about capitalism means it extracts and exploits?”
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Why the doughnut needs the bathtub – economic models for real change

Kate Raworth’s Doughnut model of the way an economy should perform is excellent. But it needs an idea of how to control that economy so it performs to requirements. Enter the bath tub.

Kate Raworth has a wonderfully clear and simple concept – that we should arrange the way we run society on the principle that we do not exceed planetary boundaries – in our relation to nature – on one hand, and that we set things up to avoid people suffering and that everyone’s basic needs get fulfilled – the human dimension – on the other.  She draws it like a doughnut.

In her excellent book, Doughnut Economics, Kate shows how this task is essentially one for the economy and a question for economics. Doughnut economics gives us a very clear set of requirements for how an economy should work. That immediately brings one to think of money, investments, taxes, banks businesses etc. And that is where the model needs a little help .

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The Logic of the UBI Simulation

In this article we are going to demonstrate how the UBI works “under the hood” by looking at the underlying game logic.

The game makes some vast simplifications of how a national economy works – it is after all designed to be a learning experience rather than a mirror of how the world actually works.

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UBI Simulation Game

Some results from alpha testing of the Universal Basic Income simulation game

Together with the Swedish Sustainable Economy Foundation I am developing a Universal basic Income “Business Game“. The idea is to take a simplified, fictive country and play around with various aspects of UBI to learn by doing.

We are into the first alpha testing phase and have produced an overview dashboard to look into what sort of figure we are interested in following as the game progresses

Conditions: raise VAT, lower taxes on wages, start raising UBI, reduction in workforce.

The above run was a force run to see how raising taxes and lowering numbers in work looks in the system. As you see the state gets less to spend on services as income declines. Maybe not so interesting. The next run looks at raising UBI from under minimum standard and just raising VAT.

Conditions: raise UBI from under minimum, raise VAT.

The second run added spending power of UBI takers to the dashboard. If you raise VAT you lower spending power. Interestingly – in the simplified model at least – you get MORE state income and the UBI takers do not get lowered VAT. This gives us a hint that it might be possible to raise UBI and Universal Basic Services, although the UBI eats away at the money available for social costs.

Modelling like this raises many detailed questions and it is a difficult task to make the game engine simple enough to handle in a game situation ( so that you learn basic principles) and complex enough to give a feeling of “real life” (so it feels authentic enough).

Let me know in the comments if there is any logic I am missing or any metric you want to see on the dashboard.

Click here for more articles on the UBI simulation

Time for everyone to talk circular economy

Our analysis of signals of change in the world tell us that there are major changes being called for.

Eliminate poverty – we already decided

The Sustainable Development goals set a new precedent for human development and it is still sinking in that the majority of countries in the world have signed up to eliminating poverty (SDG1) and hunger (SDG2) and eliminating threats to the environment.

Supporting links:

The Sustainable development goals website

Universal Basic Income and Universal Basic Services are being tried and debated as a route to achieving SDG 1.

Supporting links: Article in the Independent on University College of London Report.

A new Green Deal proposes massive investment in a new USA

From the Democratic party, the New Green Deal is the boldest proposal to come from the US for a long time – it will aim to eliminate poverty, create green jobs and transform the technical infrastructure of the US to a circular economy

Supporting links:

The Circular Economy is central to achieving the SDGs and the New Green Deal

The idea has been with us for a while, and it is slowly becoming more and more apparent that nature works in a circular way and society needs to fit in. The possibilities are huge, from green, dignified jobs for all to eradication of pollution to a better life for future generations.

Supporting links: Learn more about the Circular economy at this online school.

Heavy fees on things that pollute like fossil fuel can be a blessing

We are noticing how more and more economists are realizing that a heavy, increasing fee on fossil carbon could stimulate the economy rather than slow it if the fees are paid back to taxpayers. Some estimates point to 70% of citizens being better off under the scheme as those who use fossil fuels are ofter the wealthiest.

Supporting links:

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Five ‘Rs’ of Circular Economy- Reduce, Reuse, Refurbish, Repair and Recycle

Great rundown of the circular economy by my colleague Kabir who helps with the union of wastepickers.

Stories of Waste and Waste Workers - Live Blog of Hasiru Dala

Have you ever pondered over the role played by the neighbourhood- cobbler, electrician and tailor in recovering resources and reducing waste? Most of us have never even noticed them. If I say that they like wastepickers and recyclers are going to be the pillars of ‘Circular Economy’ envisioned by economically advanced countries, will you believe me?

I am assured that your first question will be ‘What is circular economy?’

According to the authors- Peter Lacy & Jakob Rutqvist of the book ‘Waste to Wealth- The Circular Economy Advantage’, ‘

Shifting to a circular model means changing our linear economy’s supply logic. We will need more renewable energy, more biomaterials and biochemical that can degrade safely, and more technical materials like metals that are designed to use recovered secondary material and for low cost end of life recycling, effectively closing the manufacturing loop. We need components designed for reuse and products…

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Shop your way to fossil freedom

Sixteen-year old Greta Thunberg is asking good questions like “why are we doing nothing about climate change?” She tells it like it is as we stand unmoving – no group wanting to give anything away. Unions rightly take the stance that workers should not pay with lowered standards. Some want to play with small tax adjustments to see the poor OK.

The New Green Deal says “never mind the economics of it – we’ll just invest in the planet we want.” That is good, but you need to make sure people have the money to pay for those new high speed rail services and electric buses.

So. No easy solution? Perhaps there is.

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