Bathtub Economics – Stephen Hinton Consulting

How to use Real Capital and its valuation to inform policy

Link here to the full briefing on Research Gate

The table above gives an example of how to use Real Capital accounting to clarify policy. Policy is an asset, liability is shortfall and equity is performance against policy. Find more explanations in the video and briefing.

Is it possible to present information in a rational way, to policy makers, that does not need financial information to be useful to policy makers? Could scientists do this without becoming economists? In an era where scientific advancements shape our understanding of the world, the gap between science and politics remains a significant challenge. This divide often results in politicians struggling to effectively process scientific information and translate it into sound policy decisions – leaving it to economists.

The video explains the main content of the methodology brieifing

Want to take part in the UBI simulation game online?

Our UBI simulation game has been going awhile and every time it’s played is a new experience and new learning for participants. This is because – like all games – there are several factors interacting at the same time. Think UBI is all good – all bad? When you play the game you will see that even with simple factors to adjust, economics gets complex when humans are involved.

The Baltic needs saving (partly in Swedish)

The Baltic-one of the most polluted waters on Earth is in fact a treasure trove of easy-to -retrieve minerals, metals and composting material. If you remove the sediment that contains the legacy of hundreds of years of latrine and chemical farming you restore the waters and get pristine raw materials.

The restauration of the Baltic would be a gigantic win for the circular economy. It might require a shift. Either we pay little for our food and sewage and a lot (via taxes) for restoration or we pay more for food and sewage and much less to restore our nature.

See my earlier article. And this one. And the presentation.

Simple quick fixes to capitalism you never knew could be done

My recent article on how come capitalism is an extractive practice, and the later explainer of how it degrades real capital got, for me at least, a lot of interest. Very few, however, asked what could be done about it. Once you know the problem you are a long way to solving it. There are several ways to turn the extractive nature of capitalism around, and they are surprisingly simple. Read on!

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):

Green growth – that is to say the economy grows whilst extracting less from and reversing damage to natural systems – is nigh on impossible.
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.

Bathtub economics busts three economic myths

Take a look at the video of bathtub metaphor for economics above. It shows money as water (that’s why we call it “liquidity”) flowing from consumers to companies to governments and municipalities and then back again. It is that simple for 75% of the population who do not own major assets like shares or properties.

The Bathtub economics model

Check out the animation

It’s time for a simple model of macro economics – the political economy – so voters can grasp what politicians are saying – or not saying.

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 .