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!

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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.

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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.

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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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