Adventures in Economics
You know that stage every young child goes through when their response to anything said to them is ‘why?’ Well, I got stuck at that stage. From my earliest years I always wanted to know, always wanted to experience, always wanted to understand the reason. I have always been curious, adventurous, and irreverent of academic, cultural or other authority. I’ve always wanted to know for myself.
I spent a Tom Sawyer childhood leading teams of small boys on various adventures and projects involving rafts, treehouses, tunnels and mountains. My father called me an “instigator”. I read voraciously, travelled regularly from a young age, and conversed seriously and intensely into the night with many fine minds. Five year of economics, psychology and intellectual exploration at a Canadian university led to a year teaching in China and a ringside view of the popular student uprising that ended at Tiananmen Square. Back in Canada, four years as a university instructor of academic English followed, until one day I’d had enough and applied to almost every university English department in Africa, accepting a position as a lecturer at the University of Sierra Leone, West Africa.
In 1992, the year I moved from Canada to Sierra Leone, the United Nation’s annual UNDP Development Report placed Canada at the peak of human development, and Sierra Leone at the bottom. After decades of corrupt, incompetent kleptocracy, Sierra Leone was in ruins, was in the middle of a deteriorating civil war, and was governed by a small group of poorly-equipped army officers who had found themselves in power after an accidental coup. There was no electricity, little communication with the outside world, and the sounds of AK-47s and anti-aircraft guns regularly punctuated the dark, tropical nights. I threw myself into this new and exciting environment, engaging with my students, making good friends and exploring the country. In particular I spent my lengthy university holidays travelling in what was patronisingly called ‘the interior’, ‘upcountry’ or even ‘the bush’.
I soaked it all up — the ideas, the feelings, the spirit — until I became overwhelmed and experienced what could be described either as a breakdown or a spiritual awakening, depending on your point of view. Remember, while I existed in great privilege compared to those around me, I was exposed daily to some of the most heart-breaking human pain, waste and unfairness that the planet had to offer. Whatever my inner journey was, it was extremely emotional.
At the core of this emotional, mental, inner experience was an essentially philosophical conversion. In my efforts to understand I’ve always tried to be rational and to face and accept difficult truths that, while they may be unpleasant, are true nevertheless. I read philosophy, I read physics, I spent many days and nights in intense, testing and enlightening conversation, and I was what is known in this area as a ‘determinist’. I believed in the Big Bang, I believed in cause and effect, I believed in quantum indeterminacy. Conversely, at heart and deep down, I did not believe that we — and that I — had free will. Essentially I believed in fate.
But in Sierra Leone, surrounded by senseless suffering, I essentially had a damascene conversion. It might sound silly, especially considering that I’d always been a free spirit, but that was the first moment in my adult life that I genuinely and deeply believed myself and others to be free. I had been a cold, calculating and detached determinist until I saw the light of a belief in freedom. For the first time in my life I believed that free will existed. And I recognised that freedom came with responsibility, and that they were one and the same thing. Until Sierra Leone I had coasted through life, treating it essentially as an interesting experience. Now, for the first time, I became driven with a need to do something, and had acquired a purpose outside of myself.
The rebels got closer, I fled to my childhood home in Ireland, spent a year sorting myself out, and then threw myself into saving the world. I became intensely involved in my community, leading and contributing to an arts centre, youth groups, a save-the-beach campaign and more. Being rational, I knew that if our environmental challenges were not solved then nothing else would make much difference in the long run, and so I threw myself into Green politics, supporting parliamentary and MEP candidates, engaging in national discussion, and knocking on doors. It was the very early years of the internet, and I quickly saw it’s potential in dissolving informational bottlenecks and bringing people together, and so I learned how to use it and tried to spread that knowledge to the groups that I had joined. I set up email lists, online groups, websites and more for groups that had never used these tools before. I threw everything I had into the fight, across dozens of groups and organisations focused on many causes.
I knocked on doors, handed out leaflets, marched in demonstrations, crafted letters, attended meetings, participated in workshops, built campaigns, led groups, joined others, emailed, argued and discussed. I wrote press releases, told stories, built relationships with journalists, spoke on radio, and played with the dark arts of spinning perspective. I felt the nervousness of meeting senior government ministers in an attempt to persuade them of something or other. I felt the searing heat of burning armoured police carriers in the teargas saturated streets of Genoa during the last of what were called the ‘Anti-Globalisation’ protests. Until one day, standing in the rain outside the American embassy protesting the U.S. withdrawal from the Kyoto climate agreement, it began to dawn on me that, whatever it was I thought I was doing, it wasn’t working. I’d done it all and, from what I could see from the daily papers, it didn’t seem to be making a blind bit of difference.
This realisation was informed by my other life, in the corporate world of work and money. I’d been an early adopter of the internet and quickly understood that this was a vast revolution. I lived on the internet, at 26 bps. To learn more I studied, and then got a job on the phones, helping support the 20,000 customers of Ireland’s second largest internet service provider. That job led to other jobs — setting up a tech support department, quality control, network administrator. Until I cashed in my stock options and founded my own internet start-up.
My investors were the senior executives of a German-Austrian-Swiss consulting firm focusing on the pharma, nuclear and chemical industries. The key figures were former executives from Raytheon and Fluor. Their turnover was in the hundreds of millions, and they put about €300,000 into me. I burned through it during a frenetic two years with a team of eight, then watched my intended market evaporate as tens of thousands of mom-and-pop ISPs consolidated into a handful of big companies overnight. My startup had failed, and I bought back the shares I’d sold for €250,000 for only €1. It was better than any Harvard Business School education.
On weekends I would plot with passionate socialists, greens and anarchists, and then on Monday get my spreadsheets together for a meeting with rich and powerful men in fine suits who flew only business class. I drank with both, ate with both, got to know both, and had a foot in two worlds that rarely meet. On my corporate desk my penholder was a tear gas canister, picked up in the aftermath of a street battle. In a way I was embedded on both sides of the struggle, whatever that struggle was.
But one thing stood out. The market was powerful because it made things happen. The market was better organised than the protestors, more united, better equipped, more focused, and much more effective. Although my own market idea had failed, it was clear to me that the market could turn ideas into reality far more efficiently than the usual socialists, greens and anarchists marching up and down outside Dublin’s central bank for the nth time. Whatever its imperfections (and there were many), the market actually worked.
But, of course, it hadn’t worked for me — not this time. I had other internet ventures, other ideas, other projects, but my heart was elsewhere. In the ruins of my startup dream, and recognising the limitations of the campaigns to which I had devoted myself, I watched as the ice continued to melt, friends and neighbours continued to struggle, and one of the most spectacular housing bubbles in the history of the world continued to inflate. I became despairing, confused and burnt out. And so I ran away to sea.
During a maritime Greenpeace protest against plutonium being transported to a nuclear reprocessing plant in the UK I got a taste for the sea, and after that I wanted nothing else. I dropped commitment after commitment, did the minimum of paid work, and devoted my time and attention to learning the knowledge, getting the experience and adopting the attitudes necessary to make long sea voyages in small boats. A few years later I became a professional yacht delivery skipper, and spent many long nights under the stars thinking, feeling and finding myself again. Until, after a final year driving boats servicing offshore wind farms, I returned to land in the rubble of the 2008 banking crisis with a clear head, a confident heart, and a renewed commitment to changing the world for the better. I was determined not to fall into the scattergun approach of before. This time I was more focused, more targeted, much deeper, and more strategic than I was before.
Another year sorting myself out and exploring a few dead ends and I was focused on three core problems: (1) climate and the environment, (2) work and incomes, and (3) our system of banking and money. To be honest, this focus wasn’t difficult to find. After years in the trenches I was familiar of the nuances of environmental issues and politics. I was surrounded by friends and family struggling to match increasingly insecure incomes to absolutely necessary costs. And I was living in Ireland in the financial rubble of the 2008 debacle. Climate, incomes, debt. The environment, society, finance. Nature, ordinary people, and the Masters of the Universe. Three areas of our most significant dysfunction. I examined each of them through the eyes of economics.
Academia — the world of universities, journals, conferences and degree-granting authority — is somewhat frightening to many people, but it wasn’t for me. Remember, I’d spent a decade both studying and teaching at universities, deeply engaging all the while. I knew these people and, after six years teaching Academic English, I knew the language of academia better than most academics.
I also wasn’t intimidated by economics. I’d studied it formally at secondary school and university, and found it relatively easy. The concepts came naturally to me and I found it normal to think about the mass behaviour codified on charts and graphs. Although I drifted on into psychology (behavioural economics hadn’t been accepted yet), I maintained a strong interest, following economic and political affairs in the same compulsive and obsessive way that my friends followed sports. I was skilled in internet research and had all the data and ideas in the world at my fingertips. In these and many other ways, I felt that I had the tools for this inquiry. And this is what I found:
The economics of climate change is all about the price of carbon. The economic problem is that the real, actual costs of rising sea levels, droughts, floods and so on aren’t included in the real, actual price of the carbon you buy to heat your home, fuel your car, or turn on your lights. In economic-speak, the external costs of carbon are not internalised into its price, and so the market cannot even see those costs. As far as market forces are concerned, the environmental degradation of our planet may as well be happening on Neptune. Basically the problem is that the market can’t see climate change and all the other environmental damage.
The economics of incomes concerns the connection between work and incomes, and the changing nature of both work and incomes in the face of accelerating technology and globalisation. The core, unavoidable, costs of living are rising while incomes remain stagnant and increasingly insecure. Globalisation is a function of technology, and technology disrupts labour, and as technological development accelerates all around us the number of actual, feeling, voting human beings who are losing from these developments is outweighing the number of winners. Basically, machines and complex global supply chains are replacing us, so what are we going to do and how are we going to live? A lifetime of stressful drudgery at $11.35 an hour is not enough.
Finally, the economics of debt concerns money, and especially where it comes from — the money supply. This is the neglected, overlooked but vitally important realm of monetary policy, banking, and the structure of our financial system. Right now, in the system we have, almost all money is created from bank debt. Some of that debt is good debt, used for investment. But most of it is bad debt — debt for consumption and, worse, for speculation. Our monetary system doesn’t care where the debt comes from, as long as there’s debt. The events of 2008 were a very public illustration of the limits to this approach, yet this remains our system.
To me, crouched in front of my computer long into many nights, these three problems represented much of what was wrong with our world today. Each of these problems caused many other problems, and so I began to think of them as ‘meta-problems’ — overarching, systemic flaws from which many other individual human and environmental problems flowed. Climate. Incomes. Debt. Three core, fundamental, structural, systemic, deep, vast problems. Three economic problems. Three important problems. Three very specific problems. Amidst mounting and increasingly alarming evidence of the urgency of these three core problems I immediately began looking for solutions. And I quickly found them.
Before I tell you what I found, let me be first clear about what I was looking for. I knew why I was doing what I was doing (I just had to look around me). And I knew more or less what we had to do (put a real price on carbon, get more money to more people, and remove at least some control of the money supply from private bankers). The question I was trying to answer now was ‘how exactly are we going to do that?’ Many hours on Google presented the answer in the form of three policy ideas, each with campaigning activists, groups and organisations behind them.
The first idea is that of carbon tax and dividend. The problem is that we need a price on carbon, carbon is embedded in everything, and so putting a serious price on carbon raises the price of everything. How do you tax carbon without forcing poor people to freeze in the dark? Without collapsing the economy? The answer is, you give them back their money. Basically, you tax carbon and then share the proceeds of that tax with everyone equally. Everybody’s costs go up, but everybody also gets a cheque in the post, and for most people that cheque will be bigger than their increased costs. Carbon tax and dividend is an economic policy that directly addresses the core economic issue involved in internalising the cost of climate change into the price of carbon, making it visible to the infinitely innovative and powerful market. Most importantly, by taking from heavy polluters to give to light polluters, it is also inherently fair. The fact that most people gain from this arrangement makes it politically realistic as well.
The policy of carbon tax and dividend has been partly implemented in British Columbia, Canada, has been endorsed by the state legislature of California, and is the preferred policy of veteran climate scientist and activist James Hansen. It is formally supported by 56 members of the US House of Representatives (28 of them Republicans and 28 Democrat), and that number is growing rapidly. This is the climate and carbon policy of both the U.S. Green Party and of the US oil industry. The group that I support and of which I am a member is the Citizen’s Climate Lobby. If you’re new to all this, their website is a great place to start. You could also follow Ted Halstead and the Climate Leadership Council. I encourage you to learn, join and participate. This is a policy thats time has come.
The second idea I found in my search for solutions was that of a basic income. This is the simple idea that every single person is paid a basic income, unattached to any work or wealth or other conditions. Essentially, everybody gets equal benefits, whether rich or poor, skilled or unskilled, urban or rural, driven or lazy. It’s a universal benefit that essentially turns the increasingly threadbare social safety net into a solid and safe floor, releasing effort, energy and enterprise and allowing risk without fear of destitution.
I could go on and on about the people and groups and organisations supporting this policy. I could tell you about the arguments for and against. I could outline the results of previous tests and point to ongoing and planned tests around the world. But there’s no point, because this idea is exploding so rapidly it’s hard to keep up. A good start would be to follow Scott Santens, Guy Standing or the Basic Income Earth Network.
The third idea is far less popular, far less understood, and yet just as important. This is the idea of monetary financing — of removing at least some of the power to create the money supply away from private banks, and to bring that power under independent central bank control for public benefit. It is called many things and there are many versions of it — Sovereign Money, QE for People, 100% reserve banking, helicopter money and more. But the core idea is that we adopt a permanent form of quantitative easing, with the benefits going to a shared, public purpose. If you don’t understand what that means, don’t worry about it — this kind of economics is not everybody’s cup of tea. Basically, we need money, banks create money via loans, and this causes problems. Carefully ‘printing’ more of that money directly allows much greater control and stability. And spending that money into the economy for some form of public good is only fair. After all, the money may not belong to us all, but the monetary system does.
The most dynamic and effective group politically campaigning for monetary reform is the UK’s Positive Money. They are joined by the EU sister group QE for People, by the self-consciously-named American Monetary Institute, and by about 30 other national and related groups around the world. But as much as these groups campaign to raise awareness, the real discussion is held by a small number of central bankers and monetary policy nerds. Everybody thinks about money, but few people think about what money is. But some do, and some is enough.
The point is that I now had my solutions. I had identified three problems — three deep, structural, systemic problems with the environment, with incomes and with debt. And now I had identified my three solutions — a carbon Tax & Dividend, a Basic Income and Monetary Financing. Each of the problems was vast, serious, destructive, worsening, unsustainable and potentially catastrophic. And each of the solutions was simple, focused, elegant, evidence-based, politically balanced, radical enough to effect systemic change, yet institutionally realistic as well.
I immediately threw myself into reading about these policies, writing about these policies, arguing these policies, and generally exploring these policies and the organisations, people and ideas behind them. Night after night, day after day, I soaking up the ever-expanding body of information and opinion behind these policy solutions until I was convinced. At some point in any career, any venture, any project, there comes a time where you have to stop studying and start applying. At some point you have to accept that the evidence in front of you will always be imperfect and you have to make a decision. Tax & Dividend, Basic Income, Monetary Financing. These were now my policies. I begain to believe.
And then something wonderful happened. I had an idea.
I called the idea ‘Equitable Capitalism’, and I threw myself into it. The concept was simple: I would integrate the three evidence-based, functional and specific economic policy solutions in which I now believed into one single, coherent whole. I would take three existing and important ideas and combine them in some way into one cause, harnessing and focusing the people, resources and energy behind each them into one focused purpose that would be greater and more effective than the sum of its parts. From three stories I would tell one story — a new story and a radical story I accept, but at least a possible story, which was more than I was getting elsewhere. In my mind and heart I was about to save the world in the most dramatic way — with one single idea.
I launched a blog, began a book, tweeted, posted and experimented with social media and memes. I engaged, I discussed, I reached out. I argued in support of my three polices, and strategically tried to introduce people supporting one of the three policies into the ideas behind the others. I tried to connect Right and Left, Libertarians and Authoritarians, Socialists and Capitalists. These ideas could save the world and give each faction what they wanted, I argued. From three policies, one cause. Solidarity, together.
I was encouraged in my quixotic endeavour by synchronicities between each of my three adopted policy solutions. The introduction of a carbon tax and dividend system would contribute not only reducing carbon emissions and ameliorating climate change, but would also introduce the mechanism and establish the seed of what could become a basic income. Monetary financing would create ‘fiscal space’ (i.e. money) for public investment into the transition to clean energy, and would relieve pressure on the housing costs faced by those on stagnant incomes. And so on.
I was even more encouraged by some of the people involved in campaigning for each of the three policies on which I was focused, and in particular by the connections between the issues that they themselves could plainly see. Fran Boait, executive director of Positive Money, came to monetary reform from climate science. Stanislas Jourdan, of the related group QE for People, was a lead organiser in the European basic income movement. Scott Santens, the leading U.S. basic income communicator, is a strong supporter of carbon tax and dividend. Guy Standing, one of the leading figures of the Basic Income movement, talks about tax and dividend and monetary reform too. Among the campaigns for each of the three policy solutions, there were others starting to connect the dots.
I was sure that I was on the right track, and every day the news and analysis websites confirmed it. The seas rose, the arctic melted, Brexit happened, Trump happened, Sanders and Le Pen and Corbyn happened, interest rates remained stuck near zero, the mountain of debt grew. The political centre seemed to be discredited and collapsing and, in the absence of any credible alternative, the resulting vacuum was often filled with those eager to use division to gain power and attention. In the absence of the best, we got the worst. In the absence of inspiring ideas we got fear of the bond markets. In the absence of a positive vision of a prosperous, sustainable and progressive future we got warning after warning of the environmental and social dystopia that awaits. The world seemed both terrified of an approaching nightmare and pregnant waiting for a new idea. Surely Equitable Capitalism was that idea — a synthesis of three specific and coherent economic policies into one new and evidence-based alternative, attractive across the political divide. Surely it was obvious? Surely, even if there was only a small chance it might work, surely we were was obligated to try? Perhaps this was the idea to save the world?
Needless to say, very little happened. A little correspondence, a few followers, a few engagements, some small, fleeting flashes of attention, but nothing substantial. I had identified the three core, specific economic problems behind humanity’s most important challenges. I had found three credible and increasingly popular solutions to these challenges. If I could just get people to recognise the potential connections between these ideas, I thought, we might have a chance.
But sitting at home, alone, like a million other keyboard warriors, I found little purchase for my new perspective. I might have combined three smart, progressive economic policies into one general, somewhat vague idea. I might have drawn connections between disparate economic campaigns pointing in the same direction. I might even have given it all a name. But no matter how hard I promoted my world-saving idea, very little came back.
And for over a year, that is how it was. Three problems, three policies, one Equitable Capitalism. I read, I thought, I wrote, I worked on my book, I tweeted and I posted. I walked the beach and fed the dogs and spent time on my computer trying to introduce the world to a concept, an organising idea and a direction that I believed could be vastly beneficial to us all. Make no mistake, I believed that this was an idea that might save the entire world, not metaphorically, but literally. Not one small bit at a time but all together, instantly. Not far in the future but now, and over the next few years.
My new and laser-focused purpose was to bring Equitable Capitalism to the world. But the world, it seemed, wasn’t listening. Until one day last week, when the phone rang.
The call was from Rachel Oliver, lead organiser for Positive Money, the UK group campaigning for monetary reform. The invitation was to a retreat of people with a passion and interest in monetary reform being held at the Centre for Sustainability and Leadership at the Ambleside campus of the University of Cumbria. Ambleside lies on the shore of Lake Windermere, in the breathtakingly beautiful English Lake District. It was a wonderful weekend and I will tell you about it, but first let me outline where I was in my project to save the world.
In my eyes, Equitable Capitalism (the idea that global free market capitalism might be reformed through three specific and distinct economic policies) was now common sense. Everywhere I looked in the media I could see increasingly alarming evidence of the three core problems. Every time I checked in on the campaigns for my solutions I was encouraged by their explosive expansion. But nobody else seemed to connect the dots, as I did.
But what did I actually have? Sure, I was conversing with (and being taken seriously by) some of the top minds engaged in changing economics and economic policy for the better. Sure, there were economic connections between the ideas and solutions I was engaging with and championing. Sure, some of the people focused on one of these ideas were also often focused on others. There were connections — there were possibilities. But at the end of the day, all I really had was a list of three very different policy ideas and a vague, undefined notion that these ideas might somehow be organised and presented into a coherent whole. No wonder it wasn’t catching on.
In my explorations into how I might combine three stories into one, two things stood out. The first was the concept of ‘the commons’. This is the idea that all of us — every last one of us — are the shared legal and moral owners of some things. Our planet’s atmosphere is a commons. The seas are a commons. The resources of the earth and the sun are a commons. Most of the most important intellectual property in the history of humanity is commonly owned. Our public institutions and infrastructure is commonly owned. Our monetary system is commonly owned.
It seemed reasonable to me to view this commons as a wide array of very valuable capital assets, and to expect that we, the legal, moral and actual owners of these valuable assets, might expect at least a share of the considerable returns from them. Framed in this way, it was easy for me to see that focusing on ‘the commons’ offered a justification for the economic policy solutions I was advocating. Simply put, I own part of the atmosphere, and if you want to use that atmosphere to dispose of your waste Co2, then the least you can do is to pay me. Similarly I, along with everybody else in my currency jurisdiction, am a part owner of the monetary system and thus am entitled to at least a share of the considerable advantages that come from an ability to create money. In other words, the atmosphere and monetary system are valuable parts of the commons, and a basic income would be a fine mechanism to distribute some of the returns from these assets to you, to me, and to everybody else. In other words, my three policy solutions all seemed to derive their moral justification from the idea of common ownership.
The second idea was actually an image — of a doughnut. Conceived and popularised by Oxford economist Kate Raworth, this is the idea that the economic space within which we can safely operated is squeezed between the requirement for basic human needs on one side, and global, planetary environmental limits on the other. It’s basically a conceptualisation of the environmental and human space between what we need and what our planet can tolerate, expressed as a doughnut. Kate Raworth has many other positive, important, and urgent ideas in her book ‘Doughnut Economics’. But that one diagram, expressing our human social and environmental predicament in a such a clear, simple, understandable way, was a ground-breaking way of looking at ourselves and the world.
And so, obsessed with the problems and policies that I had made my own, convinced that there was at least the possibility of great value from my direction of thought, and armed with the idea of the commons and a copy of ‘Doughnut Economics’, I took the night ferry across the Irish Sea to England and to Windermere. And it was incredible.
There were about thirty of us, six from Positive Money and about two dozen supporters from various backgrounds, mostly money-related. Our focus was on how to understand, explain and communicate the ideas underlying our monetary system and the case for reform. These were rarefied, focused and extremely important subjects. These people had recognised that and had attached themselves to a group focused on organising and promoting this perspective and this platform — they were self-selecting. They were also open, passionate, friendly, focused and very, very smart.
The buzz was incredible, the connections immediate, and the conversation continuous. There was plenty of free and unstructured time for walks, pints, introductions and discussion, while in the structured sessions we focused on deep storytelling for collective action, and were introduced into the ideas of Marshall Ganz. Ganz believes that it is emotion that drives political action, and that emotion is transferred through deep attachment to shared values. These emotional values are best communicated through narrative — through shared stories. And that starts with an open, honest and authentic Story of Self. It is these techniques that I am now using as I write these words. I am no longer arguing a disparate bunch of economic policy points backed by statistical evidence and academic theories. Now I’m simply telling you my story.
And that is how I got from there to here. Let me tell you where I am now, and what I think we should do.
Our climate is in serious trouble and we’re getting close to destabilising it irreparably. Despite the Paris Agreement and the spectacular success of renewables, our carbon emissions trajectory is still on the wrong track, and the damage and danger is increasing by the day. Around the world, millions of now surplus people scramble for low-paid work, living in the fear of being one pregnancy, car-breakdown or rent increase away from destitution. Meanwhile vast sums of taxpayer’s money have gone to prop up a grossly unfair and dysfunctional monetary, financial and banking system.
Under the onslaught of such systemic pressures, our political system is breaking down. The state-controlling socialist Left is discredited. The free-market, neoliberal Centre is discredited. And much of the Right seems to have drifted off into the insularity of protectionism, borders and other controls on movement. There’s nothing left — no ideas, no vision, no leadership, no direction, no path to a better tomorrow. For many people, our biggest idea is to build a wall. Trump, the Brexiteers, Sanders, Corbyn, and all the other ‘populist’ challengers from both Right and Left are political symptoms of very real, very deep structural economic problems. Politics is broken because economics is broken.
We need a new idea. The old, stale economic ideas and stories from the 19th and 20th centuries no longer apply in a 21st Century world of online shopping, Facebook and competition from Vietnam. Marx is dead. Keynes is dead. Hayek is dead. Friedman is dead. None of them understood the internet or thought realistically about artificial intelligence or 3-D printing. We clearly and unambiguously need a new economic and political story to orientate us towards a fairer, more civilised and more sustainable order in the world we are actually living in. We need a new organising idea.
I believe that the core economic policies of carbon tax and dividend, a basic income, and monetary reform must represent the key policy ingredients of such a new idea. I believe that the perspective of the commons and the visualisation of the doughnut are key to how that story might be formed, framed, justified and communicated. Essentially, I believe that it may be possible to consciously, deliberately and strategically create a new economic and political story fit for the technological realities of the 21st Century, and to open up a new path to a positive, prosperous and progressive future for us all.
The time to do something is now. We are in a crisis, and an emergency. Climate change is with us and accelerating. Every day countless millions of real, emotional human beings live ugly, desperate lives, trapped between absolute obligations and limitations on one hand, and the rapidly changing dynamics of the labour market on the other. Financial eyes watch property bubbles in Australia, Canada and elsewhere, wondering where the next global debt crisis will begin. In the absence of an overarching political and economic story to understand and counteract these forces, we are left without vision, without purpose and without hope. The gap is filled with useless cynicism, despair and apathy, and with lowest-common-denominator appeals to the worst of our nature.
This is happening now, while you read these words. The arctic is melting, the seas are rising, Trump is in the White House, the UK is leaving the EU and interest rates remain stuck near zero. Four in ten French voters wanted Marine Le Pen to lead, govern and represent them. Authoritarians are on the rise. The traditional Left-Right divide is fragmenting. The out-of-touch establishment seems useless. The barbarians are overwhelming the barriers. Almost every election throws up a once unimaginable surprise. The centre is not holding.
It is intolerable, in a world of melting glaciers, for one individual taking a private jet on a weekend break, to emit more Co2 than an entire town switching to low energy lightbulbs. It is deeply unfair that all productivity gains go to capital and none to labour, and that workers must engage with employers under threat of destitution. It is unconscionable that the finance and banking industry, which deeply damaged the economy and took many billions from taxpayers and through austerity cuts, remains essentially unrepentant, unaccountable and unchanged. It is tragic that the root causes of these moral outrages remain mostly unexamined in public discussion, while immigrants take the blame for the resulting pain. Our current order is clearly and blatantly unfair, immoral and unjust. This is wrong.
Now is the time for change. Everywhere we see the search for a new perspective. The two big political and economic organising ideas that began in the 19th Century and evolved during the 20th Century are no longer fit for purpose. None of them are relevant in a world of microchips, the internet and AI. Yet we remain without an alternative framework within which to understand and change our world. We have no vision of a bright and positive future, and no map of how to get from here to there. We are lost in the mist, without perspective or direction. We are frightened, unfocused, disconnected and useless. Adrift.
But there is a glimmer. Out there, appearing and disappearing in the shifting fog of current events, there is something. There is a possibility. There is a shimmer of potential, and a fragile gossamer thread of achievable action linking there and here. There is a vision. I have a dream. And I am not alone. Others see it too.
This dream is of our world one hundred years from now, prosperous and at peace. Co2 levels are falling steadily and most environmental indicators are dramatically improving. The economy is stable and boring. This is a world in which the environmental and social limits of market behaviour are taxed to pay for a universal and guaranteed basic income. It is a world in which productive and strategic public investment is funded by independent central bank control of the money supply. In this possible future, the returns from the commons are shared with the owners of the commons. The outside of Kate Raworth’s doughnut is taxed to pay for the inside, while the market remains free within that safe ecological space. This would be a new and better social contract, fit for the new world we are moving into.
The implementation of just three specific policies could make that happen, and help create that future one hundred years from now. Not all at once. Not perfectly. Not right away. But it could happen. Three vast, dangerous and intractable problems that are destroying our world and our future. Three simple, elegant, evidenced-based solutions, already emerging rapidly. We are close. From three important, separate and distinct economic policies it may be possible to construct one intellectually coherent, morally justified and emotionally contagious whole. Can we not just connect the dots?
There is a ‘feel’ to certain times. Sometimes there’s a free-floating energy in the air, just waiting to be grounded and made manifest. It’s like a nervousness — a general feeling that something significant could happen. I experienced this feeling as a young teacher in the People’s Republic of China early in 1989. At the time, China was just opening up and was just beginning its transition from state communism to free markets. For the first time in decades, street trading was allowed, and teenagers selling cigarettes made much more money than university professors. Inflation was rising and the iron rice bowl was shattering. As the first shoots of market freedom sprouted, the air was tense with uncertainty and dissatisfaction, but also pregnant with expectation and hope. It was like an ideological spring.
And what a spring it was! On April 8th popular politburo member and former General Secretary of the Chinese Communist Party Hu Yaobang had a heart attack in the Zhongnanhai government buildings while discussing education reform. He died on April 15th and a small group of students protested at his funeral by breaking bottles on the ground (a reference to a double meaning in the name of premier Deng Xiaoping). On April 22nd fifty thousand students marched to Tiananmen Square to participate in Hu’s memorial service and deliver a letter of petition to Premier Li Peng. By May there were demonstrations throughout China, and tens of millions of people in the streets. The workers joined the students. There were rumours of army rebellion. For one glorious week the state media was absolutely and entirely free. Everywhere was solidarity, expectation and a hope that survived Tiananmen Square on June 4th, and that is still an important part of what China has become.
My point is that our time, now, feels like China did then, back in the spring of 1989 before Hu Yaobang died. It is as if the emotional-political landscape were saturated with petrol or gasoline, just waiting for a spark to ignite it. The tension is there, the stage is set, and the vacuum is waiting to be filled. Then something happens, and then something else happens, and then suddenly everything is different. When old orders are breaking down and everything is unstable, even the smallest things can make a very big difference. A handful of students breaking bottles at a funeral changed China.
China offers not only an example of almost spontaneous mass political movement and engagement, but of dramatic system change itself. The leadership of China, under Deng Xiaoping, recognised and admitted that their precious ideological system wasn’t working, and so they consciously and deliberately changed it. The same thing happened in the last years of the Soviet Union where, in an atmosphere of instability like our own, the entire political and economic system of hundreds of millions of people was changed, involving events ranging from the rise of Mikhail Gorbachev to a misplaced phone call between East German border guards. Vast, systemic economic and political change is perfectly possible.
In 1947, thirty-nine scholars, mostly economists, with some historians and philosophers, were invited by Professor Friedrich Hayek to meet to discuss the state, and possible fate of classical liberalism. From that meeting came the ideas, ideology and organisation that was behind Reagan, Thatcher and what is now called modern, free market neoliberalism. One meeting that changed the world.
In 1962 two men, assisted by a handful of others, leased some land on the coast of California to establish the Esalen Institute and explore, organise and communicate the ideas of the nacent Human Potential Movement. These ideas informed and directed the counter-culture revolution of the later 1960s, and helped form the culture and society we live in today. Just a few people, a little money, and an idea. And they changed the world.
I myself have sat in the reading room of the British Museum where a passionate and impoverished activist, economist and writer wrote the words that expressed the ideas that dominated the political and economic landscape of the world for much of the 20th Century. One man, with pen and paper, in a safe and quiet place. That was all it took.
This has been done before. It may not be easy, but it is certainly not impossible.
And so, dear friend who has read this far, this is where our stories begin to intertwine. Because if you accept that we have three core problems with the environment, income and debt; And if you even suspect that the three specific and rapidly emerging economic policies of Tax & Dividend, a Basic Income, and Monetary Financing might even possibly be a solution to these problems; And if you see a gigantic, vast and ever more urgent gap in the market for political and economic organising ideas and ideology, and if you can sense huge pent-up demand for such ideas. And if can get past the scale of the issues and catch just glimpse of the possibility that these three economic ideas might be combined into one simple and emotionally-communicable ideology. We’ll then, my friend, the question is, what are you going to do?
Feeling what you feel, about these deepest and most emotional of issues and values, and knowing what you know (including what I have just told you), what are you going to do about it? Our world is dying, our family, friends and neighbours are suffering, our financial system is dysfunctional and unfair. These are facts. The existing movements and campaigns for Tax & Dividend, a Basic Income, and Monetary Reform are already connected by the core concept of ‘the commons’, and are already framed by Kate Raworth’s doughnut. A lot is known about effectively developing and contagiously communicating stories and ideas.
It is not for me to tell you what to do. You are your own person with your own perspective and your own take on it all. You have your own job, your own network, your own platform and your own influence. God knows, you have your own distractions. So you know best what you can do the best from where you are and with what you have. But if you’re not sure of where to start, and for what it’s worth, here are my suggestions:
1. Learn. You probably know a lot about the three ‘meta-problems’ just from following the news. And if you are reading this you probably know a lot about at least one of the movements and campaigns involved, and the ideas behind it. You may even be familiar with two or even all three. But if there are gaps in your knowledge, I suggest that you fill them.
2. Believe. At some stage you’ve to stop studying and apply what you’ve learned. At some point you’ve got to stop reading about it and arguing about it and thinking about it and make a decision about what it is that you actually believe and what, exactly, are you going to do about it. Learning is good, but at some point you have to make up your mind. The information will always be imperfect. When looking at the range of our serious problems and at the array of solutions on offer, at some point you have to decide. In other words, you have to stop questioning and believe.
3. Connect. You’re not the only person thinking this way, feeling these possibilities, scenting the faint, sweet smell of hope in a political and economic desert of hopelessness. There are others too. Join them, follow them, reach out to them, meet them in person. Share your story and your dream with them, as honestly and openly and authentically as you can. All is not lost. There is a way out. There is a possible path to a safe and beautiful future.
4. Support. The idea that it may be possible to construct an ideology that saves the world may be quixotic. The odds of this endeavour succeeding may be small. It may indeed turn out to be “unrealistic”. But the resources required to get it out there and underway — to test it in the world — are relatively small in contrast to the potential benefit if it actually worked. In other words, while high-risk, this venture has a relatively small downside and a potentially unlimited upside. The potential returns are vast compared to the resources needed to test it in the market. For those with extra time, skills, money and organisational structure who want to invest wisely in changing the world for the better, investment in this idea is surely a good deal. Seed money and angel investment would nurture a lot of fragile roots at this early stage, not least my own.
The Positive Money weekend on Windermere, where we discussed telling the story of money and of monetary reform, was structured in the presentation, exercise and worksheet way familiar to the corporate, professional and academic worlds. At the end of that retreat we were each asked to share our dream and vision of the Positive Money campaign six months from now. It seemed a bit twee at the time, as these things often do, but I thought about this question on the train and bus and ferry home. And my dream is this:
Much is the same. I’m back at Ambleside in the beautiful English Lake District, on the same campus and in the same room. But this time, most of the people are different. This time, in my dream, Fran Boait, Ben Dyson and Stanislas Jourdan are there, from the monetary reform movement. Guy Standing and Scott Santens are there from the Basic Income movement, and Ted Halstead, Joseph Robertson and James Baker from the carbon Tax & Dividend movement (yes, that James Baker — it’s my dream!). Marshall Ganz would be there, and Kate Raworth and, for the deep historical perspective of narrative and all-round wisdom, historian Yuval Noah Harari. World Bank economist Paul Romer would be there. There would be others too, but the group would be small — under twenty.
This group would be there for a week — a whole week! — facilitated and structured by Positive Money’s indomitable Rachel Oliver, as before, and with lots of free and loosely-structured time for those spontaneous, intense and stimulating conversations in which the magic happens. As before, there would be homework — ideas and information to be read, watched and understood prior to meeting. Participants would be expected to be prepared. But this time, the topic and the focus would be different.
This time, the goal would essentially be to consciously, deliberately and strategically construct a new economic and political ideology fit for the 21st Century and the challenges we face. With the expertise and experience from each policy area, and guided by the best and wisest storytellers in these matters, we would try to merge three stories into one, and thus tell a new story. A story of survival, of progress, of potential and of hope. A vision of what the world could be. And a specific, explicit and realistic plan to get us there.
That’s my story — or at least an edited, framed part of it. And that’s my dream. Thank you for reading. If this has touched you, and if you want to do more than just read, then please do what you can.
Do it now. We have no time to waste.