Whether you look at individual human beings, at communities, or nature, few people will deny that the process of industrialization that has occurred during the last three hundred years has been rather inglorious an affair. Certainly, many individual results have been splendid, but hardly do they compensate for the negative effects. Certainly, we do not amputate legs with a chain saw any longer. Certainly, we do not travel by horseback any longer. Certainly, we do not write letters with ink and paper any longer.
But human beings have been reduced to individual automatons whose connection with other automatons is not much more than transactional. These human beings have no power to create communities. They also have hardly any respect for trees and forests.
In the proceedings we shall look at some economic forces that unavoidably lead to such results. Once we know these forces, we can control them. Coincidentally, once we look at those forces we discover the inevitable march toward political equality, irrespective of color, genes, and individual proclivities.
Can we control these forces through willful de-growth? Hardly, we might at best stunt growth, stop growth, but we can hardly control growth.
What is left then? What is left is the best alternative. Once we realize that the process of growth is much beyond our power of understanding, then we will humbly work with those forces to create harmonious growth. Then we will humbly work with other human beings and humbly work with the forces of nature to create harmonious growth processes.
IRRESPONSIBLE GROWTH
Hard to believe, but growth has occurred for billions of years without creating any disruption in its long-term processes. Look at what has happened during the last three hundred years. There is hardly any agricultural, commercial, and industrial field that is not dominated by a few or even one organization. Monopolists and oligopolists are the rage. They are recognized and mostly spurred on by a phalange of economists and technical writers.
Hardly do we hear that this is an irresponsible type of growth.
It is indeed irresponsible to be a monopolist: how many enterprises potentially delivering better products—at lower prices—have you destroyed? Conversely, having acquired the station of richest man in the world, have you not automatically assumed a station full of impossible responsibilities? Are you going to end abject hunger in the world?
It is irresponsible to be the largest landowner of empty space: how many people are you pushing into suffocating, crowded lots?
It is irresponsible to be the largest employer in the world, likely paying the lowest wages: what type of relationship do you have with your employees, when, to make ends meet, these workers have to recur to the public dole to put food on the table?
It is irresponsible to acquire large loans at favorable terms from the public trough, when the largest number of people acquire miniscule private loans at objectionable conditions.
And then there are the combinations and permutation of these conditions to consider.
Is this the growth of agricultural, commercial, and industrial growth that we desire?
At the opposite end of the scale, likely objecting to these and worse conditions, there is a growing intense desire for degrowth.
DEGROWTH
The desire for degrowth is indeed growing. Calls for complex techniques for obtaining degrowth are multiplying, but are they being translated into reality?
Rather than analyzing any of these complex formulations, a task that might prove to be much beyond my technical abilities, I will discuss a case of degrowth that has actually occurred, the case of the Degrowth in the U.S. Fisheries: A total disaster.
Fishing captains have been compelled to accept jobs as “party” boats; harbors teeming with fishing vessels at any hour of the day do barely see one or two vessels throughout the whole day; four-hundred-year-old investments in peers lay languidly in the harbor; on San Joseph’s Day, fishing families opened their doors to friends, neighbors, and passersby who were met with altars overflowing with flowers, treats, and Saint Josephs’ pasta. No longer. Fishermen have disappeared from Gloucester, the oldest fishing community in the United States. And while America for centuries used to be an exporter of fish, salted cod fish used to beef up the pantry of many nations. No longer. It has taken forty years of planned degrowth for this country to become a net importer of fish. Ninety percent of seafood consumption in the United States is now imported. At great damage to our balance of payments.
Let us start from the beginning. Degrowth in the U.S. Fisheries has been pursued to solve three problems, two intellectual problems and one practical problem: the Problem of Property, the Free Rider Problem, and the Overfishing Problem. All three “problems” are the result of grave misunderstandings.
The Problem of Property. Ever since Jefferson literally deleted the word property from the Declaration of Independence, “property” has become a “problem.” Quite apart from the political controversy about the justice or injustice of private property, there has been the obliteration of a third traditional manifestation of property: property has been reduced to “public” and “private” property. The millennial understanding of property as “common” property has disappeared from our sight. Worse still, perhaps as an internal justification for this disappearance, a great misconception has taken its place. The attention has been focused on the “tragedy” of the commons. To no avail was the retraction of this supposed reality issued by the author of this conception, Garret Hardin.
The reality was the tragedy of the enclosures: once the ownership of the commons was appropriated by the King and sold to private owners, the enclosures eventually collapsed. To recoup the cost of acquiring them, the new owners were led into the temptation of exploitation. Those who really suffered from these events were the poor, those who had enjoyed millennial free access to the commons to alleviate the pains of poverty.
The triad of economists, ecologists, and bureaucrats, likely unaware of this complex history and certainly neglecting the lessons taught by Elinor Ostrom, did not only sell the “Sectors,” chunks of the oceans, they reinforced their position by establishing quotas of fish that could be fished. One of the last quotas has been reduced to 84% for the catch for Maine cod. Could the few vessels left do any harm to the stocks of Maine cod?
The Free Rider Problem. The year 1776 was a fatidic year. While on this side of the pond Jefferson canceled the word property from our political dictionary, on the other side Adam Smith canceled “morality” from our understanding of daily events. He lambasted morality as a set of fickle “sentiments.” Who would conceivably obey a set of fickle sentiments? Morality was replaced by the highfalutin “impartial spectator.” Hardly anyone has asked who this Impartial Spectator might be. The question has an evident reply: lui meme.
Deprived of morality, social scientists were compelled to rely on the absolute power of the State to control the Free Rider, the operator who, neglecting the common good, would recur to “overfishing” to satisfy his own good.
Overfishing. Overfishing was assumed to be the cause of the depletion of the species of fish. Somewhere in the near future, the ocean was supposed to be teeming with jellyfish and certainly no species of edible fish. It was this specter that justified the creation of quotas to catch the Free Rider in the web of life.
What presumptions! The whole construction rested on a total misunderstanding of overfishing. If not for the millions of years preceding the creation of the United States of America, the fisheries had certainly been in equilibrium at least during the four hundred years of the creation of America. Equilibrium has presumably disappeared during the last forty years of managed fisheries.
The science of biology leads to two firm conclusions. When overfishing occurs it is done by two factors: the large fishing vessels of powerful business concerns and by the natural predators of each species. The family fishing fleet, with its tiny vessels, is totally innocent.
To add insult to injury, the numbers, the profuse numbers used by the federal agency to justify its quotas recommendations are totally inappropriate: some derive, not from natural forces, but from prior administrative decisions, others by an upside-down application of the science of samples. Samples lead to positive results because, knowing the “universe” one builds a representative sample. In the administration of current fisheries decisions, the small sample is supposed to yield knowledge of the universe, knowledge of the immense changing ocean.
This chain of specious conditions has yielded degrowth the U. S. fisheries. Are there are other cases of degrowth to analyze before we pass definitive conclusions on Degrowth?
HARMONIOUS GROWTH
Rather than following the polar opposites of either Irresponsible Growth or Degrowth, I would like to recommend the case for Harmonious Growth. No, there are as yet no complete cases of this type of growth, only sporadic examples here and there in the world. But these piecemeal cases show extremely consistent, positive results.
I like to recommend the case of Harmonious Growth because this type of growth is guided by four guardrails developed within the context of Concordian economics (see here and here), one guardrail for each factor of production: land, labor, financial capital, and physical capital.
Land (and Natural Resources). What is the wisest way to use land and natural resources? Careful experimentation throughout the world, guided by experts in the Georgist Movement, yields a direct answer. This is a simple but not a simplistic answer: do appropriately raise taxes on land and natural resources.
The most evident proof of the validity of this policy is this. Low taxes on land and natural resources lead to hoarding of those resources. Adam Smith canceled hoarding as well from the economics textbooks, but hoarding of land and natural resources leads to three immediate effects: it leads to less growth than there might be; it leads to more inflation than there might be (money spent to acquire those resources remains in circulation, while there is no growth to absorb these monetary resources—hence prices rise); less growth and more inflation inevitably lead to more poverty.
Labor and Physical Capital. Ever since the Luddites smashed the looms, the condition of natural antagonism between Labor and Physical Capital has come forcefully to the fore.
The general question is this. Innovations in production techniques that “save” time and physical capital are a force of nature that is foolish to resist. They should be welcome. The “surplus” labor should find ways to occupy itself with works of labor, assisting other people for instance, and labor of love: to love books, to love music, to love art. In a country in which public libraries, thanks to Benjamin Franklin, are abundant and richly endowed, this is the most “natural” solution.
This solution assumes the existence of a fair distribution of income, however. Hardly the reality today. But this is the reality that must be created.
Labor Unions are the key instrument to achieve this aim. They are generally associated with the request for higher wages. This is a self-defeating policy. Higher wages are followed by higher prices. This is the inflation spiral in movement. While workers might stay on a treadmill, low-income people and the poor fall continuously behind. While the presence of Unions is essential to even out the chances between individual workers and overpowering behemoths of industry and commerce, there is a much better pivot that Unions must use. Rather than for higher wages, they must fight for a fair distribution of ownership of the wealth created.
Once workers assume full power and responsibility of ownership, some of the most exciting events will take place. Dangerous practices that affect the health of human beings will be abated. Respect for nature, respect for the welfare of human beings, respect for welfare of communities will be the lodestar of agricultural, commercial, and industrial operations. This is going to be the axiom: all is related; all is complex. Soil. How complex is soil?
Rights and Duties of Income. Many proposals have for quite some time been explored: guaranteed minimum income, even “helicopter money” has been conceived. However, this type of solution leaves a gaping hole between rights and responsibilities, thus this type of solution leaves the perennial struggle between Labor and Capital totally unaffected.
In the interstices of Concordian economics a most satisfactory solution has come to the fore: an All-Labor Reward Program. Housework increases the wealth of the nation. Why not reward this labor? Once implemented, this solution will help solve a variety of problems: necessary income will be permanently distributed; the perennial disparity of reward to man and women will be destroyed; ditto for differences of color, genes, and individual proclivities; people will lift themselves by the bootstraps; above all, rights will be solidly linked to responsibilities. Men and women will send a payment slip for work done to the Federal Government, and the Government will pay. One question about the justice of this program is this: How much wealth did Steve Jobs’ mother produce?
Money. The modern economy is built on debt. There are innumerable consequences of this praxis. The most evident can be encapsulated in this question: How many trees are felled to create income to pay debt? The whole chain of events (much shortened) is this: trees felled gradually leads to deforestation; deforestation leads to accumulation of toxic gases in the atmosphere, which cause a large variety of effects, from climate change to poor respiratory conditions, asthma, and many other illnesses.
Why are we doing all this to ourselves? Today, with Concordian economics we have the tools to change our monetary system from money controlling people to people controlling money. The gradual but steady application of Three Rules for the creation and distribution of money will bring about this paradigm shift. Central Banks are to issue loans
- Only for the creation of real wealth of tables, chairs, and foodstuff;
- Only to individual entrepreneurs, corporations with an ESOP in their operations, and public institutions with taxing powers; and
- At cost.
This last praxis alone will reduce the cost of operation of our monetary system, and gradually will reduce inflation, and the need to fell trees to repay loans. Mirabile dictu, the Federal Reserve System has given a nod of approval to this policy; for FRS evaluation, see here.
By coordinating our monetary policy with our labor policy we will live in a totally different economic environment, an environment that we control, an environment that we control especially if we use another powerful tool of monetary policy, the Mosaic cancellation of all debt every seven years. The alternative is the incubus we all—rich and poor people—are living now: the periodic abrupt collapse of our monetary system.
Physical Capital (anew). If the administration of our monetary capital is callous, the administration of our physical capital is ridiculous. We experience agricultural, commercial, and industrial growth through the Pac Man Approach. We are all intent on destroying our competitors to become monopolists and oligopolists.
Without any planning or foresight, we are back at the beginning of this inquiry. How can we get out of this vicious circle? The solution is the application of the Brandeis Rule. Let corporations grow by internal operations as large as the market allows them, but let us put a definite stop to the practice of growth by purchase. That is industrial murder.
CONCLUSION
Eliminating as many of the powerful negative effects of modern life as possible and replacing them with virtuous cycles is not due to magic but, as Michael Emmett Brady has recognized, it is due to the reintroduction of virtue ethics in the very structure of Concordian economics.
