Towards Economic Stability

In my previous post, I reproduced a large chunk of a text I wrote in 2006 about the state of the economy and where it seems to be going, given the other tendencies I've already discussed in this blog elsewhere. I realized afterwards that I had failed to copy all of my text over... but just as well, as the posting was already way longer than it should be to be readable. The text is better broken into shorter pieces.

However, before going on to the next part of the chapter on the economy (which goes into more detail about the "shadow economy"), I have been thinking about the situation with regard to the social economy and have gained what I think are some important insights (that can be stated concisely!).

In the first part of the first decade of the 21st century, the talk about the social economy was primarily organized around NGOs and organizations that harness volonteer work. Already, it was becoming clear that the social economy, even viewed within this, rather narrow, framework, already represents some 25% to 30% of the "productivity" of most developed states.

However, the first decade of the 21st century has seen the emergence of several new types of social economy, particularly in relation to the internet. For example, take Google. Google has built a profitable business on top of a free service, and the provision of its free services seems to be built into its business model. It is likely that, if ever Google reneged on its provision of free search capabilities, its dominance of the internet marketplace would founder. Hence, although Google is a company with a bottom line in dollars, it also has a "community service" bottom line which is, in some ways, more important than its monetary value. Google is not the only internet company like this. These "hybrids" have developed a way to make money on top of a free community service. As such, these companies are a part of the social economy, even as they also share in the monetary economy.

Why is it necessary to define these as different economies - after all, social and community services can be bought and sold - a monetary value can be assigned to them. The reason has to do with this dual "bottom line". A company whose "value" can be reduced to a monetary bottom line, which makes it or breaks it only in terms of its financial stability and worth, belongs to the monetary economy. A company such as Google (or Etsy, or Linden Labs, and there are many others on the net) must maintain its monetary bottom line, but if it loses its social bottom line, it is also "more dead in the water than if it failed on its monetary bottom line". These companies are as defined by their social agenda as by their financial business models.

This type of company is both growing in impact and in sheer numbers of successful outfits. From a marginal phenomenon in the late 20th century, these social hybrids have become major players in today's economy. In tomorrow's economy, they risk becoming dominant players, not just major ones, especially as many mainstream companies are forced to adopt more of a social image as well.

In my previous post, I talked about the fallacy of the managed global economy. Money is not the simple thing the economic pundits would have you believe, it is actually something which by its very nature is highly paradoxical, and hence its management is next to impossible. In earlier postings, I suggested that the world is headed for a series of "crises" over the next twenty-five to thirty years, each of which will move us forward and closer to the convergent, post-sustainable world outlined in these pages (and elsewhere!). The US housing crisis of 2008 was the first major crisis, the collapse of the Greek economy the second. Both of these are events that occurred to nations, but both have had lasting and profound effects on the world's economy. There are signs that other economies may also be in trouble - there have been rumours of difficulties similar to those of Greece in Spain and Italy and other European nations. Last week, the new Japanese prime minister made a public announcement that the Japanese economy is tottering on top of a collosal national debt.

These crises look purely economic in nature, but they are not. They have profound impacts throughout our societies, especially towards how our societies are organized. The housing crisis led to a questioning of banking practice and to changes in the regulatory structure around banking. Banking, of course, is at the heart of our monetary system. Changes to the nature of banking represent changes with profound influence throughout society.

While I indicated that the global economy cannot be easily managed, and though the series of crises that have started to emerge it have made it clear that the global economy is, in fact, highly volatile, the growth of the social economy is actually a sign of change for the better. In essence, the stronger the social economy becomes, the more stable the total economy and the less dependent we all are on the ups and downs of the monetary economy. Remember that one of the consequences of the Great Depression was the beginnings of the Welfare State, that is, the emergence of a significant Social Economy. Each financial crisis strengthens the social economy.

This increased stability is precisely what is needed to handle a zero-growth economy. A zero-growth economy that is purely monetary in scope cannot be stable. Within the convergent, peripheralized world, as indicated earlier, extremes co-habit neighborhoods. Money, which is a complex manifestation of our social sense of economic value, is therefore pulled and pushed by more extreme ideas as part of normal operation. As a result, monetary stability will necessarily decrease, at least over the short term. However, the social economy is common to all the different, interacting groups, and hence will act as a stabilizer. Without the social economy, we would have been doomed to a wildly fluctuating world economy, of which the signs are already present. With a strong social economy, this will damp itself out to some extent. The more we can do to strengthen the social economy, the better.

With the emergence of the third component of the new economy, what I call the shadow economy, we have the three components of a stable total economy in a zero growth world. Value will be determined not only in terms of "money", but also in terms of community benefit (and also as means of disengaging from the community via the shadow economy). Although community benefit can be "monetarized" the model is different. Money is a value exchange commodity. Community benefit is not an exchange - it is a production, a gift, a giving away. Although it can be monetarized, experience has shown that when community benefit if fully monetarized, it loses its "benefit". Community benefit, by its very nature, cannot be converted to an exchange value. This does not mean that one cannot exchange community benefits - indeed, to the extent that one can, community benefit can be monetarized. But it cannot be fully monetarized.

The fact that acts of benefiting the community cannot be fully monetarized because they do not involve a mutual act of exchange between individuals, but rather an act of "giving away" to a collective, is the reason why the social economy is distinct from the monetary economy (or exchange economy, which might be the better term for it), and has very different dynamics. Indeed, part of the act of "giving" includes a "giving up" of control over the results of the act. In mutual exchange, control is also exchanged with ownership. In true altruistic behavior towards the collective, control is abandoned.

It may be that the inability of standard economic theory to deal with a zero-growth economy or, indeed, to stabilize the world economy is a result of its failure to recognize the value of altruism as an economic force (alternatively, its failure to recognize anything else except mutual exchange). Although altruism has been long suspect in our societies, much of the internet is built on altruistic acts. Altruism towards the collective is here to stay.

Fortunately, the somewhat dismal picture of the economy in crisis is offset by the more hopeful image that is developing from the still growing rise of the social economy. We expect the latter to begin to dominate the former as the world situation evolves over the next two decades. The only "dark" element that now needs to be integrated into this model is the so-called shadow economy, which also has its role to play.

The Economy as a Set of Interlocking Paradoxes - Part II

I realized when I went back to look at my manuscript that I had left out the last third of the chapter on the economy. Just as well, really - the text was already rather long for a blog. So I am continuing the discussion with a second posting on the same subject, allowing me to append the material that was missing. This presents the tail end of the discussion of money, followed by a more detailed exposition of the three interlocking economies I see emerging.

Hence we can neither “throw money away”, nor have it “appear out of nothing” – both actions
have consequences for us as individuals and as social beings. In a sense, when we lose or gain
money, we are “eating ourselves”. Money is at the heart of the paradox of being human, of being
both an individual actor and a social animal. This analysis should make us very wary of misusing
money – even of miscommunicating about it!


61
Ibid.
46
Money is therefore itself a form of paradox. Furthermore, it partakes of the change in
communication paradigm discussed elsewhere in this book. Hence money is more than a “unit of
exchange”, it is a “trigger” that activates neural networks in both parties involved in the
exchange. In this sense, it is a relationship. When money “changes hands”, it activates feelings
and responses in both people, that is, it also “changes brains”. This highlights not only the
relationship between money and power, but also between money and identity.
As suggested earlier, there may be many different forms of money, not just those that are usually
considered to be such. As we move further into the 21st century, several different money systems
are likely to emerge. I am not talking about different currencies, the US dollar versus the Euro,
but different kinds of money based on different types of value. In the centrist world of the 20th
century, all forms of value could be converted to currency. In the peripheral world of the 21st
century, this is unlikely to be the case.
The Shadow Economy
Briefly mentioned in the preceding paragraphs is the idea of an emerging “third economy”, that
of a group that “opts out” of other arrangements (see Chapter 5 for more on this group). The
future outlined in this book is not all rosy – indeed, it is based on the idea of paradoxes, the co-
existence of opposites. It therefore incorporates, by necessity, a strong shadow side. Now, today’s
world also includes a huge shadow business, but this business goes virtually unacknowledged. In
the world described here, the shadow side is recognized as a necessary part of society and not one
to be suppressed or ignored as much as possible. As such, the shadow world will actually be less
all-pervasive than it is today, because we spend so much time denying its existence.
For example, the internet has revealed the scope and extent of our formerly hidden sexual
proclivities. While we each of us may deny any direct link to the world of pornography on the
world wide web, the sheer scope of the phenomenon tells a different story. This is one of our
greatest cultural paradoxes. If we were to stop denying the connection, perhaps the phenomenon
would become more manageable. I am not saying everyone is into pornography. I am saying that
everyone has a shadow self, and that recognizing that shadow self, coming into contact with
one’s own devils, is a necessary part of becoming healthy as an individual, and to becoming a
participant in a healthy society. In today’s society, public acknowledgement of one’s devils is
usually considered to be an excuse for a witch hunt on the part of other people who are equally
guilty of hiding their shadow selves (for otherwise, there would be no witch hunt!).
This underlines the need to recognize inconsistency in ourselves and to accept it in others. As
outlined in the chapter on Relationships, the single most difficult task we face as human beings is
to learn to accept who we are, all of our identity, including our own dark side. Our identity is
necessarily paradoxical – if you fail to see the paradox, then you’re missing part of your own
story! As we move into a world in which we are more accepting of ourselves and others, a less
orthodox world, we will find that the world will become more rich and strange, less uniform, less
organized into sets of conformity. More peripheral.
47
Within this world, the people who are today treated as marginal, disenfranchised, as having
“dropped out”, will find themselves “one among many”. Part of this group includes
individuals who cannot function in the world of conformity and orthodoxy in any case. Indeed,
many of these people learn to live with paradox more readily than those of us in the mainstream.
As long as we have national governments and income tax and a global business economy that
normalizes all transactions, we shall have such marginal groups. As we move towards a society
that is more marginal, more accepting of difference, more fragmented, then the group that is
today considered to be disenfranchised will become one of the main groups in tomorrow’s world.
The shadow economy that today exists largely within and through the internet, in the 1960’s was
found in the thriving pornography and sleaze industries in North America62. A variety of
companies existed outside the law during that period and made millions on the unacknowledged
erotic interests of a largely male readership. The female readership, on the other hand, was buried
in romance literature, considered more socially acceptable but nonetheless as distorted in its
intensification of aspects of life that are not, well, real, as is pornography.
The prevalence of different literary genres in our reading and film entertainment practices today
speaks to the darker side of who we are in much the way the sleaze and romance industries of the
1960’s did. Hence detective fiction deals with murder, sex crimes, robbery and other criminal
activities we are not allowed to live out in our everyday lives, and yet which have their
psychological hold over us. Thrillers, likewise, incorporate a shadow world that is very much
grounded in the real one. Science fiction constitutes a “shadow” representation of our
technological world, while Fantasy and Superhero Comic fiction are a shadow of a shadow, a part
of our usually unacknowledged desire to live in a more “magical”, pre-technological world.
Historical novels allow us to wallow in our world’s past, another form of shadow of our modern
culture. Each acknowledged genre points to a shadow side of our own culture. However, these
represent, for the most part, distractions – that is, at the same time that they serve our need to
express our shadow selves, they allow us to refuse recognition of the latter. Hence detective
fictions provides us with an expression for our criminal tendencies, but allows us to identify with
the “good guy” and hence to negate any direct relationship with the criminal. Historical fiction
allows us to investigate the past, but protects us from contact with our own past.
The internet, of course, has created a widely accessible storehouse for “dark stuff”. Furthermore,
this is a very international storehouse, by no means confined to the west, as were earlier
industries. The rise in international trade in slaves, in sex tourism, in the abduction of children, in
human organs, in international terrorism, and other almost unspeakable acts are all partially
supported by the internet in its most perverse aspects. There are no easy answers to dealing with
these, indeed, shadowy issues either. Certainly the answer is not to deny their existence, nor to
avoid looking. That there are clients, and participants, and organizations that operate doing these
activities results from the fact that we, each and every one of us, has a shadow side of our own
personality that, for the most part, we resist acknowledging in public (or even to ourselves). Until
we come to grips with this, with the need to provide public forums for engaging with the shadow
within ourselves, we have no hope of addressing these questions through orthodox means. They
will not yield to orthodox methods (e.g. policing, the military, politics, etc.).


62
Brittany A. Daly (editor), 2005, Sin-A-Rama: Sleaze Sex Paperbacks of the Sixties, Los Angeles: Feral House, 288
pp.
48
The emergence of an international, acknowledged, shadow economy is therefore a
necessary step to coming to grips with the darkest socio-economic characteristics of humanity.
We must resist the temptation to “regulate” it out of existence. Like the politically correct
movement, all that will do is silence our ability to talk about it, without changing the reality of its
operation. In fact, when there is no longer an ability to talk about it, the human need to engage in
such activities is enhanced. In the 21st century, coming to terms with these questions is part of the
agenda we are dealing with.
Three parallel economies
In the above pages, I have laid out an emerging vision for our 21st century global, zero-growth
economy, as consisting of three distinct economies operating in parallel, with some areas of
overlap. It is useful to try to map out what economic activities are included in each of these
economies. Let us begin with the third economy, and work backwards.
1. The shadow economy
It has already been suggested that the shadow economy includes today’s massive sex trade.
Current estimates put the total value of the pornography industry about close to 20 billion
dollars63. This does not include either prostitution or more deviant aspects of the industry, such as
sexual slavery (part of the prostitution trade). The net value of the combined sex industry is
therefore considerably larger than this, perhaps its double. The majority of prostitution revenues
are “off the books” or “under the table” – as distinct from the pornography industry, they usually
do not pay taxes or function within the consumer economy. This is why it is hard to estimate the
monetary value of this part of the industry. Prostitution is clearly part of today’s shadow
economy, in that it escapes legal controls for the most part. Pornography is more integrated into
our consumer economy, but a sizeable portion of this industry is also not legally registered.
Although criminal activity is not today considered to be an “industry”, within the framework of
this discussion we might legitimately treat it in this way – it certainly “generates” money! The
total value of criminal activity is another statistic that is very hard to compute. Even criminal
activity that is reported (i.e. via “arrested criminals”) is hard to evaluate. However, when
combining the drug trade, various extortion rackets, internet crime, and so on (but excluding the
sex trade, as this has already been discussed), the amount of money involved may be close to that
of the sex trade. Within the ‘industry of crime”, however, we might legitimately include the
police force and the legal profession, resulting in a global value easily commensurate with the sex
trade take as a whole.
As suggested before, a third area we might reasonably consider as being part of a “shadow
economy” is that of psychotherapy, in both its legitimate and its “alternate” manifestations. By
alternate, I am including a variety of “new age” or “alternative medicine” approaches, even body-
based approaches, that seek to help individuals “ground themselves”. Taken as a whole, this
industry is unlikely to be any where near as powerful as either the sex trade or the industry of
crime – its total monetary value might be expected to be at most about a billion dollars.


63
Reference
49
Institutions that deal with illness and disability might constitute a fourth industry that we
could legitimately associate with a shadow economy, even though these organizations today are
not at all associated with “shadowy environments”. This association of the “health industry” with
the “shadow economy” is likely to be controversial at best, but it does reflect a certain reality
within the way we deal with our health (see chapter on Health below). Indeed, in the 19th century,
hospitals were considered to be part of the shadow world, along with workhouses, madhouses,
prisons and bordellos. The association is not without some justification. Today, people often
receive treatment for illness or help for disability only if they meet certain legal requirements
with regard to the intensity of the condition. This leaves a class of individuals disenfranchised,
and this class may still seek various forms of treatment. This treatment, however, is more clearly
situated within the shadow economy.
A fifth sub-economy I’d like to associate with the shadow economy includes the existence of
counter-cultures and splinter economies – groups that “opt out” of other social and economic
arrangements.
Note that I am advocating a kind of acknowledgement of all forms of the shadow economy. I’m
not sure exactly how we may do so with regard to the “industry of crime” nor with parts of the
sex industry, since today, these activities occur outside of our society’s legal bounds. However, it
is worth mentioning that criminal behavior is much more widespread than one would suppose. I
would say that, out of my own acquaintances, I know directly of roughly 30 to 40 %, perhaps
more, who engage in some form of “marginally ethical” behavior that leans towards criminality.
This includes cheating in school, cheating on income tax reporting, cheating on expense account
or insurance claims, engaging in marginally criminal behavior for which there is a guarantee one
cannot be caught, and so on. I think I have engaged in at least one of these forms of criminality
myself. Given this situation, how can we possibly “get away” with locking away people who are
not all that different from ourselves? Our legal system needs a major overhaul, and one that
recognizes that most so-called “criminals” are not fundamentally different than you or I. We need
to find a way to “legitimize” at least the humanity of criminal behavior.
Also, I am expecting that the psychotherapy aspect of the shadow economy shall grow
dramatically as we take on a more active engagement with paradox, both as individuals and
collectively. Also, the splinter economies will grow as we move more into a heterogeneous social
and economic climate. Meanwhile, if we seriously engage with our personal paradoxes, such as
sexuality and our ethics and deviation from these, we should see a reduction in these aspects of
the shadow economy. Nonetheless, overall, it should remain large, albeit with a different balance
of power between the sectors that make it up.
2. The social economy
The social economy consists of those activities that generate more “health” than “wealth”. We
need to find effective ways to evaluate the former contribution over the latter, and stop
pretending that the contribution of the social economy to our world can or even should be
50
evaluated in monetary terms64. We need to define an “economy of value” that includes non-
monetary forms of value.
All forms of governance are examples of a segment of the social economy. Today, most of these
activities are included within government, but this is not necessarily the case, indeed,
increasingly it is not. Governance generates value through its actions that structure and
coordinate socio-economic function.
Theology and the offer of religious services are also clearly and widely accepted as parts of our
social economy. Religion generates value via its contribution to community building and
maintenance, and through its commitment to taking care of the needy, the poor, the ill, the
disabled, the underprivileged. Religion may also generate value through its willingness to
challenge unjust behaviors in other organizations.
Translation, interpretation, and intercultural language services, although frequently offered by
businesses, also constitute an increasingly important contribution to the social economy. Often
these services are offered at cost or for relatively modest fees, via government subsidies.
Language services create value via improved communication between groups who would
otherwise find it difficult to communicate, and may also create value by allowing groups to avoid
costly errors due to miscommunication.
Athletics and sports activities are contributions to the social economy, despite the huge amounts
of money that certain of these activities generate. They are therefore sources of both health and
wealth, but they belong in the social economy because they contribute more to health than to
wealth. They promote an engagement with the body, an openness to play, and a spirit of personal
excellence that are widely imitated and inspiring.
Social activism and lobbying organizations are of increasing importance, and they are
increasingly well organized and function as businesses. These are the tradition NGOs. They often
fund themselves through organized fund-raising activities, and then use these funds to exert
influence over governments, sometimes multinationals, and, increasingly, world forums. They
contribute value through effective organization of a collective voice.
Cooperatives and member-based associations are also organizations of increasing importance
in the social economy. They often contribute huge value in community building and organization
as well as the production of monetary wealth, and serve to produce value for their members as
well as society at large.
Internet communities generate huge value in, for example, freely-distributed products such as
software, essays, images, and so on. They contribute to the social economy at the scale of the
planet, rather than via any particular economic region.


64
Jane Jacobs, in The Nature of Economies (2001), suggests that certain forms of work we have turned into paid
work, we may need to turn back into unpaid work in order not to sidetrack the goals we wish to achieve by this work.
For when work becomes paid work with an organization, the latter seeks to maximize productivity, whereas for
many forms of work, particularly within the framework of the social economy, we are not seeking productivity, but
other values such as community.
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Artistic production services are important contributors to today’s social economy (here, I
am not talking about mass culture, which is a business enterprise belonging to the consumer
economy). These services include, therefore, theatrical troupes, performance companies,
galleries, small presses, opera houses and so on. They contribute cultural and artistic value and
sensitivity to the wider community.
Research establishments, whether within universities, governments or private organizations are
also a major contributor to the social economy. The value generated by research establishments
includes new knowledge and know-how, and, increasingly, innovation.
Learning services, what we call today educational organizations, are squarely found within the
social economy, where they are heavily subsidized, but as we shall see shortly (and as already
suggested in an earlier chapter), learning services are likely to shift from the social to the
consumer economy. Learning services contribute value in by raising the overall know-how and
effectiveness of individuals in our society.
Transportation services are another activity that could be associated with either the consumer or
the social economy. One might suggest that communal transportation services are part of the
social economy – they require a social commitment on the part of the population to support, but
they contribute to the effectiveness of community living and work arrangements.
Taken together, these different participants in the social economy generate even today net value
in excess of that associated with the shadow economy, although the actual evaluation of the value
contributed is no easier to carry out for this part of the economy than it was for the shadow
economy, albeit for different reasons.
3. The consumer economy
The term “consumer economy” covers everything else, but, in general, this is what we term the
“economy” today. Hence the consumer economy includes most of what were, in another epoch,
the “guild trades” – manufacturing, textiles, food services, natural resource exploitation,
engineering, caretaking trades, telecommunications, banking and finance, insurance, real estate,
and so on. Within the consumer economy, although value other than monetary is created, this
value serves the interests and needs of the population directly, and hence is transformed into
money through exchange. I do not mean to suggest by placing this economy last on my list, that it
is the least important (or that the shadow economy is the most important). On the contrary, I have
presented the list in this order because it is easier to identify the shadow economy, and, to a lesser
extent, the social economy, than to pin down the consumer economy. The consumer economy is
the most mature of the three, and the most complex. It remains the motor of large parts of the
economy – it is simply destined to become only one motor among several.
A period of transition
52
In the period leading up to the new millenium, Asia entered to world economy as a major
unit. Sometime in the next thirty years, Africa will do likewise. Eastern Europe, also, will
become an increasingly important player. These critical moments will bring about (are already
bringing about) dramatic changes in our global economy. Already, the presence of the Asian
economy is causing shifts in western national economies. As each major unit comes on-line, it
will begin by taking over the transformation of primary goods into service goods, since these
economies will begin by being less effective in the 21st century knowledge economy, but more
effective in 20th century manufacturing. As their societies re-organize and the educational levels
improve, however, they will play an ever more important role in the 21st century economy. The
result will be a shift in the first world towards less reliance on manufacturing techniques inherited
from the earlier century, and more reliance on the creative cultural economy that will increasingly
emerge in the 21st.
Samuel Brittan highlights some of the economic turmoil characteristic of the period leading to
zero growth :
“The real difficulty is that, coming in response to shocks, a structural slowdown
would hit different industries very differently. We have already had a foretaste of
that in the misfortunes of the aviation and travel industries, far exceeding those of
the rest of the economy. The policy problems are the familiar ones of how to
compensate the victims of economic misfortune without putting a brake on all
structural change.”65
Jay Earley writes about the situation we live in now.
“We have a burgeoning global economy, producing unparalleled material
affluence and at the same time an appalling exploitation of the disenfranchised,
reminiscent of the worst early days of capitalism. We enjoy a proliferation of
wondrous, easily affordable consumer products, while many people are isolated
from the joys of community and family, living empty lives of striving and
alienation. We continue to see great intellectual and scientific advances while at
the same time our private lives are bereft of meaning, creativity, spirituality and
other qualities that make life worth living.”66
This period of transition represents, indeed, significant opportunities for “getting rich quick”,
although as we progress forward, there will be a growing shift in social awareness and values
from “wealth” to “health”. The window of opportunity for large profit based on the huge
disparities within the world economy as large new sectors of society come “on line” is probably
narrower than we realize. Although the opportunities will continue to exist, the growing
awareness of a broad public and its unwillingness to sit back and “let things happen” will lead to
a climate unfavorable to such action and may, even, result in a changing legal environment that
renders such actions inoperable.


65
Ibid.
66
Jay Earley, A Future Society Must Integrate Current Contradictions,
http://www.earley.org/Transformation/future_society.htm, cited June 2006.
53
Towards a post-sustainable economy
The new zero-growth economy will involve profound changes in reorganization of our lives.
Samuel Brittan67 writes :
“A slowdown in economic growth which reflects a change in taste is a very different
animal to one which reflects a deficiency of purchasing power. If people want to buy less, they should - ultimately and rationally - also want to work less. A structural growth slowdown need not therefore be accompanied by a large increase in involuntary
unemployment. Instead of balancing at a high rate of growth, the economic system would
balance at a low rate or at zero. In the extreme case people would envoy the benefits of technological progress entirely in the form of reduced working hours rather than in
increased take-home pay. The efficient organisation of production would mean supplying
static wants with the minimum of working hours.” Nonetheless, the resulting system would still permit excess: “Although the resulting system would not look much like capitalism as we know it, there would still be great advantages in retaining competitive markets. People who did not share the anti-consumption, anti-work ethos could - as Keynes indicated so long ago - opt in to the consumer society without disturbing their neighbours; and there could still be luxury hotels or ocean cruises for those who wanted them and who were prepared to work more than average to obtain them.”68 Jay Earley also writes about the need to work within what he calls contradictions (and I call paradox) :
“We need a new form of capitalism that is democratic and ecological. It’s not a question of free trade vs. community health. We need an economy that is global and local at the same time. It’s not a question of multiculturalism vs. preserving our cultural heritage; we need both. Gender equality doesn’t mean erasing the difference between the sexes; it means valuing both the masculine and the feminine. Embracing intuition and spirit shouldn’t mean discarding rational, linear thinking. We need systemic, dialectical thinking that is also grounded in the heart and the spirit.”69

Moving on - the Economy as a Set of Interlocking Paradoxes

One of the things that stalled the unrolling of my 2006 book manuscript into this blog was my feelings of ambiguity over my chapter dealing with the economy. In 2006 the world seemed to be in a fantastic boom period with not a cloud in sight, while my analysis of the Peripheralizing World suggested we were headed for a very turbulent period of economic uncertainty and change. I doubted my own analysis, based on the evidence in front of my eyes.

In the three and a half years since I first wrote these ideas out, the world has become a very different place. Although the economists are still spinning out a story of growth and development in a "business-as-usual" mentality (an idea I have indicated time and again in these postings simply cannot be maintained by any intelligent observer of today's world!), they are now forced to acknowledge that the world's economy is also beset by "some difficulties". If you listen to the politicians and the economists they hire to present the situation to the public, we are experiencing "local events", that is, the tail end of a "housing crisis" brought about by a lack of regulation in the banking system, followed by the collapse of the Greek economy, no doubt rendered fragile by the worldwide effects of the housing crisis in the US economy. There is no understanding of these events within a broader, cross-disciplinary framework of socio-economic-environmental change.

On the other hand, despite such "official" positions, I find my own ideas and arguments have been reinforced and substantiated by recent events, and although I still feel "precipitous" to make economic proclamations, I also feel that perhaps the time is right to put these out into the public discourse, right or wrong. Even if they are wrong, I think they raise interesting questions about the nature of the world and the socio-economic environments within which we function. I also think that we need to break through the "expert-only" mentality that says only trained economists can talk about the economy. In the context of cross-disciplinary perspectives, one can infer almost as much about the economy from other connecting studies as from economic analyses directly, perhaps more. Therefore, someone with a good grounding in relevant disciplines may actually have something intelligent to say about the economy, even without direct training in the latter. Well, so much for my attempts to bolster my credentials!

“Paradox I now see to be inevitable, endemic and perpetual. The more turbulent the times, the more complex the world, the more paradoxes there are.” – Charles Handy, The Age of Paradox (1984, p. 12)

The economy in a post-sustainable world is almost inevitably going to be characterized by zero growth, at least in terms of today’s standards. Any growth that will occur will be localized, limited in time, and offset by decline in other areas of the economy. Although today’s experts have divided opinions concerning how such an economy can function, the world will have to find or invent a way to make it work. All indications are that the world will have to give up its dependency on fossil fuels over the next twenty to thirty years, and there are numerous studies that tie economic growth to energy use. So with declining energy use and declining population growth, the emergence of a zero growth economy seems assured.

A zero-growth economy

What do we mean by a “zero-growth economy”, though? Why all the fuss?

Such innocent-seeming questions take us into the heart of modern economic theory and its paradoxes. Economic theory today is in a bit of a shambles. There is no complete theory for the global economy, not one that can be trusted to serve as a guide to policy. This despite the fact that many national governments have staked their fiscal policy on one theory or another. Regardless of the various economic theories presently in circulation, however, all, or almost all, assume as an initial condition that the economy grows. Furthermore, this is an assumption, not a conclusion.

As a result, if the assumption is challenged, the whole fabric of the theories and their predictions begin to break down, without any explanatory power to deal with the situation of zero-growth. This is, in a nutshell, the source of the disarray over the idea of a “zero-growth economy”. This is why there is a fuss. Some economists, when questioned on this issue, blithely assume that “somehow” the economy will continue to function as it always has. Others predict the collapse of the whole system. But both these reactions are, essentially, blind, almost instinctive reactions in the complete absence of any real data. They have more to do with the emotional propensities of
their proponents that to any real world behavior.

What is the way out of this dilemma? Without pretending to deep economic understanding (I am not an economist, perhaps fortunately!), the beginnings of an alternative view would appear to reside in an analysis like that of Jane Jacobs (Jane Jacobs, The Economy of Cities, 2001; Jane Jacobs, Cities and the Wealth of Nations, 1984; but also, Jane Jacobs, Dark Age Ahead, 2005.) Jacobs argues that the whole idea of global management of the economy is a non sequitor, it is the misapplication of a principle at the wrong scale. She argues that the real economy resides in the functional operation of cities, and that the very notion of a national economy is nonsensical. She uses an analysis of an ancient city, which had its own currency, as a touchstone for understanding the organic nature of the feedbacks that exist between a city’s economic development and the corrections that currency fluctuations introduce. In a few words, a currency’s fluctuations are in direct response to city conditions and automatically correct a city’s economy towards economic health. When a currency is applied to a larger region involving several cities, a number of anomalies creep in – the system of checks and balances no longer operates to correct the dynamics of the city.

The basic tenet for her idea is that cities are complex systems that concentrate the ability to replace imports on which they depend with local innovations. Each time this replacement activity, which occurs in a burst, happens, the city diversifies itself and attracts new workers to support the production of the new products. Then, it begins to import new categories of products, often luxury or unusual items that are not produced by the city itself, and exports the local innovations. Over time, the city becomes dependent on the new class of imports, and goes through another replacement burst. A city, therefore, cycles through phases where there is a dependency on exports, followed by one on imports and then the replacement burst. When in the part of the cycle dependent in imports, the value of the city’s products are lower and this exerts a pressure to reduce employment. During the replacement burst, employment pressure grows dramatically and the value of a city’s products go up, while the value of imports drops. If the city has its own currency, the fluctuation of currency values will support this cycle, dropping when in its import stage and rising when in its export stage. These changes in currency value will serve to pressure the system into moving on to the next part of the cycle – a lower currency value will make imports more costly still and encourage the development of import replacements, while at the same time keeping the cost of living low when employment is down. A higher currency value will increase the value and return on investment of exports, eventually making the exports too expensive and hence shifting the economic focus back to imports. Jacobs argues that the move to nationally managed economies and national currencies created perverse conditions where a city’s production cycle no longer receives the right feedbacks and hence may go into permanent decline.

The judicial use of trade tariffs and regulations at the national scale can partially offset these difficulties, but this is most effective for small nations with a single major metropolis. Jacobs argues that, overall, the use of a “national currency” acts as a kind of systemic pressure that slowly emphasizes one metropolis over all others within the nation. All nations move towards a “one city, one nation” environment. For small nations, this is close to the natural organization of the country. For large nations, especially geographically large nations, this creates anomalous effects that may hamper economic development, since a majority of the population resides outside the main city.

Paradoxically, this is without doubt the reason for the re-emergence of large cities as economic entities in their own right. The rise of the internet with its opportunity to form new social arrangements that start to break down the population’s sense of belonging to its national culture and government, is leading to a growth of awareness of the “major players” in the economic world – and cities are benefiting from this shift of awareness. Without necessarily accepting all the precepts of Jacobs’ arguments, this constitutes a very powerful argument for a society in transition, away from the imposition of orthodoxies (of which nations are a highly typical example) to a greater contact with paradox.

However, the globalization of the world economy has led to the emergence of other effects that are not directly addressed by Jacobs’ groundbreaking ideas. Indeed, it has become clear that the environment must be managed at a planetary level – nations are poor drivers for this, as they tend to focus on their own specific needs to the exclusion of those of others. Because we all live in the same world, there has been a net progression towards more effectively addressing the problems we have created in the environment, but this work has been undertaken at the level of world-wide organization. A return to city-based economies will not address this problem.

Also, the internet itself provides an extremely powerful global structure for the economy. In a sense, the internet acts as a kind of “virtual city”, with a market economy not unlike those of individual cities. However, its global nature makes it an effective tool both for social change and for economic development in a way that bridges regions and distances.

Third, the globalization of the world economy has created huge opportunities for wealth. With fewer currencies in circulation, and dramatically reduced presence of trade tariffs, economic activity in one area can rapidly influence activity in another area. It is a situation ripe for the operation of the “butterfly effect” in economic terms. While national economies are a kind of nonsensical structure, a global economy is a different kettle of fish. It has its perversions also, but there is a dynamic that operates globally that is not yet understand and is participating in the
profound social changes in progress.

Jacobs argued that managing the economy beyond the scale of a city makes little sense. This is where I part company with her analysis. I believe that there is a global systems dynamic that operates through and around the internet. However, I disagree with those who seek to create a “unified global economy” or that the current globalization necessarily takes us to such a situation. Rather, I believe we are headed towards a fragmentation of the economy, not in regional terms, but in the broad framework I have outlined here – at least three different, partially connected
economies, with several splinter economies also at city scales.

The global economy

Current future thinkers are suggesting that, not only are our national economies connecting with each other in unprecedented ways, but that this is leading to a situation where the income extremes are lessening, and may, eventually, disappear (Note that Jacobs was more critical of such ideas. She believed that management efforts that seek to impose controls are destined to fail – instead, we need to restore appropriate checks and balances. She argued against loans and so-called development help, which is partly what is proposed to deal with the African continent, and, indeed, suggests that poor agriculture is not primarily a problem of climate and geography, but of the lack of city development. Her arguments do not, however, constitute a direct contradiction to the ideas presented here. From a systems perspective, the large inhomogeneities between regions may well tend to subside, even when Jacobsian dynamics are included in our considerations). Until the late 1990’s, the world’s poor were concentrated in both Asia and Africa. Now, only Africa is left (except for pockets throughout the rest of the world). It was believed, up until the sudden change in the Asian economy at the turn of the century, that corruption was the primary cause of poverty (see Jeffrey Sachs). Now, with several Asian countries still rife with corruption doing reasonably well, it has become apparent that this is not the case.

Jacobs’ arguments about city-based economies applies here. Jacobs discusses a number of “hinterland” effects of large city economies that can be extremely destructive for local economies. One of these effects is the development of a “supply region”. A supply region is a region whose main purpose is to supply a city, often located at a considerable distance, with needed products. This results in the implantation of an economy within the region that serves to support the local population, but only as long as the product need exists. Because these regions do not develop into a diversified city culture themselves, they are totally dependent on the distant city for their existence. And, as already mentioned, the way a city functions, it will eventually find a way to replace such dependencies with new products that can be produced more cheaply and closer to home (often involving the development of new technology). Jacobs points out that colonies served as supply regions for their founders, and that much of the developing world acts, essentially, as a vast supply region for cities in the developed world. She points out so-called “developmental aid” – loans and injections of foreign capital, usually exacerbate the problem rather than solving it. The effective solution is to encourage the development of local capital and local business environments that have the ability to develop replacement economies. This means that they must trade with regions of similar technological and economic level, in order for the replacement principle to operate (i.e. they must have to ability to develop local products of higher quality that the imports that are not produced locally). If the economies with which trade develops are advanced cultures, this replacement can never take place.

The emergence of the Asian countries as economies of force in the world marketplace actually confirms her ideas. The cities that are at the source of the changeover include Hong Kong, Taipei, and Shanghai. These are all cities that developed through particular funding arrangements into replacement city economies. Furthermore, they traded first of all with other cities in the region – trade with advanced western cities is much more recent. These cities have now become competitive with many cities in the developed world – they were able to replace imports from the west and produce local variations of them more cheaply and more effectively, with quality near that of the originals. Now they have become net exporters of these products and are flooding western markets with them.

The route out of Africa’s poverty will need to follow a similar path. This is now being recognized by a variety of organizations, both within and without Africa. Projects such as the Millennium Cities Initiative (http://www.earthinstitute.columbia.edu/news/2006/story04-24-06b.php) aim to enhance the economies of African cities with just such a viewpoint in mind. Hence understanding of the source of such poverty has grown by leaps and bounds and through appropriate international investments, it is appears possible now to alleviate the extreme poverty of nations in this situation, regardless of social and political factors that may degrade the effectiveness of this aid. In a highly connected, zero growth economy, large economical disparities will disappear. System dynamics argue for this. Instead, we will have a constant "bubbling" of economic replacements at a range of scales. In contrast, in today’s world, the economy is driven by large gradients that are often geographically organized – and these gradients occur when there are differences in quality of life while buying power stays high. The world’s poor, although they suffer from low quality of life, also have low buying power. But, as we have seen in Asia, when buying power soars, quality of life improves dramatically (leading to improvements in education and a corresponding drop in population growth rates).

These changes occur within an economy that combines regulation and free market forces. It is now widely recognized that economies that are regulated only in limited ways do poorer than economies that have a good mixture of both, while economies can also lose efficiency if they become too highly regulated (Hank P. Savitch and Paul Kantor, 2004, Cities in the International Marketplace: The Political Economy of Urban Development in North America and Western Europe, Princeton University Press: Cambridge, Mass., 480 pp.). Finding the right balance varies from one situation to another, depending on cultural and other values, but all economies that do well are in the middle field.

Furthermore, it has become clear that cities are the motors of good economic health. In the 21st century, economic management will shift towards a greater emphasis on city scales and on global scales, with a corresponding downplay at national and regional scales. Also, there must be a return of awareness of the natural cycles that regulate an economy. Currently, all national governments throughout the world are focused on the need for innovation to be more competitive. But as highlighted by Jacobs’ analysis, there are times when innovation is the opposite of what is called for. Indeed, innovation emerges spontaneously when an economy is in the right state of readiness (at least, this is true of a city economy). Jacobs pointed out that, historically speaking, this innovation often begins with artists – it is artists who seek to replace imported goods with local equivalents of high intrinsic value, and these equivalents are then modified and used in other applications. Hence the current pressure for generating innovation “at any cost” is another perverse effect of the existence of national economies. It is an attempt to find a cure for the desultory economic development of national economies, when the source of the problem lies elsewhere (i.e. with the definition itself of a national economy!).

The corporate and consumer worlds

What kind of consumer economy will function effectively in a highly connected, zero growth world environment? Business is already changing, with the emergence of the internet as an effective economic force. The technologization of the business world and the merging of networked computing with web-based services will continue to exert huge pressure on business. This ongoing transformation may appear to be rooted in technologically driven change, but it shares with the other social changes in play the shift from a centralized economy to one in which peripheral effects will dominate.

Today, the vast majority of businesses function locally in steady-state conditions – one has only to think about the “corner store” to see this in operation. Physical location is still important, and likely to remain so for some time to come, especially as energy costs increase. Cities, in particular, are gaining in importance, and a new, worldwide, city network is currently emerging.

In a post-sustainable world, the context within which businesses will operate will be different, however – our living communities will be globally networked as well as locally rooted, and this will create pressures that will lead to new economic arrangements. The human need for progression, in the absence of population growth driven development, is leading to an increasing tendency to incorporate social values within the global economic marketplace. Today’s governments have come to recognize the importance of the so-called “social economy”, that part of the economy built on not-for-profit organizations and volunteer work. (For example, current Canadian statistics suggest that the social economy constitutes about 3% of the GDP, while government defined broadly generates about 12% of the GDP. Combined, the social economy may be said to represent 15% of the GDP today. However, these statistics should be treated with care – what they measure is still money. The social economy actually generates considerably more health than wealth, but our current measurement means do not account for this. They only track the wealth component.) The emergence of Web Two Point Oh businesses on the internet, of which the most prominent example is almost certainly Google, is accelerating this shift towards socially focused businesses.

In addition, bartering is emerging worldwide as a “new” source of economic power. Some, such as e-Bay, are based on the use of money, while others trade product for product or service for service. This forms the basis for what I call the shadow economy. (Today, the term “shadow economy” refers to that part of the economy that escapes taxation and other forms of regulation, but this usually includes monetary exchange. My use of the term is somewhat different. In the post-sustainable world, universal taxation will likely not exist in the form it takes today, since a variety of different “social contracts” are expected to come into being and participation conditions will vary. Choosing to avoid regulation is certainly a form of shadow economy, but the use of non monetary means of exchange constitutes a second form that may serve this need but has somewhat different consequences.) With the increase of non-monetary bartering within the business world, and the increasing use of corporate organizational structures within the social economy, this shall lead towards co-existence and, eventually, perhaps partial fusion, of the social and consumer economies. What is today a fundamental difference between not-for-profit societies and for-profit corporations, is already blurring and, in many cases, may disappear.

One of the means under discussion to change the focus of the monetary economy is to create new currencies based on limited resources such as energy production capacity or byproducts such as pollution (“Eliminating the Need for Economic Growth”, a Foundation for the Economics of Sustainability document, http://www.feasta.org/documents/energy/Feasta_Stern_Review2.htm). These alternative currencies are often regulated by a diminishing total supply, and hence their use favors a gradual reduction in reliance in these resources or byproducts. The creation of such new economies may offset the risk of a collapsing mainstream economy as overall growth slows.

Furthermore, it is likely that our living environments will also change. We shall increasingly live in worldwide, networked communities of individuals and groups with shared learning needs, in which both physical locality (especially cities) and non-localized social affinities (e.g. through the internet) work in tandem. This will result in the limited movement of people from one physical location to another within a given networked community, and will ensure the continued existence of the tendency to homogenize goods and services offered across different locations within the network. There will be interest in local communities and the specific cultural environments they have to offer, but there will be a tendency towards the development of global franchises. Furthermore, these living communities will likely be based on social contracts that are legally binding and will eventually replace current national systems. It is therefore likely that businesses will operate across many different legal regimes, even within a given locality.

Predictions are also almost universal that energy production will drop over the next twenty to thirty years. Oil production is near its limit, and alternative energy sources are not as “energy-rich” as petroleum products. There will therefore be a global shift towards less intensive energy consumption and changes as dramatic as those discussed elsewhere in this text in the organization of business and trade worldwide, in transportation services, and so forth. This will result, for one thing, in a drop in tourism and business travel. Long distance travel may well be more heavily focused towards maintaining new networked living arrangements, eventually, and not almost exclusively, as today, on business travel and tourism. Within the transition period, movement to the benefit of the social economy shall also increase.

Finally, as shall be explored in more depth later, there will be an intermediate period during which large inhomogeneities in wages and production costs will occur (this is already in play). This is resulting in the establishment of global methods of moving goods and services from one location to another*. Once created, even as the inhomogeneities begin to dampen out, this infrastructure will serve the new circulation structure of the economy and encourage a certain segmentation of the market place as a function of locally determined strengths and weaknesses.

Our economy will continue to function both locally and globally. In addition, larger businesses may feel the pinch sooner**. Although many businesses will sell to broader markets, the majority will remain focused on serving small, albeit networked, communities. What happens to big businesses, however? These will clearly be impacted by an economy that changes along the lines we are projecting. As we move towards a global zero growth economy, we can expect new currency-based economies as described above, to develop in many areas. Some cities may decide to form their own currency and break away from the global currency basis. Each currency, whether monetary in the traditional sense, or not, provides a means to treat a variety of activities not necessarily focused on direct production of consumer goods and services as a form of business development, and to shift trade and market development to arenas not driven by traditional quantitative production incentives. Businesses will diversify into these new markets, and the result will be “quality-driven growth” rather than the “quantity-driven growth” that we have now.

Ultimately, today’s commodity stock markets may be replaced by a kind of “social development stock market” that better integrates the many different “values” that humans share, rather than converting these to a purely monetary unit as is done today. It is likely that if such an approach takes hold, there will be a merging between organizations that are seen today as different, even opposite – so-called not-for-profit companies versus commercial businesses. Indeed, until recently, these organizations were considered to operate in entirely different ways. Today, this is no longer the case. Not-for-profit organizations are now called “businesses”, suggesting a shift in attitude, and it is recognized that they contribute in significant ways to the overall economy. They are viewed as businesses that market human resources for social gains rather than human resources for economic gains. But social gains have an economic value associated with them that is becoming increasingly evident, and economic gains may have a social value55. Already, the distinction between these two types of organization is starting to blur.

Managing the economy

One of the ideas of the 20th century that has generated a great deal of both attention and anguish has been the idea that the regional and global economies can be managed. A great many brilliant thinkers have been seduced into the idea and have generated arguments concerning how such management may be achieved. However, each timegovernments have heeded these arguments and institutionalized them as policy, real economic behavior has escaped the prison and surprised us all over again.

It is my belief that the idea of the global economy as a more or less orthodox sub-system of the world, and therefore one that can be managed or controlled through rule-based behavior, is problematical. The economy is based on the notion of the flow of money, and money itself, while it seems to be a very simple idea, is actually one of the most complex ideas we have, and one that is profoundly paradoxical.

In a world undergoing expansion, it is somehow not surprising that the main economic issues are viewed as “inflation”, “unemployment”, “capital growth”, “interest rates” and such indicators. Nor is it surprising that classical economic theory should state that as prices rise, unemployment should fall and vice versa. Although money is in circulation, it represents something that is not in circulation, but in expansion. Therefore money per se will tend to degrade in value over time, a consequence of a fixed amount being in circulation in a system whose overall value is growing. However, the paradoxical nature of the situation means that such growth cannot continue
unchecked.

In today’s world, the economy is “managed” by modifying interest rates, borrowing or lending monies, stimulating spending and promoting the reduction of debt. Essentially, these permit small fluctuations in the way in which the value of money reacts to economic drivers, but they do not really constitute management in the sense that the overall drivers are under “control”. As we shift to a zero-growth global economy, the circulation of money will come back into synch with the overall economic value of the community at large. Many of the experts fear such a state (or disbelieve it, which comes to the same thing). They believe society will collapse before it can operate in a zero growth situation. But nobody really knows – this is the first time in history our society is achieving zero growth in a highly connected environment with a very complex system in place.

Possibly the single most mysterious aspect of a post-sustainable society is what the economy will look like. Despite a growing awareness that the world is moving towards a zero-growth economy, not only is there very little consensus about what is involved, there are actually almost no ideas about what a functional zero-growth economy might look like. All current economic theories are constructed upon the idea of growth – to the point that many economists deny even the possibility of a functional zero growth economy. Others suggest that the post-sustainable world will be characterized by technological growth and hence that a zero-growth economy is unlikely to occur. There is, however, more confusion surrounding such affirmations that any form of good
sense.

The Economy of the 21st Century – A Riddle Worthy of the Sphinx

As with all the changes in progress, the evidence for how the new society will function is already in place around us. The trick is to sift through the many different threads and find those that are likely to persist. In different parts of this blog, a view of 21st century life is constructed. The broad argument is that the change to a zero population growth society within a highly connected world will engender a shift in how personal identity is viewed. We shall live in a less centrist world, one in which periphery becomes paramount. In the absence of a clearly defined centre, our
world will consist of apparently irreconcilable opposites often located next to each – we shall have to abandon the idea of consistency, and enter into a world in which paradox reigns supreme.

The economy has been treated, in various historical currents, as a mathematical system, a system of assumptions, and various forms of social subsystem. Only one school of thought suggests that the economy cannot be separated from the rest of the social system – that of the so-called institutionalists. The most prevalent economic theories of the 20th century were focused on the economics of exchange. However, all these different approaches have been based on assumptions about the nature of human beings.

In this blog, the assumption made is that human beings stand on the threshold of choosing to live with paradox instead of within orthodoxies. This is a different assumption about human beings than most economic theories make, and therefore a new kind of economic theory will be required.

Furthermore, the notion of paradox is central to the new economic theory. The role of paradox within the human psyche, as recognized by Zen Buddhism, is that paradoxes cannot be answered intellectually – instead, when approached with any kind of persistence, they result in the engagement of the whole being, a contact with irreconcilable opposites that, over time, leads to the emergence of a “third way”58. In Zen Buddhism, this is “enlightenment”. In Freudian or Jungian analysis, this is a transformation of the self, what Jung called "individuation". For society or the economy, this is a transformation of the whole.

The economy that is consistent with the world described in this blog is a non-centrist economy. All economies in recent history have been centrist in nature, many even, imperialist. As with human identity, this means that there is a dominant economy that acts as an organizing principle for the whole economy. In a post-sustainable world such as that outlined here, the world will be made up of many distinct units, not nations as today, but communities with at least a social reason for being, and sometimes a geographic one as well. Furthermore, the so-called “business economy” characteristic of the 20th century will be just one economy among several, each with different functional laws. As outlined earlier, what is called the Social Economy today will grow to rival the business economy. In addition, it is expected that a sizeable proportion of the population will “opt out” of these economic arrangements and develop a separate, shadow economy of street bartering and trade.

As suggested earlier, these different economies already co-exist in parallel with each other. One or two decades ago, these were not viewed as “economies”, simply as marginal activities. Today they play a significant role in world development, but when we discuss “the economy”, we still refer to the “stock market” as the primary and dominant motor. However, in the coming years, this will make less and less sense. In a zero-growth economy, the need for capital investment will decrease, and hence the interest in the stock market will likewise play an increasingly marginal role. The business economy will become but one part of a much larger, more pervasive economy that, in its total state will become too complex for any individual or group to understand. Each of these sub-economies will use a different form of “money” although these will have overlaps between the systems. Let us explore the issue of money a little more.

Money and the Worm Ouroboros

Money is both mysterious and quite concrete, however, it is an entity that tends to shy away from analysis. In its simplest terms, “Money is a medium of exchange”, it is a symbol that serves to simplify value transactions. It may also act as a store for value and as a unit of account for thinking about value (Kit Sims Taylor, 1996, Chapter 3: Why Economists Disagree, Human Society and the Global Economy, http://online.bcc.ctc.edu/econ100/ksttext/disagree/disagree.htm). Today we think of money as “a spectrum, running from the most liquid (easily spendable) form to the less liquid forms that better serve as stores of value” (Ibid).

The tricky part comes in trying to determine the value of money. In essence, this value depends on the willingness of others “to accept it in exchange for the goods and services we want to purchase”61. Hence money is not just the value we negotiate with the salesperson, but also the value of this purchase in relation to a kind of average social value across the monetary system.

We may make an analogy, therefore, between money and the worm Ouroboros. Remember that the worm Ouroboros is the mythical serpent that swallows its own tail. When we engage in a transaction, we either give or receive money in exchange, but the interaction in essence propagates out into the global economy and mingles with all other such transactions, then comes back around in its collective form to be swallowed again. Whether we spend money or earn it, money becomes a part of our action in the world and this returns to us in the form of its net value.

In a sense, money is the name we give to the crack in the universe, the place where the worm Ouroboros eats his own tail. By our labor, we produce value, and this value we exchange via a symbolic entity we call money. But money doesn’t mean only the value we ascribe to it, it means the value the whole operation of our social machinery returns to it. In a world of circularity, money becomes the means by which we understand how our work is valued by the collective, it is our action coming back and biting us from behind.

Conclusion

Although I call the postsustainable economy a "zero-growth economy", in essence it is really a "micro-growth economy" or a "zero net sum economy". The economy will of necessity be characterised by lots of movement and change, but the movement will be between different parts of the economy (for example, between the monetary economy, the social economy and the shadow economy) and across different scales (for example, between cities and different internet-based communities). The fear of collapse in a zero-growth economy is based on the idea that zero-growth means stagnation. But as we human beings know, beyond our rapid growth in youth, there is still enormous room for dynamic change within our sense of being. The growth spurt is not necessary to ensure change. Although analogies between individuals and global economic systems are untrustworthy, the point is, just because we don't currently understand how a postsustainable economy can function doesn't mean that it won't function! Already many of the underpinnings of the new economy are taking place around us - the trick is to see these for what they are. While my attempts to do so may be error-prone, I dare to say the same will be true of most other attempts. But I suspect the emergent economy will already be much clearer within the next decade as the world stumbles through a series of crises, each of which will allow the changes to consolidate.


*Samuel Brittan writes : “There will be for a long time opportunities for business expansion meeting the growing needs of the Third World. And even in a static Western economy there might still be a good deal of investment and entrepreneurial action. Consumer desires, even if modest, might still be subject to changes of taste; the fashionable clothing "gear" might change; or trips to old coalmines might alternate with visits to the Himalayas, or painting one's home in a novel manner, as ways of spending leisure.” http://www.samuelbrittan.co.uk/text101_p.html (Samuel Brittan, Economic possibilities for our grandchildren, Financial Times, Jan 3, 2002)

**“To be more concrete, companies that use automated, specialised equipment to make very large quantities of one thing in one place and then need to ship it to markets around the world will tend to lose out to smaller firms which use rather more labour with a higher level of skill and less specialised equipment to make a wide range of things for their local markets. Higher prices also shift the balance away from the centralised supply of energy drawn from fossil sources to local systems supplying energy from local sources. Local energy sources become important again and, just as in the past, instead of energy being taken to wherever in the world is currently a cheap place to manufacture, economic activity will move to wherever there is a reliable supply of competitively-priced energy available for its operations. This has the potential to bring about a shift in political and economic power.” http://www.feasta.org/documents/energy/Feasta_Stern_Review2.htm, Eliminating the Need for Economic Growth,
December 2005, A submission to the Stern Review on the Economics of Climate Change, FEASTA

Religion turned inside out

I realized while going back over my posts on this blog that I never did publish the chapter of my book manuscript that dealt with religion, and that without it the comments regarding Bishop Spong's book and thoughts lack context - they discuss a comparison while the "other half" of the comparison has not been laid out for public perusal. In the interests of allowing this to occur, I here reproduce the main elements of my 2006 chapter, even though were I to write it today I would incorporate some of Bishop Spong's concepts and update the text based on more recent experiences.

My 2006 text begins with the following quotation from Charles Handy's book "The Age of Paradox" :

“Living with paradox is not comfortable nor easy. It can be like walking in a dark wood on a moonless night. It is an eerie, and, at times, a frightening experience. All sense of direction is lost; trees and bushes crowd in on you; wherever you step, you bump into another obstacle; every noise and rustle is magnified; there is whiff of danger; it seems safer to stand still than to move.” – Charles Handy

In preceding sections, we have developed a global view of the changes underway and focused on particular changes that will occur but also that need to be guided into appropriate paths in the development of new learning environments and new business arrangements. Here, we are concerned with another major aspect of daily life beyond School and Work, that of Church. Some may question the importance given to this topic so early in the unveiling of the changes in progress – others may wonder why this hasn’t been given top billing. In fact, religion remains, one of the major motive forces in our current world society and is intimately tied to daily life throughout the world, although the nature of the religious practices vary. Later on, we shall be dealing with other aspects of our spiritual lives, and the importance this has in the development of new living arrangements, but here, we lay the groundwork for these more nuanced discussions by engaging in a critical study of religion.

Our discussion of religion follows the broad plan laid out in this blog – from orthodoxy to paradoxy. Religion has been, since its beginnings, the foundational model for orthodoxy. On the other hand, some have argued that the spiritual figures on which religions are based, Jesus, John the Baptist, Mohammed, Buddha, and so on, are not, themselves orthodox – rather, orthodoxy is the set of codified beliefs and practices that are built up over time based on their usually more spontaneous teachings.

From whence comes this apparently universal tendency to create coherent systems of thought around inspirational individuals, and then require people to follow these systems? This is an important question for those such as ourselves, who have at the least named a counter-tendency, the modern drive to move away from orthodoxy, and who propose to strengthen this counter-tendency.

The Origins of Orthodoxy

In an earlier posting, I noted that the word “orthodoxy” derives etymologically from the roots “ortho” and “doxa”, Greek words meaning “right” or “correct”, and “thought”, “teaching” or “Glorification”71. Its formal definition is given as “correct theological or doctrinal observance of religion as determined by some overseeing body”. A common definition is, on the other hand, “a belief or orientation agreeing with conventional standards”. The notion of “right thought”, however, is actually a part of the teachings of many of the spiritual figures within religion, including Jesus, Buddha and Mohammed.

In other writings (actually, my published scientific writings!), I discuss the idea of Presence. Interestingly, although Presence is a current pre-occupation with regards to the design of effective virtual reality environments, it also has its roots in religious experience. Presence, in particular, appears to result from a kind of CONTACT with the Other. In religious experience, the Other is God (or the Buddha, or the Tao, and so on). Furthermore, Presence is not about CENTRE, but rather concerns PERIPHERY. The whole idea of the Other is a form of PERIPHERY. Finally, Presence is an experience that occurs in the Now. It is a CONTACT with the Other in the Now. Prayer is a way of attaining a form of Presence, as is Meditation (N.B. This is, indeed, if my reading is correct, how Bishop Spong situates the role of prayer). Right thinking may also be a way of achieving Presence. Enlightened individuals are concerned to bring about a greater contact between other individuals and this Presence, for the greater good of our being. Furthermore, we all have experiences of Presence in one form or another, indeed, the moment we stop and listen, even to ourselves. These moments are not attainable without a sense of awareness, a paying attention to ourselves. Right thinking among most spiritual leaders incorporates this idea of self-awareness.

Given that we all have experiences where we associate what we are thinking and how we are thinking, with the experience of Presence, it is perhaps not so large a step to want to systematize these associations within the goal of achieving a greater, ongoing sense of Presence, that is, a spiritual Enlightenment. Hence the emergence of a doctrine of “right thinking”, that becomes an orthodoxy. The tendency may be a result of what it is to be human, and what it is to experience Presence.

However, once an orthodoxy has been formed, it tends to become both fixed and invasive. Rather than remaining a guide for choice for the individual, it often becomes a straightjacket imposed by the community upon its members. Furthermore, different religions define their orthodoxies differently, and seem to get locked into a given belief system based on their particular doctrines. This has resulted in the dividing up of the world into different groups and beliefs. Finally, this is often where tolerance is paradoxically least felt. Why is that?

The Relationship between Identity and Belief

Modern research in cognition(*) is slowly revealing a fundamental truth about human nature – our very identities are built on our beliefs about ourselves and the world. Therapy and psychoanalysis are largely activities designed to bring us to question our beliefs about ourselves and to allow the reorganization that may spontaneously follow when these change. In the post-sustainable world, identity is a continual reconstruction that occurs by questioning who one is every single day (i.e. a focus on process), while in the old world, identity was a cumulative construction with a fortress-like defensive system aimed at “preserving” identity (a focus on structure). Identity was viewed as a means to ensure survival of the individual (or the group) through defensive action. In the new world, it is achieved through a more stable, but fundamentally more challenging method, by re-questioning one’s beliefs and allowing oneself to be redefined with each new contact. The fear is that we shall lose ourselves, that we shall lose our way by acting in such a paradoxical manner. The truth is, based on more than a century of experience with psychotherapy and analysis, the self is much more robust than that – the self thrives on paradoxes and contradictions, and grows as a result of dealing with them.

The shift in identity from a focus on structure to a focus on process follows the paradigm shift from a world struggling towards sustainability to a post-sustainable world. In the first world, the world of expansion, identity as a cumulative central structure makes sense. It is only in the new world that identity as a continual re-construction process comes into play. This suggests a second reason for the universal tendency towards the creation of closed orthodoxies. We begin with the need to develop a “right thinking” guide, and then we naturally build upon this within our understanding of what it means to have an identity, and hence accumulate doctrines and defend them.

Within the new paradigm, our identity needs to be constantly under re-construction, because our boundaries must be open, to function effectively in a world characterized by circularity and periphery. This will lead us away from orthodoxies that are cumulative and defended, whether these be religious, scientific, historic, or some other form. Instead, we shall be focusing on the co-existence within our systems of thought of often contradictory ideas. Right thinking to achieve Presence will still be a necessity, but it will be found by exposing ourselves to controversy and paradox. Ultimately, this will be closer to the original thoughts behind the need for “right thinking”, where such thinking arises not from a community-based doctrine, but from the necessities of remaining open in a world where paradox is primordial.

This, of course, heralds a profound change that will occur, eventually, in the way our religious experiences and lives are organized. Even the notion of “organized religion” will have to be rethought, since it is based, at least partially, on the idea of cumulative knowledge. However, to be fair, most religions today are struggling with the emergence within them of critical and questioning voices that are driving the very kind of identity re-thinking we are discussing here.

We are suggesting, rather, that such change from within will become ever stronger over the coming years, and that religions will be called upon, at some point, to rethink their entire organizational structure. The more centralized they are, the harder this will be.

Towards Paradoxy Within Organized Religion

In order to survive in the post-sustainable world, religions will have to give up their vice-like grip on orthodoxy, and on the idea that one can be “wholly” within one belief system. The single most important aspect of the post-sustainable world to grasp is that it is based on “paradoxy”, not orthodoxy. All the rest follows.

When I go to church (every Sunday – I sing in the choir), I hear sermons that assume that I have an absolute belief in God and Christ, and that tell me what I should do to better live the life of a Christian. But I carry within myself a deep contradiction. While one part of my being finds the sermons interesting, the symbolism fascinating and, on some level, true, even in terms of its call to action, another part of my being rejects the whole exercise as being far too focused on a single idea about the world, a single belief system. I have long said to myself that “one’s first right as a human being is to be inconsistent”. There is no outside authority that requires one to believe in any given system. I flirt with astrology, and there are times I accept what it tells me, and others when I consider it all to be nonsense. For a scientist, the first is considered unpardonable (science is another orthodoxy, another system of beliefs, that needs to move towards paradoxy).

I am not alone in this. While there are still many, perhaps even a majority, of people who “buy into” our orthodoxies, most are also struggling with doubts and other beliefs that are not allowed to surface (orthodoxy is very much about what is allowed, or not). But once one makes the switch to paradoxy, it is hard to go back. It is a harder road to follow, more uncomfortable at a personal level, because with it goes an acceptance of the contradictions within the self and the uncertainties that may result in our choices. However, the paradoxical road is, ultimately, the one that leaves us with a more robust identity, more open to growth and change, more equipped to survive.

Religions (and other orthodoxies, such as science, political parties, nations, and, even, to some extent, certain parts of the artistic community), will have to give up the idea that one can be “wholly for” or “in” their particular belief system. In fact, we may be both Buddhist and Christian, scientist and artist, spiritual and atheist.

A Practical Guide for Change

What does this mean in practical terms? What kinds of changes need to take place? One of the recent struggles experienced by many churches was the adaptation of their doctrines towards a more inclusive language. This was what has been termed the “Politically Correct” or PC movement. One of the down sides of this movement was that it was a highly orthodox movement. It was a revival of the idea of “right thinking, right action”, but within a context that permitted no inconsistencies. The results, in some cases, have been changes in hymn books and doctrinal texts that have taken much of the paradoxical life out of these documents. We are due for a sensitive counter-movement, one that allows some inconsistencies and contradictions to creep back in, provided there is an overall focus on “right thought, right action” within a paradoxical flavor.

The struggle over women ministers or priests, and over gay marriage are also recent issues that have brought many religious communities to question themselves and their basic tenets. These debates have often brought home the realization that real life communities do include contradictions and paradoxes, and that even the doctrines of religion incorporate some of these within them.

However, religious communities are still, for the most part, focused on the idea of an “exclusive belief”, even thought they often act more inclusively. Hence, for example, in recent years I have taken part in communion at several different churches, Protestant, Anglican and Catholic. However, I have also been exposed to doctrine-based affirmations such as “all those who are baptized are invited to take part” or “all Christians are invited to take communion”. As inclusive as these may sound to many members of these communities, I am neither baptized, nor, strictly speaking, Christian. Hence, although from a practical point of view, I may partake in
these activities, in fact I have been formally excluded from a doctrinal point of view.

Furthermore, I have found that I am frequently not alone – I know several individuals in these different communities who have likewise not been baptized, or have other beliefs than those shared by Christians.

The first major step towards paradoxy, therefore, is to be more inclusive in doctrine, not just in practice, with regard to other religious beliefs, including non-Christian ones and even atheistic beliefs. There is a general feeling that this would be going too far, but it is a crucial step if religions are to survive over the long term. Furthermore, despite fears to the contrary, this does not mean giving up a belief in the Numinous, nor giving up a practice of “right thinking and right action”. It simply means making these more part of our personal doctrines, and more a result of a
struggle and less a part of the organized doctrines that make up a religious community.

As discussed elsewhere in this blog, the new world will be profoundly structured around the idea of PERIPHERY rather than CENTRE, as the world we are leaving was organized. Organized religion needs to recognize and understand this change. It is a matter of shifting the focus of attention. Religions, like many complex structures and organizations, contain many different elements and may adapt to changing circumstances. Shifting to a PERIPHERAL focus is another vital step. Many churches and religious groups are still clinging to the idea that they should struggle to play a
more “CENTRAL role” in society, and undertake extensive, costly, and, ultimately futile activities aimed at achieving this. Instead, churches and religious organizations should embrace their role as being important to the PERIPHERY of society. Since society is a whole is moving to become more PERIPHERAL, this is actually a focus that favors survival, even a new kind of flourishing.

Since Presence itself is PERIPHERAL, and hence human individuals are also PERIPHERAL, this should be no great hardship. But moving towards a more peripheral focus also means giving up the importance of Place. Place is a central notion that will become less important in the coming years and decades. Hence the notion of the Church or the Meeting House or the Temple will become less important. Organized religion needs to let go of this idea, and start to develop a more malleable notion of contacting the Numinous. This won’t happen overnight, but it will need to happen over a longer period of time. We won’t completely let go of Place, instead we shall create many Places, none of which has dominance over the others.

Organized religion also needs to network more strongly with other faiths. With the move away from doctrinal orthodoxy, this should become easier than it is today. Although some cooperation occurs today, it is often based on joint outreach or socially engaged action, because these do not require doctrinal modifications.

Already, the four practical actions we have outlined (changes in doctrine to accommodate other religious beliefs, acceptance of the shift to a Peripheral role in society as a positive value, movement away from a centralized Place of worship, and networking with other faiths at the doctrinal level) represent major changes in thinking and understanding for most religious communities in existence today.

The Recognition of Shadow

In other postings, I've gone to some pains to discuss the importance of allowing a shadow culture and economy a more accepted place in our societies. Likely actions include creating public forums for discussing our own personal shadow behavior as well as those of others. Organized religion offers a significant forum for doing just that, if there were an openness within these communities to do so. The discussion around gay marriage is certainly an example. Gay relationships were long relegated to our society’s shadow, and because they challenge us in heart of our own contradictions, they are still a touchstone for strong, not always understood, feelings.

Religion provides a very interesting environment for opening up a discussion about the shadow. It has always provided a forum for discussing demons, albeit within an orthodox environment – demons were always to be condemned. To open the doors to a more paradoxical debate about the nature of good and evil, a necessary step is to open the religious environment to discussions of belief and doubt. This is quite different from orthodox discussions of belief, that see doubt as something to be found within a box “over there”, a source of challenge towards orthodoxy and hence something to be acknowledged so as to keep it out. Instead, I am talking about paradoxical discussions about belief and doubt, about the idea that God might not exist, a doubt that is allowed to challenge one’s religious identity, rather than kept on the wrong side of a wall of orthodox doctrine.

All of the great religious orthodoxies act in this way (Christianity, Moslem, Hindu, Buddhism, Shintoism, Judaism, etc.), with the possible exception of Taoism. However, each does so with a different flavor. Hence, while the demons of Moslems are not the same as the demons of Buddhists or Christians, they all discuss these demons within doctrine. The possibility of opening up the world’s religions, “from the inside”, offers fabulous cultural enrichment to the peoples of the world, if we can only let go of this persistent clinging to orthodoxy, to exclusiveness, to shutting parts of ourselves out, and with this, shutting other people out.

Conclusion – the Means for Change

What I have laid out is a roadmap for change. I recognize that it is unlikely that these changes shall be realized over a short period of time. However, although the significance of this work may be that we have named the demon to be tamed, over the longer term there will be growing pressure for the changes outlined to occur, not just for Christian churches but also for Moslems, Buddhists and other religious groups.

Religion is rooted in the essence of being human. Despite all the arguments over the years, from Marxists and communists, from science and psychoanalysis, from feminists and anarchists, popular interest in religion persists. There is something compelling about religion and religious practice, even when one does not, fully, believe. Instead of struggling to return religion to its central role in human culture – a struggle that it will lose – a more intelligent response would be to open itself up “from the inside”, to turn itself “inside out”, so that all the paradox of human spiritual growth is still given a place to reside, but not an exclusive central place, rather a set of intermingling peripheries. This is the future of organized religion, sooner or later.

One of the abiding qualities of religious communities is their longevity. It would be a shame to lose this quality in our communities, because of an inability or an unwillingness to change. Furthermore, the changes need not always occur in the midst of controversy and struggle. Oftentimes the solution to a paradox is to sit quietly, perhaps years at a time, until movement emerges, until change comes as a form of necessity, within a third way.

*Cognitive Behavioral Therapy, as developed by Albert Ellis and Aaron T. Beck, is based on the idea that our emotions are determined by our thoughts and core beliefs. However, there are recent indications of a merging between cognitive therapy and classical Freudian and Jungian analysis, and these hybrid approaches focus more specifically on the role of beliefs (see Mark Solms and J. Allan Hobson, Freud Returns, Scientific American Mind, April/May 2006 edition.

Final note

Interestingly, although this text was written completely independently of knowledge of Bishop Spong's writings, the two visions are very closely allied. In some ways Bishop Spong is far more radical in his vision of the changes that need to occur within the Christian Church than I was (although I was discussing all religions more generally than only the Christian Churches), in other areas I was more specifically radical (for example, in questioning the central role of Place) but we both agree that change is not only possible, it is necessary, not just for the survival of Christianity, but also for the survival of humanity. As I indicate in my text, I am not strictly speaking a Christian. I spent much of my life as a self-defined atheist, but always as one who recognizes that we humans have an inner spiritual life, even if we may have trouble articulating it. I have recently come to recognize that my understand of "God" (not a word I am comfortable with, fundamentally) is of an immanent presence, not a transcendent presence (following distinctions that Gregory Bateson discusses in his books - see, especially, his "Where Angels Fear to Tread - Towards an Epistemology of the Sacred"). This notion of an immanent God is very close to the non-theistic God as the "Ground-of-Being" discussed by Bishop Spong. Also, Bishop Spong presents a very cogent and articulate argument about the need to accommodate shadow. I focused in my text on the role of doubt as part of a religion's shadow (and also the issues of gay marriage and women ministers), but the whole notion of shadow is much more extensive than this and Bishop Spong gives it more place in his writings. In fact, the whole notion of shadow in a communal sense needs to be extended and explored in much greater depth.