Our current economic model, premised on profits and returns, consumption, and growth — on greed, has proven to be problematic for the environment, society, and governance.* Over time, humans have inflicted grave damage to the land, forests, rivers, streams, and atmosphere. Some of this was in the interest of survival. A lot more was done in the interest of greed. Of late, we have done especially grave damage to the atmosphere by burning increasing amounts of fossil fuels. Gasses emitted from this burning of fossil fuels have induced Global Warming – aka – Climate Change. Today, our species and many others face extinction because of the accumulation of these greenhouse gasses in the earth’s atmosphere. Much of this damage, too, was and is being
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Our current economic model, premised on profits and returns, consumption, and growth — on greed, has proven to be problematic for the environment, society, and governance.*
Over time, humans have inflicted grave damage to the land, forests, rivers, streams, and atmosphere. Some of this was in the interest of survival. A lot more was done in the interest of greed. Of late, we have done especially grave damage to the atmosphere by burning increasing amounts of fossil fuels. Gasses emitted from this burning of fossil fuels have induced Global Warming – aka – Climate Change. Today, our species and many others face extinction because of the accumulation of these greenhouse gasses in the earth’s atmosphere. Much of this damage, too, was and is being driven by greed.
Now, the protection of this avaricious economic model is being held over our heads by the thread that we are damned to economic collapse if we don’t continue employing it. Continue doing the very things threatening to kill us all.
The problems with the current economic model have always been there. For too long, it has been heresy to question constructs like capitalism, free markets, and free enterprise, constructions meant to serve the interests of wealth. An economy should serve the people’s interests, be considerate of all species, and protect the environment. Our current model doesn’t. Climate Change is but one of the things telling us to have a closer look at our current economic model. The responsibility is ours.
Now, it is about survival. To survive, it is all-important that we stop burning fossil fuels. To date, the progress in reducing greenhouse gas emissions has been far too slow, hindered, in the main, by the interests of those vested in fossil fuels. Their interests are of no concern; aren’t the problem. The problem is that burning fossil fuels is destroying the environment — the environment that allowed for our evolution. The one we depend on to survive.
Without the efforts of the American Petroleum Institute (API) and the coal industry lobbying groups in the interest of profits and returns — greed, and wealth; we would be much further along in transitioning off fossil fuels. Without the influence of such special interest groups, we would have acted more rapidly and decisively to develop alternative sources of clean energy; the damage from Climate Change would be less. Without our current economic model, we would not so easily have been deterred. With a better economic model, we would not have promoted consumption and growth as much; would not be burning so much fossil fuel; would not be in such dire straits.
Given that much of the burning of fossil fuels was for the production, transportation, and marketing of consumer goods; reducing consumption would be an effective way of reducing the emission of greenhouse gasses. Producing goods that last longer reduces the need to consume. Buying only what we need reduces consumption. Stop teaching our children to be consumers would be a good idea. Stop teaching the citizenry that consumption for consumption’s sake is good — another. Doing these things along with developing and adopting an economic model that isn’t dependent on consumption could greatly help reduce greenhouse gas emissions while we transition to clean alternative energy sources, and would reduce energy requirements going forward.
Today, consumer goods by the billions of tons are being shipped all around the world. Much of this is due to the current model’s appetite for cheap labor. Much of it is in quest of returns. The practice of shipping goods great distances over oceans, of hauling goods from one side of a country to the other, begs another look. Both increase greenhouse emissions and thus accelerate climate change. Producing goods that last longer near the point of consumption would greatly reduce the emission of greenhouse gasses. Would also reduce the defense budget.
No doubt trade advanced and spread civilization up through the first part of the 20th century. These days, radio, television, the internet, and cell phones do so at the speed of light. Trade for the sake of making money may not be a good and sufficient reason for hauling goods over great distances. Plus, there are all sorts of benefits from being self-sufficient.
There are still far too many shopping malls left in America. These abominable things were invented to increase consumption, to stimulate growth (“add jobs”). For decades, Americans dutifully got in their cars, drove miles, and shopped until they dropped. What could go wrong?
For one thing, the cars they drove spewed tons of the greenhouse gas CO2 into the atmosphere. For another, onshore production of goods was/(jobs were) offshored in the name of profits. In their enthusiasm, people bought more than they needed — could use. The shopping malls had replaced local stores within walking distance and downtown stores accessible by public transit. — Goodbye and good riddance.
The current economic model requires constant growth, ever-increasing consumption, the pursuit of cheap labor, a lot of imagination and rationalization, and the constant feeding of oodles of propaganda to the populace — is now face-to-face with reality. Now would be an ideal time to develop an alternative model. One to carry us forward.
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This same greed that brought on and exacerbated Climate Change does harm in numerous other ways. For three-plus decades, private equity firms have been buying up residential units en masse, then squeezing them for more return on investment. Rents in these units have increased as much as 200% shortly after purchase. The tenants in these units have to do without in order to pay rent that may exceed half their income. Many are becoming homeless due to these rent increases. These purchases of housing units by private equity firms do not increase goods and services.
Private equity firms are also buying up nursing homes and hospitals. In those nursing homes and hospitals, we are seeing more people suffering and dying from neglect. This neglect is in the name of profit, in the name of return on investment (making money off money) — in the interest of greed. For these private equity firms, it isn’t about providing goods and services. They are buying up existing facilities and then maximizing the rate of return. There is no net economic benefit from this practice.
How different is the private equity firms’ right to profit and return on a market they control from that of the drug cartels?
Many of life’s necessities, like housing, food, clothing, and healthcare have long since been commodified. Now, there is pressure to commodify k-12 education. Should any of these essential goods and services be commodities?
Universities now structure their curriculum around what is marketable. Many university students take only those classes associated with future employment. Should higher education be about training people for jobs? Be a trade school for high-paying jobs? Or, should higher education be about personal development and trade and professional schools separate?
Are we seeing the consequences of this trend in the form of high-tech billionaire man-boys like Musk, Zuckerberg, …? In a wealthy elite sans introspection? In an underclass with little respect for others? In our politics?
When asked in an interview about the causes for the increased popularity of authoritarianism, Nobel Laurette Maria Ressa posited that the main reason was that the media’s pursuit of profit gave rise to the increase in false information which in turn enabled the rise of authoritarianism.
We hear that markets are magic. This, of course, is just propaganda in the interest of wealth. That free markets were heaven-sent is more B.S. on top of B.S.. Sometimes, if well-regulated, markets do work well. Sometimes, they don’t work so well. Sometimes, they fail spectacularly. The question for designing a new economic model is: When, if ever, would markets be the tool of choice?
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In designing a new economic model: How best structure an economy to produce/provide and equitably distribute the requisite goods and services?
When considering an alternative economic model, questions like ownership of the means of production, private property, wealth accumulation, and compensation arise. There are questions about how best to decide what products to produce, how much of a product to produce, and how much wealth a society should expend on research. Questions such as whether a society needs to incentivize its population. About opportunity.
A government representing the people could build and own the means of producing the requisite goods and hire people to manage and staff them. A government could build and own the means of producing the requisite goods and let out contracts for the operation to private entities. A government could contract out the production of requisite goods in toto. Or, a government could use any combination of these.
How best to equitably distribute the requisite goods and services? A society could decide that only those able and willing to work were eligible. It might decide that all living members were eligible. A society could agree to compromise on some combination of these. A society could make these economic decisions via a democratically elected, representative government.
In a society that cares for all its members, each member gets sufficient food, clothing, housing, education, and healthcare. Because: A well-nourished, well-clothed, well-housed, well-educated, and healthy society makes for a better society and a stronger nation.
Sufficient food, clothing, housing, education, and healthcare could be basic. Members who contribute to the production and distribution of requisite goods or the provision of requisite services might be entitled to more compensation commensurate with their contribution. In regards to healthcare, would a society want to deny any member access to good healthcare? Education plays a significant role in inequality. Wouldn’t a society be better off if all its children got a good education? Were given equal opportunity?
Expertise in re: what products to produce, how much of a product to produce, and how much a society should expend on research abounds within the current society.
Under our current economic model, compensation is often in the form of money. Does an economy need money? Do we even know what money is? People buying cryptocurrency don’t. Nothing is new here; after all — capitalism, too, was always a Ponzi scheme. What is new, and perhaps is adding to the confusion about what money is, is that money in the form of currency is disappearing. What was thought of as money is becoming an account. Any facilitation previously afforded by currency is now afforded to us electronically. In a new and better economic model, everyone will have an account. In what units, this?
Positing that any currency’s worth is a function of the issuing nation’s inclusive wealth, the worth of any account held in a nation will also be a function of that nation’s wealth. Perforce, all citizens of a nation would have an account. Other nations might.
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Is wealth accumulation in and of itself good for a society? Under the present economic model, some can save enough for their retirement. A good thing to do if one can afford to do so. Unfortunately, the current economic model doesn’t accord about one-half the population enough income to do so.
Should one’s food, clothing, housing, education, and healthcare be wealth dependent?
The current economic model allows some members of society to accumulate wealth enough that the income from investing that wealth is sufficient to provide them with lavish lifestyles for their lifetimes and those of generations of their heirs. Today, much of this income may come from hedge funds and private equity firms, neither of which positively contribute to the economy. Quite a lot of it may come from squeezing workers’ salaries. Such accumulations of wealth come at the expense of and lessen the opportunities for others in society.
Should the wealth of a nation, a society, be in the hands of individuals? Or should a nation’s wealth belong to all its citizens? Under the current economic model, a significant part of our nation’s wealth is in private hands. Private ownership of wealth has grown so much that a few oligarchs may dictate a nation’s policies — the world’s. Some of these oligarchs are more powerful than most governments; collectively, they may be more powerful than any. Now seems a good time to look again at wealth, what it is, and who should own it.
Voices for wealth like the American Enterprise Institute, the Heritage Institute, the CATO Institute, and even the Constitution tell us that private property is the bedrock of economics. Saying that this is so is the sole reason for the creation, for the existence of the first three of these. As for the Constitution — at the time of our founding, this saying was held by many to be true. Was it? Or did the idea come to us whole cloth from 18th century England? We imported, and still have, laws designed to protect the property rights of England’s wealthy. This fact might give us reason to question who was in charge of the writing of such laws.
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Changing one’s thinking can be difficult. For most people, the familiar is how things should be. Even when the familiar is flawed. People who live under authoritarianism come to believe that that is the way it should be; is the norm. In 21st-century America, a large part of our population still subscribes to a 17th century European model of economics — of society. This in a time of tremendous change — in a world of ever more multicultural societies.
Beyond this inherent resistance to change, perhaps due in part to it, wealth exerts, has long exerted, an excessive – an inordinate – amount of power over our politics, thus also our economy. In a government of the people, the people should choose which economic model to employ. Our current economic model was imposed on us by the wealthy in the interest of the wealthy. An economy should be an integral part of government. Not the other way around. An economy should serve the populace. Not the other way around.
Our Declaration of Independence was a giant step forward. We could hardly ask for more. It is good and proper that the shedding of other vestiges of the old way of thinking was left to succeeding generations.
Sometimes, someone comes along who can see around corners. Sometimes, a whole generation. Starting with our founders, and then the likes of Abraham Lincoln, Francis Perkins, Martin Luther King, Cesar Chavez, Robert Kennedy, …, …, — America has been fortunate. Now would be an especially good time for a visit from fortune.
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There is probably more than one economic model that could work. Perhaps even our current economic model could have been made to work had it not been for the pervasive influence of wealth on government.
Regarding which: It is not by accident that Trump’s scheme to overturn the 2020 election depended on bouncing the decision to the state legislatures through a loophole in the Electoral Count Act or to the U.S. House of Representatives.
What was to become the American Legislative Exchange Council (ALEC), was founded by Paul Weyrich and Henry Hyde in 1973 in response to the 1971 Powell Memorandum to counter such egregious governmental actions as establishing the Environmental Protection Agency. The Heritage Foundation, founded in 1973 by Weyrich and Joseph Coors, was also in response to the Powell Memorandum. The Powell Memorandum itself was a clarion call to action. To defend the power of wealth in American politics. Its author, Lewis Powell, seemed more a subscriber to the 17th-century European social model than a 20th or 21st-century one.
For more than four decades, ALEC helped Republican state legislators write legislation that led to the Republican supermajorities we now see in 26 states. In some swing states, there are nearly as many, maybe even more, Democratic voters than Republican voters. But with the ALEC-assisted state legislative district gerrymandering, the states have Republican supermajority legislatures. If Trump could have denied Biden 270 electoral votes, the election would have gone to either the House or the state legislatures. Either way, Trump would be the president by a majority of 26 to 24. ALEC’s decades of work, combined with the flawed electoral college, could give us a president who receives less than 40% of the popular vote.
ALEC-assisted state legislative district gerrymandering allowed for ALEC-assisted congressional district gerrymandering within those same states, thus allowing these same states to send unrepresentative Representatives to the House of Representatives — sometimes, enough to give them the House majority, the House Speakership — with far less than the majority of the national congressional votes.
None of this was by accident; all was well planned and executed as a means for wealth to retain power in American politics. John Roberts’ appointment to the Supreme Court and ascension to Chief Justice were well planned and executed to assure the continued power of the wealthy. Too, the Citizens United, Shelby, and Rucho decisions.
Likewise, the appointments of Justices Gorsuch, Kavanaugh, and Barrett were well planned and executed, well funded, and were in the interests of the wealthy.
Private equity firms buying up tracts of housing and then increasing rents and corporations paying out more to their shareholders than to their workers are examples of the wealthy squeezing money out of the working class — of the same greed that brought us slavery and Jim Crow laws — that worked workers to death in mines and factories — that to this day, employees children — that imposed an economic model that wasted resources and exploited its workers was enabled by the power of wealth.
After the success of these most undemocratic efforts in the interests of the wealthy, it is no longer possible to rescue the current economic model.
The wealthy have always known that an economy is a part of government. The Powell Memorandum warned them not to take any chances on democracy. Following Powell’s call to action, they have acted in manners that gravely wounded, likely killed, democracy.
Thanks, Lewis Powell — thanks lots.
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Consequent to this pursuit of ever greater returns, ever more profit, and the right to do so, we now have a coopted moribund government. Consequent to having a moribund government, we haven’t been able to: adequately address climate change, regulate social media, or enact effective gun control; and, struggle to establish guardrails around artificial intelligence, …. Under the current economic model, motivated by greed, the power of wealth has subverted our democracy and endangered our nation’s and our species’ future.
*Hat tip to Bill Haskell
“When Private Equity Becomes Your Landlord,” ProPublica, Heather Vogell.
“What links Rishi Sunak, Javier Milei and Donald Trump? The shadowy network behind their policies, George Monbiot,” The Guardian.
“Democracy on the ballot—the “‘independent state legislature theory'” will not empower state legislatures to override presidential election results, Brookings, Fred Wertheimer.