Tuesday, May 17, 2011

What transition? Part 4: Renewing the framework (Installment #4: Introducing an Economic Transition Income)

This post is based in large part on joint work I did with Warren A. Johnson at the end of 2010. Warren is an eminent geographer, now professor emeritus from San Diego State University, who has worked for four decades on natural resources and on pathways out of the current economic and social model. We wrote a paper together that was inspired by his two main books: on the one hand, his classic Muddling Toward Frugality, initially published to public acclaim in 1978 (going on to reach sales figures of about 50,000 copies) and re-issued in 2010 by Easton Studio Press; on the other hand, his recent manuscript provisionally entitled The Gift of Peaceful Genes and the Sustainable Revolution (forthcoming at Easton Studio Pres under a different title). After having read Muddling Toward Frugality (which I had found referenced and warmly recommended in John Michael Greer's book The Ecotechnic Future), I contacted Warren by email, expressing my admiration for his prose and his ideas, and he responded so amicably that I was emboldened to suggest we write up a case for a guaranteed-income scheme as a tool for ecological and economic transition -- an idea he had been one of the very first to express in the English-speaking world in an article published in 1973 and entitled "The Guaranteed Income as an Environmental Measure." (It was subsequently to become a key idea in the work of André Gorz in France and Philippe Van Parijs in Belgium.) So Warren and I drafted a brief paper entitled "The Guaranteed Income as a Tool for Transition," which contains odd bits of his two books as well as extensive new material, and which I will now transcribe in a somewhat recast version.


4. An Economic Transition Income (ETI) as a tool for allowing citizens to act out their choices

In the process of "muddling through," individual citizens and households need to be emboldened to act on their desire for change. Sure enough, large-scale institutions such as the World Transition Organization (or WTransO) and the new nested governance structures discussed in installments #1, 2, and 3 are a crucial aspect of a genuine transition. However, they are hardly sufficient if we are going to start a bottom-up, truly citizens-based movement of "emigration" from the unsustainable niche of industrial-financial capitalism towards a plurality of sustainable niches. One central addition to the set of renewed framework conditions would be a deep overhaul of the current income-redistribution logic of our social democracies. First, let me go back to the general context in which we are to locate this overhaul. (I've already said some of these things in earlier posts, but it probably won't hurt to re-state a number of them. If you feel bored by repetition, just skip the next six paragraphs.)

The industrial-capitalist world will not be able to afford the luxury of annual economic growth much longer. This is not a normative claim. Scientific evidence points to the advent of an age of scarcity, linked mainly to two factors: the current plateau in oil production, and the difficulty of sustaining growth given the heavy debts and the competition from low-wage countries. We are consuming the urban industrial niche as we use the fossil fuels that made the Industrial Revolution possible in the first place. Fortunately, there is another niche open to us: the sustainable niche that supported all human life prior to the industrial era and will do so again as the fossil fuels are depleted -- but with the simpler, more cooperative ways that have passed the test of time throughout human history and can be supported by renewable energy. Those who relish the opportunity of exploring the "sustainable frontier" will be pioneers in (re)creating those ways of life that can go on indefinitely and eventually will be all we have as the fossil fuels grow scarcer. So shouldn't we try to take seriously the call for reasonable frugality? The Latin root of this word means the "full and fruitful use of resources." This is the opposite of how we are using resources now, in an economy that is like a speeding train. It's an impressive train, but it has to keep speeding up all the time. For many would-be passengers, it is going too fast for them to get on. Many others who are already on board aren't enjoying the trip as much as they expected.

It is hardly advisable to even keep the train at its current speed, let alone speed it up even more when less energy means less wealth produced, fewer jobs, and probably more debts. The most pressing issue, therefore, is what shape the transition toward a frugal economy will take. This is where things do get normative. Like in an airplane's landing operation, transition is a combination of keeping sufficient speed while slowing down sufficiently, and touching down on the right strip. In the train metaphor, the ideal would be to control the locomotive so it won't have to keep going faster all the time, and to set it at whatever speed makes the trip most enjoyable -- or even to operate several trains at different speeds to satisfy different travelers. External adjustments at the macro level, such as most prominently the global de-growth compact linked to an economic Kyoto protocol, play a crucial role. But the transition to a post-fossil fuel age is not only a matter of external adjustments, but also of an altered worldview, a new conception of the good life. New macro-systemic conditions and an evolution in worldview actually go hand in hand and are a necessary condition for changes in personal behaviors and in spiritual as well as cognitive modifications. Those of us who can visualize how life can be better as the economy slows down will determine what the future will be like. The "pluri-economic" view I have been proposing in past posts finds its roots in this realization.

The current economic arrangements were inherited from a time when oil and coal were abundant and cheap. These are now being replaced with costly fuels with low or even negative net energy. Scientists from a broad range of fields have been alerting us to these facts for decades. At the same time, unsustainable ways of life have been made into cultural values. We need new ways of living that have long-term evolutionary potential. This includes working to counter the inner defects of the age of expansion: greed, self-centeredness, vain ambition, and declining capacity to work together. If these defects were really linked to "human nature," we wouldn't have much leeway. However, the social and psychological difficulties of the present era suggest rather that our modern, expansion-related ways don't fit the human condition, as reflected in increasing depression, addictions, and manifestations of anger. This is probably best seen as part of the deepening and increasingly untenable tensions within financial and industrial capitalism, and it would get worse if the biosphere were to implode, leaving the planet to create new forms of life almost from scratch -- a million-year task.

Barring this bleak scenario, the idea is to find ways -- political, economic, and cultural -- to re-inhabit the sustainable niche. Should we adopt new ways which are untried and hence as yet unknown, or should we recover some ways of the past which have proven themselves over long stretches of human history? We will learn the answer to this question as people decide to emigrate from a declining industrial and commercial niche toward life practices that can be supported with renewable forms of energy. This is by no means a mere regression; to make simpler, more cooperative ways good once again, they will of course be using the knowledge gained in the modern era. This will require the humaneness that comes with accepting two things: first, that the modern achievement is unsustainable and, second, that the main source of happiness even now lies in frugal ways, in close (though not necessarily parochial, oppressive, or tradition-ridden) human relationships. The most important technologies -- medical care, communications, the knowledge industries, and many others -- can undoubtedly be made sustainable, but not the perpetual "getting and spending" reflexes constantly required by the now dominant system logic.

A frugal economy will still be a market economy. Prices, supply, and demand are not per se culprits to be rejected. They have to be harnessed toward sustainability rather than growth. The division of labor will remain valuable especially in the smaller, more local markets that encourage the use of nearby resources to make life easier in smaller communities. However, money circulation and trade will occur on the backdrop of a different view -- the view of a "real economy" that meets everyday needs rather than merely generating whatever it takes to provide enough jobs in an ever-growing economy. The frugal economy will be a "socio-diverse" network of communities experimenting with frugal ways of life, a loose network of local economies producing primarily for the local population. There will still be some long-distance trade, but with transportation having become so expensive, there will be far more of decentralization, i.e., increasing de-globalization and re-localization. Frugality will have to go along with decreased purchasing power, meaning that in the sustainable niche people will have to make do with lower real incomes. Otherwise we will only perpetuate short-term consumerism. But happily, a rejection of consumerism is precisely what motivates those who venture into frugality. Those who really strive in the mainstream financial and industrial capitalist economy are unlikely to be those who will first move toward frugal ways. The most constructive way of engineering the transition would be to allow both ways to co-exist as the economy slows, rather than squeezing down everyone's incomes right away. In other words, the more people whose center of gravity shifts toward sustainability -- with on-the-spot job opportunities linked to renewable energy, more cooperative relationships with friends and neighbors, and families pulling together as family enterprises become increasingly necessary -- the easier the transition will be for those who initially remain in the mainstream economy. And if the pioneers in this effort do their job well, those who follow later as the economy slows will at least know what to expect, and the shift will be more acceptable to them as their mainstream incomes drop.

This frugal economy will be wishful thinking unless a way of encouraging it is created. The underlying issue is how gradual, smooth, and thus bearable, the transition will be. Will it encourage the cooperation that has always sustained cultural evolution, or will it foster the Darwinian hell of a survival of the most aggressive? Many of us are still under the spell of technophilia, wanting to believe that some miracle technology will make growth possible and postpone the need for change. There is also a resistance to anything seen as "going backwards," and a reluctance to embrace what is viewed as marginality or impracticability. The sustainable niche, however, is not the end of work, nor is it the realm of idle hippies, as the mainstream media often like to portray it. It will mean more work and less consumption, but also a shared commitment to neighbors, with more regard for the well-being of all, rather than trying to stand out from others in a large, impersonal economy. Critical resources will be carefully protected while keeping their use to the minimum possible, and with a high regard to preserving both the beauty and health of environment that everyone is dependent on. But beyond that, those who gain a taste for frugality and its advantages should be able to count on public assistance when taking the plunge into a different way of life, whether in an urban neighborhood, small green firm, community farm, or homestead. This will only be possible if the mainstream economy remains healthy, since that will make it possible to assist those who are creating of sustainable ways of life. Ideally, therefore, the sustainable economy would function in parallel with the mainstream economy as it declines -- hopefully slowly enough so as to stretch out the time available for those who are still accustomed to the mainstream economy. Income support should be low enough to appeal to people who want to live simply, yet high enough for them to get by that way and develop a preference for frugality over unsustainable ways, while being able to count on health care and education.

The challenge is to provide assistance to those interested in the sustainable economy, while simultaneously contributing to the primary need of keeping the mainstream economy on track. We will focus here on one possible such scheme, a welfare reform measure known as the Family Assistance Program (FAP), which was first proposed by U.S. President Richard Nixon in the 1970s. It provided an incentive for recipients to find work by allowing them to keep a portion of the FAP payment as their incomes rose. By the time a modest income base was reached the FAP payment would have declined to zero. Because the FAP would be administered through the Internal Revenue Service, it was often referred to as a "negative income tax." That's how I will conceive it from now on, too, using the acronym ETI: Economic Transition Income. The ETI would not only help those wishing to move in sustainable directions, but would also reduce the stigma of welfare for the poor. This stigma would be reduced even further if ETI payments were used by educated young people -- and, more generally, by those who gave up jobs in the mainstream economy -- to build sustainable ways of life. Creative people could be among the first to use ETI payments as they explore new avenues of living sustainably, but so could those who wanted to try traditional ways that are difficult to uphold now, especially in intentional communities formed around shared values.

An additional benefit of the ETI, however, would be its contribution to keeping the overall economy in balance while maintaining a stable labor market-- which is essential for a smooth transition. This could be done by altering the amount of ETI payments, much as a central bank adjusts interest rates. If, for example, more workers were needed in the mainstream economy, the ETI payments could be reduced enough to draw those marginally involved in the sustainable economy back into the mainstream economy. The more likely problem, at least in the beginning stages of the transition, is apt to be a surplus of people still seeking work in the slowing mainstream economy, threatening to drive wages down and trigger a deflationary spiral. In such circumstances, the ETI payment would have to be increased to entice workers into exploring the sustainable territory, since that will require a certain amount of resourcefulness when there are, as yet, few actual past experiences to draw on. This is where the efforts of the pioneers will be so important, especially as they find the ways that others can follow with better prospects for success, and which can then be expanded in other directions as more experiences are gained. Along this process, giving the ETI a try will become less of a venture into unknown territory, and more one of learning from others. Young people are especially apt to pass information around as they compare the sustainable alternatives with the choices they have in the mainstream economy. As the sustainable economy evolves, it will offer a steadily greater range of opportunities to be explored. These opportunities will be seen as adding to the range of alternatives available in the sustainable niche, but will also leave the mainstream economy more secure because it will be less vulnerable to deflationary forces. Anything that works in the sustainable economy will attract attention and then be replicated and adapted. As the range of alternatives increases, it would become easier for people to find the openings they feel most comfortable in, and to acquire the skills that contribute to a snowballing transition in sustainable directions.

As the difficulties of getting started in the sustainable economy are reduced with more experiences and more people joining it, the ETI payments will decrease automatically, if for no other reason than more people are receiving them, which also means that fewer people are working in the mainstream economy to generate the tax revenues to pay them. As time passes, the sustainable economy will be able to continue more on its own, with lower ETI payments and then none at all. At all times, however, those receiving the assistance will have to accept that the payments will fluctuate with the needs of the overall economy, especially the tax revenues that can be generated as incomes in the mainstream economy will slip along with the energy available to it.

Hopefully the transition will be as slow as possible, and with rising incentives for using energy ever more efficiently to stretch out the time it is available. How well this proceeds will depend on the ongoing health of the mainstream economy, and whether it is chugging along fine or struggling with unanticipated setbacks, shortages, or instabilities. If its health can be maintained, the sustainable economy will become the place where most dynamism is focused on the fascinating task of finding the ways of life that work best in the emerging circumstances, and on using renewable forms of energy as effectively as possible. Conservation taxes, ETI payments, and existing fiscal and monetary tools should be more than enough to keep the transition on track between inflation and recession, and with balanced budgets. The guaranteed income would then genuinely act as a transition income. This will be all the more easy as the vast amounts of money going into trying to keep the mainstream economy growing are reduced as sustainability replaces growth as the goal. The pace of change will slow as sustainable ways emerge that have the capacity to go on indefinitely while making frugal -- full and fruitful -- use of resources, in stable ways such as those that have been valued throughout human history. The issue would not be so much one of cost, since the income support to the "frugalists" would have to be quite modest to assure that the ways of life created could be supported with renewable forms of energy. It would be a fraction of the cost of creating jobs in the mainstream economy-- which, for instance, under President Obama's 2009 stimulus program was about $200,000 per job created. Even if the new "growth" jobs were successfully created, they would still increase the demand for oil that drives up its price. All such mechanisms would be halted as sustainability replaced growth as the goal. Public budgets could be balanced as the building of sustainable ways of life gets under way. The main motivation in all of this will be to create livelihoods that have ongoing value, as opposed to a job that often provides little beyond a paycheck. A key to economic survival will be to learn how to get by with a lower real income. There are many opportunities to do this, and they will become important as needing less income increases the range of economic opportunities available.

Further issues of money creation -- going beyond the mere use of traditional fiscal and monetary instruments to steer first-world de-growth -- will be discussed in a forthcoming post (see installment #6 of Part 4). Let's just hint here that local communities in the sustainable niche could develop their own, complementary currencies (as suggested by frontline thinkers such as Bernard Lietaer, Margrit Kennedy, or Tom Greco) and start labeling part of the guaranteed income in those currencies -- which would be increasingly plausible as sustainable communities develop and practice internal division of labor (local farming and small-scale manufacturing, local health services, neighborhood services, local repair, etc.), so that the scope of local economic activities broadens and the local currency's purchasing power de facto increases by the sustainable increase in the accessible variety of frugality-compatible goods and services. As the rate of emigration from the industrial niche toward the sustainable niche increases, the local currencies may or may not end up disappearing. The most educated guess is that they would remain, and even take on increased importance, as the mainstream -- bank-issued, private-monopoly -- currency loses its grip on many people in many activities. In the meantime, the initial trigger for a move toward the "frugality frontier" (a frontier of a new sort, not geographically visible initially except in people's inner geography of desire and longing) would be a new cultural model. It takes a highly motivated and creative person or family to undertake the risk of developing one's work while getting by with less and learning how to become more self-sufficient. For the first pioneers, it can be lonely and difficult work in unfamiliar territory. As I already wrote in an earlier post, the frequently heard criticism that these people are "dropouts," and that they don't contribute their skills and energies to solving "society's problems," or have developed "adaptive preferences" which lead them to wrongly accept bad situations -- that criticism is totally wrong. They are doing a task that is essential for our future, developing new skills and ways of living that will provide models for others as necessity pushes more of us in that direction. Nothing could be more important. The pioneers -- those who are able to get by on the modest "transition income" right away -- are opening up new economic territory where subsequent settlers can join them.

An ETI is not a basic income. It isn't given "for free" to everyone, whether rich or poor, on top of whatever income they are already earning. The State only pays the gap between what one is earning and the guaranteed income level. Of course, there is always the chance that the bulk of the population will just pocket the income guarantee and either continue playing the financial and industrial capitalist game, or drop out of it through permanent inactivity. This is, as we know, one of the main arguments against any sort of unconditional income support. I am not minimizing this risk. However, I believe the argument as it is most frequently voiced draws too much on assumptions inherited from mainstream economic theory: People are naturally lazy, they want to work as little as possible while getting the highest possible income, and given half a chance they'll slouch in front of the TV with a beer or a Coke (paid for with dole money) instead of investing in socially or economically worthwhile activities. My own take on the human condition is that this description of many people's behavior is indeed empirically valid, but that it betrays the alienating effects of capitalism and consumerism more than it reflects a deeply entrenched "human nature." (Disagreement on this crucial point is one of the watersheds that separate those of us who are optimistic about a transition and those of us who are skeptical.) I start out from the conviction that, given the chance and the right framework conditions, most people will indeed embrace alternatives, linked to both economic democracy (see next post) and to a reasonably frugal life. The presumption behind the ETI mechanism is that appropriate income redistribution can act as a "transition pioneer trigger."

Sure enough, this requires that such a guaranteed-income scheme be viewed as part of larger package in which includes the circulation of ideas and the creation of public forums (inside and outside of mainstream education institutions) where the alternatives to the current system are discussed. Of course, part of the circulation will occur spontaneously as (a) pioneers start sharing their experiences with society at large and (b) the media become increasingly curious about these "fringe" phenomena. This is, to some extent, occurring already. More generally, the ETI has all the more chances to trigger extensive "emigration" towards the frugality frontier if the extended concept of equality of opportunity I have been expounding in earlier posts has become a well-circulating intellectual and political currency -- that is, if enough citizens have started to realize that what is currently being sold to us under the name of equal opportunities is a needlessly truncated notion. Clearly, without some sort of guaranteed income, many citizens today who would like to make the transition to a frugal life will be afraid to do so, because they might lose most, or too much, of the (direct and indirect) income support currently associated with participating in the capitalist social democracy. A guaranteed-income scheme is a crucial centerpiece of any genuine equal-opportunity policy that includes the chance to act on one's "alternative" choice. And quite obviously, unless the rest of the framework conditions being discussed in this Part 4 are put into place roughly in sync with the ETI, perverse effects are likely to occur due to the fact that, for instance, not all trading partners of the country adopting an ETI scheme are themselves adhering to the de-growth compact.So all these framework conditions more or less stand and fall together, which will be huge challenge to face when we come back down to earth in Part 5.


For those of you who are interested in Warren A. Johnson's ideas, you can also have a look at his open letter to President Obama, dated July 30, 2010, in which he neatly summarizes his views: http://ukiahcommunityblog.wordpress.com/2010/07/30/warren-johnson-letter-to-obama/

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This post from the "Eco-Transitions" blog by Christian Arnsperger is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Tuesday, May 10, 2011

Why such long posts? Here's a short answer

Dear Eco-Transitions visitors,

You won't be surprised to learn that I have been asked by several readers why in the world I post such very long entries.

Well, it's partly because I'm a long-winded writer who needs time and space to make his points. [1] But it's also because I feel that I want this blog to be a genuine place to reflect and dig into deeper and more difficult issues -- at a distance, for the moment, from the alternative formula with short texts and YouTube videos. Both formulas are perfectly fine (see Rob Hopkins's post of May 3, 2011 on his blog for an example of what can be done well with videos), each has its specific audience (guess where the most hits end up?...), and I'll eventually try to offer more of a mix of the two, but right now my priority is to provide analytical substance -- as much substance as I can cram into those posts.

Maybe this makes them too "academic" at times, but that, too -- or so I tell myself -- is a way of showing you respect. I am, after all, an academic and I see my role as being one of disseminating ideas -- not watering them down or making them sound simpler than they are, but disseminating them in the most demanding way possible so that we don't kid ourselves that we've got it all figured out. And if that's so, then there's no use in wanting to placate visitors by simplifying things. (In fact, it would be slightly disrespectful.) The interdependencies involved in today's transition issues are so large and intricate that analysis and complex discussions can't be avoided entirely. Of course, that's no excuse for being obscure or exceedingly convoluted -- I gather I'm not being that, even though I may have momentary lapses. But not too many, I hope...

Once that groundwork has been laid, I expect to be able to occasionally post shorter things, too, such as book reviews or discussions of a very specific point.

I hope this works for you. And thanks so much for checking in, anyway.


[1] I have also wondered, from time to time, whether perhaps -- more or less unconsciously -- long posts aren't a defense mechanism against having to manage comments. The reader is so exhausted by the end of the entry that s/he can't be bothered to spend additional time and energy writing up and posting a comment. QED...

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This post from the "Eco-Transitions" blog by Christian Arnsperger is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Monday, May 9, 2011

What transition? Part 4: Renewing the framework (Installment #3: New Governance -- Participatory coordination and communalism)

3. Implementing social ecology: Communalism and participatory coordination as a compromise between bottom-up and top-down

From now on, I will focus most of my discussions and proposals on the so-called "developed" world. The task I want to undertake presently is to set out the most important framework conditions that might help in bringing about the "first-world de-growth" portion of the global de-growth compact -- i.e., of what I earlier called the economic Kyoto protocol. After having understood the basic rationale for such a protocol (installment #1) and having argued that its worldwide implementation needed global collective action in the form of a World Transition Organization or WTransO (installment #2), we can now ask ourselves to what sorts of national, regional, subregional, and municipal governance structures such an Organization should come as a transnational complement. In effect, as I announced in Part 3, we are looking at the need for a new worldwide governance structure in the form of nested decision-making levels that will ensure a smooth and exhaustive use of citizen-generated information so as to counteract both the bio-environmental externalities and the anthropo-environmental internalities that massively characterize our current economic system.

The mere capitalist market economy is not able to perform such an informational task. Markets, regardless of the degree of competition on them, are ill-qualified to internalize externalities (because prices reflect myopic profit maximization bottom lines and don't spontaneously allow for profit-curtailing criteria to enter economic calculations). And markets are -- even more so -- virtually unable to externalize internalities, i.e., to allow "voice" to express itself in anonymous arbitrage mechanisms that turn on "exit" (to take up Albert Hirschman's classical, and enlightening, distinction). Price information transmitted by markets reflects, at best, the aspirations, needs, and wants of those who momentarily have the effective means to pay (i.e., to contribute to GDP-enhacing transactions). At worst, it reflects the short-term interests of the most powerful and/or mobile and agile agents, including speculators, who have no qualms about alienation, exploitation, or environmental degradation. But in a de-growth economy where the reduction of economic accumulation has to be judiciously selective, it's all the more important that non-price information be massively injected into the allocation of goods and services, both private and public. This is because, actually, in a growing economy with steep competition between sellers, prices actually tend to fall as quantities sold and consumed rise -- so that the rise in the "consumer surplus" due to price competition actually rhymes with higher output (if profits are going to remain at all stable), and this may -- and does, in many cases -- mean huge tensions on working conditions and even a tendency for total throughput to increase (even if throughput per item sold decreases). I suggest the reader consult the excellent sequence of books by Juliet B. Schor (see her website in the sidebar): The Overworked American (1991), The Overspent American (1998), and most recently Plenitude: The New Economics of True Wealth (2010). She offers a compelling picture of how what she calls BAU (business as usual) leads to all sorts of effects which standard economists who defend market "efficiency" have long viewed as virtuous but which are now turning out to be highly perverse -- so that, effectively, a decentralized market economy is no longer able to provide the right incentives for a finite, fragile planet peopled by finite, fragile, and exhausted humans. Too much important information gets lost when the only goal of policy is to ensure that the sum of all values-added in the economy, as measured by market prices multiplied by quantities circulated, increases each year.

Let me emphasize outright that the alternative to a capitalist market economy should not only not be Soviet planning (does one really need to keep saying this?) but should also not be an archipelago of micro-entities all striving for near-total self-sufficiency. Sure enough, as I have surmised before, some sort of re-localization and de-globalization is bound to result from the global de-growth compact, simply because reducing growth rates in the richest areas and reducing greenhouse-gas emissions in the most polluting areas is bound to have an impact on the rhythm and geographical scope of trade flows. However, the global de-growth compact must be managed and steered in such a way that it does not generate sudden, brutal, and massive disruptions. (This is why such a compact and the accompanying WTransO are so terribly long overdue.) It should allow countries, regions, subregions, and municipalities to carefully select, upon due public deliberation, and after having coordinated their decisions with all other same-level and higher-level instances, which quantities of goods and services need to be reduced and which, on the contrary, need to remain stationary or even to keep growing. I want to re-emphasize that first-world de-growth -- seen as a threatening perspective these days when countries such as Portugal or Greece face massive deflation and recession because of IMF debt-reduction prescriptions -- has nothing to do with sudden deflation and everything to do with a concerted, gradual, and politically validated reduction is the production and circulation of various items on the list of available goods and services.

The environmental content of the goods and services is certainly one important parameter that should influence deliberation and coordination in de-growth. In that sense, as I said, the current Kyoto protocol is a substantial part of the global de-growth compact. But there is more. The "economic emissions" component is also crucial -- all the aspects through which the forced economic growth built into our current system hurts persons, communities, and cultures. How are we to decide which goods and services have to be considered harmful, and which can be seen as innocuous or even favorable? Clearly, this is not for the WTransO to decide from the top down with a bunch of well-informed and well-meaning experts -- and in that precise sense, the broader economic Kyoto protocol may differ from the merely environmental one. There simply cannot be the equivalent of the IPCC for the issue of human and cultural degradation and for the question of what will happen if anthropo-environmental internalities accumulate and are not externalized. The main reason for this difference is linked to the sort of knowledge that is required: The IPCC makes use of objective, externally measurable data about gas concentrations, nonlinear effects on climate, and so on, whereas the reduction of humanly harmful "economic emissions" involves more elements which, while still objective, are not externally measurable -- they are linked to human emotions and suffering, ethical judgments, and more generally things that can only be conveyed through the use of language. And that inevitably means deliberative conversation and discussion instead of merely scientific evaluation and quantitative measurement. Please don't read this as a disparaging of science -- it isn't at all. It's just that, if we want to avoid falling into the positivist trap of "scientific Marxism" which sought to measure exploitation and alienation using profit rates and commodity flows (in the same way we might measure CO2 concentrations or ppm's), we need to acknowledge that the modes of deliberation and the ways in which legitimate decisions are reached are going to be different.

Basically, the need to collect qualitative information above and beyond market prices, so as to coordinate selective de-growth and to decide which areas can still grow, requires a participatory democracy. Participatory coordination means that it is citizens -- not just as buyers and sellers and producers and workers, but as fully-fledged, conscious participants in public decisions about their lives -- who have to be consulted and whose aspirations, demands, and suggestions have to be gathered at each level n so as to be synthesized and sent "up" to level n+1. The corresponding governance structure is one of nested popular assemblies -- neighborhood assemblies, worker councils in firms, town assemblies, regional assemblies, national assemblies of a more classical, parliamentary kind, and so on -- which would in such a way that natural resources, work effort, consumer goods and services (both private and public, local and foreign), and investments (both private and public) get allocated optimally given (i) the overall de-growth norm for a country as determined in the WTransO and (ii) the multitude of local values and priorities that flow into determining how this norm is "shared downwards" across the country's towns, sub-regions, and regions. While not at all reducible to a market economy, such a multilevel participatory setup does require some complex feedback mechanisms, since higher-level constraints -- which can't be deliberated on at lower levels because these lower levels are the ones who have to respect the constraints -- need to be distributed downwards after having been calculated through a synthesis of the information sent upwards by the lower levels. (Quite obviously, here the adjectives "lower" and "higher" have no evaluative meaning at all, just a descriptive one.)

This idea of nested levels of political decision-making about economic issues is underpinned by the principle of subsidiarity, which I set out in Part 3, installment #1 (posted on April 19, 2011). The basic point is simply that decisions ought to be made at the level where the variables in question are "closest" to the people whose lives they affect. This is quite different from the idea that all stakeholders should have an equal say in decisions -- since in many cases, as Michael Albert and Robin Hahnel insist in their discussion of participatory economics, all persons don't really have the same stake in a decision. This is, in fact, the case of the world market, where each buyer has a "one dollar, one vote" decision-weight in many matters that concern a firm he's buying goods from, regardless of how far away that firm is located or how culturally different it might be. Subsidiarity posits that decisions need to be taken by those who are most impacted by them -- subject, of course, to various higher-level constraints which embody (but not only in the form of price information) the desiderata, priorities, and impact estimates of all other agents in the economy. This means, in particular, that citizens should be able, at the most decentralized level possible, to formulate their aspirations and choices as to the variety of modes of economic organization (how to work, how to organize production, how much and what to consume, how much and in what to invest, and so on) and to have these aspirations and choices be taken into account at higher decision levels. This is why the principle of subsidiarity trumps the old "top-down/ bottom-up" distinction: As they move upwards along the nested hierarchy of deliberative and legislative instances, the qualitative aspirations and choices of citizens at neighborhood, town, and regional levels, as well as their quantitative data, become constraints on higher-level decisions -- so that, for instance, national or European economic policy could not simply override citizens' desires to live in a more cooperative, less competitive economy and make some of their considered life choices impracticable. That, as we saw in previous posts, would amount to a blatant violation of the enlarged equality-of-opportunity principle. So in a very significant sense, subsidiarity as embodied in a nested structure of participatory councils is the operational aspect of our enlarged equality-of-opportunity principle.

Of course, citizens' aspirations and choices can't be simply expressed in an anything-goes vacuum. We all face top-down limits on our choices, in the form of legal principles (which, however, we should be able to challenge, discuss, and possibly change in a democratic way) and of various other large-scale, systemic constraints (which, again, should not be unassailable by citizens' groups, as I have argued at length in my book Critical Political Economy). The global de-growth compact and its associated "growth quotas," as put together and given binding legal force by the WTransO, and as translated into national and regional limitations within nations, would be one eminent example of such additional top-down constraints. This means that citizens would, at the grassroots levels where they formulate their aspirations and choices, have to take into account the constraints associated with first-world de-growth. This is likely to make some economic options more difficult to realize than others -- resource-consuming, humanly stressful, and purely profit-driven choices might much more quickly come up against the collective limits than would more frugal, reasonable, and balanced life choices.

Since this participatory coordination process would involve multiple citizens' assemblies, deliberative bodies, parliamentary counter-checks, and supra-national entities where global norms are negotiated, we would be very much in a "muddling-through" process. It is highly unlikely that the transition emerging from such a device would be brutal and disruptive -- in fact, it might seem much too sluggish and uncertain in the eyes of many committed environmentalists. But as Warren A. Johnson has repeatedly emphasized, this is actually a major virtue of a democratic system. Not that our democracies wouldn't need a fairly deep overhaul; they would, in fact, since as the late Murray Bookchin (probably one of America's most articulate progressive-libertarian political philosophers, and still vastly underrated) spent his whole life claiming, we are not currently living in genuine democracies. "Statecraft," as he called it, has been a late modern attempt to water down the democratic ideal by conflating the demos, the State, and an exclusively parliamentary mode of functioning. Autonomous infra-State entities, as well as fully participatory, direct modes of functioning, have been all but totally evacuated -- or, if they haven't, they have become part and parcel of a centralized State that has stopped seeing them as sources of bottom-up information to be used in devising the appropriate top-down constraints and has degraded them into being mere recipients and executors of national directives and instructions designed in the more removed circles of expertise and parliamentary commissions. (The demise of participative budgeting in Kerala under the centralizing pressure of the Indian State, as well as the emptying-out of territorial autonomy in France despite a budding rhetoric of "décentralisation" in the early 1980s, are two blatant examples of this degradation.)

As a practical basis for implementing subsidiarity-guided, nested decisions with a view to creating a truly participatory economy that can stand up to the ecological crisis, Bookchin has proposed and expounded a model he calls "libertarian municipalism," embedded in a philosophical doctrine called Communalism. This is no wide-eyed, bucolic dream inspired by some neo-Luddite fantasy of a little house in the prairie, or of a Walnut Grove that is small, hence beautiful. It is an entirely concrete proposal for new democratic governance structures, rooted in the conviction that (a) our current ecological problems are really the visible side of much deeper social-structure and human-relations problems (Bookchin calls this position "social ecology"), and that (b) since Man's domination over nature is really rooted in Man's domination over Man, non-parochial local structures of decision-making need to replace the large-scale, over-sized economic and political structures of capitalist social democracy. This, according to Bookchin, implies a network of bio-regionally embedded communes oriented towards reasonable frugality -- which is, of course, precisely what the "first-world de-growth" portion of the global de-growth compact will eventually require:

"Logistically, 'free nature' [that is, a reasonable articulation between free human agency and the evolutionary fact that humans are an integral part of nature] is unattainable without the decentralization of cities into confederally united communities sensitively tailored to the natural areas in which they are located. Ecotechnologies, and solar, wind, methane, and other renewable sources of energy; organic forms of agriculture; and the design of humanly scaled, versatile industrial installations to meet the regional needs of confederated municipalities -- all must be brought into the service of an ecologically sound world based on an ethics of complementarity. It means, too, an emphasis not only on recycling but on the production of high-quality goods that can, in many cases, last for generations. It means the replacement of needlessly insensate labor with creative work and an emphasis on artful craftspersonship in preference to mechanized production. It means the free time to be artful and to fully engage in public affairs. One would hope that the sheer availability of goods, the mechanization of production, and the freedom to choose one's material lifetsyle would sooner or later influence people to practice moderation in all aspects of life as a response to the consumerism promoted by the capitalist market."
(Murray Bookchin, Social Ecology and Communalism, pp. 47-48, © 2007, AK Press)

One of the key ideas underlying Bookchin's thought -- although he doesn't express it in those words -- is that while many goods need indeed to be considered as public and/or global instead of private and subject to international trade flows only, it's of little use to have large, supranational entities profer "ex cathedra" lists of goods to be considered global public goods. What is to be considered a public good is dependent on many local preferences, cultural options, life choices, and so on -- and what is to be considered a global public good should, it seems, emerge from a near-unanimous consensus between cultures, local options, and preferences -- always, of course, subject to certain large-scale constraints such as, in our case, the economic and environmental Kyoto protocols. Of course -- and this will be crucial when we investigate the "Next-Step Economy" in Part 5 later -- Bookchin's approach relies on his confidence that, under favorable circumstances, human beings will actually switch to more frugal ways of life because they will have discovered within themselves a desire to do so. (A desire which, perhaps, under current circumstances, is stifled and even censured by the systemic constraints we are all facing.)

The communalist structure of governance is based on the idea that, as Bookchin puts it, the city or "commune" is organic to human life in a modern society: It strikes the right balance between openness and universality, on the one hand, and human scale and manageable size, on the other. Municipalities, or neighborhoods in larger cities, are the adequate places from where the upward movement of citizen-generated information can begin. This certainly does not mean that the process should also end there, as if we could count on the "blind" emergence of a new economy from merely parochial, uncoordinated decisions made at municipal level. Bookchin is adamant that there should be a confederative logic at work -- and I believe that this confederative logic should, in fact, be induced from the top down in an "optimal social engineering" perspective. The WTransO and the national representatives inside it should be instrumental in pushing for confederalism in all regions and nations, so that each municipality is embedded in a region structured as a "commune of communes" where regional-level assemblies perform the role of coordinating communal information into regional data on desired goods and services, working conditions, investments, and so on. It is fundamentally a matter of pulling all communes into a broader logic where universal constraints of a human as well as environmental nature are taken into account -- and this requires interdependence, not independence. Here is how Bookchin conceives of the rationale for confederalist communalism:

"Any self-managed community (...) that tries to live in isolation and develop self-sufficiency risks the danger of becoming parochial, even racist. Hence the need to extend the ecological politics of a direct democracy into confederations of ecocommunities, and to foster a healthy interdependence, rather than an introverted, stultifying independence. Social ecology would be obliged to embody its ethics in a politics of libertarian municipalism, in which municipalities conjointly gain rights to self-governance through networks of confederal councils, to which towns and cities would be expected to send their mandated, recallable delegates to adjust differences. All decisions would have to be ratified by a majority of the popular assemblies of the confederated towns and cities. This institutional process could be initiated in the neighborhoods of giant cities as well as in networks of small towns. (...) a truly ecological society would open the vista of a 'free nature' with a sophisticated eco-technology based on solar, wind, and water; carefully treated fossil fuels would be sited to produce power to meet rationally conceived ends. Production would occur entirely for use, not for profit, and the distribution of goods would occur entirely to meet human needs based on norms established by citizens' assemblies and confederations of assemblies. Decisions by the community would be made according to direct, face-to-face procedures with all the coordinative judgments mandated by delegates. These judgments, in turn, would be referred back for discussion, approval, modification, or rejection by the assembly of assemblies (or Commune of communes) as a whole, reflecting the wishes of the fully assembled majority." (Murray Bookchin, Social Ecology and Communalism, pp. 49-50 and p. 51, © 2007, AK Press)

Surely, Bookchin is too much of an anti-Statist -- and of an anti-centralizer -- to give enough weight to planet-wide macro-constraints such as those which the WTransO would have to impose. But he can inspire an interesting vista: that of a WTransO which would not only distribute differentiated "growth quotas" to countries, but which might also serve as the Commune of communes at a planet level -- with (as we saw) third-world countries having a disproportionate say in order to create incentives for first-world countries to renounce time-honored power plays. Now, the question as to how the "rational" decisions would be taken and how "the community" would arbitrate between various citizens' desiderata, aspirations, and choices, I have already stated that there is inspiration to be taken from Albert's and Hahnel's model of a participatory economy -- a model where "price" signals are calculated by coordination offices rather than by markets, and are complemented not only by macro-regulations (as in today's so-called regulated market economies) but also by qualitative signals embodying citizens' wishes about working conditions, the sharing of workloads, and more political aspects of production, consumption, and investment. (See, for instance, pages 59-62 of their analytical book The Political Economy of Participatory Economics, published in 1990.) I will devote more specific posts to this "ParEcon" model later in the blog. Let me just emphasize here that Hahnel, even more than Bookchin, is skeptical of the possibility of communal self-sufficiency and even quasi-self-sufficiency. He believes that an extensive division of labor, and hence also trade between communes and between countries, will continue to be a priority and will therefore have to be managed collectively -- and for that, participatory coordination on a world scale (hence with nested levels going all the way up to a WTransO) is paramount as a complement to grassroots communalism. Although Hahnel seems a bit one-sided in his judgment of the dangers of parochialism and collective egoism in Bookchin's scenario, he does have a point which we need to heed carefully so that our discussion of alternatives doesn't retain too much of a "head-in-the-clouds" quality:

"How would communities decide how much of a division of labor they would want to engage in? What if one community wants a greater division of labor than another community wants? A careful reading of Bookchin's vision of libertarian municipalism reveals that no community must acquiesce to a greater division of labor than it wants to. While this is a specific rule, it is a problematic one. This rule means the community that wants the least division of labor among communities can impose its preference over the preferences of all other communities. Why a community that is better endowed with natural, human, and/or physical capital would not be tempted -- even if unconsciously -- to take unfair advantage of this veto right is unclear. Even if communities could agree on a division of labor with other communities, how would they go about deciding how to distribute the burdens and benefits of this division of labor? How would they jointly manage the division of labor? Should goods and services not produced by every community be traded between them in free markets? If so, why would this not lead to the usual litany of inequities, instabilities, and inefficiencies that advocates of community-based economics (correctly) criticize in capitalism and market socialism? Should communities attempt to plan mutually beneficial economic relations? If so, how would they go about it, and how would the authoritarian dynamics of central planning be avoided? Simply asserting that the communities will decide all this 'democratically' is not a good enough answer." (Robin Hahnel, Economic Justice and Democracy, p. 183, © 2005, Routledge)

I think the framework we are contemplating in this blog will definitely go beyond the wishy-washy answer that everything should be "democratic." Everything should indeed be democratic, of course, but it all depends on how exactly the traditional bottom-up/ top-down distinction is bridged and overcome. We can go a long way towards a full alternative by combining a global-norm-enforcing World Transition Organization with a Commune of communes that are linked to one another in interdependence and engage in a participatory-economy process of supplementing market allocation with various devices to make economic agents internalize bio-environmental externalities and externalize anthropo-environmental internalities. I know that put in this dry, compact way, it sounds awfully theoretical. But actually, this combination of institutions contains -- or so I believe -- the potential for being the driving force of a genuine ecological and economic transition based on sound principles of social ecology.

We aren't through yet with the framework conditions, though, because we still need to see how modifications in (a) income redistribution (installment #4), (b) entrepreneurship (installment #5), and (c) monetary creation and circulation (installment #6) are to complement these large-scale institutions, so that citizens can feel more comfortable in contemplating and, eventually, embracing new and more frugal ways of life. The whole idea, remember, is to build a scenario that's both a vector of fundamental change and a purveyor of smooth, gradual shifts in behavior and constraints, so that we get a stepwise transition and not a sudden, catastrophic breakdown of the dominant system. On the side of procedural mechanisms, I think these three first installments of Part 4 give some assurance that, indeed, the modest realities of muddling-through will prevail over the illusion of a grand apocalyptic transformation.

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Thursday, May 5, 2011

What transition? Part 4: Renewing the framework (Installment #2: New governance -- Creating a World Transition Organization)

2. Implementing the global de-growth compact: A World Transition Organization

As we saw in the previous post, one of the keys to a feasible transition is a global de-growth norm in the same spirit as the Kyoto protocol. I called this an "economic Kyoto protocol" to highlight the parallelism. (In fact, the greenhouse-gas Kyoto protocol should be viewed as partly a sub-protocol of this broader one.) This idea is an expression of the general stance voiced recently in the Stiglitz Report on financial and monetary reform, whose introductory chapter asserts that with the 2008 crisis, "it became evident that economic globalization has outpaced political globalization: the world had become more interdependent, and what happened in one country could have profound effects on others. Globalization meant that there was an increasing need for global collective action, for the countries of the world to act together, collectively and cooperatively" (p. ix).

Of course, we might have been better off taking this fact into account at the very inception of the world system, rather than letting ourselves be derailed by repeated crises and catastrophes -- and actually, there have always been attempts at creating supra-national coordination mechanisms. All of them, however -- and most notably the Bretton Woods agreements of 1944 that led to the creation of the International Monetary Fund and the system for whose reform the Stiglitz Report is now calling -- were created to reinforce the internal coherence of the industrial-financial capitalist system. The Homeric battle at Bretton Woods between John Maynard Keynes and Harry Dexter White as to whether the world currency should be a neutral, supranational "Bancor" or the US dollar was still, after all, a struggle about which conditions might allow the capitalist economy to operate best. And it's into that system, now massively globalized, that our governments believe they have a duty to fit us in the name of equal opportunities for all. The IMF and the WTO are viewed, by the advocates of globalized capitalistic incentives, as the supranational agents of international, national, and sub-national equality-of-opportunity policies: equal opportunities for all to trade, invest, work, and consume in a network of world markets whose properties should be as close as possible to those of a single, enormous, level playing field.

The fundamental idea that global collective action is needed is perfectly sound. That this collective action should be aimed mainly, or even exclusively, at reinforcing -- or, as it were, propping up -- the current system by "reforming" it is much more disputable. I have argued in earlier posts that genuine equality of opportunity means the possibility, for each citizen, to have access to the type of economic life he or she desires: This means that each of us ought to be able to explore and experiment ways of trading, investing, working, and consuming that are not necessarily congruent with the dominant logic. I have argued that such extended equality of opportunity is what a fully-fledged democracy should aim at. And this means that while global collective action remains immensely important -- in fact, even more so than now -- it can't be targeted merely at the usual narrow spectrum of capitalism's systemic properties (and failures).

It is unthinkable to leave planetary growth reduction and the distribution of its short- and medium-term burdens to the individual States. The current power relations are such, and the intrinsic logic of capitalist competition is such, that we would obtain even worse blockages than with the Kyoto protocol and its attempted continuations in Copenhagen and Cancun. The economic Kyoto protocol and its built-in "de-growth" norm needs to be backed by a renewed institutional setting. This is what I would like to study now. We will see that as we reflect on how to coordinate the global de-growth compact, new ideas will also emerge as to the national, regional, and sub-regional levels of government.

The need for global collective action, let me just reiterate, flows from the fact that, up to now, we have let economic growth remain an "anarchic" variable left to the steering of economic activity by national States. As much as I believe in the right combination of bottom-up and top-down steering, I think that in today's global context, economic growth should not be left to decentralized emergence mechanisms. The world growth rate is part of the framework conditions which should be coordinated and negotiated so that citizens can subsequently, in a setting where the adequate balance of positive and negative growth rates and areas of positive and negative growth has been struck, take the initiatives which will (subject to other framework conditions to be set out later) increase the likelihood of a genuine transition. Currently, while there's a "win-win" rhetoric saying that whatever part of the planet grows it will benefit all other parts, in actual fact each national leader is adamant that the part of the planet that should grow in priority should be his or her own. And we know that -- just as there can be tax, subsidy, and social-conditions competition between regions in a badly managed federal State -- this is bound to lead to worldwide competition to attract investors, a competition which is unbalanced and unfair and usually fails to deliver on the promise of economic growth, anyway.

Some parts of the planet grow when investors settle there, but (as Paul Krugman has very clearly shown) this is usually because the ingredients that boost total factor productivity are present locally. Still, the lure of lower wage costs or less stringent environmental regulations does pull some investors to low-productivity regions, be it only for a short time, and these regions engage in massive regulatory slashing in order to hang on to the illusion that they can reap some crumbs from the economic growth miracle. They're usually wrong in their hopes, but that's just after the fact; meanwhile, they have destroyed their local economy even more, and created the conditions for economic growth to become ever more concentrated in countries that have the "right" conditions. And so, despite huge disparities, the world growth rate remains high -- too high for the planet, and none of these "creative destruction" mechanisms whereby private capital scans the planet for profitable opportunities are in any way coordinated.

It is the same observation of uncoordinated anarchy which, in the area of trade, led to the creation of the GATT and its successor, the WTO. Of course, it seems pretty clear that these organisms were also created -- and are currently being managed -- so that the more powerful commercial actors could actually gain wider access to a larger spectrum of profitable national markets. However, on the doctrinal level, the rational for coordinated and negotiated world trade is that this is better for the overall economy than an anarchic, power-relations-dictated, bunch of bilateral trade "agreements." The same is true, of course, when it comes to coordinating transnational measures concerning health issues, or to negotiating the entitlements and duties of each country in a common effort to reduce worldwide CO2 emissions. The WTO was created, and so was the WHO (World Health Organization). There is also an International Labor Organization (ILO), supposedly to promote coordinated planet-wide actions for the improvement of working conditions, but it has no deliberative and certainly no legislative status. During the 2009 Copenhagen Summit on climate change, some leaders (among whom Nicolas Sarkozy of France) called for the urgent creation of a World Environment Organization (WEO). Nothing has happened since.

It's probably not unwarranted to link the speed of creation of a given supra-national entity in part to the contribution it is expected, by key actors in the system, to make to the profitability of their own or their constituents' capital. So when large "green" industries have been built up and capital investors have been attracted by major financial actors into the circuits of "green capitalism," it is not entirely impossible that a WEO may see the light of day -- as a supranational organization creating the overall conditions for "green" business and "green" finance to operate in a globalized economy where planet-wide trade (but now in Kyoto-compatible products embodying all the latest technological innovations and design reshufflings, such as "cradle-to-cradle") could continue in the service of global capital accumulation, within a framework of reduced carbon emissions now perceived as a business opportunity rather than as an anti-business constraint. So, just as the WTO is (at least in its current make-up) mainly guided by the idea that free trade provides across-the-board benefits to capital movers and accumulators -- and, therefore, to the population at large -- a WEO that would be guided by the idea of encouraging "green" finance, innovation, and growth, and of providing market-based solutions to the emission problem (see e.g. Peter Newell's and Matthew Paterson's recent book, Climate Capitalism) might be in the cards.

The same cannot, almost by definition, be said for a World Transition Organization, one of whose tasks would be to implement the global de-growth compact. While reducing might be turned into a growth opportunity, reducing growth itself may not be so easy to turn into an enticing argument for private capital. One of the only channels by which some actors might perceive opportunities would be the "third-world re-growth" part of the compact: Capital might flow increasingly into countries or regions endowed with a positive growth quota -- but the challenge would be to make such highly opportunistic FDI compatible with the need to build more resilient, local economies. In my previous post, I indicated that the amount of first-world FDI into third-world economies might also be reduced because of the negative-growth imperative imposed by the compact on the first world. There might actually be, in the developed world, a build-down in capital formation over time, or an increasingly localized anchorage of capital, so that even with somewhat higher growth opportunities in less developed regions, less capital may be available to flow into them. These are complex issues which would need to be settled through careful economic analysis, and I have no room to do this here.

Whatever the case may be, it seems quite likely that a World Transition Organization would only be created if there were a massive change in worldview within both first-world and third-world countries -- to the effect that a maximal volume of free trade and a maximally free arena for capital profitability are not top priorities in the upcoming transition, and might need to be subordinated to quite different imperatives. This, in essence, is what will most probably make the emergence of such an organization distinctly problematic, when in Part 5 we investigate realistic next steps. For now, however, let me dwell on the more normative, and in many ways downright utopian, aspects.

Suppose such a WTransO (let's call it like that for short, since "WTO" is already attributed...) were to be implemented. Given its role in steering an internally differentiated, global de-growth compact, the place within it of the third-world countries would need to be predominant -- surely, another pie-in-the-sky idea, some might say. A philosophical, as well as normative-legal, argument could be made for this predominance on the basis of a positive duty of richer States to assist poorer States by helping to create the framework conditions for these poorer States to boost their growth rates while the richer States work on reducing theirs. Clearly, asking for increased classical "development aid" would not be in the cards, if the past and current reluctance of most rich nations to move aid up to the 0.7 percent of GDP benchmark -- even under still reasonably favorable domestic-growth conditions -- is any indication at all. In addition, and more importantly still, there is certainly a sense in which classical development aid is not working to structurally ensure growth in poor countries. One doesn't need to be particularly conservative to accede to the arguments voiced by many development economists (such as William Easterly or Dambisa Moyo) that aid is not only not a panacea, but is actually often counterproductive. In such a context, the best form of "alternative development aid" coming from the rich States might be to create and fund an international agency which would be instrumental in coordinating first-world de-growth and third-world re-growth, using ideas and know-how from both North and South in a creative synergy, and letting the grassroots organizations and citizens' groups in poorer countries (and not just the incumbent government elites) have a more-than-proportional say about how open trade, local development, and resilience-building should be combined in the effort to build up a genuine growth potential for these regions.

This argument of a positive duty of richer States to assist poorer ones through the creation of an international, transition-oriented regulatory body may be important when it comes to politically legitimizing a decision structure that goes against the grain of currently prevailing power relations. This is because, instead of translating the positive duty into an end result to be attained (e.g., a certain level of development, or a certain growth rate), this sort of positive duty to assist rests on a procedural setup -- i.e., an international organization structured so as to give the poorest citizens a predominant voice -- that operates on the initial conditions for a well-functioning deliberation. I am well aware that a properly functioning WTransO may actually not be able to rest purely on official states, since in many of the poorer regions of the planet national governments are either directly involved in corruption or infiltrated by special economic interests which may have no interest in a genuine transition. This observation is mitigated to some extent by the fact that such dubious interconnections also exist, albeit perhaps to a lesser extent, in richer States. It reinforces, however, the case for an organization not purely based on official governments. NGOs and, more broadly, citizens' organizations should probably be part and parcel of the WTransO's deliberative and arbitrating structures -- not just as lobbying agents or as consultants, but as integral participants in discussions and votes. Letting this structure put itself into place, and therefore relinquishing the usual prerogative of States to trust and confiscate deliberations and decisions, would be an expression of the positive duty of rich States to help the citizens of the poorer countries (though not necessarily these countries' power elites).

The proceedings within the WTransO would turn mainly on the fair and transition-compatible allocation of countries' "rights to grow" -- a bit in the way the Kyoto protocol includes mechanisms to allocate pollution rights. One main issue is how to effectively monitor countries' compliance with whatever growth norm, especially a stringently restrictive one, they have been attributed, and what sanctions might be envisaged in case of non-compliance. Another is whether there should a market for "growth permits," or whether the economic-growth quotas should be negotiated through participative discussions, arbitration mechanisms, and various expertise-and-counter-expertise procedures. The issues involved in such mechanisms, in their functioning as well as in their evaluation, are complex and can become technical very quickly. I can't discuss them in any detail here but will come back to various aspects as this blog progresses. Of course, from the "next-step economy" perspective of Part 5, one of the crucial issues to be addressed will be how to launch a WTransO despite the fact that some countries -- among which, possibly and most probably, some of the currently wealthiest ones -- refuse to adhere. It won't be possible to completely disconnect this central transition issue from the functioning of the WTO and its general view that protectionism is a "bad" thing. Indeed, if a subset of countries decides to enter an insufficiently global de-growth compact, will we be able to avoid that these countries -- some of which will become resolutely engaged on a relocalization path -- request that their local economic, social, and cultural fabric be protected against unfair competition from non-transitioning countries?

Besides having to serve as a deliberative, and possibly also executive, body in connection with the many issues connected to the global de-growth compact, the WTransO will also have to serve as a coordinating body for the numerous new or revised national, regional, subregional, and municipal decision-making levels that will need to emerge in parallel with it. Here, the main philosophical as well as practical inspirations will have to come, or so I will argue, from two underexploited North American innovations: (a) the theory of "participatory economics" as promoted by Michael Albert and Robin Hahnel, and (b) the theory of "communalism" as expounded by the late Murray Bookchin. I will not be taking these theories as Gospel truths or as hard and fast doctrines, but as inspirations. This is what the next post will be dealing with.

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This post from the "Eco-Transitions" blog by Christian Arnsperger is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.