My vision for an ecologically based New Economy
Dr Shann Turnbull, Paddington, Sydney
Principal: International Institute for Self-governance
Founding member of: Sustainable Money Working Group, New Garden Cities Alliance, and the Australian Institute of Company Directors
For society to survive climate change it needs to become governed by the nature of its host bioregions as occurred in pre-modern times. Only in this way can both the environment and society be sustained in perpetuity.
The three most important requirements for establishing a decentralized locally governed ecological society are to:
- Adopt ecological property rights to land, buildings, enterprises and money;
- Adopt an ecological form of “network governance” as was practiced in pre-modern societies which has been re-developed in stakeholders controlled entities;
- Encourage a decline in the plague of people on the planet through education and providing Universal Basic Incomes (UBIs) to remove the need for children to provide care and income for citizens.
These three crucial survival requirements are self-reinforcing. Ecological property rights create a way to provide all citizens a share of income-producing property to fund UBIs. Ecological network governance would insure that income was: (a) appropriately distributed and (b) not captured by the greedy.
Ecological property rights would counter inequality in three ways that economists neglect. These are: (i) overpayment of investors in a way not reported by accountants; (ii) windfall gains in urban land created by public investment and by others; (iii) interest paid on money.
Tax incentives can be used to divert overpayments of investors to stakeholders and others to fund an UBI. Bottom up decision-making with citizen referendums can provide a way to democratize the wealth of cities from self-financing infrastructure investment. It requires all windfall gains to be captured by a suburban Real Estate Investment Trust owned only by resident voters to eliminate the cost of land for commercial investors and homeowners. This would attract new commercial investors. As land is typically half the price of a dwelling, it would half cost new homes to generate a virtuous self-reinforcing self-financing development process.
Ecological money that withered away from a negative interest rate would avoid the inequality generated from the ridiculous unfair idea of money making more money through earning interest. Ecological money would be highly attractive as it would reduces the current excessive cost of the financial system by eliminating bank and credit card transaction fees. These are ten times greater than the cost of privately issued the negative interest rate used during the Great Depression. Ecological money would not carry out its conventional roles of being a store of value or a unit of value. It would simply become a medium of exchange to avoid the inconvenience of barter.
Economic value would be determined independently of the financial system so a stable unit of account could be established. All contracts of exchange would be tethered to terminating money whose value would no longer be subject to alien government economic policies, financial crises, manipulation by central banks, currency wars, speculators, hedge funds, foreign exchange dealers, terms of trade, or any other social, economic or political events as is now the situation. Instead a standard unit of value index would be established based on a sustainable service of nature crucial for sustaining humanity in each bioregion. Economic values used by markets to allocate humans and their necessities, would now be governed by the local environment.
Nowhere in the world can the value of official money be defined in terms of any one or more real goods or services. Money has become a social construct not definable by any specified reality. Yet many believe that prices it creates allows markets to efficiently allocating real things. This irrational belief has become like religion for many economists and policy wonks.
There are a number of other ways of allocating resources than using markets. These are families, clans, tribes, communities, associations, networks and/or hierarchies in the private and government sectors. A new economy would have a more humanistic mix of governance mechanisms. A more detailed outline of my vision and how to get there is presented in my article ‘Sustaining society with ecological capitalism’.