BECK index

Sustainable Economics

by Sanderson Beck

This chapter has been published in the book BEST FOR ALL: How We Can Save the World.
For information on ordering, please click here.

An important spiritual principle is that we are all responsible for the consequences of our actions. This is true collectively as well as individually. Since the rise of civilization with the development of agriculture, most humans have endeavored to improve their world by leaving behind a better place than they inherited from their ancestors. Tools were invented and passed on, and surplus wealth was accumulated. The building structures and institutions developed usually gave each new generation a better start in life. Children inherited the estates and businesses of their parents and often were able to pass on a little more.

This process of cultural transmission is still continuing in many ways as science and technology especially advance at geometric rates. However, in the last generation or two humanity has begun to face a new situation in which many aspects of life on Earth are starting to deteriorate because of the increase in human population, the depletion of non-renewable resources such as fossil fuels, and the accumulation of waste and pollution from excessive consumption with minimal recycling.

Most scientists have estimated that the overall supply of petroleum on Earth that is practically accessible (without costing more energy to drill it than would be gained) is expected to reach its peak, or half-way mark, within just a few years, and some are suggesting that 2005 may even be the turning point of peak oil already. Because the first half of the useable supply is naturally taken from the oil that is easiest and cheapest to acquire, the prospect is that supplies will not only diminish but that the cost of drilling for them will greatly increase. Coal still is available in large quantities; but it is considered a "dirty" form of energy that greatly adds to the carbon dioxide that causes global warming in addition to causing acid rain and leaving behind devastated land.

At the same time as the Earth is running out of oil, the build-up of carbon dioxide, methane, and other polluting gases in the atmosphere is causing the temperatures on Earth to rise so significantly that the polar ice caps are melting at a rate never seen before in human history. As of September 2005 scientists have become concerned that the Arctic ice cap may have passed a point of no return with an irreversible trend that could result in the complete melting of the northern ice pack by the year 2070 if not before. This means that the large country of Greenland, which is mostly white with ice now, will actually become green. Without this cooling ice that also reflects back solar heat, the Earth will absorb more heat. The oceans will rise significantly, flooding many coastal cities and island communities, and warmer waters in the oceans will cause many more severe hurricanes like Katrina, which recently devastated the Gulf coast of the Mississippi River delta.

That global treaties can work to prevent environmental problems is proven by the early success of the 1987 Montreal Protocol that cut back the use of the chlorofluorocarbons (CFCs) that deplete the essential ozone layer in the Earth's upper atmosphere that protects life from harmful ultraviolet rays. Within five years most nations had phased out most of their CFCs. However, the effort to slow down the trend of global warming by reducing the production of carbon dioxide that was first agreed to at the Rio de Janeiro Earth Summit in 1992 has had only limited results. The Kyoto Protocol of 1997 called for specific reductions by the industrial nations producing the most carbon dioxide; but US President George W. Bush refused to agree to the accord. As the Earth becomes warmer, less glaciers will also mean much less fresh water. Less fresh water makes providing enough food for a growing population much more challenging. Feeding animals to provide meat for humans on a large scale is becoming unsustainable.

The Laws of the Sea Treaty attempted to share the resources of the oceans fairly, but the United States, the United Kingdom, and Germany have not ratified the agreement. Long drift-nets that kill marine mammals and other species not sold could be banned, and until then people can boycott fish products from nations using such drift-nets. Rivers, lakes, and even the oceans are becoming polluted by toxic chemicals discarded by humans. Mercury and other elements make eating some fish and sea food hazardous to human health. At the same time many fishing areas are being fished out at unsustainable levels, though some attempts are being made to restrain fishing in order to save the industry.

Since 1945 human beings have been mining uranium and producing nuclear weapons. For thirty years many nuclear power plants came on line to produce energy, and most of them are still operating and leaving behind large amounts of nuclear waste, some of which has been turned into atomic and hydrogen bombs. The uranium isotopes and especially the plutonium remain radioactive and deadly to human cells for thousands of years. The problem of what to do with this nuclear waste has still not been adequately solved. Yet with diminishing oil supplies some governmental leaders are considering building new nuclear plants for the first time in thirty years. Probably the greatest danger that humanity faces is a nuclear war that could kill millions of people and cause long-term radioactive poisoning in various places. A major nuclear war might even result in a nuclear winter and the extinction of the human race as mammals sensitive to radioactivity die.

Thus the consequences of our collective industrial civilization are now making the Earth a more difficult place in many respects. The people alive today are the first to confront this radical turning point in human history. Those who are alive now are probably the people who will decide if humanity will be able to adjust to this megacrisis by adapting our behavior to reduce and solve these problems. The main purpose of this book is to offer suggestions as to how we can meet these challenges by adopting improved ways of living on this Earth that will be sustainable in the future. So far this planet is the only one we have found that is teeming with beautiful and diverse organic life. Already human behavior is causing millions of species to disappear, most of them in the rain forests. Many wonderful drugs have been developed from animals and plants in these areas, and humanity may never know what miraculous cures have been lost because of the extinctions. Thus ecological wisdom behooves us to respect all living things and work to retain as much diversity of life as we can, even if we only do so for such selfish reasons.

The purpose of this chapter is to explore how we can improve our economic, social, and political institutions and behaviors so that human civilization will continue to improve instead of deteriorate. The word "economics" comes from the Greek oikonomia, which means the management of a household or family. The word oikos, which originally meant a house, came to mean the inhabited world, and thus we get the word "ecumenical." Now I believe the time has come for us to expand our idea of estate management or taking care of our family to include the entire human family and even the family of life on Earth. We need global ethics; otherwise our children and grandchildren will face even more horrendous problems than we face today.

I have already briefly discussed the first two priorities of alleviating poverty and preventing wars as the most urgent emergencies for preserving human life. Alleviating poverty by making sure that everyone has healthy conditions and good education is especially important because it is the best way of helping to slow the growth of human population to a sustainable balance. People who are educated are better able to work and provide for themselves and their families. Such people do not experience the kind of insecurity that often results in large families. As women are educated, they are more inclined to take a paying job and usually have fewer children. The most populous nation, China, has used governmental policies to slow the increase of their population; but in India, which is smaller geographically, the population continues to grow at a faster pace. These huge nations are educating many people and thus have economies that are expanding at higher rates. This poses an additional challenge, because the more developed nations produce most of the pollution and resource depletion that needs to be restrained. The United States has only 4.5% of the world's people, but it uses at least one quarter of the world's fossil fuels and produces that much of the pollution as well. The developed world, which is primarily the United States, Europe, and Japan, has less than 18% of the population but uses more than 70% of the energy while producing a similar proportion of the pollution. Population needs to be controlled, but the excessive use of resources and the manufacture of waste by the affluent cause even greater problems.

How then do we hold individuals, groups, corporations, and even governments accountable for the consequences of their actions? Some people believe that if complete freedom is allowed, then the competition in free markets will result in a natural process that will reward the successful while driving out of business those that are harmful or inefficient. However, the lessons of history show a different result, because the rich and powerful governments and corporations often abuse their power by making or letting others pay for the harmful consequences that they have caused. In fact this is why the world has come to be in such danger. What are called externalities are not made part of the actual market price of a product when corporations and governments fail to be responsible. One of the important tasks of government, then, is to make sure that individuals and groups are responsible for what they do by internalizing those consequences. Various levels of government may do this by using laws prohibiting actions that are harmful, licensing to permit only limited use of resources, taxing to discourage activities that have social effects that need remediation, and applying other ways of regulating behavior.

What ethical standards then should we use to decide which methods need to be used to curtail or shape various actions? Obviously those activities that cause widespread death, illnesses, or destruction of useful systems need to be prohibited first by laws so that the power of government can be used to hold such violators accountable and stop those harmful behaviors. In my view this is the justification for banning weapons of mass destruction first. Nuclear, biological, and chemical weapons that are designed to kill masses of people thus must be most urgently prohibited. Other weapons systems and combinations of military power can also be banned in order to keep power blocs or arrogant governments from inflicting their power on others. How we can do this has been discussed in previous chapters, which describe how disarmament can be brought about and how a Federal Earth Democracy can make sure that no nation acts in criminal ways on a mass scale.

In addition to preventing such intentional killing and destruction, governments also need to make sure that governments, corporations, and individuals do not also kill, harm, and destroy with toxins that are by-products of manufacturing and industrial processes. Companies may cause the death and illnesses of thousands of people every year by releasing such poisons and pollution into the environment. The people have a democratic right to make sure that some government holds these companies accountable by stopping such nefarious activities. Some governments either ignore such problems or may even support with subsidies the corporations that commit these crimes. Thus in these cases the people need to organize to reform those governments in their own self-defense.

Problems also occur when the actions of many individuals and groups combine together to cause harmful consequences. Yet it has been difficult to bring about the discipline needed to restrain these behaviors. People can be educated to act more responsibly; but when selfish benefits motivate many people to do those things that make things worse for others and future generations, then for the good of all the people the government can implement regulations and taxes that will discourage such selfish activities.

For example, because of the dangers of air pollution and global warming, humanity needs to learn how to use cleaner and safer energies that are called renewable because they neither deplete nor pollute limited natural resources. One method is for government to make laws requiring automobiles to release fewer toxins while getting better mileage per gallon of gas. However, powerful corporations may resist this or even argue that such standards cannot technologically be achieved yet. Incentives and disincentives can also be used by having government tax those activities that need to be reduced and by offering tax reductions or subsidies to new methods that need to be encouraged, especially in the early stages when it is difficult to make them marketable on a large scale. Thus cleaner and safer energy pathways can be pioneered by enlightened political and social policies while those existing pathways that pollute or endanger the future can be made accountable and phased out. In a way this is part of the free market system in the sense that the customers as a whole have a right to organize to make sure that some companies do not violate the people's right to a healthy environment. Another way of looking at it is that the people have the right to use democratic processes to regulate possible abuses and socialize some parts of the economy for the good of all the people.

Another example is the use of fresh water in agriculture. In many countries cattle ranchers are allowed to use public land and water resources for much less than the market value of those resources. These subsidies enable them to sell meat at a much lower price than it would cost if the customers were to pay for these hidden costs contributed by the society. As fresh water is becoming very precious, such subsidies can be removed. Destruction of the rain forest to make room for more cattle ranches is depriving the Earth of valuable natural resources that affect the life of the entire Earth.

The idea that the Earth is a living system or organic being has been called the Gaia hypothesis. Gaia is the Greek name for the Earth Goddess. Some believe that our mother Earth as a living organism will adapt herself to changes that threaten her life. From the Earth's viewpoint humans are a parasite on her body; if those parasites threaten her health, she may find ways to make them change their behavior or possibly even eliminate them.

Mad-cow disease, avian flu, and other diseases may cause epidemics so that humans will reduce their eating of other animals. One aspect of this megacrisis is that humans in their spiritual evolution may be learning not to kill other animals, especially those that are more evolved such as fellow mammals. Eating the meat of mammals is less healthy than consuming fish and fowl and much less health than living on vegetables, nuts, and fruit. As society takes on the responsibility of making sure that everyone has good health care, those personal actions that tend to cause one's health to deteriorate may be discouraged by taxing them in such a way as to pay for the health care costs they cause. In this way the freedom of each individual to choose those less healthy behaviors is still preserved, but they are held accountable by having to pay the true costs for their choice. Another example is taxing tobacco and other harmful drugs.

A democratic society has the right to plan more intelligent transportation systems that are best for all. Mass transit in and between urban areas may be more efficient for many people to use. Electric cars using batteries and hydrogen fuel cells can be used for short journeys, and already hybrid cars are providing a transition by getting much better gas mileage. Yet even hydrogen fuel requires energy to make the hydrogen and is not a panacea. Unless a miraculous breakthrough discovers how to use a safe and clean form of fusion energy, humans must learn how to be more efficient in using the renewable energies that come from the sun, wind, water, and biomass. These energies can be promoted. People can also learn how to conserve energy more efficiently, and taxes can discourage the profligate use of energy. Such green taxes respect the freedom of the wealthy to follow their own chosen way of life while making sure that they contribute to the well being of society as a whole instead of getting away with exploitation. Or societies may democratically decide to allow some privileges such as airplane transportation to individuals whose work requires such travel. With improved communication systems people will not need to travel so much to other places which electronic media can in various ways bring to them.

In the United States, for example, a corrupt political system enables the wealthy to dominate the government and thus get away with mass murder and extraordinary exploitation of natural resources and pollution of the environment. Major reforms are needed to reign in the corporations and make sure that everyone pays their fair share. In my view taxes should come from those who can afford them. Martin Luther King Jr. favored a negative income tax so that those below the poverty line would receive a subsidy to meet their basic needs. How can the poor be expected to contribute to society if they are homeless, hungry, and unemployed? Why should women taking care of young children be forced to take a job they do not want just to get enough rent and food for their family? Raising a child well is a very important job, and by the time you subtract the child care costs from the low wage of enforced workfare the result is not efficient anyway. By providing basic housing, food, education, and health care for the poor they can survive and then have a better opportunity to find useful work. While we can through our government promote the general welfare, we are not obligated to subsidize luxuries, which may be taxed. Most people will be motivated to find work so that they can have extra money to spend on personal choices. Those who stay home to educate themselves and work for nothing in the arts or for social reform may end up contributing as much or more to society than those out working in paying jobs.

The opposite philosophies of political economy that came into conflict during the Cold War are capitalism and socialism. The extreme form of socialism is totalitarian communism in which the government dominates everyone's lives by managing the entire economy with its bureaucracy. The dangerous form of capitalism is fascism that backs up the private corporations with nationalistic militarism and uses its power to exploit resources and protect private wealth while developing their own private bureaucracies. In both extremes a dominant class that is corrupted by its control of power and wealth oppresses civil liberties. What has emerged in many countries, especially in Europe, is a moderate combination of free markets with government providing social welfare in what are called mixed economies.

Regardless of the system, what is most important is that people live by ethical principles that respect the equal rights of all people. History has shown that democratic elections tend to produce better political leaders than monarchical heredity or military domination. Thus people can use democratic means to decide the combination of free markets and social welfare that they want. As James Madison wrote, if people were angels there would be no need for government. Thus if everyone acted in an enlightened way with justice and charity a completely private system without government could work. However, given human nature, this is utopian and unlikely. On the other hand, communism could work if it was democratic and intelligently designed; but probably some of the bureaucrats would be corrupt, and it would be very difficult without a private sector to allow every individual their freedom to choose their own destiny. Thus the best system seems to be a combination that allows individual freedom in private life and the market while providing a safety net of social services and charitable programs to make sure that everyone has the right to good education, health care, housing, and fair employment.

Currently many societies are experimenting with various combinations of mixed economies. Most developed nations provide education and health care for all their citizens. However, since the collapse of the Soviet Union and the renunciation of its communist system, the capitalist nations have been using loans to developing nations to try to force on them trading concessions and privatization schemes that exploit their resources while leaving these countries even poorer than they were because of the interest they have to pay. History demonstrates that such capitalist exploitation has led to imperialist domination by the Spanish and Portuguese in Latin America, the French and others in Africa, the Dutch in Indonesia, and the English in India, all of whom robbed enormous wealth from their colonial empires. Now the United States and its allies are the imperial powers that are attempting to dominate the world. Such an economic system in which the rich increase their wealth while the poor become even more destitute is not sustainable and is fundamentally unjust. A day of reckoning is fast approaching because such injustice is unstable. Efforts by big corporations to make poor nations privatize their resources and even fresh water are now being resisted, especially in South America, where a positive trend toward greater social and economic justice is emerging in Venezuela, Brazil, Argentina, and other countries. I suggest that we could forgive all the interest on these loans to underdeveloped countries and allow them as long as they need to pay back the principal. We can also increase charitable grants, especially to the poorest nations.

Consider the political economy of the United States. The greed of its leaders has cut the taxes of the wealthy so much that the national debt of the government has passed eight trillion dollars. Instead of having the wealthy individuals and corporations pay most of the taxes, which is the sensible policy, the money is being borrowed from the rich and other countries so that they can collect interest. Yet the largest military establishment in history cannot be sustained by such loans indefinitely. The excessive consumption by the North Americans is currently running a trade deficit of nearly two billion dollars per day, while private debt is so high that it has surpassed private saving. Individuals need to learn how to live within their means, not just on financial levels but including the hidden costs that affect the environment and the future. A sustainable governmental budget may be achieved by greatly reducing military expenditures and adopting progressive income taxes. The enormous debt could even be paid off gradually by taxing excess assets of the rich, whose wealth has increased dramatically in the last generation. The government and the people will be much better off when government expenditures are not financed by borrowing that causes interest. By capitalist principles a government is unwise to do this; but the private capitalists have manipulated the process to serve their selfish interests, not those of all the people.

This foolishness of drastically cutting taxes on the wealthy while increasing military spending was called "voodoo economics" by George H. W. Bush and has been especially egregious during the administrations of Reagan and the two Bushes. When Ronald Reagan was elected President, the United States was the largest creditor nation in trade, but in one term of his policies the United States became the largest debtor nation. The government's national debt of one trillion dollars began to rise quickly. During the eight years of the Clinton administration this trend was temporarily reversed, and the annual deficits decreased steadily and even went into a surplus; but with the election of George W. Bush, the line turned downward again toward record annual deficits for the federal government. Another comparison shows how the wealth was distributed. During the Reagan-Bush years the top quintile (20%) in terms of income made substantial gains; but the second quintile made only moderate gains, and the bottom three quintiles had little or no gain with the bottom quintile doing the worst. However, during the Clinton years all five quintiles had substantial increases at about the same level. Tax policies are primarily responsible for these differences. Yet because of corrupt campaigns the Democrats have also favored wealthy interests, just not as much as the Republicans. Thus campaign reform is essential to creating sustainable political economy.

We also need to change our private behavior as individuals and collectively. We can learn how to reduce our use of material things so that less waste results. We can take good care of what we use and use things for as long as possible, instead of throwing away so many things. Remember, from the viewpoint of the whole Earth there is no "away." We can use products that last longer and that can be repaired. Things that are thrown out need to be recycled so that the materials can be used again in other products. Thus we need to REDUCE, REUSE, and RECYCLE.

Green taxes can be designed so that corporations are held accountable for all the costs involved in their products and services. For example, many products come in packages that are immediately thrown out; such packages could be taxed so that companies will have an incentive to sell products with less packaging. Manufacturers must be held accountable for their waste products. Tax incentives can encourage manufacturing that uses recycled materials and that facilitates recycling of the materials used. Subsidies that increase pollution can be repealed. For example, bulk mailing gives lower postage rates, but this is abused by advertisements that create unwanted junk mail that is usually thrown away unread. Those who shop intelligently for food will find that what is most healthy ­ fresh fruit and vegetables and grains can be purchased without wasteful packages. One can also save on bags by bringing canvas or cloth bags to the market. Government can be more efficient and avoid planned obsolescence by investing in what will last longer. In Europe most highways use materials that last much longer than those used in the US. Water can be used more efficiently by using clean water for drinking and washing but reclaimed water for agricultural use.

Forests are valuable resources that need to be protected. Goats or other natural methods can be used to control undergrowth, rather than harmful herbicides. Instead of less sustainable monoculture, permaculture can mix various plants together in the same environment. Industrial hemp can be grown to make paper, clothing, and many other products. Soil conservation can prevent the loss of topsoil. Very high taxes can be imposed on the use of poisons with complete bans on the most harmful, as was done with DDT in the early 1970s. The use of pesticides can be replaced by using organic farming methods.

By living more frugally people will consume less and not have to work as much. The forty-hour work week, which has prevailed for a century, has been long overdue for major reductions, especially since we have become so much more technologically efficient in the computer age. Less human work is required to meet our basic needs, and electronic inventions are enabling us to extend our education and appreciation of the arts at very low costs. The minimum wage needs to be substantially increased. As we become materially more efficient, people will have more time for life-long education and enjoyment of the arts. These fields can provide much additional employment because a well educated populace can use many more teachers.

Copyright © 2005 by Sanderson Beck

This chapter has been published in the book BEST FOR ALL: How We Can Save the World.
For information on ordering, please click here.

Global Emergency
Alleviating Poverty
Disarming Weapons of War
Creating Global Democracy
Reforming the US Constitution
Restoring Justice
Sustainable Economics
Freeing Communication
Spiritual Awakening
Nonviolent Strategies
Global Disarmament Treaty (first draft by Beck)
Constitution of the Federal Earth Democracy (first draft by Beck)
Constitution of the United States Revised (first draft by Beck)

BECK index