Saturday, April 27, 2019

The Economics of Arrival

Ideas for a Grown-Up Economy

"The Economics of Arrival" is a 2019 book by Katherine Trebeck (@KTrebeck) and Jeremy Williams (@Jeremy_Williams), 344 pages, 93k words. It is subtitled "Ideas for a grown-up economy". Trebeck is a Senior Researcher with Oxfam, Williams is the cofounder of the Post Growth Institute.

The book was recommended in a tweet by Kate Raworth of "Doughnut Economics". Raworth wrote the 14 page (PC Kobo reader) Foreword, and this book revisits a lot of the concepts of "Doughnut Economics". The book also has a Preface (14 pages), 12 Chapters of greatly varying length, and an Appendix of further reading. The Preface, chapters, and sections in the longer chapters all begin with a nice quotation. It was a fairly quick and easy read.

"Doughnut Economics" introduced us to the airplane metaphor of W.W. Rostow’s Five Stages of Growth - prep for flight, take-off, cruising - but no provision for landing! The "Arrival" of this book completes the metaphor by letting the plane land, or arrive.

I felt like there wasn't that much new in the book - some new terms and formulations which we will get to below. But the "Arrival" metaphor is powerful, and I immediately found it very useful. Here's a comment I left on a post on the Project Syndicate Site, "How Western Economies Can Avoid the Japan Trap":

I just finished reading "The Economics of Arrival" by Katherine Trebeck and Jeremy Williams. "Arrival" is when a developed country recognizes that it has enough for all its citizens and transitions to a post-growth or circular economy. The authors suggest that, whether intended or not, Japan perhaps might be viewed as as the 1st country to have successfully "Arrived".

So put Abenomics back on the shelf! #ClimateCrisis

Again, the very next day, again Project Syndicate, commenting on a post titled "What’s Driving the Global Slowdown?":
I just finished reading "The Economics of Arrival" by Katherine Trebeck and Jeremy Williams. "Arrival" is when a developed country recognizes that it has enough for all its citizens and transitions to a post-growth or circular economy.

The developed world does NOT need growth. We should switch to efficiency as a goal; or, as Adam Smith suggested, improvement. Both include greatly lessened inequality.

At this point we should welcome global slowdowns. They give us a tiny bit of breathing room in trying to address the #ClimateCrisis. And we totally need all the help we can get.

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The Preface contains a definition of Arrival:

beyond a certain point, economic increase ceases to be meaningful and ... after this phase the growth agenda should give way to new priorities that are qualitative rather than quantitative.
It also defines a task to be completed:
If not growth, how do we understand progress?

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Chapter 1 is titled "Introduction", 48 pages. Since I began my study of economics abundance, one of my catchphrases has been "There is enough to go around!". The authors agree!

It is time to recognise that the richest countries have already Arrived in the world long hoped for. There are more than enough material and monetary resources.

...

Many would recognise the persistence of poverty in rich countries as a matter of distribution: a consequence of resource allocation that reflects political choices rather than any scarcity facing society as a whole.

We encounter our old friend, Keynes' "Economic Possibilities for Our Grandchildren". [Note, there is a similar piece, "In Praise of Idleness" by Bertrand Russell, also discussed and linked to in the linked blog post.] There is the first of several quotes from John Stuart Mill. We also hear about our old friends the Skidelsky's, whose book "How Much Is Enough" was the 1st on abundance I read. [Hmmm, errata, the book is listed as 2013, but I read it in November 2012 - so I think 2012 instead. Amazon says June 2012.]. Another definition of Arrival:
We’re using a journey metaphor, but you could also consider Arrival to be a process of maturing or reaching full size. What does the economy want to be when it grows up?
The authors also describe Arrival as "making ourselves at home". I think I like Arrival better - but, writing this, they really aren't the same thing. "Making ourselves at home" happens after Arrival.

I get accused of being a Pollyanna or panglossian fairly frequently, but, yay, I think the authors are fellow travelers.

We believe it is compelling because it is fundamentally a success story – it’s about the end of striving and the possibility of the fulfilment of our ancestors' hopes. The agenda of fighting for survival could be over if the economy were to engage with a new challenge: that of building ourselves a lasting home in this place of plenty.
It's already uploaded, let's include a horn of plenty to celebrate our "lasting home in this place of plenty". "Cornucopia" is 1 of my favorite words, as is "jubilee".

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Chapter 2 is titled "The fruits of growth", 26 pages. The start of the chapter reminded me of Steven Pinker's books detailing the many, many measures by which civilization has progressed. But the authors then remind us that not all growth implies progress and enumerate the "different forms of negative growth" identified by the United Nations Development Programme:

  • ‘jobless growth’ that does not create employment,
  • ‘ruthless growth’ in which the rich get richer and the poor get poorer,
  • ‘futureless growth’ that comes at the expense of the environment.
GDP is discussed for the 1st time, and the Skidelsky's are quoted:
‘we may reasonably ask not just growth for what, but growth of what. We want leisure to grow and pollution to decline’.

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Chapter 3 is titled "Are the fruits of growth beginning to rot?", 186 pages. It begins by talking about consumerism and its tool, advertising.

Advertisers, from cleaning products to beauticians, tell us that the route to wellbeing and happiness is as simple as a clean house and a pedicure, and always just one more purchase away. Not only is this a false promise, it is an agenda that marginalises the many families and individuals who, even in GDP-rich countries, cannot afford to participate in consumerism.
John Kenneth Galbraith is identified with Keynes as an economist who "saw an end to the ‘economic problem’".

The history of ideas on the limits to growth is explored. The chapter then introduces us to a discussion on inequality in a section titled "An unevenly shared harvest" with the [under]statement "Our world is terrible at sharing.". The discussion points out one of the most common misuses of statistics by apologists for our current system: "the tyranny of averages".

when progress is measured through GDP per capita, the tyranny of averages means that, as the designer of GDP himself [Kuznets] warned, ‘luxury at the top offsets poverty at the bottom’.
Note, Kuznets was also responsible for the now debunked Kuznets Curve.

Another quotation, from Henry Wallich in 1972, that I think is really insightful.

‘Growth is a substitute for equality of income ... So long as there is growth there is hope, and that makes large income differentials tolerable'.
So one way to look at growth is that it is a sleight-of-hand done by the rich to distract everyone else and help keep themselves rich.

Here's a more nuanced, and human, view of redistribution than that offered by capitalists,

Redistribution isn’t about taking from the rich and giving to the envious poor. It is about bringing people in from the margins, supporting the disadvantaged and, in some cases, making up for past oppression.
This quote from Mariana Mazzucato and William Lazonick points out some of why inequality has increased so much since the 1980's, but doesn't include what may be its root cause: the gutting of unions that began with Reagan.
[A] major source of inequality is the ability of economic actors to appropriate returns from the innovation processes that are not warranted by their investments of capital and/or labour in it.
This statement really reminds me of a quote from somewhere earlier in this blog, but I can't find it.
When the wealthiest are able to bend the rules in their favour while the poorest are unable to change their circumstances, democracy and trust are eroded.
This statement I think is insightful. And we know that when people's self-esteem is suffering badly, they do stupid things like vote for Brexit or Agent Orange.
With extreme inequality, people feel more anxiety about their status and worry about threats to their self-esteem.
Speaking truth to growth. What are we sacrificing on the altar of growth?
what good is growth that damages the things we value most – community, relationships and our own health?
I really like their harsh words on the "gig economy". Seriously, how can anyone expect this to be anything but totally exploitative?
As long ago as 1944 Karl Polanyi warned of the human impact of treating labour as a commodity in this way:
'the alleged commodity ‘labour power’ cannot be shoved about, used indiscriminately, or even left unused, without affecting also the human individual who happens to be the bearer of this particular commodity'
...

workers with little power and few enforceable rights are treated as disposable – at the beck and call of an app.

One of the principles of "Doughtnut Economics" that I find myself using over and over in arguments discussions, typically after someone says "That's socialism!" or "You're a socialist!":
'when is each of the four realms of provisioning—household, commons, market and state—best suited to delivering humanity’s diverse wants and needs?'
Extremely odd, my wife, who is pretty skeptical about abundance and doesn't study it at all, texted this to me today?!?!? No idea where she got it.
'In economics, there is a theory called the Lauderdale Paradox, which the Scottish politician James Maitland articulated in the early 19th century. The theory says that capitalism undervalues public resources, like air and water and soil, because they are so plentiful, and overvalues whatever is private and scarce.'
So, capitalism undervalues the commons provisioning realm, and our authors astutely point out how the "gig economy" - capitalism at its worst? - similarly undervalues the household provisioning realm:
Paradoxically, in its pursuit of growth, the economy relies on these networks of reciprocity and social solidarity (often provided, unpaid, by women) while simultaneously eroding them through time pressures, consumerism and inequality.
[Note, I replied to my wife with Peter Barnes in "Capitalism 3.0":
'When capitalism started, nature was abundant and capital was scarce; it thus made sense to reward capital above all else. Today we’re awash in capital and literally running out of nature.'
]

The authors return to consumerism. Hmmm. can't seem to find a book on consumerism??? We know its great tools advertising and marketing (aka propaganda). Very interesting, the authors identify other components of consumerism: identity; fashion; novelty; status; positional goods; conspicuous consumption. [Hmmm, I didn't get much out of "The Darwin Economy", but here it is popping up.] Here is a summary:

Status anxiety puts people on a hedonic treadmill: not only does consumption for these purposes have associated costs (time, effort, environment), but any benefit in terms of boost to positive emotions that is derived from the consumption seems to quickly wear off.
"Hedonic treadmill" is new to me but apparently "hedonic treadmill" was already a thing.

I like the Fulfilment Curve that they reproduce [reproduced here without permision].

This is very intuitive, but, is it anything more than diminishing marginal utility? I guess the survival/comforts/luxuries breakdown is instructive. "Needs, not wants".

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Chapter 4 is titled "Stockholm Syndrome? How the economy fell in love with its captor", 36 pages. Growth, growth, growth- can we live without it? A lot of overlap with "Doughnut Economics".

all kinds of interrelated forces and dynamics entrench the position of growth-based economic models, and spur political decision makers to seek more GDP.

...

current economic models are totally dependent on growth in order to function

What kind of growth do you want? Pick your poison.
Adjectives are attached to growth: ‘sustainable growth’; ‘inclusive growth’; ‘green growth’; ‘shared growth’; ‘low carbon growth’; and so on.
This looks interesting. I just purchased the eBook, $22.79, ouch!
Tim Jackson’s seminal Prosperity Without Growth points to the three pillars on which the current economic model rests. ...
  1. flourishing is deemed to be contingent on material wealth.
  2. GDP growth is assumed to deliver key social goods such as health or education.
  3. without growth the economy will collapse, taking social stability with it
The dominance of GDP as the measure of all progress is decried. Interesting, I had not read of "Kuznets’ [its creator] warning that GDP should not be used as a measure of progress".

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Chapter 5 is titled "Rushing past our stop: failure demand, uneconomic growth and consolation goods", 29 pages. This chapter introduces some terms I had never encountered before [my bold]:

As failure demand and defensive expenditure spurs more government spending to deal with the harm of the growth model, as much growth itself becomes ‘uneconomic’ and as individuals turn to consolation goods, many of the fruits of growth are beginning to rot.
1st, "failure demand". This is demand that you wish you didn't have. I remember someone who used an example like, if we all started breaking each other's legs, GDP would go up as we all pay for getting our legs fixed - not a good thing. It is fix-ups, bandaids, duct tape. The authors attribute the term's creation to John Seddon.
Failure demand is thus expenditure that not only could have been avoided by earlier preventative measures, but is reactive spending.
The authors provide a long list (11 items) of examples of failure demand. Oof, "5.2 million US workers could be described as performing guard labour".

An allied concept is "uneconomic growth", a concept they attribute to Herman Daly.

Daly explained that there comes a point – which he terms ‘the futility limit’ – where the marginal utility of production hits zero.

...

often GDP will record the economy as growing, due in part to increased expenditure on solving problems that this particular sort of growth has created. From this point on, the costs of growth outweigh the benefits. Forms of spending intended to correct the downsides of growth start to dominate – ‘failure demand’ at the societal level, ‘defensive expenditures’ in terms of the environment, and ‘consolation goods’ at the individual level.

The chapter ends with a very interesting comparison of the contradictions created when what is supposed to help instead harms and hinders. But, blaming it on abundance?
In a bizarre way, abundance has led to catastrophe as society and policy makers design and plan further exploitation of the environment, and reactionary spending to address problems created in pursuit of more growth.
[It is the not the fault of abundance, it is the fault of feudalism, tribalism, and the psychotic mindset that besets leaders, both in politics and business. Wow, that is a pretty random rant.]

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Chapter 6 is titled "Embracing Arrival and making ourselves at home", 108 pages. We've been shown the problem, now for the solution. What is the goal? The chapter starts with a brief review of "Doughnut Economics" - "living well within limits". The term "post-growth" is used for the 1st time, and we learn of some variant names.

The notion of a ‘steady state economy’ was rediscovered in the 1970s as the environmental sector emerged, and it has enjoyed more attention in the 2010s under a variety of names – post-growth, degrowth (or ‘décroissance’ in the Francophone world), a grown-up economy, and even ‘a-growth’ as in ‘atheism’.
I like this review of several formulations of The Good Life, in addition to the one I know well, that of the Skidelskys. [Note, Table 1 in this chapter was unreadable in my eBook reader. I skipped it until, doing this review, I screen captured it and then opened and zoomed the image.]
  • Martha Nussbaum ... describes the purpose of development as to ‘enable people to live full and creative lives, developing their potential and fashioning a meaningful existence commensurate with their equal human dignity’. ...
    Her list: bodily integrity; senses, imagination, and thought; emotion; affiliation (other humans and other species); play; and Material rights. ...
  • Chilean economist Manfred Max-Neef, identifies ‘needs’ as subsistence, protection, affection, understanding, participation, leisure, creation, identity and freedom. ...
  • the Skidelskys 7 Basic Goods, the Elements of the Good Life: health, security, respect, personality, harmony with nature, friendship, and leisure. ...
  • American-Israeli sociologist Aaron Antonovsky suggests that a ‘sense of coherence’ is crucial for good health, particularly pointing to the relationship between health and stress. ... [It] encompasses comprehensibility ...; manageability ...; and meaning ...
  • Epidemiologist Michael Marmot’s work confirms this, explaining that factors that impact on health include control, predictability, degree of support, threat to status and presence of outlets and access to coping mechanisms. ...
  • Sociologist Emile Durkheim suggested that people enjoy higher wellbeing when their needs are proportionate to their wants and when they have means to satisfy those wants. ...
  • Scholars such as Rawls, Sen and Nussbaum all agree that autonomy is one of life’s basic goods. ...
  • Deci and Ryan (2000) ... also highlight autonomy and add in competence and relatedness as the three basic psychological needs.
An Arrived economy is contrasted with a business-as-usual economy attempting to maintain growth, tax it some, and use the proceeds to repair the damage growth continues to do. This approach is clearly fraught with peril. On the other hand,
being at home means protecting people, keeping them safe, meeting their needs, ensuring their security (of income, of identity and of body) and recognising the whole ecosystem in which people live their lives and maintain health. With positive feedback loops and co-benefits, virtuous circles will be set in motion.
The authors also posit that "philanthropy ... is similarly about downstream mitigation." They like 'dividends' better.
Instead, Raskin et al suggest that the economy and society can benefit from various ‘dividends’: a green dividend from cost savings and eco-efficiency; a peace dividend from reduction in military expenditure; a human-capital dividend from the creativity and contribution of those currently consigned to poverty; a technological dividend from new opportunities from innovation; and a solidarity dividend from reduced security and policy costs. The dividends – savings – will help to dismantle the structural dependence on growth.
I think this is an important point. Attempts to, say, tax carbon, must offset price increases by dividends - otherwise, you will get something like the French Yellow Vest movement.

The authors are also skeptical on the chances of decoupling growth from carbon emissions.

  1. we must ensure that decoupling is absolute, and not relative. ... Resource efficiencies need to increase at least as fast as the growth of economic output for true absolute decoupling to occur.
  2. efficiency gains can easily be lost through the rebound effect – just spending the gains on additional consumption.
  3. if a country has decoupled by transitioning to a services economy, with industrial operations simply moved overseas, then nothing has changed at the global level.
I'm surprised that #2 did not reference the Jevons paradox, which we learned about here. Their conclusions about decoupling:
As Tim Jackson has shown, the rates of decarbonisation required to prevent dangerous climate change have never been achieved outside of a recession. This is supported by the findings of Wiedmann et al, whose assessment of the material flows of 186 countries over time revealed that ‘achievements in decoupling in advanced economies are smaller than reported or even nonexistent’. In summary, as one study has concluded, it is ‘misleading to develop growth-oriented policy around the expectation that decoupling is possible’.

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Chapter 7 is titled "What we might find in making ourselves at home", 222 pages. Sharing and redistribution. It is sad to me that progressive authors, always at some level afraid of being branded commies (but probably less in the UK than the US), have to make statements like this, which are completely obvious and should go without saying:

There’s no call for absolute equality, of course; there will always be natural talent and initiative, and rewards for hard work.
The authors next discuss ways to move beyond just redistribution.
Redistribution is essential for redressing existing inequalities, but ultimately, it would be better for everyone if the economy did not create so much inequality in the first place. Jacob Hacker has called this solution ‘predistribution’, looking at ‘measures to reshape the market so that it distributes its rewards more broadly in the first place’.

...

There are multiple ways to do this, from inclusive forms of business (including democratising the ownership of firms) and creating a stakeholder economy; from better jobs and higher minimum wages to a ‘participants’ income’ or even Universal Basic Assets (which, rather than a minimum entitlement to income, focuses on fairer entitlements to assets such as housing, healthcare, education and digital assets).

I like the term Universal Basic Assets as an expansion of Universal Basic Income. I think that is a term I could have used in this post describing a Post-Scarcity Utopia.

The authors have a discussion of making work more "meaningful", which I think is beside the point. Ha ha, I believe there are enough of us who want to work that the rest of can spend time on activities we find more meaningful.

This next discussion is I think 1 of the most important in the book:

a life designed around relationships, experiences and participation will almost invariably be one of less consumption.
Nice, we get an extension to the Fulfillment Curve of Chapter 3. [Reproduced without permission]

We encounter John Stuart Mill again.

Activities and experiences – the ‘graces of life’ as Mill wrote, bring better rewards than the short-lived and disappointing ‘sugar highs’ of passive consumption. Focusing on experiences is also more rewarding: doing rather than owning, and engaging in collective activities rather than the often solitary and fruitless consumption. For example, arts or sport can feed the soul and allow self-expression, and often take place in a social context. Being active, giving, supporting others and being social all lead to increases in life satisfaction and life expectancy, and it seems that people recognise this.
[Interesting, in my family, gift-giving has increasingly become consumables - food, sauces, marinades, beverages. My wife & I have a houseful of stuff, 2 of my daughters live in small big-city apartments - nobody seems to want more stuff to take up space. Giving experiences is harder - it kind of requires you to have write access to the giftee's calendar, which I don't think is good.]
If making ourselves at home facilitates a move from materialism to ‘experientialism’, people may come to pursue conspicuous consumption of experiences rather than things.
Not sure that this is exactly the correct formulation. Jetting around the globe for breath-taking vacations is not very carbon neutral.

This is an interesting point:

In particular, while income is positional (and hence breeds status-seeking pursuit of more income), leisure time is not – people are not anxious if others gain more leisure at the same time as them.
We again encounter the importance of The Commons in the section titled "Stewardship of the commons". Hah, Peter Barnes would prefer "Trusteeship" to "Stewardship".

Here's a nice list, [I love lists, I don't know why authors don't use them more. Part of the refactoring I do in these summary/reviews is putting stuff in lists.]

To qualify as truly sustainable, our vision of a society that has Arrived and made itself at home would need to fulfil Herman Daly’s three criteria for sustainable development:
  1. Exploit renewable resources no faster than they can be regenerated.
  2. Deplete non-renewable resources no faster than alternatives can be developed.
  3. Emit wastes no faster than they can be assimilated by ecosystems
We encounter our old friends: the Alaska Permanent Fund; Norway's sovereign wealth fund; Elinor Ostrom's work on managing commons. Interesting, Prof. Ostrom, who was at IU, is the only woman to have won the Nobel Prize in Economics.

We are introduced to "A circular and collaborative economy".

Along with preserving nature for future generations – and for itself – making ourselves at home implies better use of existing resources.
I'm not sure I agree with their view of streaming music and video services as being an advancement. I'm kind of in hybrid mode with music. Most of it I download but thereafter I am playing local copies on various devices rather than streaming. I think this is the more efficient model. Video I'm pretty much completely streaming, but that might change with faster download speeds.

I'm also not sure why but renting rather than buying things often makes me uneasy. I don't know, some how makes me think of company stores. Or of privatization - just another way to put more $$$ in fat cats' pockets.

For example, Philips now provides light (‘lux’) as a service to Schiphol Airport and others, rather than selling light bulbs.
I think that there is so much potential in sharing. I have so many tools that are idle 99.999% of the time. Damn, I still can't locate the quote to the effect that "private property was only developed because we did not have good tools to manage sharing".
One of the leading thinkers in this field, Michel Bauwens of the Peer 2 Peer Foundation, calls for an economy guided by the principle of ‘If it is light, share globally, if it is heavy, share locally’.
P2P Foundation looks very interesting, Nice, just subscribed to their RSS feed.

Moving up to the higher levels of sharing, the authors aren't impressed with "impact investing". They instead want investors to be closer to other stakeholders - to have some skin in the game. This leads to a discussion of the financialization of the stock markets - no longer are the markets about raising capital for companies, they now are about extracting as much money as possible, in as many ways possible. The tyranny of focusing on shareholder profits is decried.

Much better are cooperatives and employee-owned companies. We hear again of the Mondragon coop in Spain.

Turning next to politics, we are reminded of the great need for campaign finance reform.

the influence of ‘corporate money’ in the political process has rendered democracy meaningless and a ‘charade’.
"Participatory budgeting" looks like a promising form of direct democracy, made possible by tech.

At the global level, there are 2 Arrival strategies, 1 for the developed world and 1 for the developing world.

  • First, the world’s industrialised economies need to recognise that they have Arrived and reduce their emissions and material footprints, through technological change and via the cultural and systemic shift that we have been describing. This ecological resizing would free up resources for others in a ‘contraction and convergence’ dynamic.
  • Second, developing countries need to ‘leap-frog’ the energy and resource-intensive journeys of the global North. Instead, so-called developing countries need to create renewable and circular economy systems first time around, cutting to the chase and taking an easier, cleaner path to arriving at a safe and prosperous ‘home’.
Hooray, there are models to help us get to a Post-Scarcity Utopia!
There are some bright minds modelling this scenario, including professors Peter Victor and Tim Jackson. Their Green Economy Macro-Model and Accounts – short name GEMMA – models how a society not pursuing economic growth will operate. It takes into account economic and financial stability, employment and social outcomes in a context of environmental and resource limits.
The models give a laundry list of action items - 17 are listed. Some seem pretty unrealistic, but, that can change as quickly as public opinion does. Objections to any of these items are political, not technical. I like this one, which we have seen before, I think mainly in "Capitalism 3.0".
  • stabilising consumption, including controls on advertising[my bold];

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Chapter 8 is titled "Arrival and making ourselves at home in the real world", 158 pages. So are there any current places in the real world that show us how to Make ourselves at home after Arrival? The authors list several examples:

  • South Africa we could draw on the notion of ubuntu (‘I am because you are’), a useful counter to the West’s individualism ...
  • gotong-royong in Indonesia, a deeply held spirit of mutual aid and consensus ...
  • Nuka, ... , a word used by Native Alaskans that means a vast living system. It informs social structures based on reconnecting people with the entirety of their community: prioritising physical, mental, emotional and spiritual wellness. ...
  • Buen Vivir – ‘living well’ – arises from recognition that the individual is always and inherently part of the community. For the indigenous and Andean peoples in South America, Buen Vivir ‘expresses a sense of satisfaction in achieving the ideal of the community ... through the equilibrium between the living forces of Nature and the commonwealth of the community’. It carries a strong sense that ‘wellbeing is enjoyed collectively’. ...
  • E.F. Schumacher (the economist and statistician who wrote the 1973 book "Small Is Beautiful: A Study of Economics as if People Mattered" famously called his overall approach ‘Buddhist Economics’, and the same principles that he espoused can be seen in Thailand’s concept of the Sufficiency Economy. [Hmmm, that book does not appear to be readily available. All I can find is a paperback on Amazon.]
I found this next very interesting: is Japan a country who has Arrived? It is especially interesting to me because when I formulated My Plan The Plan, I noted that Japan seemed like the perfect place to try it out. This article by Norihiro Kato in 2013 suggests that
people in Japan are beginning to wonder whether those “two lost decades” really were “lost” after all. Perhaps those years were simply the prelude to a new post-growth era.
But, the authors point out, Japan is not looking at things that way. Abenomics tried to reignite growth.

Does Japan look like a post-scarcity utopia? They have high debt, with the Bank of Japan doing some creative monetary policy [Jubilee!]. But their Gini coefficient is 32.10, not bad but not great. Better than the US at 41.00 or the worst case South Africa at 63.40, but above the leader Ukraine at 25.50. Very disappointingly, 17% of their population is below the poverty line. So, if Japan has Arrived, they need to work on Making themselves at home. Hah, maybe they still need to try The Plan!

Next up, Costa Rica - "one of the best ‘over-performers’ on the Social Progress Index" and "in 2016 ... scoring highest in the Happy Planet Index, for the third time in a row."

The next section of this chapter is "Stakeholder decision making". Some examples:

  • Participatory budgeting (PB), [which we encountered above], Luton Borough, Paris, Portugal, Newcastle-upon-Tyne, New York City; ...
  • Participatory Municipal Planning ...
  • Social auditing ..., serving to keep public bodies transparent and accountable to the people they serve. ...
  • the Open Government Partnership ... launched in 2011.
The authors next explore "a healthier relationship with work."
the Dutch work 1,430 hours a year, as compared to annual US hours of 1,783 and 1,676 hours in the UK. Almost half of Dutch employees work part time, and most part-time workers have no wish to increase their hours.

...

25 of the 33 OECD countries used shorter working time to avoid redundancies during the economic downturn

...

Other scenarios in existence include closing public buildings on one day a week

...

Other strategies include supporting early retirement; increasing vacation time (by collective agreement, Dutch and German workers have 30 days a year); facilitating more part-time or school-time working; job sharing; sabbaticals and career breaks; and longer parental leave.

The authors discus "B Corp" corporations. I guess these are a good thing, a little bit of Rhine capitalism for the rest of us, but somehow I fear that these may wind up just being lipstick on the pig.

Like sharing, access to capital may be getting an upgrade thanks to improved tech.

Alongside social stock exchanges and community shares, is the emergence of peer-to-peer lending sites ... that offer loans that are funded by ordinary people.

...

This same sense of participation is present in the arts world too, where people crowd-fund films, stage plays or art projects.

I like the title of this next section: "From conspicuous consumption to experientialism and conspicuous citizenship". "Conspicuous citizenship" reminds me of Athenian Democracy, for some reason. This next is a great thought:
materialism could be a phase of development rather than a permanent state.
The chapter ends with a discussion of a "circular economy", and introduces a new term: "remanufacturing" - where rebuilding rather than replacing becomes the default strategy.

[Our clothes dryer has lately been making bad noises, and a repairman who was out for something else listened to it, identified the failing component, and opined that it would be as cheap to replace the dryer as to repair it. But, we replace, the current dryer prolly winds up in a landfill, versus a couple of parts. So, I'm thinking, we repair, despite the fact that this seems like "throwing good money after bad", which one generally tries to avoid.]

Other new terms: "collaborative economy" and "collaborative consumption". There is also a passing reference to the "gift economy", which we learned about in "Postcapitalism".

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Chapter 9 is titled "Are we nearly there yet?", 31 pages.

‘When is an economy “grown up”? And how will we know if we’ve arrived?’
  1. Part of the answer lies in calculating sufficiency of material resources.
  2. Another part is found by looking at the point at which growth no longer brings about improvements in quality of life.
  3. And yet another will be revealed when uneconomic growth sets in.
So 3 things to look for. Talking about sufficiency, this is an interesting number, from "sustainabilty expert Chris Goodall":
‘3 kilowatts per person can provide a decent standard of living, wherever you are in the world’.
Ouch, this is not going to go over well. Can we get most of this back on the supply rather than the demand side, i.e., through increases in efficiency?
Americans, on the other hand, are looking at an 80% cut in their ecological footprint to wrestle their consumption back within a sustainable and fair share.
Lots of "fascinating attempts to quantify a ‘sufficiency line’".
  • Bhutan, for example, engages with the notion of sufficiency – a Bhutanese person is deemed to be ‘happy’* if they attain sufficiency in six or more of the nine Gross National Happiness domains. ...
  • Professor of Ethics of Institutions at Utrecht University, Ingrid Robeyns, is carrying out work to specify a ‘riches line’ – an objective point above which people’s wealth is morally problematic. [www.fairlimits.nl] ...
  • the New Economics Foundation (NEF) has sought to map a ‘plenty line’ ...
  • In the US, Daniel Kahneman and Angus Deaton found no increase in wellbeing when incomes rose beyond US$75,000. ...
  • When mapping the GPI, Kubiszewski et al noted that beyond a GDP per capita of around $7,000, GPI per capita does not tend to increase
I think this statement is misleading - or maybe, rather, that it refers to average per country rather than within a country:
beyond $25,000 there is no correlation between income and life expectancy.
I think that this might be true on the average, but, seriously, one believes this about access to health care in the US? Maybe this is true in the UK.

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Chapter 10 is titled "From individual initiatives to wider change: agitation, amplification and attention", 117 pages. How do we move forward, step by step? What is our roadmap?

I have never heard of this before. For being "oft-cited", The Google did not have much to say on this. Maybe this reference. Or this one.

Geels and Schot’s oft-cited Multiple Level Perspective of Transition Theory explains that system transitions occur via interactions between three levels of the system:
  1. the niche, or micro-level (where innovation happens at community, grassroots and individual enterprise level);
  2. the regime or ‘meso level’ (the realm of dominant norms, practices, policies and rules);
  3. the landscape or macro level (markets, the built and natural environments and cultural and political beliefs).
We encounter again "The great systems thinker Donella Meadows".
From Meadows’ advice four tasks can be distilled:
  • Highlight the failures of the current system.
  • Paint a compelling picture of what a new economic model might look like.
  • Work with people who have power in the current system, or who could gain it.
  • Support people who are seeking and delivering change themselves, and those who are open minded, leaving those who are unlikely to change where they are.
Another well known thinker we have previously encountered:
In his famous book, "The Structure of Scientific Revolutions", Thomas Kuhn spells out how the old guard will lash out against new ideas in a futile attempt to defend their own, albeit discredited, theories.
Ha ha, I think this next is an understatement. I don't know that this book agrees with others I have read that figure that we will wind up having to fix it all at once.
Dismantling the contours of the current economy – its class structures, its power hierarchies, its patriarchy, its apparent ‘common sense’ and intellectual scaffolding and its sense of the possibility for change – will be a complex, messy, contested process.
They talk about "change agents" - Elon Musk, for example. This next is interesting - that this number is so low.
Eventually a critical mass (estimated to be about 10% of a given population1) might be attained and a tipping point reached and new norms created.
I hate to say it, but I think that a major crisis or catastrophe may wind up being the way we get there. The powers-that-be are going to have to be smote mightily to get their attention. And I like the scenario proposed by Kim Stanley Robinson in his novels (blogged here, here, and here), where We The People pile on to a financial crisis like 2008 via a universal strike against paying all forms of rent and then nationalize the big banks instead of bailing them out.
External events create the most obvious opportunities for change – a financial crisis, an election that brings a new political party to power or the signing of a new international agreement. These ‘teachable moments’ that show the impossibility of business as usual might not bring change in themselves, but they create moments of opportunity.
Wow, this seems somewhat Machavellian - it reminds me of what the Russians have been doing to the rest of the world.
But the power and influence of elites is not automatic – it depends in part on whether they form a cohesive group or consist of competing factions. This gives us a possible way to counter their influence: by finding mechanisms to fragment groups and undermine their cohesion.
A discussion of power:
To do this, power of some sort needs to be wielded, and there are many theories of power, its nature, its use and its creation. For example, hard or coercive power as opposed to soft or persuasive power; and then there is visible and hidden power. Equally, there are various other forms of power: ‘power within’ (personal agency); ‘power to’ (the capacity to exert influence); ‘power with’ (collective strength); and ‘power over’ (the ability to get someone to do something they would not otherwise do).
And, of course, if people's ideas don't seem to be heading in the right direction, we can use "behavioral psychology and ... economics" to hoodwink nudge them. ;->

This is really interesting to me, in my reading of "Wealth of Nations" I never noticed this next. I'm not sure if this point is profound, or more of a historical accident - that Smith was so early in the development of economics.

Adam Smith may have written the key book for free market economics, but he didn’t much care for economic growth. It hadn’t occurred to him or anyone else yet to use the size of the economy as a measure of success. Instead, Smith uses a disarmingly simple word for describing economic progress: improvement. All sorts of things are described this way, with roads and canals chosen as the ‘greatest of improvements’. The economy is better: improved, rather than bigger.
That paragraph is followed by this next one. I don't think the importance of this can be underestimated. Liberals in the US have been getting their butts kicked by conservatives for decades when it comes to the terms used to frame a discussion. The very name of the field - economics - biases us away from thinking in terms of abundance and Arrival. Hence my use of economics abundance.
The words we use about the economy matter. They reinforce a view of the world, and a view of ourselves. They can paint a picture of selfish people grasping after their own interest, or cooperative individuals working together for a shared prosperity. They can portray a world of scarcity and competition for resources, or of abundance and the common good. The dominant narrative of today emphasises the first half of each of those equations, a view that is strengthened over and over through political speeches, media reporting and cultural bias.
Another concept new to me: the Overton Window.

The chapter concludes with a section titled "Measuring making ourselves at home". It mentions many new measures which can become a replacement for GDP.

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Chapter 11 is titled "Choosing Arrival - one step at a time", 38 pages. Here we finally get our laundry list of actions, organized by social hierarchy. We saw something like this in Chapter 10 of "Capitalism 3.0", but the groups were a bit more organic.

  • 6 Steps for international institutions;
  • 14 Steps for governments ... a commons approach to natural resources is a step, nice. I just mentioned "Capitalism 3.0", which I think is the best discussion of the commons I have read.

    "sumptuary or luxury taxes" are proposed, as is "rebalancing the tax system away from income and towards wealth".

    I don't think I'd seen this proposed before: "taxes on ownership of robots used in production processes".

    This next addresses a pet peeve of mine:

    capital gains tax set at a level to ensure that unearned income is not taxed at a lower rate than earnings from work;
  • 8 Steps for businesses; This is a good idea which I think is new to me:
    issue different classifications of shares, with committed shareholders receiving favour in dividends or bonus shares and greater voting rights.
  • 9 Steps for cities and local communities;
  • 8 Steps for individuals; This is an interesting idea:
    If you get offered a pay rise, take the opportunity to work fewer hours rather than to earn more.
    Looking back on my decades working as a corporate manager, mostly for (growing) software companies, I don't think we would ever have allowed the developers I managed this option. And it would have been a career-limiting move for them.

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Chapter 12 is titled "Conclusion", 8 pages. Short and sweet.

The fruits of growth are rotting on the vine as economies remain geared to the pursuit of yet more growth.

...

Humanity already has what it needs: it is, however, patently terrible at sharing and cherishing those riches.

...

Keynes foresaw that future time of abundance. He also wondered if we would find it hard to adapt. Survival has been a primary goal since time immemorial.

...

‘Enough’ is impossible to define, but many nations have Arrived in a place where they have more than enough to meet basic material needs and secure a good life for all their citizens.

...

There is plenty more to do, infinite opportunities for progress – but what comes next is improvement, not enlargement.

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I really don't feel like I have done this book justice. As I said at the start, there didn't seem to be too much new info - but, you know, there was a fair amount. Of the currently 25 economics books I have read, I seem to go back to these 2:

And after those, these next 2: There was so much new information on inequality, provisioning, etc. in those books that I detailed in those summary/reviews, that I did not reproduce it in the summary/review of this book. I really think that is the best I can do. It is too hard to write a summary/review of something that overlaps earlier summary/reviews without incorporating at a summarization level those earlier reviews. So, I think the best strategy is, read my earlier posts, come up to my currently very ambiguous understanding of economics abundance, and then the deltas in knowledge presented in this summary/review will sync our mental models of "WTF is our economy, and how can we tweak it to get to a post-scarcity utopia?"

Or, if you haven't read those other books, just read this one. It is a quick and easy read, and you will thereafter carry with you the very powerful memes of Arrival and Making ourselves at home. Spread the memes.

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Posted by Chris Heinz at 8:18 PM
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