Real World Curriculum

I – Paradigm Lost

A New Kind of Global Marketplace

What if we were to implement this one simple idea: true cost?

Kalle Lasn

  • 15 Jul 2009

What is the real cost of shipping a container load of toys from Hong Kong to Los Angeles? Or a case of apples grown in New Zealand to markets in North America? And what is the true cost of that fridge humming in your kitchen, that car purring on the road or that steak sizzling on the grill? Practically every one of the products we buy in the global marketplace is undervalued because the environmental costs haven’t been taken into account. As a result, every one of the billions of purchases we make every day pushes the world a little deeper into the cosmic red.

But what if we were to implement this simple idea: true cost?

We calculate the hidden costs associated with products – what the economists nonchalantly refer to as “externalities” – and incorporate them. We force the price of every product in the global marketplace to tell the ecological truth.

We start with the little things: plastic bags, coffee cups, paper napkins. Economists calculate these eco costs – say it’s five cents per plastic bag, ten cents per cup and one cent per napkin – then we just tack that on. We’re already doing that with the various eco-fees and eco-taxes included in the price of tires, cans of paint and other products. But now we abandon the concept of ancillary fees and taxes and implement straight true-cost pricing.

Inevitably, your palate will submit to your wallet.

Then, over a ten-year period, we phase in true-cost eating. We raise the price of avocados from Mexico and shrimp from China to reflect the true cost of transporting them long distances. And we estimate and add on all the hidden costs of our industrial farming and food processing systems. That burger at McDonald’s will cost you more, so will most meats, produce and processed foods. You can eat whatever you want, but you’ll have to pay the true cost. Inevitably, your palate will submit to your wallet. Processed, mega-farmed and imported foods become more expensive as the cost of organic and locally produced food goes down. Bit by bit, purchase by purchase, the global food system heaves toward sustainability.

Then we phase in the true cost of driving. We add on the environmental cost of the carbon our cars emit, the cost of building and maintaining roads, the medical costs of accidents, the noise and the aesthetic degradation caused by urban sprawl and maybe even the military cost of protecting those crucial oil fields and oil tanker supply lines. Your private automobile will cost you around $100,000 and a tank of gas $250. You’re still free to drive all you want, but instead of passing the costs on to future generations, you pay upfront. This would force us to reinvent the way we get around. Demand for monorails, bullet trains, subways and streetcars would surge. We would demand more bike lanes and pedestrian paths and car-free urban centers. And gradually a paradigm shift in urban planning would transform urban life.

True-cost pricing is fraught with daunting, seemingly insurmountable problems. For conventional economists, it’s a frightening concept that would slow growth, reduce the flow of world trade and curb consumption. It would force us to rethink just about every economic axiom we’ve taken for granted since the dawn of the industrial age. It could turn out to be one of the most traumatic economic/social/cultural projects that humanity has ever undertaken. And yet … and yet … the idea of a global marketplace in which the price of every product tells the ecological truth has a simple, almost magical ring to it. It makes sense, it feels right, and it’s totally nonpolitical. It’s the one big idea that – if we are able to agree on it, implement it and muster the collective self-discipline to sustain it – could pull us out of the ecological tailspin we’re in and nudge this failing experiment of ours on Planet Earth back onto the rails.

— Kalle Lasn

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Paradigm Lost

Adbusters

  • 15 Jul 2009

We are a colony of maggots, feeding off nature’s bloated corpse while economic policy makers soothe our troubled minds with lies. Not to worry, they tell us, things will get better – we’re making progress – the key is more liquidity, more stimulus, more credit, more consumption, more growth.

It’s time call their bluff.

This book is a battle plan. We attack the massively fortified system of thought control in which the same tenured forces have been entrenched for fifty years. We take on this powerful intellectual army whose generals include Milton Friedman, Alan Greenspan, Gregory Mankiw, Paul Krugman … who have boots on the ground in Summers, Bernanke and Geithner plus the heads of the International Monetary Fund and the World Bank … and whose foot soldiers are the thousands of business and economics professors all over the world. They all have the same mission: to perpetuate growth and consumption at any cost. We cannot stand idly by and allow these old-school practitioners of a failed paradigm to keep calling the policy shots. Ten more years of their brand of economics will send our planet into a tailspin from which we may never recover.

In this section of the book, we identify five cracks in the foundation of the neoclassical paradigm, five soft spots to start hacking away at.

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The Delusion Revolution

The future we have been dreaming of is not based on reality.

The Delusion Revolution

Mike Mills, Let’s Be Human Beings, 2003, Photo: Todd Cole


THE CREATIVE DESTRUCTION OF NEOCLASSICAL ECONOMICS
Deep in a recession and with scary ecological scenarios looming, now may be the ripest moment we’ll ever have to power-shift global capitalism onto a new path. Adbusters #85 asks economics students around the world to join the fight to revamp Econ 101 curriculums and challenge the endemic myopia of their tenured neoclassical profs. Go to KICKITOVER.ORG, read a few texts, download the Kick it Over Manifesto (and other posters) and whack them up in the corridors of your campus. Make sure your university is at the forefront of the paradigm shift from neoclassical to ecological economics now underway. If you’re an economics student, email kevin@adbusters.org to receive a half price copy of Adbusters #85.


Imagine you are riding comfortably on a sleek train. You look out the window and see that the tracks end abruptly not too far ahead … The train will derail if it continues. You suggest the train stop immediately and the passengers go forward on foot. This will require a major shift in everyone’s way of traveling, of course, but you see it as the only realistic option. To continue barreling forward is to court catastrophic consequences. But when you propose this course of action, others – who have grown comfortable riding on the train – say, “We like the train, and arguing that we should get off is not realistic.”

In the contemporary United States, we are trapped in a similar delusion. We are told that it is “realistic” to yield to the absurd idea that the systems we live in are the only systems possible or acceptable based on the fact that some people like them and wish them to continue. But what if our current level of first world consumption is exhausting the ecological basis for life? Too bad. The only “realistic” options are those that view this lifestyle as nonnegotiable. What if real democracy is not possible in a nation-state with 300 million people? Too bad. The only “realistic” options are those that view this way of organizing a polity as immutable. What if the hierarchies our lives are based on are producing extreme material deprivation for the oppressed and dull misery among the privileged? Too bad. The only “realistic” options are those that view hierarchy as inevitable.

Let me offer a different view of reality:

(1) We live in a system that, taken as a whole, is unsustainable – not only over the long haul but in the short term.

(2) Unsustainable systems cannot be sustained.

How’s that for a profound theoretical insight? Unsustainable systems can’t be sustained. It’s hard to argue with that. The important question is whether or not we live in a system that is truly unsustainable. There’s no way to definitively prove such a sweeping statement, but look around at what we’ve built and ask yourself whether you really believe this world can go forward indefinitely … or even for more than a few decades. Take a minute to ponder the end of cheap fossil energy, the lack of viable large-scale replacements for that energy and the ecological consequences of burning what remains of it. Consider the indicators of the health of the planet: groundwater contamination, topsoil loss, levels of toxicity. Factor in the widening inequality in the world, the intensity of the violence and the desperation that so many feel at every level of society.

Based on what you know about these trends, do you think this is a sustainable system? If you were to let go of your attachment to this world, is there any way to imagine this as a sustainable system? Considering all the ways you understand the world, is there anything in your field of perception that tells you we’re on the right track?

The important question is whether or not we live in a system that is truly unsustainable.

To be radically realistic in the face of all this is to recognize the failure of basic systems and to abandon the notion that all we need to do is recalibrate the institutions that structure our lives. The old future – the way we thought things would work out – truly is gone. The nation-state and capitalism are at the core of this unsustainable system, giving rise to the high-energy/mass-consumption configuration of privileged societies that has left us saddled with what James Howard Kunstler calls “a living arrangement with no future.” The future we have been dreaming of is not based on reality. Most of the world’s population – who don’t live with our privilege – has no choice but to face this reality. It’s time for us to come to terms with it.

Robert Jensen is a journalism professor at the University of Texas at Austin. He is the author of Getting Off: Pornography and the End of Masculinity and All My Bones Shake: Seeking a Progressive Path to the Prophetic Voice.

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A Preface to the Student

You are entering economics at a critical juncture. The inability of economists to incorporate externalities into their models and to account for phenomena such as species extinction, resource depletion and global warming – not to mention the financial meltdown that blindsided them all – has turned the profession into a target for derision and ridicule. And it’s not just some academic joke – today even ordinary people look down their noses at the ineptitude of economics.

And yet as you delve into your textbooks and listen to the sensible, ordered tone of lectures and come to associate your professors with the accolades that hang from their walls, you may get the sense that economics is a science: a rigorous discipline with its own immutable laws, proven theories and crop of Nobel laureates. Far from it. Though you may be temporarily fooled by this façade, you need only to look beneath the surface to discover that economics is a highly contested field … a profession whose axioms, principles and credibility are being questioned like never before. The prevailing neoclassical paradigm is crumbling and a new, more chaotic, more biologically based paradigm is struggling to emerge.

But your department, like most others around the world, is still marching in lockstep with the old guard. That’s because generations of tenured professors have marginalized dissenters and eliminated competition. Your university is a police state … not a free marketplace of ideas in which innovation is acknowledged and rewarded. But outside your department, a vigorous heterodox economics thrives … there are social economists, feminist economists, interdisciplinary economists, ecological economists and hundreds of intellectuals and maverick professors who are openly critical of the neoclassical paradigm and fighting to overthrow it.

So there are really two ways for you to approach your studies over the next few years: You can ignore all of the screaming inconsistencies and accept the status quo. You can cross your fingers and hope the old paradigm has a generation or two left in it, enough for you to carve out a career. Or you can align yourself from the get-go with the mavericks. You can be an agitator, a provocateur, one of the students on campus who posts heterodox messages up on notice boards and openly challenges professors in class. You can bet your future career on a paradigm shift.

I hope this book inspires you to take the riskier, more exciting path.

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Fulfillment Paradox

We consume three times more than our grandparents – why aren’t we happier?

Happiness

On a Tuesday morning in June, a Vancouver man named Salim and his beloved decided to get married. They tracked down a minister and a few hours later in Choklit Park, realized they needed a witness. I was crossing the street when I saw three people waving me over. “Sorry, I’ve got a meeting,” I said, when they asked me to help. “It will take five minutes,” the minister assured me. “We’ll say the vows, you’ll sign the registrar and then you’ll be off.” So in Choklit Park – overlooking Yaletown’s office towers and million-dollar condos – Salim and his bride made their solemn oaths. I joined these strangers in a bubble of unexpected, collective happiness.

What can this bubble tell us about happiness and economics? Quite a lot.

For hundreds of years we have believed that increased material wealth makes us happier, and we have shaped our world accordingly. We have built big box stores along highways that can only be reached by car. We have built larger and larger vehicles that isolate us from others and emit dangerous levels of carbon. We work 40 hours a week – or more – to maintain this lifestyle. Why do we believe that making a lot of money makes us happy? “We didn’t evolve with iPods and fancy cars,” explains Christopher Barrington-Leigh, an economist at the University of British Columbia. “How could we possibly have a preset level of satisfaction that relates material things to how happy we are?”

For hundreds of years we have believed that increased material wealth makes us happier, and we have shaped our world accordingly.

While the world has certainly grown richer in the last 50 years, most happiness economists agree that happiness and life satisfaction levels have remained constant. The United States, for example, has failed to see higher happiness levels since the end of the Second World War, despite a quadrupling of their gdp. The New York Times recently reported that while incomes in China grew by 250 percent between 1994 and 2007, life satisfaction levels shrank drastically. The Easterlin Paradox, a theory developed in 1974, explains this phenomena: Money makes us happier until average incomes are achieved. After that, money’s affect on happiness is greatly reduced.

So if Hummers and iPods won’t make us happier, what will? Instead of concentrating on the accumulation of wealth, we should be concentrating on the quality of our human relationships. Social scientists and economists have shown that groups with strong social networks usually have lower crime rates, better child welfare and public health, and less political corruption … all of which translate into greater happiness and life satisfaction. Societies that are democratic, supportive of gender equality and more accepting of marginalized groups such as immigrants and homosexuals tend to be happier societies as well.

Back in Choklit Park, the minister handed me the marriage papers to sign. I was going to be late for my meeting, but something more important was going on. Salim and his new wife were trusting me to sign the document that could chart the course of their lives for many years to come. Married people generally report greater life satisfaction than unmarried people: One study suggests that this marriage could produce the same happiness as a quadrupling of Salim’s annual income. (Although if Salim’s proposal was as whimsical as he said it was, the effect of his marriage could be similar to that of winning the lottery: a sudden spike in happiness that quickly diminishes.)

The United States has failed to see higher happiness levels since the end of the Second World War.

In the distance the downtown sector shimmered with economic productivity, but in Choklit Park we had enacted a microcosm of pro-social, financially neutral, happiness-inducing activity that would slip below the radar of mainstream economics. As Senator Bobby Kennedy famously said to a group of Kansas students: “[gdp] measures everything, in short, except that which makes life worthwhile.” Will happinomics actually free us from the big box stores and the never-ending mutations of the iPod? Probably not. But people are paying attention. The government of Bhutan has been following a policy of Gross National Happiness since 1972, and French President Nicolas Sarkozy recently announced that happiness levels would be taken into account when measuring the country’s economic performance. In the coming years, we can expect to find these ideas beginning to influence our government policies. In the meantime, we can open ourselves to our communities and reap the dividends of a rich social life.

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