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Economics for Transition:

building an equitable and resilient local economy. Economics for Transition:. <Your Name here!> Transition Initiative. Ambitious agenda. The current economic crisis and its historical context (short recap) Understanding the structure of the economic system

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Economics for Transition:

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  1. building an equitable and resilient local economy Economics for Transition: <Your Name here!> Transition Initiative

  2. Ambitious agenda • The current economic crisis and its historical context (short recap) • Understanding the structure of the economic system • Understanding money and the banking system • Understanding the financial system • Responses and Alternatives

  3. Robert Reich summarizes • Connecting the dots about the US economy

  4. Time to understand the economic system that leads to these results… • Concept of Surplus • 5 types of economic systems • Inherent contradiction and instability

  5. The Concept of Surplus • Who produces it? • Who owns it? • Who distributes it?

  6. Five Economic Systems • Ancient (self-employed) system • Communitarian system • Slavery • Feudalism • Capitalism

  7. The Inherent Instability of Capitalism • Two major systemic failures in the last 80 years • In the same period 11 crises (recessions) • Labor as cost vs. aggregate demand • “investing the surplus” (media control - social narrative, government) • C-corporations and the profit imperative

  8. What can you buy with the surplus? • How about the best government money can buy? • Part one • Part two

  9. Would you like a social narrative with your Government purchase? • Welfare queens • The poor are lazy and deserve their lot • Don’t tax the job creators (the rich) • The economic crisis is due to excessive regulations • If you criticize capitalism you are a traitor or a commie • Raising taxes will hinder economic growth • The private sector is efficient the government is not • Social Security is a Ponzi scheme • Immigrants steal our jobs

  10. Robert Reich • Debunking 7 economic myths in 2’ 30”

  11. Problems with the current economic system • Unstable • Concentrates wealth and power • Tendency towards larger entities and reduced competition • Anti-democratic • Socially and environmentally damaging • Spectacularly wasteful

  12. What way forward? • Localize and democratize • Alternatives • Strategies • Defensive • Pro-active • Transformational

  13. The Money System • Documentary “The Money Fix” • What is money? • A short history of money • Barter • The invention of money (commonly accepted mean of exchange) • Money as debt

  14. Problems with the current monetary system • Money is created with issuance of debt • No money is created to repay the interests on the debt • Growth imperative otherwise… • Scarcity and guarantee of failures • Money creation power in the hand of private elite • Fundamentally undemocratic

  15. What way forward? • Localize and democratize • Alternatives • Free banking system • Democratic control of credit creation • Strategies • Expand gift exchange economy • Commodity exchange economy • Expand barter • Alternative currencies and LETS • Move your money

  16. The Public Banking Revolution

  17. The Financial System • Provides investment capital to finance economic growth • Allocates investment capital • The investments of today determine the world we will live in tomorrow • The narrow lens of investing

  18. Who Owns and Controls investment Capital?

  19. Problems with the current financial system • From capital as mean to capital as end in itself • Holding period and stock trading • Financialization of our economy • Fundamentally undemocratic

  20. Stock Trading Is About to Get 5.2 Milliseconds Faster Source: Bloomberg Business Week - March 29, 2012

  21. What way forward? • Localize and democratize • Alternatives • Community Capital • Strategies • Slow Money • Local Investing

  22. Systemic intervention points • Raise awareness, education • Build social capital • Democratize the workplace (workers owned cooperatives) • Move capital ownership into the hands of the community (Land Trusts, CDFI, local government ownership e.g. public utilities, etc.) • Support existing system alternatives

  23. Responses and Alternatives(personal) • Withdraw consent and complicity • Move your money • Turn off TV • Decolonize your mind (get your news from non-corporate media) • Build trust and resilience in the community (social capital)

  24. Responses and Alternatives(cultural and political) • Challenge outdated social narratives • Get educated through alternative non-corporate sources • Turn off TV • Stop gap political intervention at the national level • Engage with the political process at the local level

  25. Responses and Alternatives(economics and finance) • Move your money! • Support alternatives with purchases, employment and investments (local first!) • Sharing economy (from ownership to access/use) • Benefit Corporation as alternative legal structure • Develop and support alternative means of exchange (local currencies, time banks) • Develop gift exchange economy (Gift circles, resilience circles, pay forward, volunteering)

  26. Joining the Great Turning • Fight the system but love the people • Allies can come from the most unexpected places! • Keep it fun and light • Make it irresistible to join your cause!

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