Tag Archives: growth imperative

Newsletter – March, 2014

Contents. (This edition will be timely but brief).

Back to America

My latest article

Degrowth Conference on Social Equity and Ecological Sustainability

Malaysia

Hi, Well it’s just a matter of hours now before I board my flight that will take me back to the United States. I always find other places and cultures interesting, but four months abroad has been long enough and I’m looking forward to being back in more familiar territory, seeing friends and family, and discovering what the universe has to show me next. To begin with, I’ll be enjoying the relative calm and quiet of the Arizona desert, then looking for a more permanent place to hang my hat.

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My latest article

I spent a good amount of time over the past few weeks writing an article that I was invited to submit for publication in an online journal, Transformation, published by Open Democracy. I’m pleased to announce that my article, Money, debt and the end of the growth imperative was published yesterday. You can read it here,

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Upcoming Degrowth Conference on Social Equity and Ecological Sustainability. Call for papers extended to March 14th

A recent message from Birte Ewers announces that the 4th International Degrowth Conference to be held in Leipzig Sept 2-6, and that the original deadline for submissions of short papers has been extended. The deadlines for other formats have expired but deadline for “short papers” is now March 14th. The review process will be concluded by the end of April. See the conference website at http://leipzig.degrowth.org/en/http://leipzig.degrowth.org/en/ and the Call for Papers at  http://leipzig.degrowth.org/en/call-for-papers/ for details.

About The Conference:

4th International Degrowth Conference on Social Equity and Ecological Sustainability – Bridging movements and research for the great transformation.

The International Degrowth Conference has reached its fourth venue. Since Paris 2008 the debate on how to move away from a growth-oriented economy towards a more sustainable society has drawn world-wide attention. The fourth international conference will take place in a country that is considered as the European engine of economic growth.

Different traditions of growth critique, such as the concept of a post-growth society stemming from the German-speaking community and the French and Southern European degrowth debate, are invited to a fruitful dialogue. The conference seeks to bring practitioners, activists and scientists together and encompasses various formats for presentations, interaction, workshops, and exchange.

The 4th conference will address following thematic threads (abstracts for short papers can be submitted to any of them):

- Organizing Society (Emancipatory politics, participation, institutions)

- Building a social and ecological economy ((Re-)productivity, commons, society-nature relations)

- Living conviviality (Buen vivir. Open knowledge. Convivial technology)

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Malaysia

For my current journey in Southeast Asia, Malaysia (Kuala Lumpur) serves as both my entry point and exit point. Flights to and from KL tend to be cheaper even than Bangkok, and I always enjoy spending some time in Penang, which is only about a 4 ½ hour bus ride from KL Thailand is easily reached from there.

Malaysia is quite a developed country, though it still has some third world charm, as well as annoyances, like the roar of motorbikes zipping around through every available space, making it difficult and dangerous for pedestrians to cross the streets. Sidewalks, if they exist at all are usually obstructed by parked motorbikes, or food stalls, or even workshops that flow out into the public spaces.

One interesting thing about Malaysia is language. Almost everyone speaks some English and signage is usually in both English and Bahasa Melayu, or Malay language, which derives many words from English. Malays have developed what seems to me to be a very reasonable pattern of phonetic spelling.

Here are a few familiar English words with their phonetic Malay spelling, which I think we should adopt.

Complex

Kompleks

Bus

Bas

Central

Sentral

College

Kolej

Bicycle

Bisikal

Community

Komuniti

Counter

Kaunter

My pictures from my November visit to Penang

https://picasaweb.google.com/112258124863172998784/201311Penang?authuser=0&authkey=Gv1sRgCMnztYHzp4268gE&feat=directlink

Pictures from my February/March visit to Penang and Kuala Lumpur have not yet been uploaded.

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Joke of the month

Certainly not original, but here it is; some of you may appreciate it.

You know you’re old when you and your teeth no longer sleep together.

May you enjoy this season when life springs anew,

Thomas

Money, debt and the end of the growth imperative

My latest article, Money, debt and the end of the growth imperative, was published today (March 3) in the online journal, Transformation. Read it here. –t.h.g.

Counting the Cost – Money for nothing

Tarek El Diwany and Jem Bendell have done a great job in this Al Jazeera interview program explaining the dysfunctional features that are built into the corrupt global system of money and banking. They also cover Islamic banking and mutual credit clearing. This is a “must watch” video.—t.h.g.

Fossil Fuels, Debt-money, and the Growth Economy

The video below (300 Years of FOSSIL FUELS in 300 Seconds), from the Post Carbon Institute, is very well done. It tells the story about the development of industrial civilization based on fossil fuel energy, and the mega-crisis that now confronts us. While it is inaccurate in pointing to fossil fuels as the main driver of economic growth, it is well worth the five minutes it takes to watch it.

As I’ve been saying for a long time, the availability of cheap fossil fuel energy has been the enabler of continuous economic growth, but it is not the driver. The driver of the growth imperative which has been operating for about the past 300 years is the political interest-based debt-money system. It is a system that creates money based on interest bearing “loans.” It is the compound interest that is built into the global money system that requires the continual expansion of debt, which in turn forces the physical expansion of economic output. Now nature is putting on the brakes, telling us it’s time to STOP.

We can make the transition to a regenerative economy consciously and deliberately, or we can try to deal with the developing problems on an ad hoc basis in the midst of inevitable chaos. The end of the industrial era should not be mourned, nor does it need to be painful. We have before us the opportunity to create a happier, more peaceful world, one in which we all have enough to live a dignified and fulfilling life with enough time and energy to restore our communities and our environment. For more about that, see my presentation on The Butterfly Society.—t.h.g.

Exponential growth-a key concept

In all of my writings I’ve tried to make clear that there is inherent in the political money system a growth imperative. That results from the fact that money is created by banks as interest-bearing debt. The compounding of interest causes debt to grow as time passes, not at a steady rate, but at an ever-increasing rate. At some point the amount of debt increases so rapidly that it overwhelms the ability of the real economy to carry it. We now seem to have reach that point and our civilization is in crisis.

This growth imperative based on debt compounding is the primary engine that is driving us to destruction, but debt is not the only thing that is growing exponentially. This video is part of Chris Martenson’s Crash Course. In it, he explains very clearly how compounding works. His entire Crash Course is highly recommended. –t.h.g.

The World’s Ominous Reckoning

My latest article, The World’s Ominous Reckoning, is featured on Reality Sandwich. It was also excerpted and posted on the P2P Foundation blog.

For your convenience, I also post it here.

The World’s Ominous Reckoning

By Thomas H. Greco

In a recent Washington Post article titled Europe’s ominous reckoning [1], economist Robert Samuelson correctly argued that “Ireland’s economic crisis is … not about Ireland.” What he seems to not recognize is that “Europe’s ominous reckoning” is not about Europe.

The reckoning will be global because the money and banking regime is global — and deeply flawed.

Discussions about possible solutions to the debt crisis tend to degenerate into ideological bickering because ideologies provides an inadequate framework in which to understand the nature of the problem and discover real effective solutions. Fiscal conservatives want to cut social spending so as to avoid raising taxes on the rich and privileged class. Political liberals have largely caved in to the same interests because they think that supporting the privileged class’s agenda is their only hope of gaining power. They will pay lip service to a social agenda and throw a few crumbs to the masses in an attempt to get elected, but they will ultimately advance the same elitist agenda, as have Presidents Clinton and Obama. Progressives argue that budgets can be balanced by cutting the military budget and raising taxes on the rich, but they remain impotent because political power has been so thoroughly centralized that popular progressive agendas have not a prayer of being implemented. Even if they were, they would simply make matters worse because under the present money and banking regime, a balanced government budget is not possible. How can the debate move beyond ideologies, and common ground be found?

Samuelson, like almost all conventionally trained economists, blames the woes of Ireland, and every other country, on failures in policy. He says, “Most European economies suffer from the ill effects of some combination of easy money, unsustainable social spending and big budget deficits,” but he fails to address the deeper questions of why? Why has money been easy? Why is social spending unsustainable? Why have budget deficits been too big?

It is not only a problem of European economies, it is a problem for virtually all national economies. As Samuelson points out, even the most prosperous countries have accumulated enormous debts. The governments of Germany and France, for example, have, respectively, gross debts of 76 percent and 86 percent of GDP (GDP is a measure of total economic output). The debt of the United States government is projected to exceed 100% of GDP within the next couple of years. And this picture does not even include the debts of lower levels of government — states, counties, and municipalities — or all of the private sector debt that burdens companies and individuals.

If the world has become so prosperous and productive, why all this debt, and why does it continue to grow ever more rapidly?

It is not a matter of policy, i.e., how we operate a flawed system. The problem is structural and systemic. The system is designed to create debt, and ever more of it. Like a pernicious cancer, debt is a parasite that is killing us, and in the end a parasite will die along with its host. How much of our well-being shall we sacrifice to keep feeding this cancer? Are we willing to starve ourselves and our children, to endure cuts in spending for education and public services, to sacrifice our hard-won freedoms, in order to sustain a system that despoils the earth, destroys the social fabric,  and creates ever greater economic inequities?

A few have been calling for “debt forgiveness,” a remedy analogous to cancer surgery. That may be a good start, but even that does no go far enough. We can excise the cancer, but if we do not recognize and eliminate its fundamental cause it will simply grow back. We can restart the game of Monopoly, but the outcome of the next round will be very much like that of the previous round unless we change the rules — or choose to play a different game.

The fact is, there is a debt imperative that is built into the global system of money and banking, and debt is eating us alive. As I wrote in my first book more than 20 years ago, our money system, based as it is on banks’ lending money into circulation at compound interest, requires debt to grow with the passage of time. Virtually all of the money today is created when banks make “loans.” The compounding of interest on these loans means that debt must grow as time goes on, not slowly, but at an accelerating rate. Ever greater amounts of money must be borrowed into circulation for this system to continue. When the private sector debt can no longer be expanded, government assumes the role of “borrower of last resort.” That is why government budget deficits have become chronic and continue to grow. In the latest cycle of Bubble and Bust, governments are rescuing the banks by taking “toxic” debt off their hands and giving them government bonds in return. In this way, the system can be sustained a little bit longer, but at costs that have yet to be tallied.

The current global predicament is the late-stage symptom of this fundamental flaw. Every political currency collectivizes credit. It is our credit that supports each national currency. We have allowed the banks to control our credit and we pay them interest for the “privilege” of accessing some of it as bank “loans.”

What must be done? The answer is simple, but few have been willing to hear it: interest must be eliminated from the money system to put an end to the growth imperative. To modern economists, such a proposition is heresy, foolish even, unthinkable! Interest to them is an essential inducement to save and invest and a necessary means of regulating credit and the economy. Nonsense, I say, a gross error and delusion fostered by incessant propaganda, media hype, and financial mumbo-jumbo. In an economy that is free from inflation, preservation of one’s capital is sufficient motivation for saving, and return on productive investments can be had in the form of ownership shares (so-called equity investment) instead of interest on debt. Such equity investments share both the rewards and the risks inherent in a productive enterprise, making the relationship between the user of funds and the provider of funds more harmonious and fair. As for regulating credit, we don’t need interest to do that; we can merely decide to withhold or offer credit, to whom, for what purpose, and in what amounts.

We need to learn to play a different game. We need to organize an entirely new structure of money, banking, and finance, one that is interest-free, decentralized, and controlled, not by banks or central governments, but by businesses and individuals that associate and organize themselves into cashless trading networks. This is a way to reclaim “the credit commons” from monopoly control and create healthy community economies.

In brief, any group of traders can organize to allocate their own collective credit amongst themselves, interest-free. This is merely an extension of the common business practice of selling on open account — “I’ll ship you the goods now and you can pay me later,” except it is organized, not on a bilateral basis, but within a community of many buyers and sellers. Done on a large enough scale that includes a sufficiently broad range of goods and services spanning all levels of the supply chain from retail, to wholesale, to manufacturing, to basic commodities, such systems can avoid the dysfunctions inherent in conventional money and banking and open the way to more harmonious and mutually beneficial trading relationships that enable the emergence of sustainable economies and promote the common good.

This approach is no pie-in-the-sky pipe dream, it is proven and well established. Known as mutual credit clearing, it is a process that is used by scores of commercial “barter” companies around the world to provide cashless trading for their business members. In this process, the things you sell pay for the things you buy without using money as an intermediate exchange medium. It’s as simple as that. According to the International Reciprocal Trade Association (IRTA), a major trade association for the industry, “IRTA Member companies using the “Modern Trade and Barter” process, made it possible for over 400,000 companies World Wide to utilize their excess business capacities and underperforming assets, to earn an estimated $12 billion dollars in previously lost and wasted revenues.”

Perhaps the best example of a credit clearing exchange that has been successful over a long period of time is the WIR Economic Circle Cooperative. Founded in Switzerland as a self-help organization in 1934 in the midst of the Great Depression, WIR provided a means for its business members to trade with one another despite the shortage of official money in circulation. Over three-quarters of a century, in good time and bad, WIR has continued to thrive. Its more than 60,000 members throughout Switzerland trade about $2 billion worth of goods and services annually.

Yes, it is possible to transcend the dysfunctional money and banking system and to take back our power from bankers and politicians who use it to abuse and exploit us. We do it, not by petitioning politicians who are already bought and paid for by an ever more powerful elite group, but by using the power that is already ours to use the resources we have to support each other’s productivity and to give credit where credit is due.

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The financial reforms will fail!

It seems that everything the government does to fix the economy only makes matters worse. Why? Because they are trying to sustain a moribund system of money, banking, and finance. The recent passage of a “financial reform” measure by Congress, while hailed as a measure to prevent a recurrence of the abuses of the recent past, will do nothing of the kind. In fact, it will enable them to continue and will further strengthen the huge financial institutions that have been robbing the American people.

Peter Schiff has a better understanding of the situation than most financial pundits. While even he does not seem to get quite to the root of what ails our economy and our society, his insights go deeper than most.  He offers three reasons why the new law will fail do achieve its stated purpose:

1. The bill doesn’t get to the root causes of the crisis.

2. The law fails to end ‘Too Big to Fail.’

3. More regulation means higher costs for smaller financial services firms, reducing competition.

He explains this in this brief video.

I have pointed out in my books and writings that the very nature of the money creation process is at fault. The creation of money by banks on the basis of interest-bearing debt creates a “debt imperative,” which in turn creates an economic “growth imperative.” Since the physical limits to growth have been reached on planet Earth, this money system cannot be sustained, yet every action by the governments of the developed nations attempts to do just that.

The crisis will continue to deepen until people create parallel decentralized systems of exchange (money) and finance that enhance the vitality of their communities and local economies. –t.h.g.