Food Security, Politics, Economics, Sovereignty, and Justice
©Darryl Benjamin, April 1, 2015
by Darryl Benjamin
“Whether we and our politicians know it or not, Nature is party to all our deals and decisions, and she has more votes, a longer memory, and a sterner sense of justice than we do.” —Wendell Berry
As with the GMO debate, the challenge for food movements is a many-tentacled creature requiring not only vision and preparation of the desired change, but a strategic and tactical sense of the players, projects, and institutions at work within local, national and global food arenas.
The goals of ‘food security, politics, economics, sovereignty, and justice’ are resolving problems of hunger, malnutrition, food insecurity and environmental deterioration while achieving the systemic changes needed for sustainable, equitable, and democratic food systems. There is no single solution, no magic bullet, and no simple answer. In this chapter we will strive to understand, organize, and delve into the issues in a concentrated effort to clarify the problems and thereby identify workable solutions.
We will examine who determines food policy; definitions of food security, politics, economics, sovereignty, and justice; historical context of modern food systems; the New Economy Movement; and the roles of food movements, political associations, and economic relationships.
We will explore many of the rich diversity of experiences, projects and organizations fighting hunger. Models from locally- to system-driven are cropping up like plants breaking through cracks in the asphalt, an observation made by Harried Friedmann, Ph.D., Professor in the Department of Sociology (Mississauga) and Fellow of the Centre for International Studies at the University of Toronto.
But what will it take to change these systems? Chances are unlikely that social movements will succeed in inspiring citizens to action and force legislative transformation or reform. The tobacco industry, for example, was forced to reform only because of a variety of cumulative pressures. Isolated early efforts against the tobacco industry unsuccessfully accused it of negligent manufacture, negligent advertising, fraud, and violation of various state consumer protection statutes. It wasn’t until the 1990s that over 40 states united in accusing the tobacco industry of contributing to health problems among the population which resulted in significant costs to the states’ public health systems. They collectively sued the tobacco industry seeking monetary, equitable, and injunctive relief under various consumer-protection and antitrust laws. A ‘Master Settlement Agreement’ was finally reached in 1998.
What is the moral? In order to implement political restructuring, the food movement will need strong partnerships and the ability to distinguish between superficial reform and true structural change.
To illustrate some of the complexities and cross-currents churning in the food movement, consider these diverse populations and organizational movements: groups working for immediate food aid to the hungry v. those struggling for structural change to prevent hunger in the first place; those working with discriminated and underserved communities v. those working with the privileged and ‘overserved’ groups; those working on national hunger issues v. those working on international hunger; and global civil society (such as lobbyists) influencing the halls of Washington, DC, Brussels or Rome v. those national and local farmer organizations and NGOs struggling to implement fair, sustainable practices on the ground.
As the global food crisis unfolds, food movements are expected to grow and increase social pressure on the corporate food system. Assumed with pressures emerging from the climate, financial, and fuel crises, these forces could strengthen the counter-movement and help introduce reforms.
History: Rise of the Corporate Food System
The basic definition of a food system is a ‘rule-governed structure of production and consumption of food on a world scale’. Food system analysis combines political economy, political ecology and historical analysis to explain how particular relations of food production and consumption are central to the functioning and reproduction of global capitalism.
The First Food System. From 1870–1970 the industrialization in Europe was supplied by inexpensive food and raw materials from tropical and temperate settler colonies. In exchange, the US delivered wheat and meat – the dietary staples of the working class – to Europe.
The Second Food System. Marked by US food surpluses from 1940s–1960s, food began to move from the Northern Hemisphere to the Southern Hemisphere – in the opposite direction of the previous System – as industrial agriculture and the ‘Green Revolution’ took hold. This period was characterized by a concentration on high yields of a few cereal crops, especially maize, wheat, and rice combined with subsidized fertilizers, pesticides, irrigation and machinery. The consolidation of lands in fewer and fewer hands – along with the mechanization of formerly labor-intensive activities – pushed farmworkers onto insubstantial hillsides and into urban slums in unprecedented numbers. Global agribusiness contributed to a reduction of farms from seven million in 1935 to 1.9 million in 1997. By 1999 farm ownership of 500+ acres was 79% of all farmlands.
The Third Food System. Corporate institutionalization (1980–Present) distinguishes the current food system. Policies were implemented via Structural Adjustment Programs (SAPs) whose goals were to reduce tariffs, undo marketing boards, and eliminate price guarantees. They also had the effect of devastating national agricultural research and extension systems in the Global South. The vehicles used to establish these SAPs were Free Trade Agreements (FTAs) and international treaties. The establishment of the World Trade Organization (WTO) in 1995 formalized these agreements into the Agreement on Agriculture (AoA). This effectively institutionalized the process of global agricultural liberalization – the loosening of restrictions – by limiting the rights of sovereign states to regulate food and agriculture.
What defines today’s corporate food system? The following are but a few features: unprecedented market power and profits by a select few agrifood corporations; globalized animal protein chains; growing links between food and fuel economies; a ‘supermarket revolution’; liberalized global trade in food; increasingly concentrated land ownership; a shrinking natural resource base, and a growing opposition from food movements worldwide.
Hunger, the 2007-2008 Global Food Crisis, and the Corporate Food System
What were the contributing factors to the 2007-2008 Global Food Crisis? A number of issues, including increasing oil prices, greater demand for biofuels and trade decisions — such as export restrictions —affected world cereal prices. Contradictions were abundant: record levels of hunger for the world’s poor were at odds with record global harvests as well as record profits for the world’s major agrifoods corporations, suggesting a catastrophic disconnect between availability and distribution.
Food riots erupted in unprecedented numbers in Africa (Burkina Faso, Cameroon, Côte d’Ivoire, Egypt, Guinea, Madagascar, Mauritania, Morocco, Mozambique, Senegal, Somalia, Tunisia, and Zimbabwe), Asia (Bangladesh, India, Indonesia, and the Philippines), The Americas and the Caribbean (Argentina, El Salvador, Haiti, Mexico, Nicaragua, and Peru), and the Middle East (Jordan and Yemen).
In June of 2008, the World Bank reported that global food prices had risen 83 percent in three years and the FAO cited a 45 percent increase in their world food price index in just nine months.
According to a 2012 blog by Eric Holt Jimenez, Executive Director of Food First, in the Huffington Post, hunger is caused by “poverty and inequality, not scarcity.” For more than 20 years food production has outpaced global population growth by more than one and one-half times. So where’s the food problem? The problem rests in economics: although we can presently feed more than the anticipated 10 billion people by 2050, the on-ground truth is that subsistence farmers earn less than $2 per day and simply can’t afford to buy this food.
Most of the industrially-produced grain crops goes to biofuels and confined animal feedlots rather than food for the 1 billion hungry. It appears that the interests of global agribusiness are supplanting or superseding the needs of the poor. Feeding corporate interests — no matter how noble the intentions — does not equate to feeding the hungry of the world.
Liberalized Global Trade in Food
The results of thirty years of liberal trade policies left many developing countries dependent on the global market for basic food and grains. Taken as a whole, developing countries in the 1970s had yearly agricultural trade surpluses of US $1b; however, by 2000 the Global South had fallen into a deficit of US $11 billion per year (FAO 2004).
The corporate food system had created a systemic vulnerability due to a recipe of overproduction and Northern food aid, structural adjustment, international finance institutions, free trade agreements, green revolution farming models, and a selling off of state agricultural subsidies and investments.
Governments have been promising to end hunger for over 30 years:
1974 — 500 million hungry people in the developing world. The World Food Conference pledges to eradicate child hunger in 10 years.
1996 — 830 million hungry people. The World Food Summit pledges to reduce the number of hungry people by half by 2015.
1996 — 12% of the U.S. population is hungry. U.S. Farm Bill increases food nutrition programs (Food Stamps, Women and Children in need), and food banks augment donations of government surplus with local and industry-donated food.
2000 Millennium Summit—World leaders pledge to reduce extreme poverty and hunger by half by 2015.
2002 — 850 million hungry people. The World Food Summit+5 admits to poor progress on the Millennium Development goals.
2008 — 862 million hungry people. The FAO High-Level Conference on World Food Security announces that instead of reducing the ranks of the hungry to 400 million, hunger has increased. The World Bank re-calculates its projections for extreme poverty upward from one billion to 1.4 billion. Over three billion people live on less than $2 a day.
2008 — 12% of the U.S. population is still hungry. Despite $60 billion yearly in government food nutrition programs and the explosion of over 50,000 food banks and food pantries across the nation, one in six children in the United States go hungry each month and 35 million people cannot ensure minimum daily caloric requirements.
2013 — 48.8 million Americans, or 15.5 percent of the population — including 16.2 million children — live in households that lack the means to get enough nutritious food on a regular basis. As a result, they struggle with hunger at some time during the year.
“Market mechanisms conflict with natural mechanisms for production and exchange in traditional societies. Unregulated markets cause tremendous damage, as can be witnessed today in terms of countless economic crises, wars, environmental destruction, as well as damage to social networks. Because of this damage, market societies can only be maintained by force, as well as disinformation. To resolve crises on myriad fronts caused by the unregulated market, it is the need of the hour to find viable alternatives.” — Dr. Asad Zaman
Understanding Farm to Table Economics
Economics is largely taught as five “schools” of thought. A “school of thought” can be defined as a policy, philosophy, philosophical system, or organized set of beliefs. Economic schools of thought differ by financial systems, methodology, and assumptions used in order to describe economic patterns. The following are simplified definitions of the foremost schools of economics that impact Farm to Table issues:
Classical economics states that the role of economics is to find a way to produce things that people want in the most efficient way possible. Classical economists argue that people will naturally produce the things that others want in the most efficient way possible as long as they have the right environment. The recipe for the ‘right environment’ is low taxes, free markets, protection of private property, and a stable price environment. The focus is therefore on competitive advantage, competitive markets, land development, labor theory, and the division of labor.
Macroeconomics (Keynesian Economics). Study of the behavior of the whole (aggregate) economies or economic systems instead of the behavior of individuals, individual firms, or markets (which is the domain of Microeconomics). Macroeconomics is concerned primarily with the forecasting of national income, through the analysis of major economic factors that show predictable patterns and trends, and of their influence on one another. These factors include level of employment/unemployment, gross national product (GNP), balance of payments position, and prices (deflation or inflation). Macroeconomics also covers role of fiscal and monetary policies, economic growth, and determination of consumption and investment levels.
Institutional economics emphasizes the importance of nonmarket factors (such as social institutions) in influencing economic behavior. Economic analysis is based on institutional design and how institutions shape consumer choice and affect economic performance, including sociological factors, history, institutional development, political science, business organization, and law.
Marxian economics (also Neo-Marxian, Post-Marxian, and Radical Political Economics) argues that big business maintains selling prices at high levels while simultaneously cutting costs, increasing and maintaining advertising, and marketing their products. These big businesses are generally competing with a few other big businesses. Surpluses exceed consumer demand and are therefore funneled toward imperialistic and militaristic governmental goals which is the most efficient method to take advantage of surplus productivity. Marxian economics focus on worker exploitation (especially minorities), economic crises, distribution of the surplus product and value, and the labor theory of value.
Neoclassical economics is classical because it is based on the idea that competition leads to an efficient allocation of resources, and regulates economic activity that establishes equilibrium between demand and supply through the operation of market forces. It is neo because it differs from the classical argument in its analytic approach on mathematical methods which focus on price theory, constrained maximization (industrial efficiencies), an emphasis on aggregate measures (such as Gross Domestic Product) and narrow technical models whose objective is “balanced growth” between human capital and “economic capital.”
Environmental economics explores aspects of economic and political institutions that affect the development and management of natural resources and the environment. Emphasis is on costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming.
The Food Crisis as a Barometer of Emergency
Today’s food movements are an aggregate response to economic and environmental pressures employed by the corporate food system. The corporate food system, in turn, is a logical result of economic policies supported by theoreticians, ideologues, sociologists, politicians, mathematicians, and a host of other well-meaning specialists. But how are food movements able to effect social change? The extent and nature of reform or transformation will depend on a more integrated, humanistic approach toward setting and achieving realistic goals that are more evenly balanced vis-à-vis food production, distribution, and consumption.
Understanding this balance of forces is a daunting and inexact task; however, the necessity is indisputable. When a sixth of humanity is hungry – and half is at risk of hunger – it is a global disaster.
Analysis of the Relationship between Corporate Food Systems and Global Food Movements
Newton’s Law states, “For every action, there is an opposite or equal reaction.” The corporate food system’s tireless social and environmental strategies have prompted the formation of tens of thousands of local, national and international social movements concerned with food and agriculture. Before Newton stated his law, Plato said, “Excess generally causes reaction, and produces a change in the opposite direction, whether it be in the seasons, or in individuals, or in governments.” That food movements have emerged as a response to the perceived inadequacies of the corporate food system suggests a need for a correction to restore balance. Let’s take a look at a few of these responses — food movements represent widespread agendas: land reform and food sovereignty; sustainable and agroecological agriculture; ‘good, clean and fair’ food; fair trade; local food; and community food security.
To complicate matters relating to the food system, government, industry, big philanthropy and global institutions have waged war on hunger using an arsenal of institutions, programs, and campaigns. These efforts are meant to provide food aid and enhance agricultural development. Some of their methods include:
treating hunger and poverty as a business opportunity and call for solutions based on public–private partnerships and models of corporate eﬃciency and competitiveness;
insisting government and industry should be held accountable if they advance policies or enterprises that undermine the human right to food
renewing calls for reinvestment in agriculture and a revival of the Green Revolution, often accompanied by arguments in favor of genetically modified crops and sometimes by calls for reforms
To further highlight the complexity of the food system issues, there is the overarching context of the tension between those who want to stabilize the corporate food system and those who strive to change it (see chart below). Within this framework is a dizzying array of competing forces including class, race, systemic differences, discourses, models, and approaches. How to make sense of it all?
The Rise of the New Economics Movement
There is widespread agreement that a new economic model is needed if we are to transition to the new realities of global agricultural, ecological, and societal crises. Natural Economics may be the successor to our current Macroeconomic models. It is clear we need to restore damage to the planet by utilizing renewable energy and placing more emphasis on the productivity of natural resources rather than labor (human power).
Founded in the 1980s, The New Economics Movement is represented by its flagship New Economics Institute which refutes specialization; rather, it addresses a broad spectrum of human interaction including ecological economics, solidarity economy, degrowth, and Buddhist economics and rejects the central assumptions of mainstream neo-classical and Keynesian economic theory. Instead, it states that the planet should come first, and that it is human well-being, not economic growth, which is of paramount importance.
The New Economics Debate
Seeking solutions to the entangled tapestry of competing economic forces has resulted in a new model that is being embraced by leading economic, political, sociological, and psychological luminaries. Although ‘necessity is the mother of invention’ introduces new ideas and actions, founding them typically requires time and opportunity to grow into their own, to establish the range and scope of their influence, and to counter the old and entrenched models.
Nobel Laureate Economist Joseph Stieglitz referred to economics as a “faith-based religion.” New organizations such as the New Economy Working Group and the New Economics Institute are challenging the intellectual legitimacy and relevance of conventional economics thought. They seek to reverse the consequences of current economic policies that have led to environmental destruction, extreme inequality, and political corruption. The central tenant the New Economists seek to dismantle is the assumption of infinite growth on a finite planet. To date, it has been easy to point out the failings of the existing economic system but difficult to identify an alternative. With the emergence of these organizations another vision is coming into focus. Let’s explore that vision.
Four Points-of-View Representing New Economics
On May 30, 2013 the New Economy Working Group and the New Economics Institute co-sponsored a
“New Economy Transition Webinar Series.” The following is a synopsis of their statements:
David Korten, Chair of Yes Magazine, and Co-Chair, New Economy Working Group. Author of Agenda for a New Economy and When Corporations Rule the World. Former Harvard Business School faculty.
“Critiques of economics center on GDP. This is a valid, but rather narrow critique and generally ignored. Flawed intellectual foundations and a narrow lens do not look at the broader problems with economics that go much deeper. Ekonomia, which in ancient Greece meant the “management of the household” is forgotten. But modern economics starts with the firm, not the household. The human household writ large is the Biosphere. The Biosphere is the real basis for our economy — which is extremely complex on its own, and even more so when we add humans and their varied communities into the context.
Ultimately, it’s a cooperative dance. Life is the defining value and focuses on earth community: Symbioses with the biosphere. Maintaining life is the defining characteristic. Most species are part of the Earth Community Household and contribute to the overall functioning of the Household. Even bacteria pulls its weight. But some species are pathogens. The most dangerous for the Biosphere is the human species. Our behavior is not instinctively or genetically determined but by choice, which has led to economic dysfunction.
Our economics does not cause the dysfunction, but obscures our ability to recognize it and change. Economics as a discipline is hopelessly narrow in scope with little connection to the real world, supported by economics based on spurious assumptions. Economic models focus on financial exchange, and even then they focus on a narrow slice. Financial exchange is highly complex, but not as complex as the Biosphere left out of economic models. Economists ignore by domination, manipulation of the global system by financiers for private benefit using rules of their own choosing. Economics should be broad and inclusive and based on real world observations, but in fact is narrow and insular. Economists seem unconcerned by their inability to understand how the real economy behaves. Economists’ narrow and limited understanding of money, markets, institutions, human behavior, biology, power, ecology, and history can’t address our dysfunctional management of the earth community household.
We may need to look beyond economists to invent the economics that we need. We need open, creative thinkers to create the new economics.”
Neva R. Goodwin, Co-Director, Global Development and Environment Institute at Tufts University. Involved in variety of efforts to synthesize and institutionalize a “contextual economics” with real world relevance and to insert these perspectives into economics texts and courses.
What are the essential characteristics of a new paradigm? New economics should start by helping to define the goals of the economy: promote wellbeing in the present and the future. Does it need to be grounded in moral principles? It certainly must not deny moral principles. Economists need to be honest about identifying their values: 20th century economics pretends to be value-free (it is not the valuing of individuals and selfishness) but contributed to destructive cultural norms (what is right and wrong). Valuing of marketization and growth contributed contributes to the devaluation of sharing, caring, cooperation, and the role of government. Well-being in the present and in the future requires justice and a healthy Biosphere — that can’t happen without a just society and healthy ecological surroundings.
How can we help people understand how to move an economy toward these goals? Methodology is important. It has been a critical aspect of neoclassical economics: stymied a lot of other efforts. Bob Solo said, the great boast of this discipline is that it is fully axiomatized — basic axiom: humans are economically rational. It starts with a rational economic man — everything else is deduced from that. Wellbeing in present and future requires a just society.
Economics is a purely deductive science, but it doesn’t need to be. It needs to be a combination of deduction and induction, probably more on induction.
It needs to use theory as a generalization from observed facts and keep testing. It needs to frequently test generalization against new observations. Must have an alternative methodology. Must go back and forth between theories from generalizations of observed facts.
Third aspect: basic understanding of “What do we know and how do we know it?” 20th century economics and shared economics of how things work is laden with values; we must have alternative methodology. The starting point: To respect each individual as a source of knowledge about human beings.
Modest proposal: My work focuses on a respect for all individuals who have knowledge about human behavior. We need to respect each individual as a source of knowledge about human beings. We assume individual economist knows more about human motivations than can be summarized in any set of statements.
Context: show how economy is enabled and constrained by context. A useful understanding of the economy must rest on ecological and social context. How do environmental and social contexts influence the economy and in turn are affected by it?
Interdisciplinarity: Economists must use their own experience and judgment while drawing on a variety of disciplines and fields of knowledge — ecology, anthropology, systems theory, sociology, philosophy, psychology, nutrition, anthropology, political theory, and more. Have to talk in terms that non- economist can understand: Must be able to talk comfortably to people of other disciplines — must be able to talk jargon-free. Study enough outside of economics to know where to look for insights they lack themselves.
Institutions and Universities: These are people willing to accept the current discipline.
Human Capital that has been developed by people who have a stake in the system.
Obama’s Dilemma: if you’re not immersed in economics, how do you choose which economists to listen to? Who should be playing major policy roles? Individuals who are good at making money? Wall Street criterion? We need an alternative way to recognize expertise; we need better teaching materials.
The first requirement is to establish an alternative way to overcome Obama’s Dilemma.
John D. Erickson, Professor and Interim Dean, Rubenstein School of Environment and Natural Resources and Fellow of the Gund Institute for Ecological Economics. Past-President of the U.S. Society for Ecological Economics.
Where has Ecological Economics gone astray in pursuit of a life-serving economics? We have an opportunity to abandon faith-based economics and reclaim the moral and intellectual roots of economics. Full disclaimer: New Economics is old wine in a new bottle. To quote Carl Sagan, “If you wish to make an apple pie from scratch, you must first invent the universe.” That’s where we are. Ecological Economics starts with humans as a social primate in this physical system: Humans are a species within the ecosystem and we are bound by our own evolutionary roots. However, there is an opportunity to reclaim the moral imperative and the old core of economics. I would re-imagine economics as a life science.
Where has ecological economics been led astray? What we have is an economics based on an outmoded view of human behavior and an ideology that puts humans at the top of a hierarchy with dominion over the Earth. Herman Daly called for economics as a life science.
What went wrong: We treated social science as an independent way of thinking about the world, divorced from the natural sciences. We [ecological economists] accepted economics as a legitimate alternative, training scientists to think like economists. Then we began training biologists and ecologists to think like economists — when we should have done the exact opposite. We allowed economics to infect the social sciences — anthropology, political science, sociology — to think like economists do; put nature in models like economists. This is also true for political science and other social sciences.
Suggest a return to an economics closer to its moral philosophy roots, bounded by new discoveries of moral mind, our penchant for cooperation to get beyond resource bottlenecks (modern economics strips this away). New Economics needs to be based on new insights into the human animal and our capacity for cooperation and a new economy of human constraints regarding fundamental principles of the conservation of energy and life on earth.
Peter Brown, Professor, McGill School of Environment, Department of Geography, & Department of Natural Resources. Currently organizing a collaborative partnership of academic and non-academic institutions to advance the creation and application of a trans-disciplinary science-based ecological economics.
Agrees with what John Erickson says. We have started a new initiative between the University of Vermont, McGill University, and New York University to educate a large number of people in Environmental Economics. We’re calling it “Economics beyond Prophesy.” We educate people on a new Ecological Economics, as EE is in danger of going extinct.
We are in a new period: a period where there is substantial instability. There is a sense of crisis — crises of climate, financial, income gap, a population increase of two billion expected in the next 30 years, a crisis of people in radical poverty. We are fundamentally lost.
A business as usual approach won’t work. The disciplines are orphans. I use a metaphor of orphans: Disciplines who are alive but whose metaphysical parents are dead. This includes Ethics, Economics, Finance, and Governance. We have symbol systems and ways of thinking about the world that don’t match the way the world is.
A healthy, life-supporting economics must ground on theory of the universe — how does universe itself work? It’s not productive to leverage current model; that is counterproductive, not getting back to the fundamental basis of knowledge systems. There are many disciplines that are profoundly mistaken when matched to lessons of physics and biology, particularly post WWII. We’ve learned a lot about the physical world since then, but economics and related fields are orthogonal (at right angles) to these understandings. There has to be a compete re-think and re-grounding of these disciplines.
My paper on ethics looks at the three premises of Jefferson: life, liberty, and the pursuit of happiness — an odd set of premises that need to be substituted with different goals: Membership in Life’s Commonwealth (human consumption, human rights), Householding (care of surroundings so life flourishes); and Anthropic Thrift (low-entropy resources that make life possible) – now we’re using these resources with utter abandon. We have to go back to our place in the universe and start there.
Robert Johnson, Executive Director, Institute for New Economic Thinking and senior Fellow and Director, Global Finance Project, Franklin and Eleanor Roosevelt Institute. Former Managing Director at Soros Fund Management and Bankers Trust Company and former Chief Economist, US Senate Banking Committee.
Jürgen Habermas talked about how power behaves: “Legitimate if they can, accommodate if they must.” The traditional economic theory is not a legitimate system. It’s great to join this group that says economics is not a legitimate discipline. The legitimacy of this system is shattered. What are the constituent energies — what are the forces for reform? Can we get accommodation?
What is wrong? The biggest flaw in economics is the yearning for false certainty. A “life-serving paradigm” assumes we can achieve that certainty. Knowledge is imperfect and we are always sailing in the fog and it is an anxious process. We have to resist temptation to substitute false certainty for the humility of inquiry. The greater the uncertainty; the greater the yearning for demagogues to fill the void.
A life-serving economic paradigm would envision and derive goals that would produce mentally and physically healthy human beings.
Ecological economics: what is going wrong there? Pointing out the ecological dangers is going right. But not understanding that there is more at play than just the end-game damage of destroying the environment. Understanding the resistance of well-meaning people to change is critical. People think they will lose their job in the name of making this a better system. It is very daunting and frightening to a large number of people. Our macroeconomic ideologies are producing substantial, broad-based, wide-spread underemployment over the world and sets up barriers to change.
The economic profession is frozen and antiseptic — it creates a false certainty in equations. The challenge is to produce a new way of seeing things. People who are attracted to economics like the certainty and simplicity (though also complexity) of economics. They like to stay in an antiseptic environment.
There is strong social pressure to stay in current methodology. Challenge must come from outside. My own intuition is that in ranting at that profession we encourage them to circle the wagons. By lancing at the profession, we are actually fortifying their resolve. We need to breathe affirmative ideas, and be aware that we are in an emotional context. Bad ideas stick if they are emotionally satisfying. Autonomous people practicing antiseptic economics will be further marginalized, ridiculed, and bypassed.
We must beat a bad vision with a better vision: we have to be in the business of creating a better vision. We need to be in the business of creating affirmative visions and attendant to emotions. Not in a Darwinistic process where best ideas win; we’re in an emotional process, we need to unlock emotions. It is about vision and emotion. As Antoine de Saint-Exupery said, “It’s only with the heart that one can truly see.”
Bad ideas that are gratifying are much more resilient than they should be. We have to learn to unlock emotions. Reinjection of the heart: challenge the enlightenment primacy of the mind. It is only with the heart that one can truly see. We need a little more sense of humor to inspire people to come out of their foxholes and help create the new discipline.
The Future of the New Economy: Emerging Outlook
What are the prospects of the New Economy taking hold? Can a new paradigm that challenges the conventions of ownership and constant growth be replaced by a green and socially responsible economy?
There is a currently unseen but gathering momentum for change. This change is characterized by a shift from corporate bottom-line thinking to egalitarian, green, worker-owned cooperatives. The following are examples concepts, organizations, and businesses contributing to the transformation:
Social Enterprises. There is a growing trend for ‘social enterprises’ that use profits to achieve environmental, social or community-serving ends.
Urban Agriculture. As discussed in Chapter 5, “Growing New Farmers,” urban agriculture is escalating in response to GMOs, offering non-processed alternatives.
Non-profit Corporations. There are more than 1.6 million nonprofit corporations involved with economic activity.
Employee-owned For-profit Corporations. There are more than 11,000 companies owned entirely or in significant part by some 13.6 million employees. Benefits include Employee Stock Ownership Plans (ESOPs).
Limiting Executive-Pay to Worker-Pay Ratio. Some companies are establishing policies that require, for example, no one be paid more than five times higher than the average employee. In 2011, the average CEO was paid 230 times the salary of an average worker. It has been criticized not only as excessive, but also for “rewarding failure.”
B Corporations. “B Corp certification is to sustainable business what Fair Trade certification is to coffee or USDA Organic certification is to milk.” B Corporations (“B” stands for “Benefit”) promote transparency while pursuing environmental and social goals. An example is King Arthur flour, a highly successful Vermont-based, 100 percent employee-owned ESOP plainly states that “making money in itself is not our highest priority.” As of January 2013 California, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, South Carolina, Vermont, and Virginia, and Washington had all passed legislation allowing for the creation of benefit corporations with many others likely to follow.
Cooperatives. A cooperative is a business. There are at least 130 million members — more than one in three Americans — who have coop memberships. Co-ops range in size from small store-fronts to Fortune 500 companies. In many ways, they’re like any other business; but in several important ways they’re unique and different. Cooperatives are owned and democratically controlled by their members — the people who use the co-op’s services or buy its goods — not by outside investors. Co-op members elect their board of directors from within the membership; cooperatives return surplus revenues — income over expenses and investment — to members proportionate to their use of the cooperative, not proportionate to their “investment” or ownership share; cooperatives are motivated not just by profit, but also by service, to meet their members’ needs for affordable and high quality goods or services; cooperatives exist primarily to serve their members; and cooperatives pay taxes on income kept within the co-op for investment and reserves. Surplus revenues from the co-op are returned to individual members who pay taxes on that income.
Triple Bottom Line Companies (Also called “TBL,” “3BL,” “People, Planet, Profit” and “The Three Pillars.”). A triple bottom line measures the company’s economic value, “people account” — which measures the company’s degree of social responsibility and the company’s “planet account” — which measures the company’s environmental responsibility.
The American Sustainable Business Council (ASBC). The Council spans a growing network of over 60 business associations across the United States, representing over 200,000 businesses and 300,000 business executives, owners, investors, and others. “The mission of American Sustainable Business Council is to advance public policies that foster a vibrant, just, and sustainable economy. We do this in two ways: first, we research and communicate to businesses, policy makers, and the media how a sustainable economy based on broad prosperity is good for business and good for America. Second, we provide a platform that enables businesses and business associations to engage executives, owners, investors, entrepreneurs, and other business professionals in the public debate.” A sampling of ASBC Partners include: California Business Alliance for a Green Economy; Count Me In for Women’s Economic Independence; Evergreen Cooperatives; Fair Trade Federation; Freelancers Union; Green America; Green Business Networking; Manhattan Chamber of Commerce; New York State Sustainable Business Council; Northwest Atlantic Marine Alliance (NAMA); Restaurants Advancing Industry Standards in Employment (RAISE); Sustainable Business Alliance; Sustainable Food Trade Association; US Federation of Worker Cooperatives; Vermont Businesses for Social Responsibility (VBSR); and World Business Academy. A sampling of ASBC Business Supporters include Ben & Jerry’s, Dansko, Eileen Fisher, Naturepedic, New Belgium Brewing, Ogden Publications, Patagonia, Seventh Generation, Stonyfield Farm, and Underground.
The Business Alliance for Local Living Economies (BALLE). With a growing North American alliance of nearly 80 fully autonomous local business networks with their own names, missions, and initiatives, made up of more than 30,000 US and Canadian entrepreneurs, BALLE focuses on uniting locally-owned businesses and initiatives to build a sustainable ecology and economy. Their methodology is to build long-term economic empowerment and prosperity through local business ownership, economic justice, cultural diversity, and environmental stewardship. They plan to reach these goals by concentrating on Sustainable agriculture, Renewable energy, Zero waste manufacturing, Independent retail, Green building, and Community capital. Their long-term goal is to building a global system of “living communities” of interconnected local communities that function in harmony with their ecosystems.
New Economy Coalition (NEC). Founded by Sarah Stranahan, a longtime board member at the Needmor Fund, Stranahan says, “The old models have not delivered. Something new is required.” NEC is a network of individuals and organizations interacting within a broad framework of shared objectives, open to many perspectives and ideas. They are committed to change the political economic system through mutual learning and collaborative action. They function as a clearinghouse for information and research produced by member organizations. As of January 2014 there were 200 to 250 new-economy leaders and organization members. A sampling of members include: American Sustainable Business Council; Business Alliance For Local Living Economies (BALLE); Canadian Community Economic Development Network; The Capital Institute; Conservation Law Foundation; Cooperative Development Institute; Demos; Economists For Equity and Environment; Freelancers Union; Global Development And Environment Institute at Tufts University; GreenAmerica; Institute for Agriculture and Trade Policy; The Liberty Tree Foundation; The Marion Institute; Patagonia; Program in Nature-Culture-Sustainability Studies at RISD; Public Banking Institute; Schumacher Center for a New Economics (SCNE); Senior Entrepreneurship Works; Slow Money; Small Planet Institute; Sustainable Economies Law Center; Trillium Asset Management; US Federation of Worker Cooperatives; and Vermonters for a New Economy.
Dashboards: New Economic Indicators. The New Economics Institute (NEI) and progressive think tank Demos are working to replace the perceived outmoded and faulty indicator of Gross National Product (GNP). The problem with GNP is that it makes no distinction between labor that generates pollution and labor that cleans it up. By cancelling each other the net gain is zero. The GNP, however, regards it as a positive gain. NEI and Demos are developing Economic Dashboards that measure genuine economic gain, environmental destruction, and social benefits. Economic Dashboards currently in use provide regularly updated metrics of key Economic and Market Indicators to assess current economic health and trends include: Corporate debt, Market volatility, Interest rates, Mortgage delinquencies, Core inflation, Employment growth, Consumer spending, and Economic expansion. Another example is the Dashboard of Sustainability, developed by members of the Consultative Group on Sustainable Development Indicators (CGSDI). These indicators present complex relationships between Economic, Social and Environmental issues and are based on Millennium Development Goals (MDGs) established at the Millenium Summit of the United Nations. Indicators include: Eradicating extreme poverty and hunger; achieving universal primary education; promoting gender equality and empowering women; reducing child mortality rates; improving maternal health; combating HIV/AIDS, malaria, and other diseases; ensuring environmental sustainability and developing a global partnership for development.
Challenges to the New Economy
It is not an easy task to reorganize an existing system. There are three major challenges the New Economy faces:
Less is More. Many New Economy advocates argue that conventionally-defined economic growth and environmental issues such as global warming must be slowed or reversed. Zero- or reduced growth systems are difficult to promote with rampant unemployment. Further, it is construed as a direct attack on the core principles of the current economic system. It runs counter to the Keynesian strategy of constant growth.
Reduced Influence of Labor Movement. Nationally, unions lost nearly 400,000 members in 2012 alone, down to 11.3 percent of the workforce, or 6.6 percent of private-sector workers. Many new-economy advocates hold progressive views on most issues of concern to labor including a new emphasis on agroecologically-produced local food; investment in underserved communities; new business models and community benefit packages for production, processing, and retail; better wages for agriculture workers; solidarity economies; and land and food access.
Implementing Systemic Change. As noted earlier, there is an ongoing conflict between those who wish to “fix” the current system and those who wish to transform it. Proponents of systemic changes for the New Economy face stiff opposition by Washington, whose efforts are more focused on putting out fires rather than considering deeper strategic issues, especially when they challenge current prevailing beliefs.
Hope for the Future
Many people argue or believe that lasting change cannot come without a total failure of existing structures; a social, economic, and political unravelling or breakdown of current systems. This stance, however, is not necessarily borne out by historical precedent. It is possible to achieve food security, justice, and sovereignty by the slow and steady convergence of the efforts described above. Once unified, it is possible they will erupt with the same game-changing intensity as the civil rights movement, feminism, and gay rights movements.
The food crisis has sparked calls for reform and the worldwide growth of food movements that challenge the legitimacy and power of the corporate food system.
Economic and Social movements are growing, spreading, and occupying key political spaces in global and local institutions, such as the Committee on World Food Security and local food policy councils. They are also coming together across barriers of class, race and gender to realize food systems change.
As the global food crisis spreads and deepens, food movements are likely to grow and increase social and economic pressure on the corporate food system. When combined with pressure emerging from the climate, financial, and fuel crises, these expressions could intensify.
It is important to build social convergence within the movement’s diversity. The political effectiveness — sustainability, equity, food justice and food sovereignty — of this coming together will depend on the nature and strength of the strategic alliances between the disparate groups of the food movement. The common-ground demands for food justice, immigration rights, and labor rights are one example of an area of important strategic convergence.
The transformation of the corporate food system would require a transformation from societies embedded in the market economy to economies and markets that are embedded in society. If food movements can play a radical role in food system change, they may go a long way towards driving the social transformations needed to ensure broader systemic changes.
Background Resource Reading
Peter G. Brown, “Ethics for Economics in the Anthropocene.”
Jon D. Erickson, Presidential address, 2011 U.S. Society for Ecological Economics
Neva Goodwin, “From Outer Circle to Center Stage: The Maturation of Heterodox Economics.”
David Korten, “A Living World Economy Needs a Living World Economics“
Robert Nadeau, “Brother, Can You Spare Me a Planet?”
Robert Johnson, “Economists: A Profession at Sea“