Sophia the Robot speaking to UN Deputy Secretary-General Amina Mohammed at UN Headquarters in 2017. Credit: UN Photo/Manuel Elias

By Hazel Henderson
ST AUGUSTINE, Florida, Jun 17 2019 (IPS)

We humans are at the absurd stage in our technological evolution when we seem to have abandoned our common sense. Billions are spent by governments, corporations and investors in training computer-based algorithms (i.e. computer programs) in today’s mindless rush to create so-called “artificial” intelligence, widely advertised as AI.

Meanwhile, training our children and their brains (already superior to computer algorithms) is under-funded, schools are dilapidated, sited in run-down, often polluted areas while our teachers are poorly paid and need greater respect. How did our national priorities get so skewed?

In reality, there is nothing artificial about these algorithms or their intelligence, and the term “AI” is a mystification! The term that describes the reality is “Human-Trained Machine Learning”, in today’s mad scramble to train these algorithms to mimic human intelligence and brain functioning.

In the techie magazine WIRED, October 2018, we meet a pioneering computer scientist, Fei-Fei LI, testifying at a Congressional hearing, who underlines this truth. She said, “Humans train these algorithms” and she talked about the horrendous mistakes these machines make in mis-identifying people, using the term “bias in—bias out” updating the old computer saying, “garbage in—garbage out”.

Professor LI described how we are ceding our authority to these algorithms to judge who gets hired, who goes to jail, who gets a loan, a mortgage or good insurance rates — and how these machines code our behavior, change our rules and our lives.

She is now back at Stanford University after a time as an ethicist at Google and has started a foundation to promote the truth about AI, since she feels responsible for her role in inventing some of these algorithms herself.

As a celebrated pioneer of this field, Professor LI says “There’s nothing artificial about AI. It’s inspired by people, it’s created by people and more importantly, it impacts people”.

So how did Silicon Valley invade our culture and worldwide technology programs with its short-term, money -obsessed values: “move fast and break things”; disrupt the current systems while rushing to scale and cash out with an IPO?

These values are discussed by two insiders in shocking detail, by Antonio G. Martinez in “Chaos Monkeys” (2016) and Bloomberg’s Emily Chang in “Brotopia” (2018). These authors explain a lot about how /training these algorithms went so wrong: subconsciously mimicking their mostly male, misogynist, often white entrepreneurs and techies with their money-making monopolistic biases and often adolescent, libertarian fantasies.

I also explored all this in my article “The Future of Democracy Challenged in the Digital Age”, CADMUS, October 2018, describing all these issues of the takeover by AI of our economic sectors; from manufacturing, transport, education, retail, media, law, medicine, agriculture, to banking, insurance and finance.

While many of these sectors have become more efficient and profitable for the shareholders, my conclusion in “The Idiocy of Things” critiqued the connecting of all appliances in so-called “smart homes” as quite hazardous and an invasion of privacy.

I urged humans to take back control from the over-funded, over-invested, over-paid computer and information science sectors too often focused on corporate efficiency and cost-saving goals driven by the profit targets demanded by Wall Street.

I have called for an extension of the English law, settled in the year 1215: “habeas corpus” affirming that humans own their own bodies. This extension would cover ownership of our brains and all our information we generate in an updated “information habeas corpus”.

Since May 2018, European law has ratified this with its General Data Protection Regulation (GDPR), which stipulates that individuals using social media platforms, or any other social system do indeed retain ownership of all their personal data.

So, laws are beginning to catch up with the inhuman uses of human beings, with our hard-earned skills being used to train algorithms that then replace us! The computer algorithm trainers then employ out of-work people surviving in the gig economy on Mechanical Turk and Task Rabbit sites, in minimum, hourly- paid data entry tasks to train these algorithms!

Scientist Jaron Lanier in his “Ten Arguments for Deleting Your Social Media Accounts Now” (2018) shows how social media are manipulating us with algorithms to engineer changes in our behavior, by engaging our attention with clickbait and content that arouses our emotions, fears and rage, playing on some of the divisions in our society to keep us on their sites.

This helps drive ad sales and their gargantuan profits and rapid global growth. Time to rethink all this, beyond the dire alarms raised by Bill Gates, Elon Musk and the late Stephen Hawking that these algorithms we are teaching will soon take over and may harm or kill us as did HAL in the movie “2001”.

Why indeed are we spending all this money to train machines while short-changing our children, our teachers and schools? Training our children’s brains must take priority!

Instead of training machines to hijack our attention and sell our personal data to marketers for profit — let’s steer funds into tripling efforts to train and pay our teachers, upgrade schools and curricula with courses on civic responsibility, justice, community values, freedoms under habeas corpus (women also own their own bodies!) and how ethics and trust are the basis of all market and societies.

Why all the expensive efforts to enhance machine learning to teach algorithms to recognize human faces, guide killer drones, falsify video images and further modify our behavior and capture our eyeballs with click bait, devising and spreading content that angers and outrages — further dividing us and disrupting democracies?

Let’s rein in the Big Brother ambitions of the new techno-oligopolists. As a wise NASA scientist, following Norbert Weiner’s Human Use of Human Beings (1950), reminded us in 1965 about the value of humans: “Man (sic) is the lowest-cost, 150 pound, nonlinear all-purpose computer system which can be mass-produced by un-skilled labor”, quoted in Foreign Affairs, July-August, 2015, p 11. Time for common sense!

By Hazel Henderson
ST. Augustine, Florida, May 31 2016 (IPS)

Today we are saturated with media hype about the joys of information and communication technology (ICT). We will all be connected, all the time, by the Idiocy of Things (IoT )devices and our social media, all converging in the cloud. Our lives will be monitored by smart sensors in homes with smart refrigerators, toasters, TVs, doorbells, alarm systems, garages, cars and electricity meters. We are bombarded with ads showing us how all these smart devices will improve our lives and health, bringing ever greater convenience. Driverless cars will be safer, allowing us to read, monitor our kids or enjoy the scenery. All this ICT and automation is already a multi-billion dollar industry and its producers are salivating over its growth and profits. Individual privacy rights and security concerns seem to be an afterthought.

Hazel Henderson

But wait! There are increasing signs that this ICT revolution may be one more “bubble”, another example of how markets regularly overshoot. The Atlantic Council and Zurich Insurance Risk Nexus (2016) measured the overall costs and benefits of ICT. They report that ICT costs currently outweigh the benefits – even when these costs are added to gross domestic product. Markets generally over-react as expectations drive private investors, and producers go into overdrive. As a result of the hype, many of the social costs are overlooked, including job losses, growing ranks of involuntary part-time workers in the “gig” economy, from newspapers to local Main Street retailers, manufacturing, automation of asset management, legal and medical services, accounting and other white collar jobs. As many as over 2 million US workers will need retraining as a result of this information technology revolution. Unless adequately addressed and planned, much of the resulting fall-out from the automation of many sectors will be paid for by taxpayers.

Kentaro Toyama, author of Geek Heretic (2015), and co-founder of Microsoft Research India, has documented the limitations of ICT when applied to India. He recounts how ICT was over-promoted to increase economic efficiency. Toyama cites Bill Gate’s dictum “automation applied to an efficient operation will magnify the efficiency. Automation applied to an inefficient operation will magnify the inefficiency.” Toyama redefines “efficiency” , showing how our current models and metrics have been very narrow in their focus and interpretation of this concept. He exposes the failure of many social theories of ICT interventions, which in some cases entirely ignore the cultural ramifications on peoples across the globe.

The US Office of Technology Assessment (OTA) launched in 1974, reported on many of these social costs and the environmental impacts of new products, technologies and industrial development. OTA looked at which were “producer push” or “consumer pull”, and who would be the winners and losers. As a member of OTA’s Technology Assessment Advisory Council, I insisted that for every technology we researched, on its scientific advisory group, the report would include representatives from segments of society most likely to be impacted: consumers, low-income and minority groups, workers and watchdog environmentalists.

OTA’s approach fundamentally challenged the laissez-faire economics’ Panglossian assumption: if new products and technologies appeared, consumers must have demanded them. OTA countered that markets today are driven by giant corporations with advertising to create demand, now a global $500 billion a year industry. OTA was shut down in 1996 and its reports deep-sixed until Ethical Markets and the University of Florida Press relaunched the reports that have been amongst the most prophetic and relevant to today’s technological concerns and warnings on climate change.

Concerns over the advance of big data, robots and artificial intelligence are now voiced by insiders from Edward Snowden to Bill Gates, Elon Musk, Eric Schmidt of Google and physicist Stephen Hawking. They fear that humans may lose control of their machines and their algorithms, as discussed with NASA Chief Scientist on the TV program “Robots Taking Over: What Will Humans Do?” Privacy and security issues are covered by Jon Mills in Privacy in the New Media Age (2015). The downside of big data, IoT and the new part-time “gig” economy are unravelled by Doug Rushkoff in Throwing Rocks at the Google Bus (2015) and Raw Deal (2015) by Steven Hill.

Deeper analysis means questioning the business models of most ICT companies: Google, Amazon, Facebook, Twitter, LinkedIn which all freely collect users’ data and then sell it to advertisers, data brokers, insurance companies, banks, credit card and insurance companies. Jaron Lanier in Who Owns the Future (2014) calls for new business models where ICT companies must pay users for any use of their personal data – quite feasible using available software.

Ethical Markets proposes a new standard to shift the balance of power back to consumers and citizens: a new Information Habeas Corpus. In 1215, Britain adopted the rule of Habeas Corpus, which assured individuals’ rights over their own bodies, further codified by Parliament in 1679. Today, we need to extend this right to our brains and all the information we generate in all our activities, in an “Information Habeas Corpus”.

The public is awakening to the new Orwellian threat of big data while acknowledging all its potential benefits. We do not need many of the products promoted for profit in the Internet of Things. New surveys like the one from Parks Associates find that 47% of US broadband users have privacy or security concerns about smart home devices. Tom Kerber, Director of Research, cites recent media reports of hacking into baby monitors and connected cars and suggests that if firms offered a Bill of Rights to consumers, this might ease concerns. At the very least, all smart devices should allow users to switch off their connectivity and operate them manually.

In Smart Homes and the Internet of Things, New Cities Foundation’s Greg Lindsay reports that 66% of smart phone users are afraid of having their movements tracked and 45% see no reason to want a smart home. The Atlantic Council’s March 2016 seminar on “Smart Homes and Cybersecurity” airs all these concerns, with some experts saying it’s already too late to protect homeowners and other users. For example, a smart refrigerator programmed with the owner’s dietary needs can detect any bingeing, notifying the insurance company, resulting in loss of coverage. Automotive engineer Mary Louise Cummings of Duke University testified at a recent Senate hearing on driverless vehicles at which Google, General Motors and Ford were requesting over $3 billion in subsidies. She noted that these companies had done no real testing of driverless vehicles and doubted they could be autonomous and safe.

It is time for an Information Habeas Corpus!

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Dec 2 2015 (IPS)

Civil society organizations, known as NGOs, have for decades used their non-government status to prod officials, politicians and business on climate issues. Veteran campaigners Greenpeace, Friends of the Earth, Oxfam, Kenya’s tree planters, India’s Chipko tree-hugging protectors and indigenous movements worldwide first raised the issues of protecting the Earth and its atmosphere.

Hazel Henderson

Social change rarely comes from elites since those in power are insulated from the hunger, desperation, pollution and resource depletion their populations experience. Change comes from societies’ periphery, those marginalized, excluded, voiceless in policy discussions of governments and business.

Thus civic and voluntary associations, movements and protests become the vanguards of social change – often positive, but negative if ignored or suppressed. These ancient forces in human societies are rooted in our earliest experiences of dangers and risks and our responses to our fears: competing with other groups for territory, accumulating and hoarding resources – or more positive responses of bonding, sharing and cooperating as Charles Darwin saw as our evolutionary success.

Elites in Britain hijacked Darwin’s theory of evolution through natural selection and saw it as the “survival of the fittest” recast in The Economist by Herbert Spencer. The magazine apologized for its focus on competition and “this poisonous phrase” in December 2005 as I described in Ethical Markets: Growing the Green Economy (2006).

The NGOs leading the climate debate for decades include the Carbon Disclosure Project, now CDP, Rocky Mountain Institute, Natural Capital Solutions, Carbon Tracker and the Club of Rome of concientized and superannuated elites. Drivers are social and environmental justice groups, worldwide indigenous networks of ecovillages, local currencies, monetary reformers, ethical investors and, more recently, religious groups led by Pope Francis, followed by many others, including the movement Our Voices.

The official climate debates in the UN summits focused around the 1997 Kyoto Protocol, unfortunately captured by the economics profession into ineffective carbon markets and trading of pollution permits, offsets too easily gamed by financial players. While many reaped money rewards, these “markets” failed to reduce or even slow carbon dioxide and other GHG emissions.

The UN Climate Summit in Copenhagen in 2009 saw officials naming, blaming and shaming between Tier I countries which had achieved development on fossil fuels and their emissions and Tier II countries still seeking their own development. The stalemate was largely influenced by this Kyoto Protocol. The major possibility for agreement was left on the table: accelerating the global transition of all countries to low-carbon, renewable resource economies – beyond the fossil-fuel era to the next Solar Age.

Fast forward to Paris and COP 21, the NGOs are still leading the way with their many approaches to this transition to 100 percent renewable resource economies and the equally necessary inclusion of all in the coming green prosperity. They drove the agenda at Rio +20 in 2012 with Brazilian groups, the Rainforest Alliance, the Committee on Sustainability Assessment, World Resources Institute, Biomimicry Institute, the International Institute for Sustainable Development and many others.

The historic deadly duo: resource depletion and inequality are at last being addressed as the single issue for human survival and evolution. This deadly duo is central in the 17 Sustainable Development Goals (SDGs) ratified by the 193 member countries at the UN in New York, September 2015. This new inclusive development model supersedes the obsolete economic model measured by gross domestic product (GDP), its subsidies to fossil fuels and all pollution and social harm it treats as “externalities” omitted from business and government accounts. Even mainstream Wall Streeters are critiquing inequality in corporations. Hedge fund philanthropist Paul Tudor Jones, founder of JUSTCapital, is launching a JUST 100 Index of the fairest corporations. While 66 per cent of corporations now accept climate science, 95 per cent of them still belong to trade associations obstructing progress, according to InfluenceMap. At last, these past subsidies which caused global warming are being phased out.

Solar, wind, wave power, geothermal and energy efficiency are revealed as cheaper than unsubsidized fossil fuels and nuclear power. Full-spectrum accounting by SASB and IIRC drives the new NGOs promoting all these Solar Age technologies. Our Green Transition Scoreboard launched in 2009 now tracks private investment in green sectors worldwide at $6.22 trillion.

Helio International’s HIFI tool for investors will help steer them to those countries most hospitable to Solar Age investments, mostly in developing countries.

These societies are not trapped in obsolete infrastructure and can “leapfrog” directly to green technologies: beyond vulnerable national electric grids to decentralized local power from community-owned local solar and wind generation. Asset owners, pension funds are driving shifts of investments and portfolios to fossil-free, green sectors, including CERES, 2° Investing, Grantham Foundation, Climate Bonds Initiative, Sonen Capital, Green Alpha Advisors and others.

NGOs can continue driving the debates at COP21 with their new allies and accelerate the great global transition now underway to the next economy, equality-based and powered by the daily free photons from our Sun.

(End)

Excerpt:

By Hazel Henderson
MIAMI, Florida, Nov 17 2015 (IPS)

We humans are acutely aware of risks. From our earliest times, the risks we faced were from hunger, predatory animals, extreme environmental conditions and, as our numbers grew, from other human tribes.

Hazel Henderson

Today, in the 21st century, new risks dominate our political and social issues from terrorism, barbarous attacks on civilians as in Paris, nuclear meltdowns and weapons, financial crises, desertification and famines, disappearing glaciers in the Himalayas, Greenland and Antarctica, water shortages, polluted air, rising sea levels, new pandemics and drug-resistant diseases.

Yet views about these risks and priorities in addressing them are all over the map. This disparity is largely due to different views on how these new risks arose, who is to blame (since they are mostly humanly self-inflicted). This underlying debate about causes of today’s risks still hampers agreement on how to address let alone solve them or mitigate their effects.

Take the view of risk prevalent in the global financial system and its millions of traders in London, Wall Street, Frankfurt, Tokyo and Shanghai. They focus on risks to corporate earnings and profitability, interest rate risk, weak GDP growth, volatile gasoline prices, grassroots opposition, government regulation, political demands for rising wages, democratic demands to reduce inequality.

I attended a conference on “Playing for the Long-term” in New York, November, 3, 2015, hosted by the New York Times convening some 500 Wall Streeters. Their views focused on these risks, as well as those disrupting finance posed by the incursions of Silicon Valley startups threatening to bypass Wall Street: crowdfunding, peer-to-peer lending, cellphone banking, social media and electronic startups based on Internet platforms. Risks from cyber attacks also focused much attention. Risks from the wider world received little attention – even those now impinging on coal and oil stocks from activists divesting from fossil fuels. I asked Morgan Stanley CEO James Gorman if he agreed with Bank of England head Mark Carney that many fossil fuel reserves could never be lifted or burned without further damage to the global climate and that these assets would be devalued. Mr. Gorman allowed that climate change was a problem, but that it was “not our business.”

Climate risk was hardly raised until one of the last speakers, former US Vice President Al Gore, explained how his London-based investment firm Generation Investment Management had produced healthy financial returns on $10 billion dollars of client assets by investing beyond fossil fuels in the more efficient, knowledge-rich technologies of renewable energy companies and the growing next economy: the Solar Age. Unfortunately for the rest of us, financial players like economists see risk in terms of money – forgetting that currencies are simply units of account which track and keep score of human transactions and interactions with nature’s resources.

So it still seems a question of “What risks?” – where and how they arise. How can we come together to share responsibility for our common future on this planet, powered daily by free energy from the Sun? As the beleaguered beautiful city of Paris prepares to host the UN Climate Summit from November 30 to December 11, 2015, even the world’s scientists of the Convention on Climate Change find their assessments of climate risk challenged not only by those denying that humans caused it, but that their models under-estimated these risks.

A UNEP Emissions Gap Report assessed the 119 Intended Nationally Determined Contributions (INDCs) submitted by the UN Framework Convention on Climate Change (UNFCCC) October 2015, covering 88 per cent of global GHG emissions in 2012. This indicates these efforts could cut up to 11 gigatons of CO2 equivalents from projected emissions by 2030. But, this is only half of the total required if there is a chance of staying below the target of below 2 degrees Celsius of warming by 2100. UNEP Executive Director Achim Steiner said that these INDC levels are an increase in ambition levels but not sufficient to reach this 2C target.

Several scientists warn that sea level rises are now inevitable due to long feedback processes measured by Earth-observing satellites. These risks focus on melting glaciers in Greenland and Antarctica, reported by scientists James Hanson, Erick Riguot, Richard Alley, Andrea Dutton, John Englander and others. David Wasdell, director of the London-based Meridian Programme, critiques the official IPCC report’s Summary for Policy Makers for downplaying the risks for political and economic expediency. Wasdell’s Climate Dynamics: Facing the Harsh Realities of Now (September 2015) concludes that human greenhouse gases already emitted, moving heat through Earth’s atmosphere and oceans, have already exceeded the 2C target and notional “available carbon budget.” Wasdell’s report concludes that any notional carbon budget allowing further emissions has already collapsed and we face a carbon debt instead.

Are these new climate risks insurmountable? Most experts say that there is time, but it is fast running out.

The good news is that more decision-makers and citizens in all sectors have ended their focus on fossil fuels and now recognize that our planet has always been amply powered by the Sun’s daily shower of free photons. Atmospheric CO2 can be returned to soils, deserts can be greened and ecosystems regenerated as finance is redirected by the 2° Investing Initiative. We humans have all the technology we need to scale up the next economy of efficient renewable resource technologies, as we track in our Green Transition Scoreboard® currently showing 6.22 trillion dollars of private investments in these Solar Age companies and technologies.

Risks also offer opportunities, and stress is evolution’s tool. Breakdowns drive breakthroughs!

(End)

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Oct 20 2015 (IPS)

The year 2015 highlights the global shift from traditional money-based, gross domestic product (GDP)-measured economic growth to the new models of sustainable, inclusive human development embodied in the United Nations Sustainable Development Goals (SDGs) ratified by its 193 member nations.

Hazel Henderson

This multi-generational shift also involves deeper processes of changing world views, social organisations and evolving cultures in our global human family of some 7.5 billion people.

These historic changes in 2015, now visible in the SDG 17’s intertwined goals, go far beyond the earlier Millennium Development Goals (MDGs). They embrace the major problems and opportunities for continuing the successful evolution of human societies on planet Earth. The SDGs close the obsolete textbooks on money-based, GDP-measured economic growth. Today, the social and environmental costs of this earlier GDP model are evident to all in pollution, ecological and social disruption, widespread effects of climate change, global warming and rising sea levels – all measured daily by 120 Earth-observing satellites.

All this physical evidence of humans stressing ecological limits and planetary boundaries also led to the focus on finance as driver of these failed models of GDP-growth and short-term profits. The “free market” models of Britain’s prime minister Margaret Thatcher and US president Ronald Reagan in the 1980s drove “financialisation” and globalization which privatized and deregulated economic activities – divorcing them from their social context and consequences.

Finance became a global casino, the servant of fossilized industrialization and its overemphasis on investing in coal, oil and gas. This is highlighted in the research of the British NGO Carbon Tracker: trillions of “assets” in fossil fuel companies balance sheets became potential liabilities because they could not be burned without further damage to the climate. Client Earth, a public interest law firm, announced it is monitoring 250 corporations and their directors for possible legal action pursuant to the Companies Act of 2006.

Many science policy analysts, including this writer, and millions of citizens have been pointing out the failures of economics and its GDP-growth fetish which still drives financial markets. Yet, it took decades before today’s physical evidence, growing crises and millions of ethical investors produced the global transitions now recognized in the UN’s SDGs. This fossilized global finance is addressed in the two-year, ground-breaking United Nations Environment Programme (UNEP) Inquiry: Design of a Sustainable Financial System, whose report The Financial System We Need was released October 8, 2015.

This two-year Inquiry was steered by a global advisory board of central bankers, stock exchange and pension fund executives, regulators led by UNEP administrator Achim Steiner, and was co-directed by Nick Robins and Simon Zadek. It explores how to reshape and align crisis-prone global financial markets with the new SDGs – beyond short term speculative high speed trading toward serving needs of the real world economies. The UN Inquiry report contains many innovative studies including Greening China’s Financial System; Exploring Financial Policy and Regulatory Barriers to Private Climate Finance in South-East Asia; Scaling Green Bond Markets for Sustainable Development; Financial Reform, Institutional Investors and Sustainable Development; Fiduciary Duty in the 21st Century; Values BasedBanking; Insurance 2030 – Harnessing Insurance for Sustainable Development; and reports on these issues from India, Brazil, Indonesia, Bangladesh, Africa and Colombia.

Many innovative critiques are also referenced, including Ethical Markets’ Reforming Electronic Markets and Trading; Britain’s New Economics Foundation’s Financial System Impact of Disruptive Innovation, on the electronic shareconomy, crowdfunding, peer-to-peer lending – all bypassing conventional finance. Canada contributed research from CIGI (Center for International Governance Innovation) on environmental risk disclosure, its new FALSTAFF model and Central Banks Can and Should Do Their Part in Funding Sustainability, which boldly calls for central banks to use their quantitative easing (i.e., money printing) to buy new green bonds to grow the next economy for real people rather than bailing out past mistakes of big banks.

The Inquiry’s 4th progress report: The Coming Financial Climate reviewed all the findings on how governments, regulators, standard-setters and market actors are starting to incorporate sustainability factors into the rules that govern the financial system. Although there is much still to be done to de-risk and transform conventional finance, this Inquiry has broken down major barriers and brought together many of the progressive forces taming speculative markets and reforming practices that led to the 2008 crises and resulting human misery. The battle lines are drawn. Ending tax breaks and subsidies to fossil fuels and nuclear power will accelerate the new cost advantages of the more efficient renewable sectors worldwide.

(End)

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Aug 27 2015 (IPS)

Millions in the New York City area are excited about Pope Francis’ visit on Sep. 25 to address the U.N. General Assembly as worldwide consensus grows on the need to shift global investments from fossil fuels to clean, efficient, renewable energy in the UN’s Sustainable Development Goals (SDGs) scheduled to replace the expiring Millennium Development Goals (MDGs). 

Private investments worldwide in the clean energy transition now total 6.22 trillion dollars while successful U.S. students’ divestment networks have forced over 30 college endowments to divest.  Over 200 institutions have divested worldwide, including the U.S. cities of Minneapolis and Seattle, Oxford in the United Kingdom and Dunedin in New Zealand.

Hazel Henderson

The Episcopal Church and the Church of England, in a faith-based consortium, are calling on Pope Francis to urge divestment for all religious and civic groups.  Islamic Climate Change Symposium leaders cited the Quran earlier this month in calling 1.6 billion Muslims to act in phasing out fossil fuels by 2050.

Backlash from traditional Wall Streeters has joined some U.S. Catholic organisations with millions still invested in fossil energy, fracking and oil sands.  The U.S. Conference of Catholic Bishops (USCCB) has guidelines against investing in abortion, contraception, pornography, tobacco and war but is silent on energy stocks.

Reuters reports that Catholic dioceses in Boston, Baltimore, Toledo and much of Minnesota in the United States have millions of dollars in oil and gas stocks, making up between 5-10 percent of their holdings.  It has been reported that Chicago’s Archbishop Blasé Cupich, appointed by Pope Francis, will re-examine over 100 million dollars in fossil fuel investments.

Wall Street is also re-examining its positions on fossil fuels.  A survey of asset managers in Institutional Investor, July 2015, found that 77 percent expected the carbon-divestiture movement to continue and gain momentum.  Yet, Exxon Mobil CEO Rex Tillerson has claimed that the models on climate change “aren’t that good” and has no plans to invest in renewable energy.

Recently, many large companies have been calling for and budgeting for carbon pricing – favoured by most economists.  Britain’s BG Group, BP, Italy’s ENI, Shell, Norway’s Statoil and France’s Total sent an open letter to world governments and the United Nations in June asking them to accelerate carbon pricing schemes.The U.S. Conference of Catholic Bishops (USCCB) has guidelines against investing in abortion, contraception, pornography, tobacco and war but is silent on energy stocks

The ethical investing movement now accounts for one-sixth of all holdings on Wall Street and the U.N. Principles of Responsible Investing counts signatory institutions with 59 trillion dollars in assets under management.

Hybrid approaches include venture philanthropy and “impact” investing, while a recent CFA Institute survey found almost three quarters of investment professionals use environmental, social and governance information in their investment decisions.

Against this backdrop, Timothy Smith, pioneer founder of the Interfaith Council on Corporate Responsibility (ICCR) and now Senior Vice-President of Walden Asset Management, says that the “visit of the Pope in the wake of his prophetic Encyclical on climate is a clarion call – to ramp up our efforts to combat climate change with concrete actions,” adding that “it’s not the Pope’s job to present a specific game plan for Americans.  That is our job.”

Through ICCR, religious investors have worked for two decades on these issues.  Firms like Walden, Ceres and others have joined up to combat climate change, promoting efficiency and renewable resources.  All this new activity within the climate debate provides the greatest challenge yet to business-as-usual capitalism.

Many financiers in the global casino still see themselves as “masters of the universe” because they control capital flows, most investments, pension funds, influence monetary policies, capture politicians and regulators, while funding friendly academics and think tanks.

The recent jitters of stock markets have again revealed their fragility and the increasing turbulence and volatility caused by computerized algorithms accounting for over half of all activity.  High-frequency trading (HFT), “flash crashes”, are continuing with little regulation.  Foundations are crumbling from these many new challenges as small investors flee. 

Crowdfunding, peer-to-peer lending, local and cryptocurrencies, credit unions and cooperative enterprises are flowering along with hybrid start-ups in the “shareconomy” – AirBnB, Uber, Lyft, Task Rabbit and the growth of farmers markets, swap sites for tools, clothes and second-hand exchanges.

Many reformers of capitalism try to change its culture, of short term gain and speculative trading.  The U.N. Inquiry into the Design of a Sustainable Financial System will release its report to the General Assembly on Sep. 25, with global research on current practices and potential reforms.

A promising new effort to mobilise U.S. public opinion is JUSTCapital, founded by luminaries Deepak Chopra, Arianna Huffington and hedge fund philanthropist Paul Tudor Jones.  CEO Martin Whittaker says: “We are addressing some of the core questions affecting capitalism and corporations in the 21^st century.  We are applying policy, research and surveys to define ‘just business behaviour’ in the eye of the public, using this definition to evaluate and rank the performance of the largest publicly traded American companies.”

While such caring financiers are quietly exploring reforms, the biggest threat is the fragility of global market structures from automation, algorithms, HFT and artificial intelligence which financiers still believe they can control.

Yet these same computers can now run markets more efficiently than humans.  Matching and trading buy and sell orders in transparent computerised black boxes makes human traders redundant, as well as reducing insider trading, speculating, front-running, naked short-selling, fixing interest rates and today’s widespread greed and corruption.

Capitalism’s greatest challenge is its reliance on rollercoaster national money systems and currencies.  Central bankers and governments’ tools fail along with economic theories as social movements are now aware of money-printing and the politics of money creation and credit-allocation, revealed in all its favouritism and inequalities.

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Jun 20 2015 (IPS)

Challenges to advertisers and marketers arose in the past century. Critics deplored the role of cigarette marketers who exploited the aspirations of women by associating smoking with liberation. 

Such manipulations were explored by Vance Packard in The Hidden Persuaders (1957), along with Marshal McLuhan’s The Medium is the Message (1967) and Stuart Ewen’s Captains of Consciousness (1974).  The use of subliminal advertising (rapid flashing of product images faster than human cognition) was challenged and the public discussion led to its disuse.

Hazel Henderson

By the 1980s, Ian Mitroff and Warren Bennis described the “deliberate manufacturing of falsehood” in The Unreality Industry (1989), followed by William Schrader’s Media Blight and the Dehumanizing of America (1992), Naomi Klein’s No Logo (1999) and Neil Postman’s Amusing Ourselves to Death (2005).

Fast forward to today’s ethical challenges.

Political advertising of candidates was likened to selling toothpaste as it emerged in the 1970s and summarized by Charles Lewis in The Buying of the President (1996) and James Fallows in Breaking the News (1996). Today, the gutting of restrictions on money in U.S. elections has led to the well-financed blizzard of attack ads that lead millions of voters to turn off their TV sets in disgust. Media corporations and their TV channels have come to rely on such financial bonanzas during elections.

What this confirms is that advertising influences media owners and the content of programmes and often distorts news coverage, leading to subtle commercial censorship rarely recognised as a threat to free speech in the U.S. Constitution’s First Amendment.

Civic groups’ limited funding precludes challenging false and misleading advertising and the “greenwashing” of many companies’ poor environmental records. “Civic groups’ limited funding precludes challenging false and misleading advertising and the “greenwashing” of many companies’ poor environmental records”

I summarised these issues a few years ago in an interview in Forbes magazine on why I founded the EthicMark Awards for “advertising that uplifts the human spirit and society”.

These Awards recognise that advertising, a global 500 billion dollars a year  industry, can be a powerful force for good beyond consumerism, in educating, inspiring and showcasing the best innovations for growing more inclusive, greener, knowledge-rich and sustainable societies.

The newest challenge to advertisers comes from Silicon Valley with the many apps that allow users to skip and block ads, including AdBlockPlus (downloaded 400 million times), as well as add-ons to Chrome and Firefox browsers.  Ad block users have grown to 200 million a month, according to PageFair and The Economist.

Advertisers could redeem their reputations and business models via Truth in Advertising Assurance Set Aside (TIAASA) which would disallow their tax exempt funds on false advertising and then award these funds to civic challengers to hire ad agencies to prepare counter-advertising campaigns.

All this highlights the growing vulnerability of media business models in the United States, other industrial societies and worldwide.

Many new media business models which no longer rely on advertising are debated in The Death and Life of American Journalism (2010) by Robert McChesney and John Nichols who compare media access policies in many countries which subsidise investigative journalism, such as Britain’s BBC.

In the United States, foundations support news organisations such as the National Geographic, the Center for Public Integrity and ProPublica, and media outlets such as the Columbia Journalism Review. The American Prospect and The Nation are largely funded by subscribers as well as PBS and NPR in broadcasting, along with many internet-based media such as The Real News Network.

Google banned ad-blocking apps in 2013, yet alternative web-browsers such as UC Browser already claims 500 million users, mostly in China and India, and Eyeo launched its ad-blocking browser available for mobile devices running Google’s Android.  These battles will rage on until legal systems – always lagging behind technology – catch up.

Two reports from the Aspen Institute’s Communications and Society Program led by Charles Firestone – “Navigating Continual Disruption” and “The Atomic Age of Data” – discuss the digitisation of ever more sectors of industrial societies and the internet of things (IOT).

In the United States, the monopolising of internet access by Comcast, AT&T and Verizon has restricted broadband access to millions in less affluent, rural communities and prevented small towns from competing with public broadband systems, as reported by the Center for Public Integrity and Susan Crawford in Captive Audience (2013).

The good news follows the analysis and proposals of Kunda Dixit in DatelineEarth: Journalism as if the Planet Mattered (IPS, 1997) and includes Dan Gillmore’s We the Media (2004) on grassroots journalism; David Bollier’s In Search of the Public Interest in the New Media (2002); Democratizing Global Media (2005); Making the Net Work: Sustainable Development in a Digital Society (2003) from Britain’s Forum for the Future; and Jaron Lanier’s Who Owns the Future? (2013). (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, May 23 2014 (IPS)

Japanese Buddhist and president of Soka Gakkai International (SGI) Daisaku Ikeda’s Peace Proposal 2014 elevated my focus from the daily news to my longer term concerns for more peaceful, equitable and sustainable human societies to assure our common future. These broader concerns are now shared by millions of humans who have transcended purely personal, local and nationalistic goals and become prototypical global citizens.

Hazel Henderson

Breakdowns in our current institutions now cause daily crises and are, as always, driving new breakthroughs as humans seek new solutions.  Stress has always been a tool of evolution – as recorded in the 3.8 billion years of life forms on our home planet.

Today’s crises are all consequences of our former myopic technological and social innovations addressing short-term problems without anticipating their system-wide longer-term effects.  This is how I became concerned about how human burning of fossil fuels and digging in the Earth for our energy which led me to join the World Future Society in the 1960s.  I was then leading an effort to clean New York City’s polluted air, living close by a huge coal-burning power plant pumping smoke and soot into the play park where I and other mothers watched our infants.

Fast forward to 2014, and I’m still a card-carrying futurist and on the Planning Committee of the Millennium Project which tracks our human family’s 15 Global Challenges.  Our latest State of the Future Report 2014 tracks where we are progressing and where we are falling short in addressing these challenges: sustainable development and climate change; water; population and resources; democratisation; long-term policy making; globalisation of information technology; rich-poor gap; health; decision-making capacities; conflict resolution; improving the status of women; transnational organised crime; energy; science and technology, and global ethics.  This Millennium Project has participants from academia, government, civic society and businesses in fifty countries.

“Political will in many countries is still hostage to special interests, lobbying and money from these legacy sectors and their perverse subsidies”
At the same time, Daisaku Ikeda, also my esteemed co-author of Planetary Citizenship, leader of SGI’s 12 million members, outlines his annual Peace Proposal for 2014, as he has done since 1983. Ikeda, born in 1928, is one of the world’s most distinguished global citizens.

Ikeda’s Peace Proposal 2014 – Value Creation for Global Change: Building Resilient and Sustainable Societies – engages  United Nation issues: moving beyond the 2000 Millennium Development Goals (MDGs) to the Agenda of 191 countries in Rio+20 in Brazil in 2012, as Sustainable Development Goals (SDGs).  These now embrace the transition from fossil and nuclear energy to the more decentralised, cleaner, greener, knowledge-richer, green economies now under way.  I came to similar conclusions in my Mapping the Global Transition to the Solar Age (2014). Retiring human uses of fossil fuels, uranium and nuclear power plants and weapons is now feasible with current technologies as outlined in many reports covered in the 2014 Green Transition Scoreboard®.

Political will in many countries is still hostage to special interests, lobbying and money from these legacy sectors and their perverse subsidies. Civic movements worldwide are pressuring pension funds and university endowments to divest from fossilised sectors and shift to cleaner, greener, more sustainable investments.  Veteran financial experts, including Jeremy Grantham and Robert A. G. Monks, now join these critics, along with asset managers offering “fossil-free” portfolios which often outperform dirtier assets. As nuclear power plants are being decommissioned in the United States and Europe due to cheaper wind, solar and efficiency alternatives, many in Asia are still planned, even in China which now leads the world in solar energy.

Huge conceptual breakthroughs are needed to shift old paradigms and theory-induced blindness. One such is the rapidly developing proposal “Iran Goes Solar” by the Planck Foundation for Iran to end run the entire political debate about its right to develop civilian nuclear power. This could bypass all sanctions, Israel’s concerns about another nuclear weapons state in the Middle East and “electrify” the upcoming United Nation Conference on the Nuclear Non-Proliferation Treaty (NPT).

While Ikeda rightly calls for a “non-use” agreement under NPT, the Planck Foundation’s plan is a paradigm shifter. Iran could accelerate its transition from both nuclear and fossil fuels by immediately acquiring blocks of shares in China’s solar energy companies and then purchasing as many of their solar panels as possible. This is already a much cheaper alternative to building nuclear reactors or fossil fuel power plants.

Iran’s bountiful oil reserves would stay underground as valuable feedstocks for industrial use rather than burning them, a plan I proposed in the NBC-TV Today Show in 1965!  Details of the Planck “Iran Goes Solar” plan also call for expanding rail services on the Silk Road to China, greening desert lands with salt-loving plants as in their DesertCorp plan for expanding seawater-based agriculture in many desert regions.

Today’s breakdowns are indeed producing the new systemic plans and breakthroughs long-proposed by futurists and planetary citizens. All these plans for our common future and green economies are covered by Ethical Markets Media(United States and Brazil), but often overlooked in mainstream media. (END/COPYRIGHT IPS)

* Hazel Henderson is the president of Ethical Markets Media (USA and Brazil) and creator of the Green Transition Scoreboard®.

Excerpt:

By Hazel Henderson
ST.AUGUSTINE, Florida, Mar 4 2014 (IPS)

Providing water for our still growing human population is reaching crisis levels. Water is vital for agriculture, energy production and industrial processes worldwide. Floods and droughts in Asia, Latin America, Europe and the United States accompanied unprecedented typhoons and winter storms. While none could be linked directly to climate change, the debate surfaced. Mainstream media started covering these issues more broadly.

The Earth’s surface is largely covered with water. So, why has the world’s attention focused on the three percent of fresh water on our planet, on water management, pollution, waste and recycling? Yet 97 percent of the water on Earth is saline: oceans, salty lakes and brackish wetlands ignored in most policy, finance, business and public debates!

At last, unnoticed research on the 10,000 salt-loving halophyte plants which grow in deserts and thrive on seawater is coming to light. I have long reported on saline agriculture, noting that halophyte plants can provide humans with food, fibre, edible oils and biofuels. Indeed, the only biofuels that meet ethical criteria are those based on algae grown on seawater.

Today, as water-related risks reach crisis levels, they are changing traditional risk analysts’ focus on financial risk. In the World Economic Forum’s Global Risk in 2014, water rose to third place behind fiscal crises in key economies and structurally high unemployment/underemployment. The United Nations General Assembly Open Working Group on Sustainable Development Goals (SDGs) cited water and drought issues high on its agenda while many countries’ delegates voted to make oceans a stand-alone focus of the SDGs.

The International Renewable Energy Agency (IRENA) provides a welcome global focus on the needed transition to renewable energy, many forms of which will conserve water and provide better methods of desalination and treatment.

Fossil-fueled and nuclear power plants are prodigious gulpers of water, another reason for the shift to renewables. Additional risk factors focus on the rising ocean levels and acidification as CO₂ emissions are absorbed by oceans which are heating faster than previous models predicted. This led to renewed interest in ocean thermal differentials as a source of electricity along with ocean currents and wave energy technologies.

Embracing this broader view, the 14^th Delhi Sustainable Development Summit connected the dots in February 2014 as Attaining Energy, Water and Food Security for All. The International Conference on Sustainability in the Water-Energy-Food Nexus, May 19-20, 2014 in Bonn, Germany, takes the same systems approach.

The Earth Systems Science programme at NASA is the most comprehensive approach to understanding how our planet processes the daily free photons from the Sun, through the atmosphere and ocean currents, which combined with geothermal energy from its core, create the conditions for life on Earth.  This daily information on how our planet functions and our human effects on it must now be cranked into all financial and business risk-analysis models, as I outline in Mapping the Global Transition to the Solar Age: from Economism to Earth Systems Science, with foreword by NASA Chief Scientist Dennis Bushnell, who is also an expert on halophyte plants and saline agriculture.

Bringing desert areas into food, fibre and fuel production by employing saline agriculture and these thousands of salt-loving plants is now the lowest hanging fruit for humanity to address its myriad crises of tunnel vision: inequality, poverty, pollution, food, water, energy and political conflicts.

Desert-greening science has been quietly maturing for decades with experiments in many countries in the Middle East, China, Australia, Mexico and the U.S. Today, business plans are emerging, such as DESERTCorp, by the Planck Foundation in Amsterdam, as well as the work of Carl Hodges in Egypt and the U.S.; Allan Savorys Savory Institute in Zimbabwe and Australia and the Grasslands Project in South Dakota, U.S., with the Capital Institute; the research of Mae-Wan Ho of ISIS in Britain; Wes Jacksons Land Institute in Kansas, U.S; Janine Benyus at Biomimicry 3.8; Gunter Pauli at ZERI; and many other projects.

A biofuels breakthrough was announced, January 22, in Abu Dhabi that Boeing, in partnership with the United Arab Emirates (UAE) are producing biofuel for jet aircraft made from algae grown on desert land, irrigated with seawater. This Sustainable Bioenergy Research Consortium (SBRC) is affiliated with the MASDAR Institute.

Director Alejandro Rio states, the UAE has become a leader in researching desert land and seawater to grow sustainable biofuel feedstocks with potential applications in other parts of the world. Other airlines are also researching biofuels, but all seem to find that oils from tar sands and shale are too dirty for jet fuel and that oil companies seem unwilling to refine these dirty oils to the standards needed for aviation since they see this market as too small. Meanwhile, worries about shale fuels include their huge water requirements, methane emissions, pipeline leaks, earthquakes and other environmental problems.

None of these hazardous forms of energy are needed!  Humanity can now stop digging up the Earth and look up harvesting the free photons from our Sun as green plants do, providing our food. Let’s now green our desert areas, growing salt-loving crops using abundant land, salt waters and sunlight. Lets accelerate the global transition, to the more equitable, knowledge-rich, cleaner, greener economies now within our grasp!

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Dec 17 2013 (Columnist Service)

The debate over structural unemployment, automation and jobless economic growth began in the 1960s as car factories replaced workers with robots.

Futurists like myself saw these technologies taking over sectors of industrial economies as opportunities for a transition to “post-industrial” information and services-based “leisure societies,” and to develop human potential, lifelong learning, research, preventive healthcare, the arts, entertainment, sports and tourism.

Some parts of our vision have materialised: tourism and entertainment are major global industries. Research has produced medical breakthroughs, new sectors based on IT, the internet, 3-D printing and drones as well as democratising education electronically in massive open online courses (MOOCs).

Alas, missing today are our futurist visions which included a key corollary to this IT takeover of work: unconditional guaranteed incomes to provide the needed purchasing power to keep up aggregate demand for this new cornucopia of goods and services. We also held that if workers were replaced by machines, they would need to own a piece of those machines.

Hazel Henderson

This debate is back, as inequality reaches crisis levels in Europe and the U.S. with the share of incomes from increased productivity falling for workers while capital owners’ and executives’ returns soar to new heights. This inequality now leads to further stagnation in many economies.

Guaranteed cash transfers directly to poorer citizens are raising living standards in Mexico’s “Oportunidades” and Brazil’s “Bolsa Familia” payments which have pulled millions up into the middle class.

These payments, called conditional cash transactions (CCTs), only require that children attend school and get medical check-ups. In Europe, the movement for unconditional basic incomes responding to widespread rising structural unemployment has led to widespread demonstrations and to a ballot initiative in Switzerland.

Meanwhile, Silicon Valley IT giants Amazon, Google and others in Japan are targeting more sectors for takeover, as they have disrupted retailing, entertainment, news media, finance and other industries.

Google’s driverless cars will threaten millions of entry-level jobs for people driving taxis and trucks. Computer scientist advisor to Microsoft Jaron Lanier paints the future digital takeover vividly in Who Owns the Future (2013). He calls for a new economy based on digital value-sharing where all personal information given by individuals to Facebook, Twitter, Amazon, Google, LinkedIn or other such firms, be paid for, since this data provides these firms with their key asset.

Selling personal information, using Big Data for marketing, not to mention handing it over to governments, is a basic IT business model.

Google’s next big projects beyond rolling out Google glasses, with all their privacy implications, is producing robots they say will relieve humans from drudgery. This claim has been used by automation enthusiasts for decades.

Economists have also avoided the implications of jobless productivity: recommending more education and re-training, while sidestepping the more controversial examination of laissez faire economic theories. Yet, unemployment faces many graduates, many thousands of whom work as janitors and part-timers. Government policies often redistribute growth unfairly in tax breaks, subsidies to powerful interests in exchange for political contributions.

All these trends revive the big questions asked for decades: what is the purpose of technology? Why does the hare of private sector technology always outrun the tortoise of social innovation? In 1974, the U.S. set up its Office of Technology Assessment (OTA) on which I served, to answer these questions: how would the benefits and impacts of new technologies affect different groups in society, as well as the environment and overall quality of life?

Take Amazon’s plan to deliver packages quickly using drones. How many are benefited by this and how many may be inconvenienced, annoyed or even injured by all these drones in our public air space? For those millions living near Amazon’s massive distribution warehouses, will such a constant plague of these locust drones overhead spoil their quality of life?

Or take the new proposals that drones may be able to take over crop-pollination from bees, whose populations are threatened by hive collapse or nicotinoid pesticides (New Scientist, Nov. 16, 2013, p. 43). Can drones really replace bees to sustain our human food supply? Who benefits and who loses?

OTA asked all these inconvenient questions until it was shut down by Republicans in Congress in 1996. Their view was to leave all such questions to the magic of the marketplace.

Today, as the digital revolution accelerates with drones and robots populating our societies, all these questions re-emerge, as well as who pays. Will Google, Amazon, Facebook, Twitter, et al., begin paying their users for their personal data, or help pay for the guaranteed incomes for those displaced people whose labour is no longer needed? We are now re-connecting all these dots and our future will depend on new answers.
(END/COPYRIGHT IPS)

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Nov 4 2013 (Columnist Service)

It is time to move the global policy debate beyond the binary options of “austerity” versus “stimulus.” Both these macroeconomic policies have caused untold harm to millions and produced dangerous policy stalemates in Europe and the U.S., Japan and other countries.

The experiments in Europe to impose austerity have not only caused unemployment, falling growth rates and quality of life but also rising extremism and political polarisation.

Europeans have learned that debts can’t be paid by more borrowing. And the U.S. Congress is succumbing to mob rule by 50 Republicans who shut down the government. These self-inflicted crises are damaging U.S. credibility and its currency.

The lessons of stimulus are equally dire. Monetary expansion loses effectiveness with each new round of money-printing, whether as bond-buying by the European Central Bank or “quantitative easing” – QEs I, II and III – by the U.S. Federal Reserve.

Hazel Henderson

Pumping up stock markets on the textbook theory that this financial prosperity will trickle down to the real economies of “Main Street” becomes less and less effective. Asset bubbles reappear, along with angry retirees and savers, rising inequality, extremist political parties and legislative deadlock.

Central bankers in emerging markets complain that all this monetary stimulus destabilises their own currencies and economies. Chinese officials plan to launch their renminbi as a global currency and have inked an agreement with Britain to make London its trading centre.

Meanwhile, fiscal stimulus causes predictable conflicts about where funds will be directed, who will win and who will lose. Popular tax cuts rarely target those whose needs assure spending their funds into the economy and often end up in more saving by rich recipients. Spending on public services and infrastructure is a larger multiplier, but is too often spent on roads or bridges to nowhere.

The question arises: are austerity or stimulus the only two options, as macroeconomic theories insist? Increasingly, leaders who claim “there is no alternative” are in disrepute.

Even the grandees of the economics profession, including those of the George Soros-backed think tank INET, are now looking for alternatives, some even pronouncing macroeconomics as defunct.

A new view from Mariana Mazzucato in her The Entrepreneurial State (2013) cuts through this narrow debate within the conventional box of economics, forcing us to look at the bigger picture through wider lenses of science policy and the evolution of technologies in the real world.

As a former science-policy wonk at the U.S. Office of Technology Assessment, the National Academy of Engineering, I enjoyed Mazzucato’s slaying of so many defunct sacred cows of macroeconomics. She begins by debunking the narrow public vs. private sector framework, exposing the myth that private business and entrepreneurs are smarter and more successful than governments in the key process of innovation.

The embarrassing truth is that economics has studied the innovation process since Robert Solow’s attempt in 1957. No coherent theory has yet emerged. Engineering and technology often precede science and theory, challenging many sacred cows of tax policy and that it and research and development (R&D) funds and investments are drivers of innovation, which is a systemic product of many social, historical, geographical and cultural factors.

Another myth is that venture capital (VC) is risk-taking. Evidence shows governments in many countries are the primary risk-takers with VCs surfing the waves created by tax-payers, often providing two to eight times more venture funding than VCs.

Even Apple obtained early help with a 500,000-dollar loan from the U.S. government’s Small Business Investment Company. And every one of the 12 key technologies in its iPhone was funded by government research grants, as was the internet itself.

Not to pick on Apple, Mazzucato shows that the Fast Fourier Transform algorithm (FFT), the basis of Google’s success, was also funded by government research. In fact, the entire myth of Silicon Valley’s entrepreneurship and brilliance was based on military funding and Cold War R&D which continues to this day.

I called out special pleaders like the American Energy Innovation Council of which Bill Gates of MicroSoft is a member in my “Advice for Bill Gates”. They began calling in 2010 for tripling government funds for clean energy – about which Silicon Valley is demonstrably ignorant.

All this upends the economics of stimulus versus austerity and its deeper basis on the myth that governments are bureaucratic and stupid at “picking winners” while the private sector is smart and creates the innovation engine that produces our jobs and economic growth.

Over 20 million jobs in the U.S. are created by governments at all levels. Starving government does not help economies recover, as shown in Europe, or lead in the U.S. to the “magic of marketplace” recoveries.

All these economic bromides are nonsense, and it is time to go beyond economics and look at the real processes of technological and social innovation through new spectacles.

In my The Politics of the Solar Age, I reviewed the evolution of human societies from the age of agriculture, the use of energy from wood and waterwheels to whale oil, fossil fuels to the next stage of innovation: the green economies of today’s emerging Solar Age.

Green technologies are the next great wave of human innovation. To fully exploit all these vast new opportunities, we must drop old economic categories and see the world anew. This can end the current gridlocks endlessly fighting over how to allocate resources to incumbent 20th century industries like fossil fuels and between competing legacy interests groups.

More austerity or stimulus simply deflates or inflates the decaying old pie! Human development requires investing in the technologies of the future, not bailing out old industries and past mistakes.

China, Germany, South Korea and Denmark have used government risk-taking policies to invest in the rapid growth of their green sectors and companies providing insights into their paradigms beyond economics. U.S. market fundamentalism leads to political gridlock, shutting down government services, mindless “sequestration” and loss of international prestige and competitiveness.

A clearer vision of our next human stage of development and policies articulating goals to achieve them is now vital – particularly in the U.S.

All this attests to the bankruptcy of economics, its cognitive biases toward individualism, zero sum games and against collective win-win action – even on our small, polluted plane.

The phrase “survival of the fittest” was coined by Herbert Spencer in The Economist in1864, spawning the ugly philosophy of Social Darwinism. Charles Darwin’s actual thesis saw the human species’ survival through bonding and cooperating rather than competing.

We can now take in all the new scientific information available from NASA’s 12 geosynchronous satellites for better knowledge of our planet, deeper due diligence and more accurate metrics and risk management, as I describe in my “Mapping the Global Transition to the Solar Age”.

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Sep 9 2013 (IPS)

As our climate destabilises, floods inundate cities, wildfires burn forests, droughts kill our crops and manmade radioactive isotopes leach into our soil and water, many accountants and policy analysts are waking up. They are joined by NGOs, civic leaders, whistle-blowers and a few public-minded politicians.

The big message is that the deep but false philosophy of “economism” and its narrow, outdated dogmas are the hidden virus spreading financialisation and its social and ecological destruction.

Hazel Henderson

This malfunctioning source code spread worldwide, commandeered public and private decision-making, overriding scientific research in other disciplines which clearly demonstrate the real conditions of our 7.5 billion member human family on this planet.

Change is difficult, especially in many human minds, as my late friend Thomas Kuhn wrote in his Structure of Scientific Revolutions in 1993. New paradigms are introduced in social systems “one funeral at a time.”

Mahatma Gandhi reminded us that “First they ignore you, then they ridicule you, then they fight you and then you win.” Polls in the U.S. find some 40 percent of the public do not believe in evolution while many politicians still deny science and climate change.

Brain and behavioural scientists demonstrate how our brains lock in habits of thought, often amplifying our fear of change and “the other,” those primitive emotions seated in the amygdala in our brains.

This constrains both personal development and public policy as we hear politicians intoning ”there is no alternative” to old ideas or the financial bubble-created status quo: austerity and cuts in public services, jobs, education, health and environmental protection. Others blame God for human-made environmental pollution and climate disruption.

Many observers, including myself, predicted the 2008 financial crisis and the continuing misery imposed on so many around the world. Wall Street morphed from small firms, partnerships and petty manipulators into ever-larger corporations and trusts, capturing hungry politicians and regulators.

These financial firms capitalised on public infrastructure, unprotected common resources and newer communications technologies, computers, the internet and satellites funded by taxpayers. Compliant politicians helped finance go global after the “big bang” deregulation and privatisation of Ronald Reagan and Margaret Thatcher in the 1980s. Money was moved offshore into tax havens as detailed by Nicholas Shaxson.

This culminated in today’s global financial bubble, with over four trillion dollars of currencies traded daily, quadrillions of derivatives generated by mega banks and flighty traders. High-frequency trading firms place and cancel billions of orders every second, phishing for trends ahead of other investors – all on shaky computer platforms and programmed by algorithms that regularly malfunction.

This misuse of publicly funded IT infrastructure led to the mini-crashes which occurred frequently since the ominous “flash crash” of May 2010 and continue in the latest three-hour crash of NASDAQ on Aug. 22, 2013.

All efforts to regulate and downsize this destructive financial bubble and restore finance to its boring, modest role supporting real and local economies are fiercely opposed by lobbyists from Wall Street, in London, Washington, Davos and among their privately funded think tanks and revolving-door intellectual mercenaries in governments.

Well-endowed academic economists and their university departments buttress economic orthodoxies: equating “free” markets with human freedom and individual rights, expanding trade and privatisation. All these policies still are based on “externalising” social and environmental costs onto others, taxpayers and future generations.

This pernicious philosophy of “economism” is unchallenged even in still referring to winners of the Bank of Sweden prize in economic “science” (sic) as a real Nobel Prize. Even correcting accounts to include “externalities” has been resisted for decades.

In 1992, 170 governments in Article 40 of Agenda 21 at the second United Nations Earth Summit in Rio de Janeiro agreed to include in their gross domestic product (GDP) the unpaid work of millions in traditional agriculture, households and community volunteering.

I experienced this resistance from the economics profession, and from finance, economic and trade ministries, while I served as a science policy advisor in Washington, DC, in the 1970s.

Statistics from other disciplines and ministries measuring poverty gaps and real performance in health, education, housing, public infrastructure and environmental monitoring were relegated to “satellite” accounts, rather than integrated into broader measures of national progress beyond GDP.

Only in 1995 did the pioneering group at the United Nations Development Programme (UNDP) publish in their Human Development Report an estimation of the global value of unpaid productive work: 11 trillion dollars of work by women and five trillion dollars by men – simply missing from the official 24 trillion dollars of global GDP reported that year.

So most societies are much richer than economists acknowledge, both in un-priced human skills and environmental assets – as social and ecological researchers have shown for decades.

Recent U.N.-commissioned reports by TEEB, Trucost and others now show that billions counted by corporations as “profits” are offset by even larger environmental and social costs and losses.

Pricking the global financial bubble and preventing its further exploitation of citizens and ecosystems requires facing down both the underlying false philosophies of economism and their adherents in government, business, academia as well as their operators in financial markets.

Once economism is defrocked as obsolete and a failed ideology, with its derived financial “innovations” exposed as mathematical abstractions, we will not be flying blind.

Accounting is a more realistic profession than macroeconomics. The growth of new more realistic accounting protocols is providing new wheels for social change toward healthier, more inclusive, equitable, greener and more knowledge-rich societies.

Accountants are now beginning to measure six forms of capital: physical (buildings, bridges, etc.); financial (money as the accepted unit of account); human (talent, energy, sweat); social (associations, community, institutions); intellectual (knowledge); and, natural (biodiversity, ecosystem services).

These new metrics for assessing corporate and financial firms’ performance as well as of cooperatives, social enterprises and community associations have been quietly growing for decades. They developed practically in socially responsible, ethical funds, pensions, foundations and endowments and among concerned asset managers, entrepreneurs, innovative scientists and monetary reformers.

Today they emerge in many forms, both at the company level and in correcting GDP. New accounting protocols are multi-disciplinary, integrating many factors key to analysing performance of firms in creating or destroying value.

They include the GRI, the IIRC, the ACCA, the ICAEW, the AICPA, the SASB, together with the NSFM and pioneer asset managers Domini, Calvert, Innovest and now reflected by Bloomberg, Dow Jones and others.

NGOs have largely driven these changes through their work, and collaborations with many U.N. agencies include those of the GEC, the WSF since 2000 and those active since the U.N. Conference on Innovative Finance for Development, Monterrey, Mexico, 2001 and joined in 2013 by many experts on Long Term Finance.

As needed, incremental changes are made and private investments have poured into green sectors worldwide since 2007, the fatal flaws of economism underlying the 2008 crash are now exposed and reforms are underway. Yet, NGOs must remain vigilant if too-big-to-fail or jail finance is to be downsized from a global casino to a public service sector.

(END/COPYRIGHT IPS)

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Aug 1 2013 (IPS)

As of Aug. 1, 2013, the U.S. Bureau of Economic Analysis (BEA) finally stepped into our new 21^st century. Gross Domestic Product (GDP) will now include much of the intangible production and services which actually make up some 70 percent of mature 21^st century economies, such as software, research and development, entertainment, trademarks, copyrights, design and other creative innovation.

Thus U.S. GDP rose 1.7 percent (with these changes adding .41 percent) in the second quarter of 2013 while the revision added 0.93 percent of the 1.1 percent increase reported for the first quarter. So far, the shift of these intangibles from “costs” to “investments” is slight, and it will be revised again on Aug. 29.

For decades, critics like me had urged modernising GDP still stuck in the early materialistic Industrial Era, counting manufacturing and obsessed with goods you could drop on your foot.

Hazel Henderson

For fifty years, services and less tangible forms of wealth had been quietly overtaking the total output of maturing economies.

From the 18^th and 19^th centuries, when farming employed most U.S. workers, the economy had transformed, with agriculture employing only two percent of the workforce.

Today, over 70 percent of the U.S. economy is dominated by intangible production: education, healthcare (now over 17 percent of GDP), innovation, R&D, the rise of the internet, software, media, entertainment, sports, the arts and public sector services, police, firefighters, the legal system, oversight of food safety, environmental quality, financial services, safety of drugs, toxic substances, etc., with more than 21 million U.S. jobs in public sector services at city, state and federal government agencies and military service.

Meanwhile, GDP remained blind to much of this new economy and still over-counted manufactured goods, ignoring the vital role of R&D and misclassifying what new services it did count as “costs” instead of valuable economic output.  I and others had criticised GDP for confusing the “goods” with the “bads” (pollution and other social costs of production) and totaling all as valuable output.

This was why Citizens for Clean Air, the NGO I cofounded in New York City in 1964, called for subtracting air pollution “bads” from GDP. We took our then senator, the late Robert F. Kennedy, on a helicopter ride to show him New York’s pollution sources. In his famous speech in 1968, he agreed that GDP gave a grossly distorted picture, “measuring everything except that which makes life worthwhile.”

Now the new revisions to GDP will boost growth totals, and the BEA has started counting R&D and artistic creation as “investments,” back casting this R&D revision from 1959 to 2007. This would have raised annual growth rates by .07 percent – mapping innovation made famous by Joseph Schumpeter as “creative destruction.”

Yet GDP still needs further fixing, and new indicators beyond economics are proliferating, including the OECD’s Better Life Index, the Canadian Index of Wellbeing and others tracked at Ethical Markets’ Beyond GDP.

The fundamental investment all societies make in their future is education of their children. GDP will still treat this as an “expense.” For decades I have called for shifting all education into the “investment” column.

In 2003, I co-convened the First International Conference on Implementing Indicators of Sustainability and Quality of Life (ICONS), in Curitiba, Brazil. Over 700 statisticians and public and private executives called for GDP to also include an asset account so that all democratically mandated public investments in infrastructure (sewers, roads, hospitals, airports, etc.) would be counted as assets to balance their costs, which GDP recorded only as debt.

When these valuable long-term infrastructure assets are added, many countries’ debt to GDP ratios shrink by as much as half!

A step in the right direction toward this capital budgeting was taken in the U.S. administration of Bill Clinton in 1999 when some infrastructure “costs” were also recorded as “savings.” This stroke of the pen, plus cuts in the military budget, contributed to Clinton’s budget surplus. And when Canada began its capital budget, it turned a 50 billion Canadian dollar deficit into a small surplus.

Macroeconomics is now unmasked as normative at its core, with economists’ various “weighting” of the value of a range of goods and services as essentially arbitrary.

If all unpaid production (about 50 percent in most industrial countries and up to 70 percent in traditional and developing countries) were included, they would all appear much richer (the 1995 UN HDI estimated unpaid production at 16 trillion dollars). 

And richer still if all the unpaid production of natural ecosystems and biodiversity were included, as the United Nations TEEB research shows. If all those “bads” (pollution; social and cultural disruption) were subtracted, they would make countries look poorer ( Trucost-TEEB reports say by some seven trillion dollars).

No wonder economics is now dismissed as a form of brain damage, as I and E. F. Schumacher joked in the 1970s!

Hazel Henderson, author of Ethical Markets: Growing the Green Economy and other books, is president of Ethical Markets Media (USA and Brazil) and creator of the Green Transition Scoreboard®.

(END/COPYRIGHT IPS)

Excerpt:

By Hazel Henderson
ST. AUGUSTINE, Florida, Jul 19 2013 (IPS)

While debating a high frequency trader recently, I encountered the familiar rationalisations that high frequency trading (HFT) contributes to liquidity and price discovery in markets. Assertions about liquidity are hard to justify after the “flash crash” of May 6, 2010, where the “faux liquidity” of HFT disappeared when needed and the traditional market-making obligations of the old specialists were absent.

Price discovery is a function of the levels of awareness and knowledge of market participants and the market places (physical and electronic) in which they trade. Clearly, HFT players contribute little and the “maker-taker” model they use together with today’s electronic markets distorts price discovery in additional ways through co-location and “latency” strategies (i.e., the speed of their computers), which are a form of “front running.”

In most worldwide markets today, price discovery is ignorant of planetary boundaries and the discoveries made by NASA satellite Earth Systems showing how our home planet functions in relation to our Sun’s daily shower of photons. Most markets and their participants do not understand that all life on Earth is a function of this flow of photons and their capture by green plants through their technology of photosynthesis, which creates our human food supply.

Price discovery is a human activity dependent not only on our levels of knowledge but also on our cultural conditioning and herd behaviour – all better researched by psychologists (Daniel Kahneman), anthropologists (Sissela Bok), brain scientists (Bruce Lipton) and endocrinologists.

Indeed, many now study traders as a clinical population, showing how their behaviour is governed by their hormonal levels, as described by John Coates in his book The Hour Between Dog and Wolf (2012). Biologist Coates describes how over-leveraging and betting are governed by excessive testosterone and produces the familiar “doubling down” on risk such as that of Jon Corzine in the demise of MF Global. Coates shows how market drops then trigger panic when the hormone cortisol takes over and leaves the trader like a deer caught in headlights.

These hormonal processes cause diarrhoea and the rush to the bathrooms or vomiting. Scott Patterson, in his book Dark Pools, describes how high frequency traders drink less so as to reduce urination and some keep buckets beside their computer if needed for vomiting.

Trading, an age-old human activity, can become obsessive and an addiction akin to gambling. Price discovery by today’s traders in today’s global markets is clearly unreliable. Then, we must take into account the pervasiveness of externalities, for example the 500 billion dollars of subsidies to fossil fuels annually worldwide, as well as the thousands of other subsidies, loopholes and lack of regulation in most industrial sectors. All this further distorts prices.

Thus the assertions that economics is a science are clearly absurd, and the Nobel Committee’s acceptance of the Bank of Sweden’s Prize for economics “in Memory of Alfred Nobel” has now been repudiated by lawyer Peter Nobel and other Nobel family members. Not only on these behavioural grounds is economics deficient but also on its pretensions of mathematical precision and its many illusions due to abstraction.

As I pointed out in The Politics of the Solar Age (1981, 1988), compound interest is a fantasy of mathematics enforced on society by powerful financial interests as in “austerity” policies. Neither does economics acknowledge the laws of thermodynamics, based on the profession’s rejection one hundred years ago of Nobelist chemist Frederick Soddy who pointed out that our planet’s sun was the source of all life. Soddy’s critique was re-published in 2012 in Cartesian Economics (Cosimo Books, 2012).

One could go on. Economics is a useful profession, like accounting, to help us track our transactions and keep our books and balance sheets.  Macroeconomics became an aberration in the search for mathematical precision and the illusions of general equilibrium in dynamic, evolving living societies. Humans refuse to behave like golf balls, yet these general equilibrium models are still used by governments, academia and market players.

The fantasies of economists Arrow and Debreu of “market completion” turned into the nightmares of HFT, recurrent financial crises and the enclosure of traditional lands of indigenous peoples.  Market fundamentalism is now threatening the planet’s last stands of virgin forests and further extinctions of other species in their shrinking habitats.

I am reminded of senator Robert Kennedy’s view of gross domestic product (GDP) as measuring everything except that which makes us proud to be Americans and Oscar Wilde’s famous words that we can “know the price of everything and the value of nothing.”

(END/COPYRIGHT IPS)

Excerpt:

In 2007 Ecuador’s president, Rafael Correa, sponsored the Yasuni Initiative to end oil prospecting in the vast Yasuni National Park, thereby preventing some 400 million tonnes of carbon emissions, if the international community or the United Nations would compensate Ecuador for half of the unrealised oil revenues (an estimated 13 billion dollars over 13 years).

Hazel Henderson

Spain donated 1.4 million dollars, Italy cancelled 51 million dollars of Ecuador’s debt, following Norway’s 20 million-dollar cancellation. Germany and France contributed token amounts along with Chile, Colombia, Georgia and Turkey. U.S. and European NGOs added their support.

Sadly, however, this innovative effort is faltering because of the ongoing world financial crisis. The deeper reason lies in the murky secrets of money-creation and how this financial sleight-of-hand enabled financial players to take control of politicians even in democracies.

Saving Yasuni and averting further social, financial, and environmental crises now urgently requires unmasking the mysteries of money.

Worldwide, we see thousands of sensible proposals ­ for re-vitalising communities, investing in new infrastructure, re-training, and green jobs, preventive health, public education, restoring ecosystems, protecting public parks ­ all blocked by politicians, economists, and financiers with the same cry: Where’s the money going to come from?

Even worse, we see central banks printing money to bailout past mistakes of financiers instead of directing it to the real economy while politicians crush taxpayers with budget and job cuts demanded by bond vigilantes and their rating agency allies.

Saving Yasuni can help us finally connect all the dots by revealing the truth: money is not wealth and only has value if we believe and trust it. Currencies are simply information systems that track and keep score of human priorities and interactions with each other and with nature’s riches.

Yet this money symbol system has morphed from a useful accounting tool into a fetish that dominates our minds, our communities, and national decision-making while hampering sustainable forms of development and more realistic global policies ­including protecting Yasuni and other ecological treasures for our common future.

The United Nations Rio+20 Earth Summit of July, 2012, helped its 193 country members and many city and provincial governments to connect many of the dots needed to overcome faulty economics and its money-based paradigm. Its outcome document, “The Future We Want”, articulated their vision for people-centred, just, green economies based on ecological sustainability and renewable energy and resources and on the protection of the biodiversity on which all humanity relies.

However, the conference did not illuminate the money paradigm standing in the way of these goals.

Once we clearly affirm that while money is a useful tool it is not real wealth, we can see how it can be re-directed away from all the mal-investments in fossil fuels, nuclear weapons, and subsidising such destructive technologies of the past. As the Green Transition Scoreboard shows, some 3.3 trillion dollars has already been re-directed by private investors worldwide since 2007 into renewable solar, wind, geothermal, water energies and far greater efficiencies, as well as green buildings, public transport, and smarter cities and land-use, proving how humans can change their minds and redirect their money towards a cleaner, greener, more equitable future.

To similarly change the minds of our politicians requires directly confronting financial centres, economists, and business schools and re-training asset managers that still control our pensions, public and private.

The Occupy movement and the Arab Spring demanded that we create true democracies and end the dictatorship of money and finance. We are changing our scorecards of progress from money-based gross domestic product (GDP) and stock markets to broader indicators of health, education, infrastructure, poverty gaps, and the environment such as the Integrated Wealth Index (IWI) released at Rio+20, the Better Life Index of the Organisation for Economic Cooperation and Development (OECD), Canada’s Index of Wellbeing, Bhutan’s gross national happiness index (suitable mainly for small Buddhist countries), and the Calvert-Henderson Quality of Life Indicators.

We are auditing the U.S. Federal Reserve and calling central bankers and their allies in finance to account, confronting the errors in their core business models and metrics.

Many challengers see beyond the money-game rigged by insiders and the powerful, based on scarcity, fear, and competition and instead point to the unpaid Love economies, gifting, and the new open source movements, all based on sharing, cooperation, creating community wealth and abundance powered by the sun. These unpaid sectors of the global economy are now larger than the paid economies officially measured by GDP. We can think beyond the paradigms of the Washington Consensus, the International Monetary Fund, the World Bank and the World Trade Organisation (all based on money measures like GDP). We can shift to Life’s Principles and Ethical Biomimicry Finance and invest in all such companies waiting for our re-directed focus on holistic, healthy investing.

We can envision a Gaian League of small countries that have rejected the Washington Consensus and are transitioning to healthier forms of local development, opting out of the global casino, such as Iceland, Bhutan and Ecuador, where they already value their Yasuni National treasure.

We and many NGOs support this kind of alternative, also promoted by the World Social Forum: Another World Is Possible. The breakdown of the corrupt, malfunctioning global casino is driving these new breakthroughs! Come join us!
(END/COPYRIGHT IPS)

* Hazel Henderson is president of Ethical Markets Media (U.S. and Brazil), publisher of the Green Transition Scoreboard and author of “Building a Win-Win World” and other books.

This column is available for visitors to the IPS website only for reading. Reproduction in print or electronic media is prohibited. Media interested in republishing may contact romacol@ips.org

In 2007 Ecuador’s president, Rafael Correa, sponsored the Yasuni Initiative to end oil prospecting in the vast Yasuni National Park, thereby preventing some 400 million tonnes of carbon emissions, if the international community or the United Nations would compensate Ecuador for half of the unrealised oil revenues (an estimated 13 billion dollars over 13 years).

Spain donated 1.4 million dollars, Italy cancelled 51 million dollars of Ecuador’s debt, following Norway’s 20 million-dollar cancellation. Germany and France contributed token amounts along with Chile, Colombia, Georgia and Turkey. U.S. and European NGOs added their support.

Sadly, however, this innovative effort is faltering because of the ongoing world financial crisis. The deeper reason lies in the murky secrets of money-creation and how this financial sleight-of-hand enabled financial players to take control of politicians even in democracies.

Saving Yasuni and averting further social, financial, and environmental crises now urgently requires unmasking the mysteries of money.

Worldwide, we see thousands of sensible proposals ­ for re-vitalising communities, investing in new infrastructure, re-training, and green jobs, preventive health, public education, restoring ecosystems, protecting public parks ­ all blocked by politicians, economists, and financiers with the same cry: Where’s the money going to come from?

Even worse, we see central banks printing money to bailout past mistakes of financiers instead of directing it to the real economy while politicians crush taxpayers with budget and job cuts demanded by bond vigilantes and their rating agency allies.

Saving Yasuni can help us finally connect all the dots by revealing the truth: money is not wealth and only has value if we believe and trust it. Currencies are simply information systems that track and keep score of human priorities and interactions with each other and with nature’s riches.

Yet this money symbol system has morphed from a useful accounting tool into a fetish that dominates our minds, our communities, and national decision-making while hampering sustainable forms of development and more realistic global policies ­including protecting Yasuni and other ecological treasures for our common future.

The United Nations Rio+20 Earth Summit of July, 2012, helped its 193 country members and many city and provincial governments to connect many of the dots needed to overcome faulty economics and its money-based paradigm. Its outcome document, “The Future We Want”, articulated their vision for people-centred, just, green economies based on ecological sustainability and renewable energy and resources and on the protection of the biodiversity on which all humanity relies.

However, the conference did not illuminate the money paradigm standing in the way of these goals.

Once we clearly affirm that while money is a useful tool it is not real wealth, we can see how it can be re-directed away from all the mal-investments in fossil fuels, nuclear weapons, and subsidising such destructive technologies of the past. As the Green Transition Scoreboard shows, some 3.3 trillion dollars has already been re-directed by private investors worldwide since 2007 into renewable solar, wind, geothermal, water energies and far greater efficiencies, as well as green buildings, public transport, and smarter cities and land-use, proving how humans can change their minds and redirect their money towards a cleaner, greener, more equitable future.

To similarly change the minds of our politicians requires directly confronting financial centres, economists, and business schools and re-training asset managers that still control our pensions, public and private.

The Occupy movement and the Arab Spring demanded that we create true democracies and end the dictatorship of money and finance. We are changing our scorecards of progress from money-based gross domestic product (GDP) and stock markets to broader indicators of health, education, infrastructure, poverty gaps, and the environment such as the Integrated Wealth Index (IWI) released at Rio+20, the Better Life Index of the Organisation for Economic Cooperation and Development (OECD), Canada’s Index of Wellbeing, Bhutan’s gross national happiness index (suitable mainly for small Buddhist countries), and the Calvert-Henderson Quality of Life Indicators.

We are auditing the U.S. Federal Reserve and calling central bankers and their allies in finance to account, confronting the errors in their core business models and metrics.

Many challengers see beyond the money-game rigged by insiders and the powerful, based on scarcity, fear, and competition and instead point to the unpaid Love economies, gifting, and the new open source movements, all based on sharing, cooperation, creating community wealth and abundance powered by the sun. These unpaid sectors of the global economy are now larger than the paid economies officially measured by GDP. We can think beyond the paradigms of the Washington Consensus, the International Monetary Fund, the World Bank and the World Trade Organisation (all based on money measures like GDP). We can shift to Life’s Principles and Ethical Biomimicry Finance and invest in all such companies waiting for our re-directed focus on holistic, healthy investing.

We can envision a Gaian League of small countries that have rejected the Washington Consensus and are transitioning to healthier forms of local development, opting out of the global casino, such as Iceland, Bhutan and Ecuador, where they already value their Yasuni National treasure.

We and many NGOs support this kind of alternative, also promoted by the World Social Forum: Another World Is Possible. The breakdown of the corrupt, malfunctioning global casino is driving these new breakthroughs! Come join us!
(END/COPYRIGHT IPS)

* Hazel Henderson is president of Ethical Markets Media (U.S. and Brazil), publisher of the Green Transition Scoreboard and author of “Building a Win-Win World” and other books.

The Jumpstart Our Business Startups Act (JOBS) signed by President Barack Obama on April 4th, 2012, had been loaded with provisions pushed by Wall Street lobbyists to include “small” companies capitalised at up to one billion dollars and perverted by relaxing both requirements of Security and Exchange Commission (SEC) reporting and compliance with the Sarbanes-Oxley financial regulations passed in response to the 2008 crisis.

While the bill fell far short of its initial promise, opening capital-access to startups is clearly needed, especially for the many that are focused on social problem-solving. The latter can be frequently found on the new generation of so-called “crowdfunding” websites, like Kickstarter and GOOD, where proposals soliciting individual investments are posted. This is a boon for social do-gooder organisations that were denied conventional loans and venture financing. Internet crowdfunding of such startups and non-profits is part of the social media revolution that disrupts incumbent industries and technologies by lowering costs, democratising access, allowing information-sharing, and ushering in the open-source, volunteerist sharing sectors described by Don Tapscott in Macrowikinomics (2010).

The IT-based revolution has changed newspapers, mainstream media, and retailing and threatens centralised energy, medicine, and agribusiness. It was only a matter of time before IT changed “too big to fail” banks and elite finance. Even though Wall Street’s grip on Washington politicians distorted the JOBS Act, key sponsors ­ congressmen Peter Welch and David Schweikert ­ have publicly vowed to amend the provisions favouring billion-dollar companies and close loopholes on disclosing and compliance that they and others can exploit.

The IT open-source community that promotes responsible, transparent crowdfunding is also gearing up to make sure the JOBS Act does not lead to further opportunities for the fraud and corruption that have decimated the trust of retail investors since Wall Street blew up the real economy in 2007-8. Indeed, it was this widespread distrust and anger toward Wall Street’s depredation of Main Street businesses, homeowners, and small investors that led to their revolts and efforts to bypass Wall Street. These arrogant gatekeepers forgot that they are not “providers of capital” but simply intermediaries between producers and savers and people who can re-deploy these savings most productively.

Like so many other middlemen, financiers and centralised finance are being dis-intermediated by the radical flattening of old hierarchies allowed by the Internet. Local currencies, time banking, neighbourhood sharing of appliances, cars, credit systems, and peer-to-peer lending increase wherever central banking, policymakers, and financiers squeeze real economies, imposing “austerity” through ideology, stupidity, power plays, or greed. All financial “crises” produce these countermovements: Argentina in 2002 and recently in European Union countries in the grip of financial dictatorship imposed by “technocrats” like President Lucas Papademos in Greece, Prime Minister Mario Monti in Italy, and Mario Draghi at the European Central Bank (ECB) ­ all alumni of Goldman Sachs.

The crowdfunding movement is a response to central banks’ incompetence, the perversion of responsible finance on Wall Street and in the City of London, and the new opportunities for bypassing such centralised control through the myriad social networks allowed by the Information Age.

Fine work has been done by reformers of Wall Street and Washington, notably Professor William Black of the University of Missouri, Gretchen Morgenson of the New York Times, and all their exposes. Yet, their condemnation of the JOBS Act need not blind them to the IT revolution bypassing the defunct financial centres they decry.

Some reformers see crowdfunding as leading to a new round of abuses, fraud, fleecing of unsophisticated investors, and the loss of trust in U.S. financial markets ­ though this trust has already been violated and lost. Which is worse: the continued printing of free money showered on Wall Street banks by the gullible Ben Bernanke and on European banks by the ECB’s equally bemused Mario Draghi or possible fraud in efforts to bypass these malfunctioning financial centres through crowdfunding and local initiatives? Meanwhile the Wall Street perpetrators go unpunished while the real U.S. economy continues to suffer with millions of evicted, homeless, long-term unemployed and pervasive fear and desperation.

The politics of money-creation and credit-allocation is spreading. The insanity of high-frequency algorithmic trading now gripping Wall Street and London is evident in its perversion of markets and misuse of computerised communications platforms funded by taxpayers. Trading has become an addiction worse than gambling. I prefer to take my chances with crowdfunding, digital trading and exchange, complementary local currencies, and homegrown economies. (END/COPYRIGHT IPS)

(*) Hazel Henderson, author, is president of Ethical Markets Media (USA and Brazil), creator of the Green Transition Scoreboard, and co-creator of the Calvert-Henderson Quality of Life Indicators.

The urgent need for a paradigm shift in economics and its financial and mathematical models has been widely recognized for decades. Recently, Credit Suisse research as well as complexity theorists at the Swiss Technical University in Zurich have demonstrated the concentration of companies in the current global economic system. They used network analysis of positive feedback effects (the network grows faster as more join, like Facebook). These dynamics also concentrate connectedness and produced a pattern: of the 50 largest companies in the world, 45 are financial intermediaries (‘ Global Finance Lost in Cyberspace”).

The top brass of these companies meet in Davos at the World Economic Forum. These firms (Barclays, UBS, Citi, etc.) operate on outdated economic theories, assumptions and financial models and tend to favour the current cruel austerity being imposed on citizens in Greece, Italy, Spain, Ireland, Portugal and the U.S. Their financial and policy models have been critiqued by scientific research in physics, thermodynamics, anthropology and, recently, brain science, endocrinology and the behavioural sciences, as I documented earlier in The Politics of the Solar Age (NY Times Book Review, 1981).

This concentration of corporate power and its outcomes are now evident in today’s global financialization and led to the financial bubble which burst in 2007-9, still causing widespread human misery. Re-inflating these too-big-to-fail banks allows them to continue dominating the actual activities of real-world, local ‘main street’ economies, rather than serving their banking and credit needs. Thus, efforts to reform today’s financial system simply have bailed out the past mistakes so that more crises, booms and busts are likely to continue.

Current scientific knowledge of our planet’s biosphere, its climate, geology and the behaviour of our human species is finally trumping this cultural legacy of conventional economics and political ideologies rooted in 18th century paradigms. Economics is not a science – as most economists will admit. Rather, its core tenets and “principles” are mere semantics: “capital” (too many definitions); “investment” (in what: nuclear power? public transport? green bonds?); “wealth” (money, ignoring all other forms of wealth); “consumption” (education, social services, household spending) and so on.

The valiant work of financial reformers since the 1970s has challenged these paradigms and their outdated models: modern portfolio theory (MPT), efficient markets, rational human actors, capital asset pricing models (CAPM), value-at-risk (VAR), Black-Scholes options pricing model, NAIRU (non-accelerating inflation rate of unemployment, used by central banks to set interest rates), etc. (” Changing the Game of Finance”). Building successful alternative financial investment strategies, the pioneers of socially responsible, ethical, triple-bottom line, green investing opened a new window into mainstream finance and managed to broaden and shift the focus of asset managers beyond single bottom line money returns (” Transforming Finance 2.0″).

The new scientific findings must now face down financiers and expose their mystifications. Financiers do not provide capital; they are merely intermediaries between savers and businesses in the real economy and borrowers they favour. Often they take depositors’ money and invest it outside the country or simply speculate on derivatives like credit default swaps. At last, we the 99 percent must rein in these practices and reverse the focus on reforms merely tweaking false economic and financial models. These proved brittle and failed disastrously in 2007-8, causing untold human suffering and widespread ecological disruption and depletion of biodiversity. The economic “technocrats” imposition of their “austerity” cuts have made matters worse. Misdirected investments in 40 percent of London’s FTSE 100 were identified as “sub-prime” by Carbon Tracker.

Today we can start with science and our new knowledge of ecology, biomimicry, climate, geology, thermodynamics, endocrinology, behavioural and brain sciences. This real-world approach will help assure that technologies, business models and enterprises are based on the expansion of human knowledge and planetary awareness. We can also take into account new behavioural insights into our own human cognitive biases, expose economic theory-induced blindness to “externalities,” as well as acknowledging our moral and ethical frailties.

Finance and its pretensions must be defrocked and its misallocations of resources re-oriented in due diligence processes that start with science in reviewing all business opportunities. Only after passing multi-disciplinary analyses of their scientific validity and resilience, possibilities of advancing equitable human development within Life’s Principles, will our models of finance and markets be reformulated to create suitable business and funding models. Some egregious conventional financial models are explored in my ” Real Economies and the Illusions of Abstraction” (2010); ” From Rigged Carbon Markets to Investing in Green Growth” (2011); and ” Updating Fossilized Asset Allocation Classes” (2008). Overviews of global financialization and reform proposals are covered at (www.ethicalmarkets.com Reforming Global Finance).

Ethical Markets’ Green Transition Scoreboard® tracks progress toward deeper greening of global economies. The multi-disciplinary “dashboard” Calvert-Henderson Quality of Life Indicators are updated regularly at www.calvert-henderson.com . The European Commission’s Beyond GDP programme (www.beyond-gdp.eu), the OECD’s Better Life Index, Canada’s Index of Wellbeing and my paper with physicist Fritjof Capra, ” Qualitative Growth,” the Institute of Chartered Accountants of England and Wales (2009), all focus on correcting macroeconomic statistics in line with global scientific realities. Join the signers of our Transforming Finance statement! Surveys worldwide by Globescan show that the public in many countries support such statistical upgrades by wide margins. Let’s set aside old dogmas and use all our new knowledge! (END/COPYRIGHT IPS)

(*) Hazel Henderson is president of Ethical Markets Media (USA and Brazil), author of many books, former advisor to the U.S. Office of Technology Assessment, National Science Foundation National Academy of Engineering, the Calvert Group, Fellow of Britain’s Royal Society for Arts and the World Business Academy.

By Hazel Henderson and - -
SAINT AUGUSTINE, Nov 16 2011 (IPS)

High-speed trading and cloud computing have far outrun government oversight and control.

For years, I have documented how often science and technology leap ahead of politicians and bureaucrats. Usually, citizens and their groups sound the alarm because they feel the impacts first: job losses, pollution, identity theft, ponzi schemes, and worthless investment advice.

The latest runaway technologies are those now driving the cyberspace communications revolution: the Internet, high-frequency trading, money-laundering, offshore finance in the global casino, loss of privacy, corporate-controlled personal data on Facebook or on servers now in the clouds.

Some examples:

-The New York Stock Exchange handles one third of the world’s stock trading (22 billion messages a day), while over 60 percent of all transactions are computerized as high-frequency trading allows for thousands of trades per second. This led to the “flash crash” of May 2010 when stocks of listed companies plummeted. Accenture, for example, fell from USD 40 a share to pennies in a few minutes, though it did recover later. The US regulator -the Security and Exchange Commission- complained they were out-gunned, out-spent, and out-smarted in this new computerized technological arms race.

-In 2011, the cable company Hibernia Atlantic spent USD 300 million on a new transatlantic cable to shave 6 milliseconds off the current 65 millisecond transmission time between New York and London. G20 “sherpas” and UK bank regulators Adair Turner and Andrew Haldane question the social value of such trading activity. Needless to say, retail investors are fleeing these financial casinos.

-At the October 20 ESG-Europe meeting of socially-concerned institutional investors in Amsterdam, Mervyn King, chair of the Global Reporting Initiative, saw the financial crises as related to a lack of transparency and disclosure and that “the two greatest challenges of the 21st century are sustainability and financial stability.” This confirms the view of the Ethical Markets’ Transforming Finance statement that all the new computerized communications tools -the Internet- and satellite-based platforms funded by taxpayers and on which casino finance rests- are being horrendously mis-used.

-The 500-plus institutional investors at the UN Environmental Programme Finance Initiative (UNEP-FI) Tipping Point Roundtable in Washington voiced many of the same worries. Co-chair Paul Clements-Hunt warned that “the disconnect between grassroots economic realities and financial markets erodes the trust that binds us together.” Co-chair Barbara Krumsiek, CEO of Calvert Investments, added, “Economic policies must move in a direction that balances the needs of all stakeholders.” The UN-backed Principles for Responsible Investing (to which Ethical Markets is a signatory member) set a higher ethical bar, but many see a lack of sanctions, vetting and enforcement.

-While government regulators fall further behind, new evidence of the concentration of corporate and financial power was finally mapped by complexity systems analysts at the Zurich-based Swiss Federal Institute of Technology, leaders in the field of technology assessment. They revealed a core of 43,000 transnational corporations, all tightly interlinked, with 147 (i.e., less than 1 percent) controlling 40 percent of the global wealth network. This study closely tracks with the 2011 Global Wealth published by Credit Suisse. These findings are echoed by Nicholas Shaxson in “Treasure Islands”, which explores offshore finance in tax havens, and the 2011 World Bank report “The Puppet Masters” on how corporate structures hid financial manipulation and stolen assets.

Once again, citizens and their civil society organizations (CSOs) are ahead of governments and academia in forcing reforms: Occupy Wall Street, which is worldwide and the most visible, as well as Global Witness, Tax Justice, Global Financial Integrity, and New Rules for Global Finance, to name a few. Business guru Don Tapscott, author of Macrowikinomics and endorser of Ethical Markets’ Green Transition Scoreboard, quotes an Occupy Wall Street sign: “This is not a recession. It’s a robbery!” He calls for Three Principles for a New Wall Street, viewing the irresponsible behaviour of bankers and financiers as unacceptable.

Will we humans be able to regain control over our technological inventions or will they dominate us as in science fiction dystopias? Daniel Kahneman brings us up to date in his “Thinking Fast and Slow”. Kahneman and the late Adam Tversky, co-founders of behavioral and decision-making research, demolished the core assumption in economics that we humans are rational decision-makers. An embarrassed Nobel committee acknowledged psychologist Kahneman with the Bank of Sweden Prize in Economics.

Macroeconomics methods are now threadbare and daily sinking further into disrepute. Mainstream economics orthodoxy still disempowers us by claiming that markets come from God’s “invisible hand” rather than human ingenuity. Mathematicians John Geanakoplos of Yale and Doyne Farmer of the Santa Fe Institute confirm the economists’ blindness. They call for lowering discount rates used by short-term-focused economists which ignore future events. I and many other ecologists and systems analysts have pointed out for decades how discount rates short-change future generations (Real Economies and the Illusions of Abstraction).

Can we learn to master our tools? The jury is still out! (END/COPYRIGHT IPS)

(*) Hazel Henderson, author of award-winning Ethical Markets: Growing the Green Economy and other books, is founder and president of Ethical Markets Media.

Excerpt:

By Hazel Henderson and - -
SAINT AUGUSTINE, FLORIDA, Oct 12 2011 (IPS)

“We recognize finance as part of the global commons,” affirms the Transforming Finance statement, signed by financial professionals worldwide critical of today’s casino capital markets. Financialization has produced the global debt bubble. Needed now are write-offs and haircuts to bond-holders and bank shareholders, a curb on bettors buying credit default swaps, as well as below 1% financial transaction taxes to limit volatility and high-frequency trading by computers ?now 60% of all transactions.

Yet the power of mainstream finance still dominates governments, forcing taxpayer bailouts, raising public deficits and demanding “austerity,” cuts in safety nets, public services and jobs. The economics profession (never a science) has clothed finance, banking and markets in obfuscation, using convoluted math and unnecessary complexification to hide the truth: economics is politics in disguise. In my Politics of the Solar Age (1981), I described “economists as apologists” ?providing cover for the powerful, justification for privilege, patriarchal structures and policies. I exploded their myths: financiers do not provide capital ?they are merely intermediaries; money is not wealth, but an information system designed track and keep score of human transactions, social and environmental capital. Today the arcane politics of money-creation and credit-allocation by central banks and their cronies in financial markets now manipulate money-printing. These global bubbles of fiat money, credit and debt starve the world’s real economies.

The spate of international meetings leading up to the Rio+20 summit in June 2012, at last, are engaging with global casino finance. Short-changed social, health and environment ministries, together with professional and scientific bodies, academics and Civil Society Organizations (CSOs) are facing down the bastions of finance, central banks and economic ministries and their academic apologists. As yet another financial crisis looms, politically weaker social ministries and their allies are illuminating the hidden connections between out-of-control financialization and their concerns for global poverty, inadequate healthcare, education, access to energy, water and the costs of environmental destruction and climate change. Brazil’s President Dilma Rousseff set a similar tone at the UN General Assembly. We learn how bankers and financiers fought ferociously to weaken the reforms in the US 2010 Dodd-Frank law. They shaped the law to defer action to regulators who now are surrounded by financial lobbyists, bent on weakening the new rules. Similar power plays attacked the UK’s Vickers Independent Commission on Banking which called on “ring-fencing” retail banking and shielding depositors from the risks of trading and investing activities. The Bank for International Settlements’ new Basel III rules to increase the capital reserves banks must hold against their losses has also been attacked, notably by Jamie Dimon, CEO of JPMorgan Chase, who called it “anti-American.” A new report, Treasure Islands, documents how offshore banking avoids regulation in all countries by setting up phony regimes, not only those cited by the OECD’S Blacklist but also the City of London and the American states of Delaware, South Dakota, Oregon, where thousands of corporations are domiciled to avoid taxes, regulation and disclosure of their finances.

Cleaning up this global financial cesspool is a daunting task requiring courage and wider cooperation. Meanwhile, private investors have placed $2.4 trillion in green sectors worldwide since 2007. Phasing out tax loopholes and subsidies to fossil fuels, nuclear power, ethanol and those supporting “too big to fail” banks and their backdoor bailouts by central banks’ money-printing are now all on the global agenda (GSI). The G-20 and many countries support financial transaction taxes, not only to curb robotized high-frequency trading while protecting real investors, but also to help reduce government budget deficits.

Scorecards based on faulty economics and money coefficients, such as Gross Domestic Product (GDP), are being challenged by the new broader, multi-disciplinary indicators on website “dashboards” which by-pass macroeconomics’ flawed methods: the OECDs Better Life Index, Canada’s Index of Wellbeing, China’s Quality of Life GDP and in the USA the Calvert-Henderson Quality of Life Indicators. These mirror triple bottom line accounting correcting companies’ books and methods to internalize their social and environmental costs that economists dismiss as “externalities.” Too many companies and bankers’ business models operate on “externalizing” these costs to taxpayers and society, with their fraudulent “returns” then added into GDP. This leads to flawed public accounting and policies, and mispricing of sovereign bonds of Greece, Ireland, Portugal, Italy, Spain, since GDP’s money-focus ignores the other forms of wealth: well-trained workforces, efficient infrastructure and productive ecosystems.

Textbook economics relies only on traditional money-circuits and finance and dismisses barter as “primitive.” Yet, electronic barter is now a flourishing staple of internet trading and banking: from mobile phones in Africa, Asia and Latin America to B2B bartering sites like Baidu in China; Prosper.com, Kabbage and other “crowdfunding” ( www.startupexemption.com) in the USA; Zopa in Britain; Craigslist, Freecycle and many others worldwide. We applaud all these efforts to reform and bypass casino capitalism. All these concerned organizations supporting the growth of fairer, greener sustainable economies will converge at Rio+20 in June 2012. They hold the hopes of millions of citizens worldwide for a better common future. (END/COPYRIGHT IPS)

(*) Hazel Henderson, author of Ethical Markets:Growing the Green Economy and other books, is president of Ethical Markets Media (USA and Brazil), www.ethicalmarkets.com.

Excerpt:

By Hazel Henderson and - -
SAINT AUGUSTINE, Aug 1 2011 (IPS)

At last there seems to be real progress in overhauling the Gross Domestic Product (GDP) as measure of a country’s status and progress-almost twenty years after 170 governments pledged to do so by signing Article 40 of Agenda 21 at the 1992 Rio Conference.

It’s about time. Since 2007 and the Beyond GDP conference in the European Parliament, surveys in 12 countries show wide public support.

The inventor of the GDP system of national accounting, Simon Kuznets, warned that it was never intended to measure overall progress. Its one-size-fits-all focus on priced output of goods and services is akin to overflying a country at 50,000 feet. While it simplified the math, the aggregation and over-averaging of data obscures important aspects of national progress and human development: education, health (both treated as “consumption” in GDP rather than key investments), the state of infrastructure and the environment. Many of these key indicators are still treated as “externalities” (like pollution) in economics and company balance sheets, and are passed on to taxpayers and future generations.

GDP indices and their regular reporting in mass media became a “fetish” as described Joseph Stiglitz, winner of the Bank of Sweden prize in economics. GDP became the focus of economic competition between nations, the justification for interest rates on their sovereign bonds, the obsession of politicians seeking election, and the reason for business leaders’ plant location decisions at conferences in Davos, the G-7, G-20, IMF, World Bank, as well as at the World Trade Organisation and the United Nations.

Then financial reporting and mainstream media amplified GDP in their global eco chambers. In stock markets, security analysts, economists, and pundits relied on GDP in benchmarking performance of securities, central bankers, company CEOs and politicians. Macroeconomists’ models measured GDP performance numbers, reducing the rich complexity of countries’ culture, history, geography, climate, terrain and various approaches to development to money-coefficients.

All this explains why it has taken twenty years to make the needed corrections to GDP and why it has been so staunchly defended by economists, business leaders, politicians, powerful ministries, and even statistical agencies in most countries. GDP perpetuates the false prices resulting from externalising costs to societies and exploiting environmental resources. This helps explain BP’s massive oil well blowout in the Gulf of Mexico and the meltdowns of nuclear reactors in Fukushima, Japan. Many crises have reached global levels in pollution, desertification, climate change, and epidemics. Recurring financial crises produce unemployment, “jobless economic growth”, and un-repayable debts. Public distrust and anger is growing, along with demands for truth and accountability. If societies are blinded to longer-term threats by incorrect prices, all incorporated into stock and bond markets and GDP, then such crises and social backlashes will worsen.

Many efforts have been mounted by NGOs, academics, and professionals in key scientific disciplines beyond economics to correct GDP. They call for proper accounting for these externalities and for the some 50 percent of productive work in all societies that is unpaid and ignored in GDP. They have faced implacable opposition from economists, business groups, and their political allies as well as special interests making money by externalising costs. Alternatives to GDP have proliferated based on indicators beyond economics: on health, education, sustainability and the environment. These include the UN’s Human Development Index (HDI), the Living Planet Index, Ecological Footprint, Bhutan’s Gross National Happiness, and the Canadian Index of Wellbeing.

The Calvert-Henderson Quality of Life Indicators, which I co-created with the Calvert Group in 2000, uses a web-based dashboard with 12 indicators. British prime minister David Cameron recently ordered its statistical office to develop an Index of Wellbeing like that in Canada. China’s innovative Green GDP, which showed in 2006 that some 3 percentage points of its rapid economic growth were externalised environmental costs which should be deducted from its GDP, was quashed in spite of public support.

The most significant new effort is that of the OECD, which announced its Better Life Index in 2011. It uses as indicators housing, income and wealth, jobs, community, education, environment, governance, health, life satisfaction, safety, work-life balance. A unique innovation is the OECD’s better life index, an interactive tool allowing customised comparisons of indicators on education, housing, and environment across selected countries. the goal of inviting more scrutiny and involvement of citizens to foster a more intelligent debate about national progress and well-being is an admirable one.

But as with most of the new indicators and efforts to go beyond GDP, direct confrontation with GDP proponents is avoided. EUROSTAT’s 2011 conference did not directly address GDP’s reliance on false pricing and externalised social and environmental costs. Such timidity and discretion is understandable, however, given the power of special interests and their profits in “business as usual” externalising costs models.

History is now on the side of the Better Life Index and the growing influence of all the other new indicators mentioned. The European Parliament voted to approve the Beyond GDP report and a new regulation on Environmental Economic Accounts. It’s a good beginning. (END/COPYRIGHT IPS)

(*) Hazel Henderson, author of Ethical Markets:Growing the Green Economy and other books, is president of Ethical Markets Media (USA and Brazil), www.ethicalmarkets.com.

Excerpt:

By Hazel Henderson and - -
SAINT AUGUSTINE, May 23 2011 (IPS)

The Kyoto Protocol expires at the end of 2012. Its global focus on CO2 emissions and trading schemes based in London and other financial centres has grown suspect.

The 2007-2008 Wall Street meltdown with the help of the fossil fuel lobbies doomed prospects for a national “cap and trade” bill in the US Congress. Widespread fraud in trading CO2 “offsets” led the UN police agency INTERPOL to warn that the next white collar global crime wave would likely be in trading these carbon derivatives.

Emission-trading schemes were devised to bridge divides between North and South, using “neutral” market mechanisms. These markets for carbon in the Kyoto Protocols included a Clean Development Mechanism (CDM) to compensate developing countries for shifting to low-carbon technologies and development. Traders in Wall Street and London’s big banks hailed these “financial innovations” and set up trading desks and exchanges.

But large polluting industries in Europe’s Emissions Trading Scheme (ETS) quickly gamed the Kyoto Protocol. They lobbied EU governments for so many free CO2 emission permits that they crashed the ETS markets for CO2. Then, instead of shifting from fossil fuels to wind, solar, geothermal and energy efficiency, polluting industries purchased “offsets” under the CDM to fund projects in developing countries.

Verification of these projects proved almost impossible, since so many would have happened any way, for sound business reasons like energy efficiency and more productive, cleaner technologies. Most of the offsets under CDM went to China, allowing it to develop solar, wind, and clean technologies. Now China has developed and captured these export markets; it has stopped selling “offsets” to Europe’s polluting industries, which must now go green and buy their new equipment from China.

Economists pushed policy proposals for “market-based solutions” to climate change in the US Senate during the Reagan and Clinton administrations. Influenced by the ideologies of conservative economists and elite environmentalists, they joined the push to privatise, deregulate, and promote expansion of market-based globalisation. US policy dominated the UN’s first climate summit in Kyoto in 1997, and led to the CO2 emissions-trading approach of the Kyoto Protocol. The focus on CO2 (with lesser attention to other more polluting greenhouse gasses: methane, NOx, VOCs) followed largely because financial traders on Wall Street and in London needed a single commodity -carbon- to construct tradable financial instruments.

Many developing countries were dubious about “cap and trade”, understandably suspicious about turning their climate policies over to faraway trading desks in the major banks and new firms set up to trade carbon. They warned that these new carbon markets were not “free” but created and administered by governments which set and policed the caps on emissions.

Pandering to market-fundamentalist economists by focusing on carbon and its financial trading now seems a strategic mistake. There was a failure to disclose that setting up carbon caps and trading mechanisms actually entailed the creation of costly, complicated new bureaucracies. Monitoring, verifying the offsets, RECs (renewable energy certificates) while lowering the levels (caps) on CO2 emissions was opposed by the polluters. The CO2 permits were to be auctioned, but this quickly turned into massive giveaways to polluters, which then sold them at a profit -as global levels continued to rise.

Thus “cap and trade” turned out to be less efficient then direct taxing and regulation. Trading was opposed by many developing countries, environmentalists, academics, climate scientists as well as some brave economists who argued for taxes. Green tax shifting is still the best solution, as I advocated (Christian Science Monitor 1989, 1990) where taxes on incomes and payrolls are cut and shifted to all forms of pollution (not just CO2), extraction of virgin resources, and waste while remaining revenue neutral. Slowly, this approach is gaining support, even in the US Senate from Senators Maria Cantwell and Susan Collins.

Meanwhile our Ethical Markets Green Transition Scoreboard researching all private investments in green technologies since 2007 reported USD 2 trillion by Q1 2011. While politicians argued, Ethical Markets urged global pension funds and institutional investors to shift at least 10 percent of their portfolios to green companies.

At the same time, the re-think on climate policy produced two ground-breaking reports from IPCC and UNFCCC itself with the World Meteorological Organisation (WMO). They advised broader approaches to global emissions beyond CO2 to focus on soot (black carbon), methane, VOCs and ozone -pointing out that this could decelerate global warming more rapidly than relying on CO2 reductions alone. These policy shifts also focus on green energy. Both can improve health outcomes from such localised pollution sources and make regional government actions feasible -before reaching new global agreements. (END/COPYRIGHT IPS)

(*)Hazel Henderson, author, president of Ethical Markets Media (USA and Brazil), co-developed with the Calvert Group the Calvert-Henderson Quality of Life Indicators ( www.calvert-henderson.com) and co-authored “Qualitative Growth” (2009), Institute for Chartered Accountants of England and Wales (www.icaew.com ).

Excerpt:

By Hazel Henderson and - -
SAINT AUGUSTINE, Apr 5 2011 (IPS)

I have opposed nuclear power since my service on the US Congress Office of Technology Assessment Advisory Council, from 1975 until 1980. Even back then it was clear that nuclear power was a fearsome military technology looking for a civilian second life. President Eisenhower’s “Atoms for Peace” was a strategy devised to subsidise this technology, despite the fact that it was never economically viable. The public was told that it would produce electricity too cheap to meter but it was never given all the facts: that there were health risks and no plans to provide storage for the spent fuel rods, which would be radioactive for centuries.

Strange for a society as dedicated to the “free market” as the US, nuclear power was the first truly socialist industry, created by government, given billions in taxpayer subsidies, and indemnified from all risks of accidents by the now-infamous Price-Anderson Act, which protects nuclear power operators from all liability by foisting it onto taxpayers and future generations. Thus, the private power companies operating nuclear plants can garner the profits while the risks are socialised.

There is still no solution for the safe long-term storage of radioactive nuclear waste, of which the US has 71,000 metric tonnes sitting in pools of water alongside most reactors. This seems to be the case in Japan’s Fukushima reactors as well. And even if a safe location for storage is ever found, this waste is difficult and hazardous to transport. Moveover, nuclear plants need to be de-commissioned after 25-30 years, even though many, like the crippled Japanese reactors, are almost 40 years old. De-commissioning is estimated to cost about as much as building the plants.

But the most important point to make is that, according to many well-researched studies (see www.EthicalMarkets.com and www.greentransitionscoreboard.com), nuclear power plants are simply not needed. The Scoreboard, which totals all private investment since 2007 in growing green, cleaner energy worldwide (which topped USD 2 trillion in February, 2011) shows that a combination of ramping up investments in energy-efficiency, solar thermal central plants (power towers) and photovoltaics (rooftop panels, new roof tiles), wind turbines, and water and geothermal energy, makes these technologies cost-competitive even when the massive subsidies to nuclear and fossil energy are factored in. Not only are wind and solar far more cost effective, they can be built and brought online in a matter of months, as opposed to the ten years it takes on average to build a nuclear plant. In addition there is the availability of geothermal power, especially in Japan and Iceland, countries that sit on the boundaries between tectonic plates.

The fundamental case against nuclear power is that fission is simply the most wasteful, stupid, and costly system for boiling water. Electricity is usually generated by boiling water and using the steam this creates to drive turbines to produce flows of electrons. The water can be boiled with oil, gas, coal, solar, wind, or geothermal power, which are the simpler methods that have been used for most of the Industrial Era. Building a vast, costly nuclear plant, digging up uranium and using coal to enrich it, shipping it by rail to the nuclear reactor is the staggeringly cumbersome and mindless way of boiling water!

Moreover, the argument that nuclear power is somehow climate friendly is bogus, in spite of the industry’s efforts to present itself as “carbon-free” -which it clearly is not. In the last count, as Ervin Laszlo suggests in his “Pact with the Devil” for The Huffington Post and on his site www.burningissuesforum.com, “nuclear future” is an oxymoron, and it is irresponsible.

Once all the social and environmental costs and health risks are properly assessed and the nuclear subsidies are suspended, we will see how wrong governments were to back nuclear power. We will also see how unjust it was to allow these external costs to be passed on to taxpayers and future generations. After Chernobyl, Three Mile Island, and now Fukushima, as well as the hundreds of near-miss accidents, many of them un-reported, economists will no longer be able to call these costs “externalities” (a Freudian slip!), or claim that they were unexpected. (END/COPYRIGHT IPS)

(*) Hazel Henderson, the author of numerous books, is president of Ethical Markets Media (US and Brazil) and co-developed with the Calvert Group the Calvert-Henderson Quality of Life Indicators ( www.calvert-henderson.com) and co-authored “Qualitative Growth” (2009).

Excerpt:

By Hazel Henderson, Joaquín Roy, and - -
SAINT AUGUSTINE, Jan 25 2011 (IPS)

The Gross Domestic Product (GDP) results for the final quarter of 2010 are an unreliable gauge of recovery and progress in Europe, the US, China, Brazil, and most other countries. A new survey by GlobeScan and Ethical Markets, titled “Beyond GDP”, reaffirms that large majorities favour reforming the money-based GDP economic yardstick and adopting many of the available indicators of health, education, infrastructure, poverty gaps, and environmental quality found in their 2007 survey for the European Commission (www.beyond-gdp.eu). The new survey was conducted in Australia, Brazil, Canada, China, France, Germany, India, Italy, Kenya, Russia, the UK, and the US and released on January 21.

Yet statistical agencies still use GDP, an inaccurate “rear view mirror” that omits vital indicators of future trends.

The chorus of critics of “GDP fetishism” now point to many more accurate indicators forecasting national well-being, sustainability, and quality of life. Britain’s David Cameron has ordered his Office of National Statistics to develop new measures by 2012, similar to Canada’s Index of Well-being.

The survey’s conclusions mirror those of the 2009 Stiglitz-Sen commission to french president Nicholas Sarkozy: that gdp had become a “fetish” and it was time to move on [1]. Reasons for the continued use of GDP include deregulation and the growing influence of money and finance in politics. In OECD countries, special interests and their allies in politics and in ministries of finance, economic development, trade, central banks, and stock markets grew to dominate government policies.

The survey showed that many companies, investors, and much of the public recognise that in GDP a well-trained work force, efficient public infrastructure, and productive ecosystems are all counted at zero.

GDP’s macro-economic, money-denominated, over-aggregated methods are unnecessary in our Internet age, which enables multi-disciplinary indicators and metrics, using systems approaches.

The fallout from the continued reliance on GDP is considerable: as deregulation and privatization became widespread, infrastructure (ignored in GDP) was short-changed, while ministries of education, health, social welfare, consumer, and environmental protection lost influence. Their support and that of NGOs for overhauling GDP accounts was insufficient to breach the bastions of macroeconomics. Statisticians claimed it was too difficult. Market enthusiasm, buttressed by financial forces and powerful interests were all justified by these traditional economic theories.

In the 1992 Earth Summit in Rio, 170 countries signed Agenda 21 Article 40 and so pledged to overhaul GDP to reflect infrastructure, social capital, unpaid work, and environmental assets. Indicators proliferated on infrastructure assets, environmental quality, resource depletion, loss of biodiversity, public health, access to clean water, education, poverty gaps, social welfare, and quality of life.

Yet, all these well-researched indicators have remained sidelined from GDP accounting and designated “satellite accounts”, which devalued their importance and relegated them to academia, NGOs, and the margins of society. mass media, financed by advertising, still focuses on driving mass consumption, gdp, and other macro-economic indicators.

Stressing the need for “faster growth”, most fail to clarify that they and politicians use GDP-growth as the tacit definition of overall progress. Other indexes of national progress (www.beyond-gdp.eu) include the UN’s Human Development Index (HDI) since 1990, the Living Planet Index of WWF, and the Ecological Footprint to measure global conditions.

Meanwhile, the rise of socially-responsible business and investment has led to new corporate accounting standards -beyond earlier “efficient market” models- to measure performance by environmental, social, and governance standards (ESG), the “triple bottom line”.

It is time to require all companies to internalize the “externalities”, i.e., to fully account for their social and environmental costs of production on their balance sheets. Many companies have succeeded in overhauling accounting practice toward this “triple bottom line”.

The new breed of micro-economists corrected company balance sheets and incorporated the new indicators. But macro-economists, the fossilized incumbent industries they serve, and their allies in politics and government agencies still seek to preserve their freedom to “externalize” social and environmental costs. They benefit from the view of “progress” in GDP-measured growth.

Thus, our economies continue to pump out carbon and other pollutants while ignoring social and environmental assets, hiding poverty gaps as well as infrastructure assets, all of which are missing in GDP. Financial markets wager on the future of the euro and bet on member countries’ sovereign bonds, while demanding “austerity”, forcing taxpayers to pay again for bankers’ follies. Calls by European leaders for bondholder “haircuts” are fiercely opposed.

We can now steer our societies away from dangerous inequalities, pollutants, and climate change toward the cleaner, greener economies we are all building and track progress with the Green Transition Scoreboard, totalling all private investments since 2007 in growing green sectors worldwide at USD 1.6 trillion in 2010.

As distrust, anger, resentment at the unfairness of the bailouts emerge in the US and Europe, indicators on public infrastructure, environment, health, education, and quality of life are even more important for our future. Nations can find new paths out of austerity and recession as casino finance is curbed and returned to its former, proper role in serving the world’s real economies. The Beyond GDP survey shows that the public is ahead of politicians ( www.globescan.com). (END/COPYRIGHT IPS)

(*) Hazel Henderson, author, president of Ethical Markets Media (US and Brazil), co-developed with the Calvert Group the Calvert-Henderson Quality of Life Indicators ( www.calvert-henderson.com) and co-authored “Qualitative Growth” (2009).

[1] “Stiglitz-Sen Moving in the Right Direction, but Slowly,” IPS, Sept. 18, 2009, https://www.ipsnews.net/news.asp”idnews=48492

Excerpt:

By Hazel Henderson and - -
ST. AUGUSTINE, Jun 28 2010 (IPS)

I join with many in applauding the leadership of Microsoft’s Bill and Melinda Gates and Warren Buffett in challenging their fellow philanthropists to pledge 50% or more of their fortunes to charity in their lifetimes. In their secret “first supper” in May 2009, they invited David Rockefeller to co-host a group of billionaire peers, George Soros, Ted Turner, Oprah Winfrey, Michael Bloomberg, Peter Peterson, Julian Robertson, Charles Feeney, California couples Eli and Edythe Broad, John and Tashia Morgridge and David Rockefeller, Jr. The Gates and Buffett are already on the right track with the focus of their grants in Africa and other developing countries and on education. They can help steer their billionaire friends to go beyond funding “vanity” buildings at elite western universities. This type of self-serving philanthropy is embarrassingly passé. Also passé is coziness with existing elites who made their fortunes from the legacy companies and technologies of the fossilized sectors: coal, oil, petrochemicals, steel, gas-guzzling autos, massive-scaled industrial agriculture, big pharmaceuticals, all still subsidized as is nuclear power. Bill Gates can drop the self-serving American Energy Innovation Council lobbying the US Congress for $16 billion of additional subsidies for unnecessary research on “clean coal,” carbon capture and sequestration (CCS) and more nuclear power. US Energy Secretary Steven Chu, a Nobelist physicist, must know that such “investments” are misguided and waste more taxpayers’ money. Coal can now be phased out with abundant US natural gas and combinations of wind and solar installations. Nuclear energy, heavily subsidized since its inception, is still the most inefficient, expensive and hazardous way that humans have ever devised to boil water (what all power stations do to drive their turbines). Special interest pleaders, like the American Energy Innovations Council that recruited Bill Gates, are part of the incumbent industries lobbying to prevent the great transition from the fossil-fueled Industrial Era to the information-rich, cleaner, greener Solar Age.

Bill Gates can do better joining forces with progressive groups accelerating the transition to the worldwide Solar Age human development models based on utilizing the power and productivity of natural systems and billions of years of Natures’ innovation. The Green Economy Initiative of ILO, UNEP and UNDP are in synch with Gates Foundation programs, as is The Economy of Ecosystems and Biodiversity (TEEB), the ZERI Institute founded by entrepreneur scientist Gunter Pauli in Tokyo, author of The Blue Economy, as well as Janine Benyus’ Biomimicry Institute. The Vision 2050 of the World Business Council for Sustainable Development (WBCSD) moves toward the pioneering models of Nicholas Parker’s Cleantech, Jeffrey Leonard’s Global Environment Fund and Matthew Kiernan’s Inflection Point Capital Management. How to corral the necessary investments to ramp up this great transition to the Solar Age? Bill and Melinda Gates can steer their billionaire friends toward innovative technologies, ready and waiting for investments to scale up the transition. They can connect with the Network for Sustainable Finance and other leaders in finance already paving the way: the UN Principles of Responsible Investing ($20 trillion in assets); UNEP-FI; CERES ($3 trillion) and the International Investment Group on Climate Change ($8 trillion). We invite Bill and Melinda Gates to study the computer model Climate Solutions 2 by Climate Risk Pty in Sydney, Australia, the Climate Bonds Initiative, the Climate Prosperity Alliance, Richard Branson’s Climate War Room and many other private investors. Since January 2007, $1.248 billion was already invested and firmly committed to companies in energy efficiency, sustainable agriculture, solar, wind, marine, geothermal and non-food use of biomass, as well as other disruptive technologies that are displacing the old polluting legacy firms and financiers still trying to preserve the past and their doomed portfolios. This exciting progress toward the equitable, ecologically sustainable future for humanity is often overlooked by mainstream media still funded by advertising from the world’s fossilized sectors. Ethical Markets Media (USA and Brazil) is dedicated to reforming markets and growing the green economy globally. Thus, we publish daily reports on new technologies, investments, entrepreneurs and companies leading the way at www.ethicalmarkets.com and on our Green Transition Scoreboard™ www.greentransitionscoreboard.com. We use the Climate Solutions 2 computer model ( downloadable) to show how the green transition can be assured by investing $1 trillion worldwide – specifically in developing countries – every year from now until 2020. This $10 trillion is less than the $23 trillion US taxpayers are liable for the bailouts of failing Wall Street firms and auto companies. This $10 trillion represents only 10% of the world’s institutional investors, pension and charitable foundations of $120 trillion. Ethical Markets Media updates its Green Transition Scoreboard™ to track private investments to encourage such pension fund and foundation portfolio managers to shift at least 10% of their assets toward growing green economies. So, Bill, Melinda and Warren, how about leading your billionaire friends into information-rich investments in green productivity and help them write-off their old portfolios? They can re-train their managers and consultants in new asset-valuation “triple bottom line” ESG (environment, social, governance) models that accurately track eco-productivity and nature’s assets. Bill and Melinda Gates’ vision already includes this great transition to real human development. They and Buffett can help lead toward this new world game and all its new scorecards beyond GDP (www.beyond-gdp.eu). (END/COPYIGHT IPS) (*) Hazel Henderson, author of Ethical Markets: Growing the Green Economy and other books, is president of Ethical Markets Media (USA and Brazil) and co-created with the Calvert Group the Calvert-Henderson Quality of Life Indicators (regularly updated at www.calvert-henderson.com

Excerpt:

By Hazel Henderson and - -
ST. AUGUSTINE, May 3 2010 (IPS)

If governments don’t work together and face down the bankers who operate the global casino, the dominoes will start falling, one by one.

The fate of Greece lies between the excesses of its previous government and its past Wall Street-friendly policies, the still-dominant ideology of market fundamentalism, their bondholders and marketmakers, and Goldman Sachs and the still-obscure USD 600 trillion derivatives market, a massive bet on Greece’s eventual default.

We have reached the inflection point in the globalised financial casino and its mountains of odious, unrepayable debt. With outstanding derivative positions totalling some USD 600 trillion -and world GDP only USD 63 trillion- today’s global debt is unrepayable. Central bankers cannot print enough money to fill this gigantic hole. So who will lose, aside from taxpayers, who are stuck with the bill thus far of USD 23 trillion just for the US bailouts?

The world’s citizens now see how governments allowed themselves and their taxpayers to be trapped by the lords of finance. The bankers funded their election to office, bribed their officials, and manipulated their regulators and public opinion. Through advertising and financing of mass media, financial moguls and media moguls converged with political moguls worldwide to form concentrated conglomerates (matching those in finance and industry): News Corp., Disney, NBC (owned by GE), Viacom, Clear Channel, as well as Comcast, Verizon and ATT, now seeking to dominate the Internet. All this is textbook fascism.

To save sovereign governments from further co-option and corruption, these government “leaders” and their economic “wise men” must now rise to the occasion. Together, they must act to downsize and curb the rogue global casino. The G-20 Summit in Toronto, June 26-27, is their next opportunity to re-assert control on behalf of their citizens and the global public interest. Will leadership come from Europe, China, India, the USA, or Brazil?

What must be done?

First, the derivatives betting on defaults of countries and companies must be shut down before the players drive Greece under to win their bets. This will help curb the “bear raiders” waiting to collect their bets against the other EU countries: Portugal, Italy, Ireland, Spain, and others.

The USA, often still seen as a “safe haven”, is on equally rocky ground with its huge trade deficits and external debts to China, Japan, and OPEC countries. Most states in the US are running unsustainable deficits, have huge backlogs of now risky bond debts, together with falling tax revenues due to high unemployment levels (10 percent nationally, 17 percent if all jobless are counted), as well as crumbling infrastructure needing over USD 1 trillion in repairs.

Only concerted action by the G-20 can arrest the takeover by the lords of finance. This will require a paradigm shift beyond economics and all its theories, from left to right, towards a reintegration of knowledge and systems approaches that “connect all the dots”.

We are now in a global, system-wide transition from the early, fossil-fuelled Industrial Era to the emerging, green, information-rich economies, from Wall Street’s corrupted and debt-choked money circuits to new electronic trading platforms that use free exchange and new currencies. The next info-currencies will be based on real assets and wealth such as KWH (kilowatt hours) as in the Planck Foundation’s Energy for Debt Plan for Iceland and their Energy Transition Plan with Ethical Markets.

Estimated world trade conducted in barter remains at approximately 25 percent but is ignored in GDP, which is based only on money coefficients. Electronic trading is a new multi-trillion-dollar market opportunity for IT companies, following the paths of eBay, Craigslist, Freecycle, Global Giving, Greengrants, Microplace, Kiva, Zopa, Prosper, and other micro-finance and philanthropy sites. Others bypassing Wall Street and the old “financial centres” include local, regional, and private company trading platforms like Chicago-based ENTREX, and local currencies like the Schumacher Society’s “berkshares”, Time Banking, and mutual credit groups.

To foster the transition from the monopoly of fiat money circuits (now just as bad as gold-based money) to 21st century electronic and local currencies, the G-20 needs to downsize financial sectors.

Wall Street and London’s bloated financial sectors have little social purpose and produce nothing. High-frequency trading by computer programmes now account for about 70 percent of Wall Street’s daily trading. Proprietary trading and risk-taking must be separated from government-subsidized deposit-taking banks. The best way to accomplish this is for the G-20 to agree on a less than one percent financial transactions tax (FTT) across the board. There are no good arguments against the FTT (debated since its introduction by economist James Tobin in the 1970s and recommended by Larry Summers in his 1989 paper).

These initial actions -banning naked derivatives (where betters don’t own the bonds) and bringing those needed for actual users of oil, commodities, etc., onto transparent exchanges; enacting the FTT; and banning ratings agencies from selling ratings to issuers- will begin the transition toward the new currencies and transparent electronic trading platforms. It is also essential to break up all too-big-to-fail banks, e.g., the six largest ones in the US: Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo, which now control 63 percent of US GDP.

Only if G-20 leaders come together in Toronto and agree on these first steps, can they avoid the next financial crisis, already looming. If they cannot summon the courage to shake off the grip of the lords of finance, they will have forfeited what little public trust still remains.(END/COPYRIGHT IPS)

(*) Hazel Henderson is president of Ethical Markets Media (www.ethicalmarkets.com), founder and co-chair of the World Business Academy’s EthicMarkr for ethical advertising, and co-creator of the Calvert-Henderson Quality of Life Indicators.

Excerpt:

By Hazel Henderson and - -
ST. AUGUSTINE, FLORIDA, Mar 9 2010 (IPS)

Icelanders, on March 6, 2010, rejected by 90% the referendum on paying $5.3 billion (45% of national output in 2009) of odious debt incurred by their privatized bank Icesave. This opens the way for a plan proposed by Dutch businessman/philanthropist Gijs Graafland’s Planck Foundation. This ingenious, well-researched Energy for Debt plan invites private and public investors to develop Iceland’s boundless geothermal energy and send its electricity to Britain and the Netherlands via a high-voltage DC transmission line. Graafland, an energy and financial expert, points out that Iceland, situated between two of Earth’s tectonic plates, has unlimited geothermal energy from the planet’s core near the surface –rather than miles deeper as elsewhere. "Iceland can become the Saudi Arabia of the North in geothermal energy", says Graafland.

Few technical barriers exist to developing Iceland’s geothermal resources, and many similar high-voltage transmission lines are already operating in Europe, China, Brazil, Japan, and many more are under construction. The main suppliers are ABB and Siemens, and more are due to come on line this year and in 2011 through 2013. The newer lines carry renewable energy: wind in Europe, new lines for solar in the USA. Such super-grids are planned by the DESERTEC-DII consortium of 12 European companies, including ABB, ABENGOA Solar, Munich Re and Deutsche Bank, to construct solar electricity facilities in North African countries and transmission lines under the Mediterranean to meet some 15% of EU consumption. Another group of ten European companies, including Areva, Siemens, Hochtief and Prysinian, announced on March 7 their plan to invest £30.5 billion for a super-grid across the North Sea for distributing wind-powered electricity. The most innovative factor in the Energy for Debt plan is that it would repay investors in assured supplies of electricity rather than in volatile or inflating currencies. This new KWH (kilowatt hour) currency will be sounder than any government issued fiat currency. Indeed, we now witness central banks bailing out their bloated, corrupt financial sectors, with zero interest funds, purchasing toxic assets and, lately, by "quantitative easing" –a polite term for printing money. Icelanders rejected the unfairness of bailing out private banks and foolish British and Dutch savers tempted by unrealistically high interest rates. The punitive repayment deal would have forced Iceland’s 350,000 citizens to each pay $135 per month for the next 8 years. The collapse brought on by Iceland’s foolish private banks has caused a deep recession and 9% unemployment. With the Energy for Debt plan, Iceland could not only restore its economy, but repay the British and Dutch in full, possibly over a shorter timeframe and in the new inflation-proof electricity "currency" that would be better and more useful than gold. Now that the defeated referendum has given a clear signal, it seems likely that Iceland’s President Olafur Ragnar Grimsson and Prime Minister Johanna Sigurdardottir, both of whom are familiar with the Energy for Debt plan, might be ready to endorse it. This would set the stage for companies such as ABB, Siemens and other big players to adopt the feasibility studies already performed. Thus, EU governments can provide the guarantees that would enable pension funds to invest, since such long-term investments are ideal for their beneficiaries. Pension funds of the Institutional Investors Group on Climate Change, representing some $17 trillion of assets, has committed to increasing their "green" investments and supports a strong post-Kyoto climate agreement. The Climate Bonds Initiative has designed many kinds of bonds for renewable energy and water projects.

Major financial media are also aware of the Energy for Debt plan but are waiting for the various players to coalesce and get the go-ahead from Iceland’s leaders. This plan may well trigger a new "energy rush" since many energy investors are interested in green, renewable energy investments, but are leery of speculators and corrupt financial markets. There are very few "plays" left within the old money circuits as the search for new profits and "asset classes" extends to buying up oil and commodities and the Earth’s renewable resources: forests and land in Africa. We see how even sovereign bonds of many countries are now attacked by speculators who also account for most of the $3 trillion of currencies traded every day. Over-leveraged hedge funds, dark pools, flash trading, naked short-selling, credit default swaps and derivatives are still un-regulated and leave most investors appalled. Many investors are bypassing Wall Street and other "too big" banks and financial firms – moving their money to local banks, non-profit credit unions and money-free electronic trading platforms. The influential US market newsletter Energy and Capital March 5^th headline " Why Energy is the Only Real Currency" advised investors of all the hazards in unreformed, still-unregulated markets. The right engineering companies, pension funds and other green institutional investors such as the UN Principles of Responsible Investing’s member funds totaling $19 trillion can take lead positions in the Energy for Debt investment. Together with British and Dutch government guarantees and a go-ahead from Iceland’s leaders, the Energy for Debt plan can provide a creative model and a beacon for the UN’s Global Green New Deal. Iceland and Europe can now look forward to a clean, homegrown energy future. (END/COPYRIGHT IPS) (*) Hazel Henderson is author of Ethical Markets: Growing the Green Economy and co-developer with the Calvert Group of the Calvert-Henderson Quality of Life Indicators. She is a member of the Club of Rome and a Fellow of Britain’s Royal Society of Arts.

Excerpt:

By Hazel Henderson and - -
ST. AUGUSTINE, FLORIDA, Feb 1 2010 (IPS)

The radical decision of the US Supreme Court on January 21, 2010, allows companies to spend unlimited money in politics. Overturning 100 years of restraint on corporate spending, the two newest justices, John Roberts and Samuel Alito, appointed by former President George W. Bush, have turned the court into an ally of big corporations. The fanciful view of this highest US Court holds that money is equivalent to free speech under the First Amendment and that corporations are "persons" equivalent to real human beings. The unreality of this view also equates corporations with trade unions without recognizing that unions represent real people whereas corporations are legal entities for the purpose of making money for their shareholders.

The effects of this narrow 5-4 Supreme Court decision include allowing access to US politics by the many international investors who own shares in US corporations. For example, Prince Alaweed bin Talal of Saudi Arabia is one of the biggest investors in Citibank and News Corporation, which owns the Wall Street Journal, TV’s Fox Network, Sky News and other global media. Sovereign wealth funds of Norway, China, Singapore, Kuwait and other countries can now influence US politics as never before. Constitutional lawyers are appalled, including President Barack Obama who noted, "the Supreme Court has given a green light to a new stampede of special interest money into our politics. It is a major victory for big oil, Wall Street bankers, health insurance companies and other interests that marshal their power every day in Washington and drown out the voices of everyday Americans." Many critics have added that politicians whose elections are due to corporate funds should be required to display these corporations’ logos on their clothing and in all public statements, for example as the Senator from Microsoft, Halliburton, Citibank or Goldman Sachs. Other critics have pinpointed the idiocy of equating corporations with real humans. They say "if this is true, then is it not a form of slavery to own a corporation?" Should companies now also be allowed to bear arms and vote? Corporations already have most of the rights of US citizenship but fewer responsibilities than real people bear. Corporations are protected by laws limiting their liabilities; they enjoy perpetual life and already wield enormous power – evidenced by their capture of regulators and politicians.

Corporate lobbyists for big banks are fighting needed financial reforms. Insurance and pharmaceutical company lobbyists have steered health reform bills into massive new giveaways. Energy company lobbyists have distorted bills on climate and energy into new windfalls for incumbent fossil fuel and nuclear power companies. Military corporations lobby governments worldwide for weapons contracts. The absurdity of the US Roberts Court’s opinion that corporations are in any way "muzzled" or need more First Amendment rights was summed up in Justice Stevens dissent on behalf of Justices Ginsberg, Sotomayor and Breyer: "While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics." Indeed, a group of US corporations responded with an Open Letter to Congress objecting to the shake-downs for money by candidates of both political parties and opted-out of this money arms race. Hopefully, this kind of socially responsible leadership by progressive companies can be buttressed by institutional investors, such as those of the UN Principles of Responsible Investing (representing portfolios of $19 trillion of companies’ shares). They can join, with the 3000 signatory companies of the UN Global Compact, in developing screens to avoid investing in those companies who take the Supreme Court’s ruling as a license for throwing even more money into further lobbying and power grabs over democratic processes. The cascade of additional money into US politics and advertising will accelerate the sinister takeover of government, as well as mass media by corporations – the classic definition of fascism. One response is the EthicMark® for ethical advertising and Ethical Markets’ campaign with the World Business Academy to stop neuromarketing and its manipulation of consumers. How will this corporate takeover of the US affect its standing in the world? Already, the greed and money-obsessed culture of Wall Street has harmed the whole world and caused many millions of innocent victims hunger, hardships, losses of jobs, livelihoods and wreaked enormous environmental damage. This Supreme Court ruling will cause the US to lose further standing and moral authority in the world. The arrogance of US unilateralism has caused offence since the fall of the Berlin Wall. This unipolar moment is over. Luckily for the international community, other countries, India, Brazil and the European Union are taking democratic leadership. The Supreme Court’s irresponsible decision has undermined President Obama’s efforts to restore multilateralism. It has dealt a blow to democracy in the US and sets a bad example in the advance of democracy worldwide. (END/COPYRIGHT IPS) (*) Hazel Henderson is president of Ethical Markets Media (USA and Brazil), author of many books and co-creator of the Calvert-Henderson Quality of Life Indicators (

Excerpt:

By Hazel Henderson and - -
ST. AUGUSTINE, FLORIDA, Nov 30 2009 (IPS)

The world’s giant pension and institutional funds (university and foundation endowments) are seeing the light on climate issues. As governments wrangle over how to cap carbon and other pollutants, how much it will cost, and who should pay, private investors in North America, Europe, China, India, Japan, and Brazil have been quietly investing in the solution: shifting to low-carbon, cleaner, renewable energy and smarter, more efficient infrastructure and transportation.

The Global Climate Prosperity Scoreboard, a service of the Climate Prosperity Alliance and Ethical Markets Media, estimates that since 2007, almost USD 1 trillion has already been privately invested in solar, wind, geothermal, hydro, ocean power, more efficient buildings, batteries, energy storage, smart electrical grids, and urban redesign.

Now, the big pension funds and endowments are joining this climate prosperity investing. The Institutional Investor Group on Climate Change (with USD 13 trillion) announced in September 2009 that it will lead in shifting its assets toward the real solution to climate change: growing the green economy worldwide.

Their “triple bottom line” accounting for environmental, social, and economic performance enables trustees of these assets to see the longer-term advantage of avoiding obsolete fossilised sectors. Their ethical principles also steer them away from the old formulas maximising short-term returns and using the now-failed ideas of market fundamentalists.

The climate prosperity strategy is the “win-win” that all countries attending the Copenhagen Climate Change Conference, December 7-14, 2009, can agree on. The wrangling between the North’s industrial countries, whose many decades of burning fossil fuels has caused the climate warming, and the newly developing countries of the South now can be bypassed. As the private investors have shown, shifting from the Fossil Fuel Age to the information-rich, green economies of the Solar Age is the greatest opportunity for all countries and all humanity. Billionaire venture capitalist John Doerr says, “we are talking about nothing less than the re-industrialisation of the whole planet.”

There is no shortage of money to finance the global green economy. The only shortage is time, and we have all the technology needed for this transition. Re-deploying just 10 percent of pension and endowment funds away from fossilised sectors, hedge funds, oil and commodities, derivatives, and speculation on interest-rates can add over USD 10 trillion to the USD 1 trillion already invested. Cutting wasteful subsidies to fossil fuels and nuclear power would release additional trillions (see www.globalsubsidies.org). McKinsey & Company’s July 2009 Report on energy efficiency shows that investments of USD 520 billion can yield USD 1.2 trillion by 2020, reducing US energy demand by 23 percent.

And, if the US, Britain, and other EU countries stop spending their taxpayers’ money on bailing out zombie banks, Wall Street, insurance companies, and other failed financial speculators and re-direct stimulus funds to small businesses and local economies, additional trillions can be saved. Meanwhile the big Wall Street bailout recipients, rather than lending to Main Street, are still speculating in derivatives, proprietary trading, and betting taxpayers’ funds in the global casino, reaping huge profits and paying executives even bigger bonuses.

Since politicians in the US, Britain, and Europe are too close and beholden to their financial sectors, independent private sector investors are now leading the way. As new funds continue to pour into building the green economy, governments may be shamed into following at least with guarantees. As a recent report from DeutscheBanke shows, the leading countries for green investors are China, India, France, Germany, and Brazil, while the US and Britain’s political inertia make them less attractive. UNEP-FI’s 2009 Report on Catalyzing Low Carbon Growth shows how USD 1 of public investment can leverage between USD 3 and USD 15 of private investment.

Those governments that do not oppose their financial, fossil fuel, and nuclear lobbies will lose the race for climate prosperity, wasting billions on futile R&D for “clean” coal carbon sequestration and other un-needed technologies. As David Martin, patent expert, of the innovation firm M-CAM points out, we have already invented all the technologies necessary for the transition to the Solar Age. While on the Advisory Council of the US Office of Technology Assessment, I learned how many of these technologies were captured and patented by big fossil fuel and financial companies in order to keep them off the market, as General Motors did with its early electric car. Martin has launched the Global Innovation Commons and inventoried all the needed technologies that are now freely in the public domain.

I have long held that it is unethical to speculate in oil, food, and other vital commodities, as well as forests and land, merely as “asset classes” for big monetary returns. No pension fund or foundation or university endowment should speculate in such vital resources. What better way for such funds to provide for their beneficiaries than to re-deploy their assets into directly stabilising our climate and growing the cleaner, greener global economy for our common human future. Copenhagen may yet see a victory for the planet, people, and common sense. (END/COPYRIGHT IPS)

(*) Hazel Henderson, president of Ethical Markets Media (www.ethicalmarkets.com ), is the author of The Politics of the Solar Age (1981), Ethical Markets: Growing the Green Economy (2006), and the Calvert-Henderson Quality of Life Indicators (www.calvert-henderson.com ).

Excerpt:

By Hazel Henderson and - -
ST. AUGUSTINE, FLORIDA, Nov 5 2009 (IPS)

Trading is arguably the core activity in all market economies. Free trade is the mantra of all economists -left, right and center. Trading is considered indispensible and more trade is always seen as better. The financial crisis caused a closer look at trade and financial traders to see if these conventional beliefs are still valid and whether stock markets have spun out of control.

E. F. Schumacher, author of Small is Beautiful (1973), drew our attention to issues of size and scale ignored by most economists, pointing out how huge organizations lost sight of reality in abstract statistics and models. The conventional view was that more was better: more GDP-measured economic growth, more goods, more money, more investments, more dividends, more jobs, all seen as driven by more trade.

Trading with money enjoys an exalted status in economic textbooks, government policies and corporate management. The much larger volume of daily transactions and exchanging between people in the unpaid Love Economy (as caring for the young, old and sick) is ignored in Gross Domestic Product. Yet, more money-based GDP-growth is not always better. It may also be jobless growth or damage our environment and quality of life. More world trade often harms local communities, cultures and causes social disruption and job losses.

Trading for profit and for trading’s sake became excessive on Wall Street and drove speculation in oil prices and volatility in currencies. Some $3 trillion of currencies are traded every day on exchanges around the world -over 90% of this is speculation. When traders attack a currency in a "bear raid" to drive its price down so as to buy it back cheaper, they harm the citizens of that currency’s country. When trade rules and prices do not take into account of social and environmental costs "externalized" to others, as in the case of World Trade Organization rules, then weaker countries and smaller players suffer from such trade.

Today, over 60% of all trading on Wall Street exchanges is done by computers -all programmed to compete to get the fastest execution of their trades at the best price. Each trade generates a commission so the most trades make the most money. The latest "innovation" is "high-frequency" or "flash" trading, where the computer programs run so fast that they can trade stocks, bonds or commodities thousands of times per minute. This allows bonanza profits from the proprietary trading of Wall Street banks and hedge funds such as D E Shaw, advised by Larry Summers, now President Obama’s chief economic advisor. Testimony at the US Congress Financial Services Committee questioned the benefit of proprietary trading to the real economy and its conflicts of interest, calling for a ban.

Today, financial trading ballooned into major economic sectors of the USA, Britain and other countries, making traders far wealthier than workers in the production of goods and services.

Trading, like finance, produces nothing. Financial "services" simply take money saved by producers in the real economy and using their networks of connections, serve as "intermediaries" facilitating bringing savers and investors together with new business ventures and other borrowers and households.

Since the financial crises of 2008-2009, many experts have called for the downsizing of these bloated financial sectors and curbing their trading activities and ever-more mysterious financial "products" such as credit default swaps (CDSs), collateralized debt obligations (CDOs) whose totals soared to $658 trillion of these bets between traders in the few biggest banks in the world. We now know that CDSs, CDOs and all the alphabet soup of such "financial products" were really bets that should be relegated to betting parlors and regulated by gaming commissions.

Why did real production take second place to trading which became such an exalted and highly-paid activity? Financial trading became conflated with normal transacting and exchanging information, a key activity in human relationships and evolution. Humans have always bartered, traded and shared information with each other, since early tribal societies. But trading is a means to an end: to increase the utility or wellbeing of the trading parties, and only a part of the much larger free exchange of information and mutual aid in societies.

Recently, trading itself expanded as a means to enrich traders and financial players. Recent financial bubbles: the dot.coms, housing and oil followed earlier bubbles: the tulip mania in Holland and Britain’s South Sea Bubble. The newest bubble Wall Street is salivating over is carbon trading, which they see as a new "asset class" to trade and a new profit center. Like earlier bubbles, carbon trading has not removed any real carbon from the Earth’s atmosphere and is unlikely to do more than make another group of traders wealthy.

Trading, like money and finance inflated, metastasized and de-coupled from the real world of production and physical assets. Psychologists who study traders see excessive trading as an obsessive compulsive addiction, like gambling or over-eating. Recent researchers took cheek swabs of traders on the stock exchanges in London and found elevated testosterone levels. Addiction to risky trading is now a consumer pastime as millions of "day traders" sit at home trading stocks on their computers -hoping to make their fortunes.

Curbing excessive trading in our global financial casinos, which brought such pain to Main Streets across the world, has now become essential. Small taxes on all financial transactions can slow down and reduce the staggering volumes of trading today. Economist James Tobin promoted this idea in the late 1970s and many experts assessed this tax, found it beneficial and reviewed various ways of collecting it (The Tobin Tax: Coping with Financial Volatility, Oxford Univ. Press, 1996). Larry Summers recommended such a tax in his "When Financial Markets Work Too Well: A Cautious Case for a Financial Transactions Tax" (1989). This tax can be collected by governments using the computer program FXTRS < http://www.hazelhenderson.com/fxtrs.html> .

Recently, Lord Adair Turner, head of Britain’s Financial Services Authority, asserted that financial sectors had become overgrown and questioned their social utility. His remedies included imposing a financial transactions tax on all trades. All such proposals, including my own (The United Nations: Policy and Financing Alternatives, Elsevier UK, 1995), have been howled down by financial sector players, as well as their World Bank and International Monetary Found handmaidens. Now is the time to bring trading back down to Earth. Necessary reform includes the Tobin Tax to stabilize financial markets and to reap many public benefits, including billions in funding to ameliorate the damages inflicted by rogue finance. (END/COPYRIGHT IPS)

(*) Hazel Henderson, president of Ethical Markets Media ( www.ethicalmarkets.com), authored The Politics of the Solar Age (1981), Ethical Markets: Growing the Green Economy (2006) and the Calvert-Henderson Quality of Life Indicators ( www.calvert-henderson.com).

Excerpt:

By Hazel Henderson and - -
ST. AUGUSTINE, FLORIDA, Sep 21 2009 (IPS)

The awful truth is emerging: globalised rogue finance is disordering human societies and destroying our ecological life-support systems on a global scale. A spate of books and studies examining the role of finance finds deep flaws in the way money is created and credit is allocated. The age-old invention of money, which extended opportunities for trading beyond barter, has become a computerised global monster. Blind to other human values and goals, this global casino has decoupled and abstracted from real economies.

Financiers make money out of money by automated high-frequency trading buttressed by faulty “financial economics” and its bogus models, engineering only corruption and using false indicators of profit and national progress such as GDP. French president Nicolas Sarkozy and economist Joseph Stiglitz stated on September 14 that the unreformed global financial system today is more dangerous and risky than before the 2008 crisis, and governments are still blinded by “GDP-fetishism.”

How did global finance turn from its earlier role as a useful service for real economies into an overgrown “too big to fail” colossus which tyrannises democratic governments through its political power of the purse?

In the US, control of the young nation by banks was feared by its founders. In 1816 Thomas Jefferson said, “Banking establishments are more dangerous than standing armies.” Benjamin Franklin voiced similar warnings as did many other founders, and as early as 1777 Samuel Webster warned, “Let monopolies and all kinds and degrees of oppression be carefully guarded against.”

In the last US presidential election, tens of millions of US voters, from the conservative supporters of Congressman Ron Paul to those across the spectrum who supported Congressman Dennis Kucinich, attested to the growing understanding of money itself, which has no intrinsic value. These millions of voters now support the over 200 members of Congress whose bill calls for examining the role of the Federal Reserve Board, founded by a secretive group of politicians and bankers in 1913.

Since then, central banks around the world have modeled themselves on the US “Fed” and promoted their claims to secrecy and independence from political control by even the most democratically-elected governments. The profession of economics (never a science) advanced this cause with thousands of academic papers and theoretical models of finance.

World leaders like France’s Sarkozy, Germany’s Angela Merkel, Brazil’s Lula da Silva, and China’s Hu Jintao are calling for the reform and downsizing of the global casino at the G-20 meeting in Pittsburgh, September 24-25. They rightly argue for restricting huge bonuses, raising capital reserve requirements on all banks and financial companies, curbing excessive risk-taking and regulating derivatives that are simply bets, such as credit default swaps. This is necessary but not sufficient.

The entire system of global finance must be restructured. China has rightly led the debate over the need to phase out reliance on the US dollar and create a more stable global reserve currency, which is supported by the UN General Assembly and its Stiglitz Commission. Beyond this, Britain’s Lord Turner has called for a small financial transaction tax to curb speculation and downsize the overblown financial sectors. Such a tax was advocated by James Tobin in the 1970s and by Larry Summers, now chief White House economic advisor, in 1989. Financial transaction taxes have been debated ever since as the best way to reduce speculation: the billions raised would be used for deficit reduction, repaying taxpayers for their bailouts, and investing in the low carbon Global Green New Deal supported by most governments, private investors, trade unions, UN agencies, and by 72 percent of the public in 20 countries in the BBC-Globescan poll, September 14, 2009.

In addition, a new level of insurance against the risks of systemic financial crises can be created. This Systemic Financial Crises Insurance Fund (SFCIF) would have all financial firms above a certain size pay to insure themselves against future bankruptcies and panics. Similar to the FDIC, which all US banks pay into, this new SFCIF would shift risk from taxpayers to where it belongs: the financial sector. In addition, governments must finally tackle reform of central banking and their money creation and credit allocation activities, which are widely seen as shockingly unfair. Their trillion-dollar bailouts of Wall Street and the financial casinos -while they claim that there is not enough money to make healthcare available, educate our children, or help the hundreds of millions of innocent victims of financiers’ excesses- is now revealed as politics in disguise.

All these reforms must be enacted globally by the G-20 and by widening these agreements to include all countries of the UN. This more democratic G-192 can join with the G-20 in finally facing down the bankers, downsizing and taming the global casino and returning it to its traditional role of facilitating businesses, production, and innovative sectors of societies and in growing a cleaner, green, more just global economy that works for all. (END/COPYRIGHT IPS)

(*) Hazel Henderson, author of Ethical Markets: Growing the Green Economy, is a vice-chair of the global Climate Prosperity Alliance, a co-organiser of the Beyond GDP Conference in the European Parliament in 2007 and co-creator of the Calvert-Henderson Quality of Life Indicators ( www.calvert-henderson.com) She can be reached at hazel.henderson@ethicalmarkets.com.

Excerpt:

By Hazel Henderson and Miren Gutierrez
ROME, Sep 18 2009 (IPS)

Hazel Henderson is a futurist, an economic iconoclast, founder of Ethical Markets Media, and author of the books Building A Win-Win World, Beyond Globalization, Planetary Citizenship, and Ethical Markets: Growing the Green Economy. Her main focus is exploring the “blind spots” in conventional economic theory.

Hazel Henderson Credit:

In the wake of the publication of the “Stiglitz-Sen report” – which says that countries need to find ways to measure well-being alongside raw economic growth, her views couldn’t be more pertinent.

Henderson spoke to IPS in an emailed interview.

IPS: We often hear that country X will not reach the Millennium Development Goals. According to Jan Vandemoortele, one of the architects of the MDGs, the MDGs have become money-metric and donor-centric, meaningless catch-all phrases. If there are no concrete, common, comparable targets, how do we know we have been successful? HAZEL HENDERSON: We need to see the MDGs in the rapidly changing world context since 2000: the U.S. has lost its single superpower position. China, India and Brazil are now key global players, the G7 and the G8 are superseded by the G20, and soon the G192 will be the expanded venue for democratising the global economy after the crises in finance changed the game for all players.

So, we need to retain the MDGs as the goal and align them with the rapidly emerging consensus on climate change: the Global Green New Deal, lead by private investments by the world’s pension funds (assets of over 120 trillion dollars) and with low-risk government guarantees for 10 trillion dollars of Climate Prosperity bonds over the next decade.

Since all the old metrics: GDP-measured economic growth and traditional “efficient markets” model are now defunct, we need to not tie MDG goals to these old metrics. New scorecards of progress beyond money-coefficients now appearing in Europe, Canada, China, Brazil and many other countries will be able to track MDGs performance more realistically.

IPS: French President Nicolas Sarkozy asked award-winning economists Joseph Stiglitz and Amartya Sen, and 20 other experts to find new ways to measure growth. The panel issued a report that says that countries need to find ways to measure happiness and well-being alongside raw economic growth. How would this new way of measuring growth affect poor countries? Bhutan, for example, declares a high “Gross National Happiness”. If a new well-being index is the reference for wealth, Bhutan may need no aid, trade or investment in spite of being one of the poorest countries of the world… HH: The Stiglitz-Sen report is moving in the right direction but too slowly and is still trapped intellectually in the now-defunct “economics box”.

Complex human societies can never be measured by using a single discipline, especially by economics which was never a science. Economic calculations are blind to most of the social and environmental costs its narrow decisions impose on others, reframed as “externalities,” i.e., costs companies and projects omit from their balance sheets. These uncounted impacts of financial decisions have accumulated unnoticed by economists until they are now crises of poverty, inequality, social exclusion and pollution – culminating in the greatest market failure: climate chaos.

Stiglitz and Sen cannot see that new national indicators of “progress” must be multi-disciplinary and use many metrics as appropriate in the kind of systems approach used in the Calvert-Henderson Quality of Life Indicators, an alternative approach I designed with the Calvert Group, tracking 12 aspects of quality of life.

I am very cautious about “happiness” indicators because they are culturally dependent and too subjective (e.g., people living near a hidden toxic dump or drinking polluted water can say they are “happy” while ignorant of these dangers). Conservative economists and statisticians have seized on “happiness” surveys as an excuse to cut social welfare budgets.

IPS: The report recommends GDP growth be used simply to measure market activity and that new systems take into account environmental health, safety and education. Aren’t MDGs enough as a reference? HH: The report is in error in recommending that GDP continue to be used to measure market activity because this would perpetuate ignoring the social and environmental “externalities” piling up. These must be subtracted from GDP to calculate a net level of real GDP.

The report also makes the mistake used by statistical offices and the United Nations System of National Accounts (UNSNA): keeping social, environmental, health, education, poverty gaps, etc. which have proliferated but are designated as “satellite accounts” and therefore ignored by media and devalued. Real reform of GDP as I have urged, explicitly covering goals similar to the MDGs, is still needed. The Stiglitz-Sen commission was composed of economists rather than including sociologists, health experts, educators, and environment experts.

IPS: Domestic work, done mostly by unpaid women, is an economic engine. Because millions of women do it, the state doesn’t have to pay for it. How do you see domestic work being recognised in practical terms? And if this hidden underground chunk of economy is taken into account, won’t countries were women don’t have access to formal labour appear wealthier? HH: Unpaid work in the home, community, is estimated at approximately 50 percent of all productive activity even in industrial countries, and as much as 60-70 percent in many developing countries. UNSNA national accounts ignore all unpaid production. The U.N. Human Development Report and its Human Development Index (HDI) in 1996 calculated that unpaid work was estimated at 16 trillion dollars (11 trillion dollars by women and 5 trillion dollars by men), which was simply missing from the official global GDP figure of 24 trillion dollars, although a truer figure would have been 40 trillion dollars for global GDP in 1996…

This highlights that policy changes are needed to restructure work, pay, pensions and the way money itself is created and allocated. Money has no intrinsic value – it is merely one form of information. The evolution of human barter and money systems now means that money can no longer allocate resources. Finance must be reformed to serve real production and access to money and credit must also be democratised. In today’s Information Age, much trading is now via information; the new form of barter now is electronic. So, your questions focus well on the need for these fundamental reforms.

IPS: How could the value of a forest, for example, be counted as part of one countries’ resources or growth? HH: The value of forests and all our ecosystems’ life support must be valued as factors of production – much more basic than just land (in the old model: land, labour and capital). Ecosystems are natural capital assets and have been estimated at providing approximately 34 trillion dollars of services to human societies annually, but missing from GDP.

In our Beyond GDP proceedings, we went much further than the Stiglitz-Sen report. Both unpaid work and ecosystem services flow from social capital and ecosystem capital which are assets estimated by the World Bank in its Wealth of Nations Report (1995): social capital at 60 percent; ecosystem assets at 20 percent; built capital (factories, roads, etc.) at 20 percent. Thus, the World Bank admitted that 80 percent of the wealth of nations was overlooked in their programmes, which focus mostly on the 20 percent of human-built capital.

This report was never incorporated into the UNSNA’s model of GDP. This key reform of GDP is the addition of an asset account to record not only the social capital of a society and the ecosystem assets, but also its tax-supported public investments in infrastructure: roads, schools, ports, hospitals, internet, etc. These public assets if valued and on the GDP books would counterbalance the public debt used to create them.

I have argued for decades in many countries for this simple accounting change, which would cut most countries’ public debts by over 50 percent with the stroke of a pen!

Wall Street and sovereign bondholders resist this change because it would also cut interest rates by 50 percent. The U.S. in 1996 made a start at accounting for public investments as “savings”. This still inadequate change contributed about a third of the Clinton Administration’s budget surplus (the rest from tax receipts from the dot.com bubble and a cut in military spending). Canada followed suit in 1999 and turned its deficit into a 50 billon Canadian dollars budget surplus!

IPS: You are leader of the international movement to review the GDP as the only measure of growth. From your perspective, has the “Stiglitz-Sen report” left anything out? HH: This asset account is still not addressed in the Stiglitz-Sen report.

IPS: What is the practical significance of this report outside France? HH: Because Stiglitz and Sen are well known, this report will elevate the debate in media. Politicians aligned with business and finance will resist, as will conventional statisticians because it will reduce their claim to profits and politicise economics and reveal its lack of any scientific basis.

Similarly, statisticians and many academics will have to write off their intellectual investments, reshuffle their models and time series and defer to many other more scientific measures of current world problems and conditions.

IPS: Is it a coincidence that this “conceptual revolution” coincides with a new push in favour of the Tobin tax – intended to put a penalty on short-term speculation, supported now by unexpected advocates like Adair Turner, technocrat and chair of the British Financial Services Authority? HH: I am happy to see Lord Adair Turner revisiting the proposal for a financial transaction tax – which now must be by international agreements by the U.N. General Assembly. Even Larry Summers (Director of the White House’s National Economic Council for President Barack Obama) proposed a financial transaction tax in a paper he wrote in 1989. I proposed it in 1995 in the book The United Nations: Policy and Financing Alternatives, which I co- edited with Harlan Cleveland and Inge Kaul. I and my partner, mathematician Alan F. Kay, also designed a computer programme to make collection of such a small tax – the Foreign Exchange Transaction Reporting System, which earned a patent, now expired.

IPS: And now what? HH: The next steps are to publicise all these reform proposals more widely, including the European Commission’s directive September 2009 proposed for the EU countries in 2010 by Stavros Dimas (European Union commissioner for the environment) and the new Canadian Index of Wellbeing, and the Chinese Green GDP (which has run into local opposition from provincial politicians still judged and rewarded by GDP standards).

The Organisation for Economic Co-operation and Development (OECD) held a conference in 2007 in Istanbul. However, the lead statisticians at OECD and EUROSTAT with whom I co-organised the Beyond GDP conference in the European Parliament are actually very ambivalent about correcting GDP. They take the same flawed view as Stiglitz that it’s ok to still use GDP for measuring market activity – still ignoring those “externalities” instead of subtracting them…

I would love to engage in an open debate with Stiglitz et al on all this!

*Miren Gutierrez is IPS Editor-in-Chief.

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By Hazel Henderson and - -
NEW YORK, Jul 10 2009 (IPS)

A powerful new global player has emerged on the world stage: the Group of 192. The G7, the G8 and the G20 must now move over.

While the G8, which met in L’Aquila, Italy, July 8-10, boasts that its members account for over 65 percent of the Gross World Product, it comprises only a handful of countries and a mere 14 percent of the global population.

The G192, on the other hand, represents for the first time all of the world’s national economies, from North to South and East to West. Long dismissed by financial elites in the now discredited, shrinking global casino, the G192 met in New York at the United Nations General Assembly June 24-26.

They shared their long-ignored views on the financial crisis and its Impacts on Development. President Miguel d’Escoto Brockmann’s masterful opening speech laid out an expanded view of the whole human family and our evolution on planet earth which allowed for a deeper dialogue among this G192 than has ever been seen at G7 and G8 summits.

The delegates were able to give voice to the new paradigm emerging from the collapse of Wall Street and the global casino that its market fundamentalist ideologies spawned. This new paradigm downsized finance and put its players back in their real place as intermediaries and servants, not masters of the real productive sectors of their economies. An efficient financial sector should comprise less than 10 percent of a country’s Gross Domestic Product. These new leaders reframed their economies as sub-sets of their societies and cultures, with their multiple sources of wisdom, values, and wealth beyond money, and with their ecological, social, and cultural assets interacting with the creative energies of their people -human capital.

The President’s Commission of Experts, chaired by Columbia University professor Joseph Stiglitz, reported its many sensible recommendations: democratising the International Monetary Fund (IMF), the World Bank, and the World Trade Organisation, a new global reserve currency as an alternative to the volatile US dollar, and stricter regulations over all areas of financial markets, rating agencies, derivatives, and excessive risk-taking.

The experts also called for a very small tax on financial transactions to reduce volatility and provide revenues for financing the Monterrey Consensus of 2002 and the Millennium Development Goals: poverty reduction, education, healthcare and the further empowerment of women. The G192 adopted the Experts’ report.

Not surprisingly, the mainstream media largely ignored this historic event, and the heads of state of the G192’s largest players, the US and other G20 member countries, sent lower-ranking officials to the meeting. The G192’s vision spells the end of their domination of global policies and that of their incumbent fossil-fuelled industrial sectors.

Watch for the G192’s 21st century style of distributed network power -unlike the fossilised elites at their highly-restricted and choreographed G8 and G20 summits. At last the G192 has a world platform to air their frustrations with Anglo-Saxon, neoliberal market fundamentalism and how this ideology spread from the University of Chicago through US president Ronald Reagan and United Kingdom prime minister Margaret Thatcher to the harsh ‘conditionalities’ and double standards of the IMF and the misplaced priorities of the World Bank. The imposition of these policies is now recognised as unjust and harmful, exacerbating the meltdowns of Asian economies. Countries like China and Malaysia avoided this pain by using their own homegrown policies.

The G192 has envisioned a new world game. They see finance serving people and a healthier, sustainable, and just future for all. They see huge opportunities in the collapse of the global casino and in the climate crisis to change course and invest in building cleaner, greener economies worldwide. They are now supported by 21 agencies of the United Nations, spearheaded by the UN Environment Programme (UNEP), the UN Development Programme (UNDP), and the International Labour Organisation in their launching in 2008 of the Green Economy Initiative and a Green New Deal for the world.

The G192 also provided a forum for civil society organisations whose policies have developed since 2000 at their World Social Forum and by thousands of grassroots groups that helped shaped the new vision. All are now coalescing to turn the lugubrious debate about the costs to incumbent fossil fuel sectors of mitigating climate change to the positive calculations of the massive savings and new wealth and millions of new jobs that will be created by investing in Climate Prosperity Bonds.

The world is ready for this new vision and welcomes the emergence of all the new leaders of the G192. (END/COPYRIGHT IPS)

(*) Hazel Henderson is author of Beyond Globalization, Ethical Markets: Growing the Green Economy and other books. She co-created with the Calvert Henderson Quality of Life Indicators www.calvert-Henderson.com

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By Hazel Henderson and - -
ST. AUGUSTINE, FLORIDA, May 20 2009 (IPS)

An outside-the-box approach is needed for the worsening problems of Afghanistan and Pakistan. US official policy in its war in Afghanistan is to combat Al Qaeda and make sure there are no further attacks on the USA from their safe havens. Yet, on his recent visit to the US, Afghan President Hamid Karzai said that there are no Al Qaeda members in Afghanistan. General David Petraeus, US Central Command Commander, also stated that no Al Qaeda members are in Afghanistan.

The Taliban are resurgent in both Afghanistan and Pakistan. In Afganistan, the Taliban appear to control large areas of the country and are threatening the capital, Kabul. In Pakistan, the army is fighting to dislodge the Taliban from the Swat Valley, Buner and Dir. According to the United Nations, over a million people are displaced or fleeing the area.

Reality dictates that both the US and its NATO allies admit that there is no military way to drive the Taliban from Afghanistan. Most Taliban come from the Pashtun tribal groups of about 45 million people who have always inhabited the mountainous region between Afghanistan and Pakistan. A small percentage of these 45 million tribes people are Taliban extremists. Even fewer of them belong to Al Qaeda.

Since neither Afghanistan nor Pakistan can control these 45 million Pashtuns in their tribal areas, they cannot prevent them from providing safe havens for their Taliban brethren. Neither NATO or US forces have been able to prevent the Taliban’s murderous attacks on Afghan schoolgirls.

So imagine a scenario:

US President Barack Obama, President Asif Ali Zardari of Pakistan and Afghan President Karzai jointly announce that they are supporting the creation of a new nation: Pashtunistan, to become the 193rd member of the United Nations. Immediately, the Pashtun tribal leaders turn inward, jockeying for who will lead their new country, who will be chosen to be its ambassadors. The Taliban re-focus their attention on their homelands. The leaders of Pashtunistan now have little interest in continuing to destabilize Afghanistan or Pakistan.

As Pashtunistan takes its place among the UN community of nations, it will be required to observe the Universal Declaration of Human Rights and confer greater rights and freedom for its women. All the UN treaties and agreements covering other nations would apply, including protection of aid workers and the press. As the “carrots” of full recognition of Pashtunistan are grasped, its tribal peoples receive aid and development funds. The “price” for giving women greater freedom from male oppression is weighed against all the new benefits of nationhood. Pashtunistan eventually begins to contribute the positive aspects of its long cultural heritage to the world.

Too far out? Not when contrasted with current muddled policies which run the gamut from “preventive war” against the non-existent Al Qaeda in Afghanistan to the notions of “nation-building” and “protecting women.” The idea that 60,000 US troops can fight the Taliban Pashtuns as they enter Afghanistan ­or protect women by cozying up to their patriarchal tribal leaders is even more fanciful than helping create Pashtunistan. As I advocated after 9/11, the US should have called in INTERPOL to help track down the Al Qaeda criminals, rather than declaring its wars on Afghanistan and Iraq. Likewise, INTERPOLS’s help is needed to find and punish those Taliban criminals who attacked defenseless schoolgirls ­and rewards should be given to informants leading to their capture.

Who are the realists anyway? (END/COPYRIGHT IPS)

(*) Hazel Henderson is author of Beyond Globalization, Ethical Markets: Growing the Green Economy and other books. She co-created with the Calvert Henderson Quality of Life Indicators www.calvert-Henderson.com

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By Hazel Henderson and - -
ST.AUGUSTINE, Mar 31 2009 (IPS)

The financial meltdown generated by Wall Street and the “too big to fail” culture of global money-centre banks and financiers is generating local initiatives and demands to decentralise and democratise finance.

While national safety-nets are unravelling because of budget cuts, local leadership is rising, offering many creative alternatives for communities to nurture healthier home-grown economies:

-Local barter-clubs, like Freecycle.com, Craigslist and LETS, and scrip currencies are proliferating, as they always do when central bankers and the International Monetary Fund fail or make matters worse. Some of the most successful complementary currencies are Switzerland’s WIR and in the US, Berkshares, with equivalent to USD 2 million in circulation and accepted by banks and businesses in Massachusetts. Similar complementary currencies are working well in Britain, Canada, Australia, Argentina, Brazil, and other countries.

-People-to-people lending and microfinance projects are booming in many countries: Women’s World Banking, Grameen Bank in Bangladesh, now emulated in many countries, FINCA and ACCION in Latin America, as well as the newer online versions. Credit unions, operated in Europe and North America for a century, are now filling new local needs, reaching out to poorer people and adding microfinance and lending to small businesses.

-Associations of small local banks and businesses are wielding more political clout, as are credit unions. In the US, they are demanding equal treatment in the government’s bailout funds currently showered on the big banks whose reckless lending triggered the financial mess. Venture capital and venture philanthropy firms, including the Rudolf Steiner Foundation, Acumen, and the foundations of Ebay founders Pierre Omidyar and Jeffrey Skoll, are investing in social enterprises that meet social needs while making modest profits. Such social capital is now creating a new hybrid sector in many economies.

-Britain’s New Economics Foundation (NEF) has been generating both local initiatives, such as the Transition Towns movement, and its Green New Deal and alternative indicators to correct GDP, measuring well-being and ecological sustainability. NEF’s proposal to save Britain’s 11,500 postal offices by adding local banking functions is backed by trade unions, small businesses, public interest groups, and pensioners.

-Time banking, a brainchild of Edgar Cahn in the US, is now helping local people connect and share services in Japan, Europe, and other countries. Neighbours contact each other via a local “time banker” to provide meals and help for shut-ins, babysit each other’s children, watch over property, mow lawns, and share appliances. And car-sharing has now spawned many new companies.

-China is host to many such local initiatives, linking small businesses on networks, including Baidu.com, Alibaba.com, as well as Qifang.com which provides affordable loans to China’s 25 million students. Circle Pleasure, a private company selling prepaid consumer cards, has formed a joint venture with Qifang for people-to-people banking, the first private company to receive a banking license from China’s Central Bank. In many countries in Africa, cell phone banking has taken off. Cell phones are the basis for the “phone ladies” in Indian and Bangladeshi villages, who rent their cell phones to other villages so rural farmers and fishermen can consult prices in nearby towns and markets to optimise sales.

How far can people-to-people finance go in bypassing big, greedy banks and ethically-challenged Wall Street financiers and their political allies? A long way, thanks to all the communications tools now widely available. Using these new information-sharing tools is helping people realise again what money is: just one form of information. Today it is possible to trade using pure information exchange. For example, in rural Florida, there are call-in radio programmes where, for example, a farmer may offer to trade tractor use for a quantity of seed. Similarly, the growth of farmers’ markets and contract-supported agriculture allows local consumers to buy fresh produce directly from nearby farms.

So how did we allow big banks and centralised finance to grow so large that they became predators on the real living economies which produce the world’s real wealth? Local people around the world are realising that they can simply bypass big banks and stock exchanges and create these services locally. The old, bloated financial sectors must downsize, cut their bonuses and take the losses from their reckless bets in their global casino. A truly efficient financial services sector should be less than 10 percent of a country’s GDP. Those in Britain and the US grew to 25 percent of GDP, metastasising with their “financial engineers” preying on the real economy. Now students are looking for jobs as real engineers, teachers, doctors, and entrepreneurs.

In a very real sense, we humans don’t have a financial crisis but a crisis of perception. We are beginning to see our world differently from the way the mainstream media portrays it. We see our choices with new eyes. As we watch central bankers printing money on TV, we learn that money is not real wealth. Real wealth is generated by productive people using the Earth’s resources wisely. Money is a useful medium of exchange when managed properly, locally, nationally, globally, or electronically. Hoarding money is no longer a reliable store of value. We are all rediscovering the many stores of value in our own communities. We find wealth beyond money. We can change our values for the new times we live in and restore the love economies to their central role in our lives. (END/COPYRIGHT IPS)

(*) Hazel Henderson, author of Ethical Markets: Growing the Green Economy (2006), is president of Ethical Markets Media ( www.ethicalmarkets.com). She co-created the Calvert-Henderson Quality of Life Indicators, updated regularly at www.calvert-henderson.com.

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