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®.

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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.

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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®.

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