FEASTA Quarterly Bulletin, Spring 2003

Contents

1. Equity, Sustainability and Health
2. New FEASTA Discussion Group - Economics for Humanity
3. Summary of Human Economics Discussion Group. By Frank Rotering
4. An Economy For the Earth. By Gillies MacBain
5. Is Bush petrified of the petro-euro? By Cóilín Nunan
6. Debt Slavery and the American Empire. By David O'Kelly
7. FEASTA Working Group Updates
8. 'The Little Earth Show' a radio programme from Feasta
9. Events coming up
10. New Feasta publications coming soon
11. Feasta activities outside of Ireland
12. Feasta Membership

(1) Equity, Sustainability and Health

History seems to suggest that societies don't need to distribute incomes and wealth reasonably fairly in order to be sustainable. There are many examples of civilisations that have lasted for hundreds of years where the power and income gap between the ruling class at the top and the serfs or slaves at the bottom has been astonishingly wide. Moreover, when these societies collapsed, they were destroyed by an invading army or the consequences of ruining their environment rather than their internal inequity.

Indeed, it seems that people can acclimatise themselves to almost any degree of unfairness if they have sufficient time to adjust they way they think about life and themselves. The Indian caste system is a good example. Those at the bottom are inured to their fate by believing that they are what they are in this life because they put up a pretty poor performance in a previous one. Alternatively, they might believe they were an animal in their last life and living as a harijan in this one is a stage they have to go through on the way up. In either case, provided they behave well this time around, they can expect something better in their next incarnation.

But what happens if rapid economic growth makes the distribution of income and wealth becomes very much less fair in the space of a few years, as it has done in Ireland? Do people become less content despite their greater affluence? Surveys seem to show that they do. For example, the EU's regular Eurobarometer survey showed that only 30% of Irish people reported themselves to be very satisfied with their lives in spring 2002 compared with 42% in 1997.

Besides becoming less content, they seem to have become less healthy. After a massive trawl through official statistics for Feasta's Indicators Group, Dr. Elizabeth Cullen reports that several series began to deteriorate sharply after 1995. "The number of days people took off work due to illness began to increase then and suicides also went up" she says.

Also, although increased incomes meant that fewer people qualified for a medical card, the total number of prescriptions issued to holders went up, perhaps indicating that poorer people became sicker. More valium was prescribed and, as is widely known, the general population's consumption of alcohol, another mood altering drug, went up.

The link between fairness in the way income is distributed on the one hand and general health and life expectancy on the other has been known for some time. As a result, since Ireland has the least fair distribution of income in the EU, Dr. Cullen was not surprised to find that it also had the worst life expectancy overall. "Thirty years ago, Irish men lived longer than the average European" she says. "In 1999, however, boys had a life expectancy at birth of 73.7 years, the lowest in the EU, while for girls it was 79.1 years, the third lowest after Denmark and Portugal. Moreover, Ireland has the fourth worst prevalence of asthma in the world."

Dr. Cullen is hoping her work will help show whether the deterioration in the general health of the Irish in the past seven years was due to the shift in income distribution alone or might have been aggravated by the speed with which the increase in inequality occurred. "Causation is always difficult to prove" she says.

(2) New Feasta Discussion Group - Economics for Humanity

Ever since Feasta was established, it has been aware that conventional economic thinking is one of the main obstacles to the achievement of sustainability. In particular, it has known that an economic system set up to maximise the return to capital - something that made very good sense 200 years ago when the energy and other resources required to build and equip factories and workshops were in very limited supply - is no longer appropriate in an age in which there is no shortage of the resources to produce artefacts but in which the environment - Natural Capital - is the factor in short supply.

Frank Rotering, an independent Canadian thinker, has been working on these lines and has written a paper An Economics for Humanity specially for Feasta, which will be published on the Feasta website. The paper has been divided into four sections and the first two sections are already on the site for downloading. The sections will follow each other at 7-10 day intervals to allow time for a discussion to develop on each. Frank, who has written an introduction to the series which is also on the website, will then amend the paper in the light of the discussion so that it can be published in this year's issue of the Feasta Review.

The new list's aims are "to formulate an economic theory for those concerned about humanity and nature. Standard economics is not a universal method of analysis, but instead represents the viewpoint of a specific class: capitalists. If we don't share the capitalist viewpoint, and if we are serious about doing independent economic analysis, then we have to rethink economic theory from the ground up."

You can join the new list by sending a blank message to HumanEconomics-subscribe@yahoogroups.com

(3) Summary of Human Economics Discussion Group.

By Frank Rotering

Much of the discussion so far has been marred by confusion, arising largely from the contradiction between the aims of human economics and Feasta's definition of sustainability.

The objective of human economics is to maximize human well-being, subject to ecological constraints. Feasta defines a sustainable system without explicit reference to human well-being. For Feasta, a system is sustainable if it can continue unchanged for a long time "... without causing a progressive deterioration in any of the factors which make it up." (Feasta Review, number 1, p. 5)

The unfortunate effect of this definition is that it permits a permanently low level of human well-being, because such a social state does not involve "progressive deterioration". Feasta's aim is to formulate broad social guidelines, which means it must take responsibility for human well-being. Its definition of sustainability therefore constitutes a significant error in the organization's initial orientation.

Despite the confusion, I have found the discussion useful because it has exposed weaknesses in my thinking, and because it has taught me to state the aims of human economics earlier and more clearly.

To move forward, Feasta must also learn and change. In my view, it should either change its definition of sustainability to embrace both humanity and nature, or retain its current definition and expand its purpose to include both human well-being and sustainability.

The future of the discussion group is uncertain. The foundational differences between Feasta and human economics will not be bridged quickly, and I have not detected a willingness among group members to discuss basic economic theory. I will be pleased to publish parts 3 and 4 of my paper on the Feasta website, but will admit to pessimism regarding discussion of the concepts presented, at least in the short term.

Frank Rotering.   frank_rotering@yahoo.com

(4) An Economy For the Earth. By Gillies MacBain

I have been taking part in the new FEASTA human economics discussion group humaneconomics@yahoogroups.com, which has so far been very successful. This is a spin off from the feasta@yahoogroups.com discussion group. My views have now crystallised.

The discussion on human economics - a group that it may not be too late to join - has led me to an expression of the views which place me out on a wing beyond even the Green Party. I believe as follows: the current religion in this country is 'Christian materialism', that is to say our policy makers are culturally Christian, even when not committed Christians, and this relic of Christian decency remains as a decaying stratum under the industrial / consumer culture that forms the growing superstructure of our society. At these upper and more recent levels a fundamental philosophy has grown up, but never been formally expressed, except in the vulgarisms: "do your own thing' , and 'it's the bottom line that counts'.

Challenging this, over the last twenty-five years, a 'green' position has emerged to the effect that we are 'stewards of the earth' and must stop acting in a way that endangers the planet.

Richard Douthwaite maintains that there are limits to growth and that many of the benefits of economic growth are illusory. Exponential expansion in a limited space (the earth) is not possible. On this we agree.

He and Frank Rotering, the host and moderator of the human economics discussion, then seem to wish to blend with this basic environmental stance agendas of human well-being and human equality. While sharing their decency, I do not see the egalitarian agenda as a fundamental or an essential part of the earth agenda. To put it crudely: nature is a right wing bitch, and ruthless as well as nurturing. I try not use the rather bureaucratic and human centred word 'environment'.

I have a number of principles for an 'earth economy' which there is not room to set out here. But let me mark your roadmap: the road forks at its very beginning. To the left - human economics, to the right - economics for the earth. But Davie has given me but 300 words. Perhaps he is trying to raise my awareness of the need for careful resource management!

Gillies MacBain. cranagh@eircom.net

(5) Is Bush petrified of the Petro-Euro? By Cóilín Nunan

In November 2000, Saddam Hussein made a momentous decision: he decided that henceforth Iraq would sell its oil on the international market for euros rather than dollars. In doing so, Baghdad branded the dollar a tool of US hegemony.

Is there in fact some validity in this claim and could Iraq's decision help explain the current policy divisions between the US and Eurozone countries, France and Germany, on Iraq?

At present, the dollar is the de facto world reserve currency, giving the US an inherent economic advantage by allowing it to import far more than it exports. The need for dollars outside the US to buy oil, repay IMF debts and carry out international trade means that foreign countries must supply the US with extra goods and services to acquire dollars which the US issues at virtually no cost. It is the demand for dollars which enables the US to live beyond its means, currently importing nearly 50% more than it exports.

The euro, however, now provides a credible alternative to the dollar. But even if the dollar only had to share the status of world reserve currency with the euro, the economic consequences for the US would be extremely serious, including large dollar and stock-market devaluations.

There is one major obstacle to this happening: oil. For many oil-importing countries like Japan, there is no point in converting their huge dollar reserves to euros if the only currency that can be used to buy oil is the dollar.

Maintaining international oil trade in dollars is therefore crucial to US economic health. But 'axis of evil' member and major oil exporter Iran not only welcomed Iraq's euro move, but is considering doing likewise. OPEC member Venezuela also welcomed Baghdad's move and has established barter deals for trading its oil with 13 different countries and encouraged OPEC to set up systems of electronic barter. Even major oil producer Russia welcomed the Iraqi move and OPEC itself has said it is considering the benefits of selling its oil for euros.

If part of the motivation for the proposed war against Iraq and the coup attempt in Venezuela is a power struggle between two competing currencies, then this underlines the importance of Feasta's proposals for reforming the international monetary system and introducing a neutral world currency for all international trade.

Further reading: http://www.feasta.org/documents/papers/oil1.htm

The dollar hegemony story took shape on the Feasta e-mail discussion list which allows members and friends to share information and discuss new ideas. You can subscribe to this list by sending an e-mail to: feasta-subscribe@yahoogroups.com

(6) Debt Slavery and the American Empire. By David O'Kelly

It is interesting that the word Empire is re-entering our vocabulary when the threat of a military conquest provides the gloomy backdrop to our breakfasts. People who mention the E word usually do so in the context of a debate about whether the US/UK led coalition poised to bomb Baghdad is just after the oil resources of the Middle-East.

The reason Imperial ambition has faded from our thinking probably has something to do with the fact that the Empire that now dominates the world is unlike previous ones. In the old days the empires of Nero and Queen Victoria were very visible in the form of ships packed with slaves (sorry, human resources) crossing the oceans. These slaves provided a virtually cost free labour force that enhanced dramatically the living standards of the rulers although strangely did little for the lives of ordinary people of Rome or London.

Slavery still exists today. Under our bright new system it is no less vicious and miserable but it is generally out of sight in the sweatshops of the 'South'. Where it is visible is in the flood of economic migrants from countries rich in natural resources to provide an underclass as domestic servants in Dublin, Paris and New York.

One thing our neo-imperial era does have in common with its predecessors is the necessity for military force to sustain it. This force is not generally deployed in the face of a military threat from a rogue nation. Usually it is deployed to suppress movements that may manifest themselves in the form of ideas. It is ideas such as freedom from debt imposed by the IMF, restoration of land ownership to indigenous peoples or the reclaiming of (say) oil wealth by those countries that have been unfortunate enough to be sitting on top of it.

So, today's empire is actually an empire of capital. Step 1: Get people into debt. It doesnıt actually matter whether it's a mortgage in Malahide or an Asian government, just get them hooked on debt. As security on the debt you will accept the deeds to their house or their mineral wealth, or their tax revenues payable in your dollars or euros. Now you have them. Now they must work hard to repay your loan and the interest on it. Now they have no time to grow their own food, develop their culture or even raise their own children. Most especially they do not have time to stop and think about what is going on.

Of course you will need to enforce the rules if they come up with an alternative to your system or decide it's just plain immoral. That is why the US today has 395 bases (garrisons?) around the World and the most awesome military force assembled in history. If someone questions your rationale for so much defence expenditure you have to point out all the threats to your security. If there are none apparent you just have to create some. Itıs not so difficult when you also own the mass media.

However all good (and bad) things must come to an end. Empires are unsustainable. Sooner or later resources become exhausted trying to control too large an area and the system becomes corrupted by such massive concentrations of wealth. When the system falters desperation creeps in and the levers of power become visible even to the casual observer. When ordinary people can spot the game, the game is up.

Don't forget. It's the ideas they fear. Do something subversive. Read a book, grow your own vegetables and talk to your neighbours.

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