Monday, June 18, 2018

Equal sharing of natural wealth promotes justice and sustainability

Natural phenomena emerge in the cosmos according to natural law. Moral precepts can be seen as natural laws of social interaction, while the emergence of civilization can be seen as a particular kind of natural phenomenon. But civilization in its current form is plagued by widespread extreme poverty and our society is threatening to produce a planetary ecological disaster. We are challenged by circumstances to create a sustainable and more just civilization. This will require a fuller respect of basic moral principles.

Civilizations thrive then collapse because they grow beyond what the natural environment can sustain. Economies boom then bust because they grow beyond what their resource bases can support. These sometimes wild swings may appear to be cyclical variations, but they actually reflect chaotic instabilities. The arc of civilization, the boom and bust of the business 'cycle' and the formation and collapse of real estate and financial bubbles are all similar phenomena seen at different time scales and different magnitudes, and with different enabling factors becoming scarce at the point of collapse. A closer adherence to basic moral principles would mean a dampening of these gyrations. Respect of moral precepts would keep natural variations within limits that would ensure that they would not pose an existential threat to the integrity of the system.

If we recognize a basic human right to define overall limits to environmental impacts, then, as citizens of a democratic society, we must acknowledge a corresponding responsibility to create a government that brings about the limits in reality that the average opinion of the people says are most appropriate. But our governmental institutions are not functioning in a way that ensures that actual impacts are within limits acceptable to most people. So we must change our institutions. We must change the way that we participate in the political process.

Increasing social instabilities and dwindling resources present us with a great challenge. A change in our thinking about property rights could offer a solution. Since the advent of civilization, we have developed the concept of private property rights. Now, if we look closely at our fundamental rights and moral duty in relation to the natural environment and our social environment, we can see the concept of public property rights emerging. A concept of public property rights is rooted in our innate sense that we have a right to use air and water and other natural resources. With public property rights respected, natural opportunities (natural wealth) will be shared equally. This concept of property rights implies that we also have a collective duty to define limits regarding the extent to which human beings will degrade, deplete and destroy these shared resources. A public property rights paradigm will emerge when we bring our actions in the political and economic realms more into alignment with basic moral principles. When we collectively resolve to only vote for lawmakers who support programs that will result in effective limits to adverse environmental impacts (limits consistent with the will of the people at large), then we will begin to carry out the duties that correspond to our public property claims.

As a kind of natural law, basic human rights must be respected. Society cannot hold together over the long term when basic rights are chronically and systematically neglected. When we carry out our collective duty to use our systems of governance and the political process to define effective limits to humans' environmental impacts, then our basic right to define these limits will be respected in practice.

We need to start accounting for economic externalities. Externalities are those side-effects of economic activity that are not reflected on the financial balance sheet of profit and loss, income and expense. Sometimes there are spillover effects produced by economic actors that actually benefit a community, but more often, externalities consist of negative side-effects of industrial and commercial activity. Externalities (also called 'market failure') can be seen as a way that producers (and consumers) foist environmental impact and depletion costs onto society and the larger community of life.

Pollution is a classic example of a negative externality. Resource degradation from excessive use or extraction of resources is another. Since these costs to society and to all life on Earth are not reflected in prices or in the cost of doing business, producers do not take into proper account the true costs of their actions. Corporations will pollute the air and water more and use up resources faster when the costs of doing so are hidden or partially hidden. In pursuit of higher profits, economic actors put effort into reducing costs that they can see on the balance sheet. When costs to society are not shown on profit-and-loss statements, businesses act as if those costs do not exist. Almost since we started carrying things (or since animals much like us started carrying things), we have traded based on what we could see as the costs and benefits of a transaction. But the effect of externalities is to prevent us from seeing clearly.

We know that natural resources are valuable—even indispensable—to industry and to society at large. Yet we allow industries to take and degrade natural wealth without any expectation that they will pay compensation for the damage done or value taken. A fee charged against those who take or degrade natural resource wealth is a tool that society can use to influence industrial and economic sectors, to en-sure that sufficient effort is put into resource conservation and sustainable business practices. This fee mechanism can replace other, less efficient means of managing natural resources. A fee would reflect the environmental costs of human activity on the financial bottom line. Costs now hidden would become apparent. Fee proceeds should be shared equally to all the world's people.

Charging fees on the taking or degradation of natural resources could moderate particular kinds of human economic activity, with the aim of keeping overall impacts within limits that most people find acceptable. This could ensure that the basic human right to collectively decide such limits (a mere theoretical construct) is respected in practice. The hope and expectation is that people would in fact choose to keep overall impacts within limits that the larger environment can sustain. Eternal vigilance by citizens will be required to ensure that a human population that has the ability to exceed what the Earth can sustain does not go beyond those limits in reality. It might be easy to persuade people that stricter limits on environmental impacts are preferable when it is understood that stricter limits will mean higher payments to the people by those who produce the adverse impacts. Higher fees charged to industries that pollute or deplete natural resources in pursuit of profit means higher payments to the people in the form of a natural wealth dividend. There is a happy coincidence of interests: What is good for the individual is also good for the community. Similarly, profit-seeking corporations will do things to save money and increase profit that will also benefit society and the larger environment.

Proceeds from environmental impact fees would be a monetary representation of the value of natural resource wealth. Equal sharing of these proceeds would buffer the downward slide of a shrinking economy, since the entire human population would continue to receive a modest income from shared natural resource wealth, independent of income from work, investments or family inheritance. A 'floor' on the loss of human confidence that causes or contributes to business contractions would be created. Spending in support of basic needs would continue, regardless of economic climate. Money will continue to flow to the most vital sectors of the economy. The part of the economy devoted to meeting basic needs would then be insulated from the worst vicissitudes of the business 'cycle'. With human-caused stresses on ecosystems and demands on natural resources kept sufficiently low through a fee mechanism, and with swings in the economic climate moderated, civilization becomes a more sustainable and more stable phenomenon.

The short answer for how to change institutions toward a public property rights paradigm of sustain-ability and moral responsibility would be to start voting green AND libertarian (or left-libertarian). A marriage of these threads from our political tradition would combine a good sense of the practical challenges and responsibilities of government (what government must do) with a principled understanding of the proper limits to government power (what government must refrain from doing). And the other short answer for how to make this change happen is to let people know it is possible.

Government power has limits to its authority, as does individual power and autonomy. Political activities (such as voting) must be moral undertakings to have good results. If we understand that governments get their just powers from the consent of the governed, then any moral foundation for governmental powers requires that we only delegate powers to government that we legitimately have as individuals. If we do not have authority to initiate the use of force or coercion against a peaceful person, then we cannot delegate this power to governments. We cannot legitimately use government to regulate others’ private actions. We cannot legitimately vote for politicians who would do so, either. Principled limits to governmental power and authority must be respected.

It is quite fitting that we should stop trying to regulate private behaviors as a matter of principle. Such a change may be absolutely necessary from a practical standpoint, too. Perhaps only by freeing-up the attention and resources now devoted to fighting drug wars and other wars can we have sufficient attention and resources available to meet the great challenges facing the entire human community.

An economy based on true-cost accounting will make material consumption cost more on the financial bottom line. This will reflect more honestly the fact that materialism costs much in terms of natural resources used. This new economy will spread material wealth more evenly across the human population, while improving the fluidity of the job market. (People will be more free to leave oppressive or disagreeable employment situations when their work income is not their sole source of income.) The new economy will limit pollution levels and rates of taking of natural resources so that they are within limits that most people agree are acceptable. We will have a more true democracy.

This change makes the chaotic thriving and collapse of civilizations (the large-scale version of the boom and bust of the business ‘cycle‘) into a less wildly gyrating phenomenon; still on the edge of chaos, perhaps (as are all living systems), but a potentially sustainable phenomenon.

Tuesday, March 20, 2018

Letter to the Editor: Share natural wealth

When pollution or environmental disasters are reported or when depletion of resources is reported, an efficient and fair policy of charging fees to industries that pollute or deplete resources in pursuit of profit should also be mentioned.

When poverty or wealth disparity are reported, a moral precept that says natural wealth belongs to all should be mentioned. Sharing proceeds from environmental impact fees is a possible solution to the problem of poverty and wealth disparity.

When (if) we account for economic externalities, industries that cause the most ecological damage will either shrink, transform themselves into something more benign, or disappear. When we share proceeds from environmental impact fees to all people, no one will live in poverty. Why are solutions to systemic problems not mentioned when the symptoms of those problems are reported? Systemic problems include economic externalities and our failure to share natural wealth.

When economic instability and contentious arguments about interest rate adjustments are in the news, the stabilizing effect of sharing natural wealth should be mentioned in those news reports. If we manage environmental impacts by charging fees to industries that pollute or deplete resources, we will notice that fees increase when the economy is in an expansive mode (assuming that we are aiming for fees that are set just high enough to hold impacts within limits acceptable to most people). When the economy expands, there will be more demand for pollution permits, etc., so the fees would necessarily increase. This would put an automatic damper on further expansion. There will be no need, then, to manipulate the money supply to curtail economic activity. Sharing natural wealth produces a dynamically-stable economic system. Fees, set at the appropriate amount, will promote sustainability over the long term by motivating industry to reduce impacts on the environment.

The tendency for an expanding economy to be held in check when natural resource extraction fees respond to economic conditions is complimented by the tendency of a slowing economy to bring a gradual reduction in the amount of the natural wealth stipend. A gradual loss of stipend income would motivate some of the people 'sitting on the sidelines' to seek employment opportunities. Millions of people entering the job market or seeking to increase working hours will make business expansion easier precisely when economic conditions call for expansion. These feedback mechanisms are analogous to the physiological mechanisms that keep conditions within biological organisms at a dynamic steady-state.

A natural wealth stipend paid to all citizens will sustain economic activity that provides basic goods and services, regardless of economic climate. The natural wealth stipend enjoyed by all will be enough to live on, in the view of some people. [A comprehensive estimate put the value of natural wealth beyond $100 per day for each person. (Nature, 2014)]

Some citizens in a society that respects public and private property rights will choose to work few or no hours for wages and instead will aim to live frugally and within the limits of that stipend. With this alternative paradigm, if the economy is slowing, the amount of the natural wealth stipend will decrease over time, as lower environmental impact fees associated with a slowing economy reduce the funding source for the stipend. More people seeking opportunities to earn a wage, and lower environmental impact fees, contribute to a counter-cyclical influence on the pace of economic activity. There will be no need to inject new money into circulation with low or zero interest rate loans as a form of economic stimulus. Downturns will simply not get to such a degree of severity, and will not imperil essential economic function, in a society that fairly shares natural wealth and accounts for externalities. With a natural wealth stipend going to all people, the essential functions of the economy will be insulated from the worst vicissitudes of the business 'cycle'. People will continue to spend money on food. They will continue to support the food-producing capacity of the economy. People will continue to spend in support of basic shelter and healthcare needs, even during economic downturns.

News reports should mention shared (equal) ownership of natural wealth when problems that could be solved by equal ownership of that wealth are reported. You should mention efficient and fair means of accounting for economic externalities when you report problems caused by externalities ("Externalities" a.k.a. "market failure" or "tragedy of the commons").

When there are two serious problems that seem unrelated, but they can both be solved by a single policy, we might take that as a hint that the problems are related. You should report policies that offer systemic solutions when you report symptoms of systemic problems. (Charge fees to those who cause adverse impact on the environment; Give fee proceeds to all people.)

John Champagne

Civilization can be made sustainable and just

Systemic flaws are not reported

A sustainable and just civilization requires that we use our moral sense

Systemic flaws are not reported

Saturday, April 15, 2017

Citizen's Responsibility

Human beings have a right to share in the benefits offered by natural resources.

We have a right to share in defining limits to how rapidly we use up resources or put pollution.

These rights can only be manifest in reality if we create an effective system of governance that has its explicit aim to manifest these rights.

Someday, humans may assert their right to share in deciding limits to environmental impacts by responding to surveys that inquire about what the limits should be regarding specific kinds of impacts. Until that time, we must explicitly assert that we have this right and we must assert that government should function so as to manifest in reality the basic principle.

Similarly for our right to share in the benefits... We will someday assert this right by accepting a natural wealth stipend and spending the money. When the government institutions do not yet exist to collect the fees and disburse the proceeds, the role of the citizen is to SAY that this must be a function of government. (Governments will not spontaneously start manifesting that principle without citizen input.)

Basic moral precepts will only be manifest in reality when people SAY that they should be.

What do we need to know that news media are not telling us?
Systemic flaws are not reported

A sustainable and just civilization requires that we use our moral sense

Friday, November 11, 2016

Don't settle into a more polarized state just yet, America.

Electors decide in December. Let's not try to squeeze into a Trump-shaped universe just yet.

There was no majority of votes cast for any single candidate on November 8th. AND the votes that were cast were not expressions of support as much as of fear, distrust or dislike of the other. So, no mandate.

We can in good conscience ask Electors to find a consensus candidate. We should insist that they discuss among themselves and find a candidate who most of them and who most citizens can agree would be a better choice.

We can still avoid a disaster. Who cares?

Jon and Tracey Stewart
Photo: New York Daily News

Wednesday, December 02, 2015

How to Fix Civilization

Civilization is unstable because of a systemic flaw:
Natural wealth is not shared equally.

If we charge fees to industries that put pollution or take natural resources, and set the fees just high enough to cause industries to cut down on environmental impacts (to the point that most people think they are being held to acceptable limits)..., we will have accounted for economic externalities AND we will have produced an economic measure of the value of natural resources to the economy and society. We will have fixed the defect that causes the economy to disregard the costs of destabilized climate, damage to the environment and depletion of resources.

The proceeds of fees should be shared equally worldwide. (We might decide to put some portion of this money toward support of public programs so that we can reduce or eliminate conventional taxes.)

A system that is calibrated against an absolute limit to to the overall extent of environmental impacts would have increasing fees when an economy is expanding, to prevent growing demand for pollution permits, etc., from causing the economy as a whole to blow past the limits (in terms of environmental impacts) acceptable to the people. The rising fees would put a damper on the pace of economic activity, thus preventing what otherwise could become an unsustainable boom. This damper on excess activity is a counter-cyclical influence that functions automatically.

With fee proceeds shared, everyone will continue to spend in support of their own basic needs, regardless of employment status. This would insulate the sectors of the economy that provide basic and services from the worst vicissitudes of the business 'cycle'. All people would continue to spend in support of these sectors during an economic downturn. Economic downturns, then, can never become so severe that they threaten social cohesion and stability.

Within this alternative paradigm, some people may choose to live a very simple life and reduce their need to seek income beyond their natural wealth stipend. When the economy slows, the falling demand for pollution permits, etc, would mean reduced fees (or reduced permit sale prices, if permits are bought at auction). This would mean reduced income for those relying largely or entirely on their natural wealth stipend. These people would feel increased incentive to enter the job market. Additional job-seekers would make business start-up and expansion easier. This paradigm would (again) provide a counter-cyclical influence. The economic system is less inclined to 'boom and bust'. The civilization is perhaps sustainable. (With pricing of natural wealth, there is an economic incentive to reduce impacts on the environment.)

A system of random surveys could tell us what limits people want on various kinds of impacts.

We talk more about minimum wage than we do about minimum income. That could change when we start talking about sharing natural wealth equally.

John Champagne

Equal sharing of Natural Resources promotes Justice and Sustainability

Integration of human society and the biosphere

Sunday, June 14, 2015

Put Public Funds Directly into the Hands of the People

Who should decide how to spend public funds?

Hardly a day goes by without another news report about supposed-to-be public servants violently assaulting the citizens who they are supposed to be protecting. (Until editors decide that the story is old and they move on to the next hot topic. Then we will likely see those reports only if we look for them, or if an incident sparks an uprising.)

Hardly a day passes that we don't see new reports of corruption by elected and appointed officials somewhere in the world. Corruption anywhere is a threat to civil society everywhere, because if we fail to create systems of government that are honest and responsive, we will suffer further erosion of trust in the integrity and value of our civil institutions. There will be some segment of the population that is more prone to being seduced by claims of a pure, perfect ideology, an alternative system, if the established order is in decline. Whatever fundamentalist, reactionary ideology is most prominently opposing the establishment will inevitably appear more attractive when contrasted with this unsustainable and corrupt system that we've made [even though the competing, reactionary ideology brings its own less visible systemic defects (less visible to its adherents).]

In order to thrive, our society requires healthy institutions that enjoy the confidence of the people. We need to see and have confidence that governments and public officials are operating in the public interest.

Would we be better-off with an alternative political paradigm that puts public funds directly into the hands of the people? Each of us might be asked to decide how to spend a small, equal fraction of the total public budget. We would spend in ways that we think would benefit the public, with the condition that our choices must line up with the opinions of at least a significant portion of our fellow citizens. If I spend my share of public funds on things that, say, 50% of citizens feel promote the public interest... we could be pretty sure that my choices, whatever they are, will in fact promote the public interest at least somewhat and probably quite a bit. We can use public random surveys to know what people think regarding this or that public service (to find out to what extent people think particular services produce benefit for society and the larger environment). We can make a paradigm that, in its very operation, directs people's attention to the question of how public funds are being and should be used. Imagine a system of surveys that ask where more public funds should be directed, and where we should reduce public spending.

If I put a large fraction (say 80%) of my share of public funds toward support of programs and projects that three-quarters of citizens agree promote the public interest, I might be allowed more latitude in deciding how to use the remainder of my share of these funds. I might be free to use that smaller fraction to support programs that, say, 20% of citizens agree promotes the public interest. This question of what might benefit the community is a really big question, and one on which reasonable people might disagree. Within this paradigm, the most widely-supported programs would receive the bulk of the public dollars (or Bitcoins, maybe), while other programs (more controversial or experimental programs, perhaps) would also have access to reduced but still significant amounts of public funding.

If we apply more generally this idea of dispersing public policy decisions to all the people, we could manage environmental impacts in ways that are in accord with what most people think is acceptable. If we take a survey and learn that most people think we would be better-off and our children would be better-off if we were to reduce carbon emissions by, say, 40% over the next ten years, then we should have a policy that would bring about that reduction (about 5.5% per year). We can assume that some people would want a greater-than-40% reduction, while others would want less-rapid reduction or no reduction. Forty percent in ten years might be the median or average rate at which people think we should reduce emissions of carbon to the atmosphere.

We could issue permits for fossil carbon emissions (or carbon extraction) and auction the permits in a free market, with the number of permits offered corresponding to what most people think is acceptable. We can apply this idea to the management of all kinds of human impact on the environment.

When the decision of how to spend public funds is put into the hands of the people at large, no person would be forced to support a program with which they had a philosophical disagreement. With a sliding-scale criterion for eligibility, there would be no hard cut-off point for access to funds. No program manager would have reason to be hyper-concerned about achieving a particular qualifying score (50%, for example). Instead, all managers and providers of public services would have an abiding interest in improving their service or efficiency, regardless of precisely where they might fall on a public approval ratings scale.

Within such a paradigm, I suspect that there would be broad support for public sponsorship of secular (non-sectarian) schools, public parks, libraries, basic scientific research, public health services... I know that I would want to support these things. [One thing I like about secular (non-religious) schools is that we would be less likely or not at all likely to find the teaching of an 'us-vs-them' mentality. We would be more likely to see expressions of the idea that we are all Earthlings. We must work together to make a healthy global community and to solve the great challenges that confront us.]

Biological Model for Politics and Economics

Friday, November 29, 2013

Are Corporations Evil?

Or are we neglecting our responsibility to make them account for externalities? Should corporations pay compensation to the people in proportion to the harmful side-effects caused by their actions?

When we carry out our responsibility as citizens, we will create rules that guide operation of businesses to ensure that what is profitable to industry is also what is good for society and the larger community of life.

We make corporations the villains because they do bad things. But the bad acts they commit are not expressions of intrinsic evil intent. They do things to meet the needs of their customers in the most profitable way.

It is our responsibility as citizens to create the rules governing society. If harmful acts are profitable, we need to change the law. We should not blame corporations for their profit-seeking behavior any more than we would blame consumers for seeking the lowest price when shopping. Both corporations and consumers are economic entities. Seeking profit and seeking low prices is what they do. The problem we need to address is our own failure to make harmful practices costly to corporations. When putting pollution or depleting resources brings a substantial financial penalty to producers, then prices for things that are more harmful to the environment will be higher. Consumers will try to avoid buying those things because they are already inclined to avoid things with high prices. Corporations will try to avoid causing harmful environmental impacts in an effort to reduce costs of production, and thereby increase profits. The most environmentally-damaging industries will shrink or go out of business.

If corporations (if economic actors generally) were required by law to pay substantial penalties any time that they put pollution or take natural resources in pursuit of profit, then they would change their behavior and do those things less, because doing them would no longer be so profitable. The penalty could be in the form of a fee or a requirement to buy from a limited number of permits sold at auction. The fee amount would be greater (or number of permits offered would be fewer) if more people polled in a random survey wanted industries to try harder to reduce environmental impacts. The role of corporations in society is to meet consumer demand in the way that they calculate as most profitable or least costly. The role of citizens is to create the rules that businesses must follow. Those rules must include efficient and fair means of limiting overall environmental impacts to levels that most people feel are acceptable.

When we see corporations as evildoers, we are less likely to see our own responsibility as citizens to create systems of governance that would require economic actors to account for externalities. Accounting for externalities will ensure that the cost of environmental impacts are reflected in prices for goods and services. If we assign fees to industries that extract carbon-laden material from the Earth, for example, in proportion to the amount of carbon it contains (and in relation to the amount of environmental damage caused by the extraction process), then fossil fuels will cost more. We will all get an effective signal (the higher price of fuel) that will tell us to burn less fuel. The industries that take carbon from the ground will shrink because they will not be able to sell as much fuel at the higher price. The threat to climate stability will be reduced. By adjusting the fees, we could achieve the rate of carbon extraction that at least 50% of citizens think is acceptable. (Random polls could reveal what most people want.)

We should recognize that corporations do not have any intrinsic desire to foul the air and water and deplete resources. They do these things only because we buy the products and services that they are able to provide by doing them. We have a responsibility as citizens to demand that corporations account for externalities. We must demand that industries pay some compensation to the people at large when they degrade the quality of that which we all own in common, or when they take natural resources in pursuit of profit. When we do this, industries will learn to meet market demand in ways that create less pollution or no pollution. They will shift to manufacturing processes that rely more on recycled materials and will reduce inputs of raw materials. We will all learn to not buy so much of that which is harmful to the environment. We only buy as much fossil fuel as we do today because it is deceptively cheap to do so. When environmental impacts are accounted for, prices will more honestly reflect true costs. We will make different decisions about how to live.

Why is there no connection drawn between the enormous environmental and climate stability challenges that we face on the one hand and the assault on human dignity and the serious threats to social stability and cohesion posed by extreme poverty and wealth disparity on the other hand? These two problems (environmental degradation and severe material deprivation) are related to our failure to share natural wealth equally. This failure points us back to the citizens' responsibility to create systems of governance that ensure that environmental impacts are accounted for AND that benefits of natural wealth are enjoyed by all.

The problem of financing the change to a sustainable society will be resolved when proceeds from pollution fees and from the sale of environmental impact permits are shared among all the world's people. With a natural wealth stipend going to all the people in the world, the money to finance the change will be in the people's hands. If we buy fuel, for example, we will be paying a higher price. We can use part of our natural wealth stipend to cover this cost. The corporations selling fuel may use this additional income to pay emissions fees. At the same time, higher fuel prices will encourage research and investment in carbon-neutral fuels. Higher fuel prices will cause some people to adjust their lifestyle to reduce their need for fuel. In fact, everyone will do this to some degree. For some, it will be easier to move to live closer to their work. Others may switch to public transit or invest in a fuel-efficient automobile. Each person will make the changes most suitable to their own situation. The fee mechanism (accounting for externalities generally) will ensure that everyone is alert to opportunities for how to reduce environmental impacts, but it will not create a need for a bureaucracy to tell people or corporations exactly how to do that.

Solutions to our problems can be found in our willing-ness as citizens to change the nature and character of government. Our government is an instrument through which we can fulfill our responsibilities to ensure an equal sharing of natural wealth and to define appro-priate limits to environmental impacts. The solution to our environmental problems is also the solution to our poverty and disparity problems: Charge fees to industries that pollute and extract resources; Give the fee proceeds to all the people, to each an equal amount. We will know that fees are set at the right amount when random surveys tell us that most people feel that overall rates of putting pollution and taking resources are not excessive. When we fulfill our role as citizens, we will live in the kind of world that we want to live in. We will have a truly democratic society.

A sustainable and just civilization requires that we use our moral sense

Systemic flaws are not reported

Equal sharing of Natural Resources promotes Justice and Sustainability