From P2P Foundation/Blogger Ref http://www.p2pfoundation.net/Transfinancial_Economics
Book: Wolfgang Hoeschele. The Economics of Abundance: A Political Economy of Freedom, Equity, and Sustainability. Gower Publishing, 2010
URL = http://www.gowerpublishing.com/isbn/9780566089404
" This book critiques capitalism as being based on the creation of scarcity in order to yield profits, and proposes an alternative path. "
An economy of abundance seeks to dismantle or reform these scarcity-generating institutions in such a way as to affirm our freedom to live life as art (self-expression to others), social equity (so that everyone can live life as art), and sustainability (so that all life can thrive into the future). Among other things, this implies a much greater role for various forms of shared property, individual and community-level self-reliance, and participatory decision-making." (http://shareable.net/blog/event-the-economics-of-abundance)
Of particular interest to P2P Foundation readers:
The beginning of chapter 2 gives a brief discussion of what I mean with "scarcity-generating institutions." The next several chapters are an in-depth treatment of this.
"The section "Wholeness and the art of living" in chapter 7 explains what I mean with art of living and why this offers a way forward; we'd obviously have to use only a part of this.
Chapters 8 and 9 provide my discussion of solutions. I call "contributory" are the ones which increase the more they are used, especially knowledge). Chapter 8 as a whole discusses what kinds of property rights are appropriate for what kinds of resources and resources uses, delineating all the different types of resource uses where common property is either the only alternative to open access, or where it is more appropriate than private or state property (a flow chart on p. 149 condenses a lot of this argument into one page). Since there are so many areas where common property needs to be further developed, I go into some of the management issues for common property in "Managing the Commons," for example, by discussing water distribution systems.
In Chapter 9, I first define the "self" in self-reliance as somebody living in relationships to a larger community that supports life as art, I then discuss things such as land refom, community gardens, water harvesting, transport policies in favor of non-motorized mobility, creation of health-promoting environments, and local generation of renewable energy as self-reliant/cooperative production, and alternative currencies and the like as forms of equitable exchange. The chapter ends with a discussion of strategies for change, focusing on coalition building and a suggestion to establish "Abundance Arts Centers" that could help bring people together and create synergy among them."
The TOC of the book:
1 The Paradox of Our Times 1
Human Needs and Wants 2
Creating Addiction 9
Depletion and Degradation of Natural Resources 12
Is There an Alternative? 14
Part I The Production of Scarcity
2 Oppressive Scarcities 19
Religion and Ideology 20
Privilege and Subordination 22
Violence 28
3 Exploitative Scarcities 31
Property 31
Monopolies and Oligopolies 41
Exchange Systems 50
4 The Creation of Needs 61
Transportation 64
Healthcare 66
Education 69
Time 70
5 A Global Geography of Scarcity 73
The International Division of Labor 74
Commodity Networks 77
Population 102
6 Systems of Control 111
The State 111
Finance 114
Knowledge Control 120
The Military 124
Frenzy 127
Part II paths towards abundance
7 The Art of Living 131
Wholeness and the Art of Living 132
Civil Rights and Liberties 144
8 Resource-Use Rights 147
Contributory Resource Uses 150
Neutral Resource Uses 157
Rivalrous Resource Uses 159
Managing the Commons 166
Undermining Monopolies 176
9 Reclaiming Self-Reliance and Cooperation 181
Self-Reliance and Cooperation in Productive Activities 182
Equitable Exchange Relationships 195
Strategies for Change 201
Bibliography 209
Index 233
"Now let me intent to summarise Wolfgang Hoeschele's book:
The creation of scarcity
In the first part of the book, Hoeschele addresses the production of scarcity. The mechanisms designed to create artificial scarcity he calls "scarcity generating institutions". This concept proves a strong guide to analyse the root causes of social wrongs, or in his words: "the economic concept of scarcity as a window on the entire political economy of today".
While mainstream economics defines economics as a science about the allocation of scarce resources, most resources are considered scarce in the light of unlimited human wants. Instead we can observe that human wants are in fact not unlimited, but capitalist institutions seek to continuously generate new forms of scarcity by creating ever new needs. "Once scarcity has been generated, it can be exploited to ccumulate power and yield profit." Scarcity is a means toward the end of profit maximisation. In order to counter this vision of the economy, Hoeschele brings together alternative approaches, which challenges the most basic current suppositions, and aims at putting an end to scarcity by creating abundance.
First of all we can take a critical look at human wants: instead of asking whether our needs are indeed unlimited, we could revise which wants are real needs. The multiplication of desires leads to unhappiness. "But contemporary economic discourse discourages from considering any methods to increase happiness that do not maximise consumption. Modern economic thought is the first system of thought to support the idea that greed is good, or at least that it is universal among our species, and that it can be used as a force for "progress". While greed maybe widespread among our species, it is also a trait that makes it more difficult, if not impossible to be happy. The greedy person deludes herself into believing that acquiring the next thing will make her happy, and it is this very powerful delusion which is exploited by the forces that promote economic growth. The aim of this exploitation is not happiness, but profit, which is itself a delusion, because the greedy person grabbing the profit has come no nearer to happiness herself."
About the radical monopoly of the car: once most people own a car and public transport is destroyed or limited, neighbourhood shops disappear because they cannot achieve the economies of scale enjoyed by the big stores that can attract customers from large distances. The downtown declines, because it becomes difficult to access, instead, suburban towns take over. After a point, it becomes impossible to reach many destinations without a car. In short, car ownership is enforced, even for people who must go into debt to buy a car. The same can be observed with mobile phones. Once most people own a mobile phone, those few who don't, get isolated. Similar with Internet access. In many social contexts certain levels of consumption are considered obligatory in order to "belong". Thus, constantly escalating consumption is enforced. This represents a loss of freedom for those people who either do not want to buy these things or cannot afford them. However, increased consumption is always represented as pure progress...
About the depletion and degradation of natural resources Hoeschele observes that fossil fuels have been treated as more abundant than renewable energy resources. They are however only "abundant" in the sense that, once they have been located, mined, and transported, very large quantities can be used at any given place and time. They are ultimately scarce, because they cannot be regenerated within a timescale relevant for human civilisation.
Scarcity can be generated in three ways: a) by reducing the total amount of a good or service ; b) by placing barriers between people and a good (a bottleneck), c) new wants or needs can be creaed, or existing ones modified, so that demand for a commodity exceeds supply.
Religion and ideology places barriers between people and spiritual development. They act as a bottleneck between people and their own peace of mind. Additionally, most religions and ideologies have created hierarchies, distinguishing people who are considered superior from those considered inferior. Privileging of men and subordination of women ranks surely as one of the most ancient forms of hierarchies in human society and create dependency releationships, and thus scarcity.
Some form of violence is involved in arguably all modes of scarcity generation. Oppressed people will resist if they can, which is however suppressed in many cases. The means of violence are controlled by a small group, constituting another "scarce" commodity: security.
About property: Hoeschele discusses public, private and common property and observes how unlimited wants in the West deplete fishing waters in other regions. At the same time, a commons, or common property, as governed by its own members can constitute a practical form of abundance, in the case of fishing, with fishing seasons and rules set to manage the fisheries despite the commercial pressures.
When private ownership is more or less equally distributed, a private property regime can lead to abundance. However "a highly unequal distribution of property allows for the emergence of monopolies and oligopolies. If only a few sellers (or a few buyers) dominate a market, they can create botllenecks and therefore scarcities for others by manipulating prices, and therefore secure extraordinary profits." And that is what we see in many of the most profitable economic sectors.
As we have observed elsewhere, patents are one of the most used legal instruments to create oligoplies (see also Michel Boldrin and David Levine: Against Intellectual Monopoly). Hoeschele discusses the damage patents have caused by creating artificial scarcities in many industries. Initially he handles the issue of patents with caution, presenting it as a "two-edged sword: excessive patent protection will enable the creation of overly powerful monopolies that are extremely difficult to destroy, but insufficient patent protection would slow technological progress." This is indeed the rationale behind patent rights as they were initially designed. However, in the Age of the Internet, innovation has shown to evolve much more rapidly when developers and inventors can freely build on the ideas of others, leading to dynamic, accelerated innovation. It has been argued by a growing numer of researchers that with the increasing complexity of high-tech products and production processes, one can easily infringe on an idea of others, and a legal minefield has grown, which tends to slow down innovation and leads to stark market concentrations. Cf. the mobile phone market or software. Software patents in particular have been fiercely resisted by small companies and civil society in Europe (FFII/software patents) and also in the USA, one of the few countries where software patents are instituted. As Hoeschele correctly points out: "more research may be needed to find out whether one's own innovations violate some patent or copyright, than to develop the software itself".
On a more critical note he points out the geography of scarcities, "..if patents either did not exist or provided far fewer privileges for patent-holders, it would be extremely difficult for any group of countries to retain a monopoly over the technologically advanced industries of the world, and hence it would not be necessary to discuss the "problem" of technology transfer. Far more people all over the world would be enabled to make use of new techologies, and technical knowledge would be used to empower rather than to control."
Development: if the goal is to end poverty, it is primarily necessary to redistribute productive assets to the people who actualy use them (by such means as "land to the tiller" agrarian reform, for example) and to provide for comprehensive basic education and health care, deploying teachers, doctors and nurses from within the country who can be paid in local currency. This goal requires practically no foreign currency (as happened in Kerala, India). If the goal is to promote domestic industries geared towards producing affordable goods for ordinary people, a modest degree of protectionism plus a disregard of foreign patents will also be quite effective, while requiring little finance from abroad. Such policies will produce no miracles, but neither will they produce long-term debt dependency, nor require governments to be responsible to foreign sources of finance rather than to their own people.
Let us analyse the conditions for monetary transations in a market that can create abundance for all parties involved:
a) both parties to the exchange must be free to withdraw from the exchange if they wish;
b) both buyers and sellers have good information about the market and the goods offered,
c) no outside force (such as a State) imposes prices or somehow manipulates supply and demand,
d) there is little fraud, e) there are means available to resolve conflicts and enforce contracts.
These conditions were first expressed for a "free market" by Adam Smith and were later further developed by many others. It is clear that in many actually existing markets these conditions are not fulfilled or not completely and they create scarcity for some of the participants. Or to put it more bluntly: no real free market has been observed ever. In the book "Markets not Capitalism" edited by Gary Chartier and Charles Johnson (book), the concept of the Freed Market is introduced, to signify a non-capitalist market that adheres to the above mentioned conditions. As markets can contribute, and have done so for millenia, to enhance the freedoms of its users to exchange their produce, maybe we should indeed talk about freed markets (or liberated markets) to avoid confusion with neoliberal "free market" discourse.
Is there an alternative?
TINA: "There Is No Alternative" was Margaret Thatcher's slogan in the 1980's ("es lo que hay" in Spanish, "that is what there is"). In other words, people believe there is no freedom of choice about how we are to organise our economy and society. We're trapped in the belief that real change is not possible.
Paths towards Abundance
Hoeschele points out several important aspects of the path towards abundance. In order to escape from the cycle of ever new scarcity generation, we need to create abundance-generating institutions and break down or reform scarcity-generating institutions so that they work towards abundance generation.
First of all, we should adapt our lifestyle to want what we really want. In line with the degrowth movement, he suggests to change from consumerism towards "wholeness and the art of living". While this may sound a spiritual exercise, it is clear that we can't go on to always want more; as Maslow showed with his pyramid of human needs, after material needs are covered, we can focus on self-realisation. But this can only be realised if income and GNP are much better distributed. Both social democratic reformism and communist revolution tend to regard increasing equity of income distribution as a zero-sum game: resources need to be redistributed from the rich to the poor; the gains of the poor are the losses of the rich. In both ways, state intervention is needed, which by doing so, reduces individual freedom.
Wholeness, or "life as art" contrasts with "life as profit maximisation", which depends on others failing to make profits, in a regime where the desire for "freedom" is played against the desire for social justice, while ignoring that any freedom that not be enjoyed by everybody at once is merely privilege.
Imagining a society that revolves around life as art, Hoeschele foresees public action to reduce scarcities to enable people to practice life as art, even if one has little income, and by ensuring that everyone has access to the resources they need. To show the changed attitute he mentions: "The phenomenon that ssome people cannot be happy even at a high level of material consumption will not be seen as a justification for more consumption, but rather as a pathology akin to alcoholism or overeating." He calls them the "pleonexics" or "consumptives" (the ancient Greeks called this the "malaise of the soul" or pleonexia).
Civil Liberties
The first requirement for an abundant life is that all individuals are free to live life as art as they see fit. This requires strong foundations for the civil liberties and human rights, like freedom of expression and well, in short, the founding principles and values we defined for the Free Knowledge Insitute: diversity, equity, solidarity, transparency, ...
Resource-Use Rights
Resources can differ in several forms, like whether its usage depletes the resource, has no effect or improves it, whether it is renewable or not, whether a resource can be effectively managed in case it is divided into parcels or small or bigger lots, etc. Hoeschele has designed a flowchart that helps to choose the most suitable property regime for different cases, be it Open Access, with or without incentives to further expand the resource (e.g. medical research), Common property (e.g. air, water, oceanic fisheries), Common or State Property (e.g. petroleum), Local Common Property or Private Property (quarries, aquifers).
Stakeholder trusts
In line with the ideas of David Bollier and Peter Barnes (Capitalism 3.0), Hoeschele argues for a commons trust that owns and protects our air. "... keeping air to breathe as an open-access resource demands air pollution be strictly limited, at the cost of the polluters." Barnes proposes the set up of a commons trust that owns all the air of a country. Each citizen owns a non-transferable share and is represented in the management. The trust would auction a set number of permits to pollute the air on an annual basis. Oil and coal companies would have to buy these permits and pass on the costs to the consumers. The revenue of the trust would be paid out to everyone equally, providing a kind of Basic Income. On the one hand such system would make it expensive to deplete or degrade natural resources, and on the other it would provide a basic income. The latter in turn could liberate the labour market in unprecedented ways, if the income from the shared ownership of the natural resources would be sufficient to survive on, assuring that individuals would be free to withdraw from the labour market either fully or partially, if they would prefer so.
Stakeholder trusts could also be set up for other common property resources, such as municipal water infrastructures. Such customer-owned corporations would have an interest in minimising costs and maximise efficient service provision. Public regulation would however still be needed, "to ensure that these water companies maintain river water quality, but there would be no need to regulate prices."
Anti-trust and policies to favour small over big companies
This is one of my favourites: instead of helping the big organisations, we could reform certain policies and legislations to help the small companies by hindering the big ones. After all, market dominance is one of the core problems of actually existing markets, and reduces the freedom of all other participants. A company's economy of scale is only of social benefit if it is forced by its competitors to pass on the benefits to consumers. Hoeschele suggests three techniques: 1) reduce barriers to entry for new competitors, while weakening other mechanisms that favour market concentration; 2) transfer scarcity-generating mechanisms from the control of the monopoly to the control of a public institution, and 3) deprive the company of the scarcity-derived profits (rents) after the fact.
He makes a case for Open Access in research and the avoidance or limitation of patents: "if governments insisted that results of publicly supported research be made part of the public domain and generally restricted the scope of patent potections, new technologies would become available to many more new and existing businesses."
With respect to the third point, he suggests that inheritance laws could be modified in such way that passing on a company to its employees would be burdened with far fewer taxes than passing it on to the owner's descendants. Taxation could also help to reduce the size of companies: to make near-monopolies pay higher taxes in the benefit of smaller competitors, "thus gradually leading to a deconcentration of the respective economic sectors." "Simply reforming the policy environments so that they hinder, rather than facilitate, the creation of monopolies, could have major positive impacts." We should revert the current "small is beautiful, big is subsidised."
Reclaiming self-reliance and cooperation
The last chapter of the Economics of Abundance deals with cooperation. Hoeschele mentions local exchange and trading systems (LETS), parallel currencies and even a different monetary design, with negative interest, such as suggested by Silvio Gesell and Lietaer. Furthermore the Tobin Tax is discussed. But the big absent in the book is the forms of cooperation that have emerged through the Internet, in particular digital commons, based on free and copyleft licenses. I would have expected the abundance generating mechanisms so clearly observed in free knowledge, free software and free culture projects as one of the building blocks towards abundance. Futhermore the third mode of production, peer production, as extensively discussed by Michel Bauwens and Yochai Benkler. Other authors who inspired Hoeschele or gave him feedback include Roberto Verzola, Lawrence Lessig and David Bollier, all of which describe clearly the emergence of commons-based peer production and free knowledge communities. Hopefully this part of the equation is included in other (or future works). I would suggest the inclusion also of the free hardware movement and its potential for a commons-based industrial production, very much in line with the abundance economics.
For the rest it was a very good read and impressive list of references Wolfgang Hoeschele has integrated into a coherent and sensible vision for a more sustainable and freedom respecting future for the world population. Let us hope more people can work on making important parts of this vision a reality." (http://freeknowledge.eu/blog/wouter/wolfgang-hoeschele-economics-of-abundance)
Is There an Alternative? (pp. 14-16)
In light of considerations such as these, there is a widespread belief that “there is no alternative” to the capitalist system; there is even an acronym for this phrase (TINA). In other words, people believe that there is no freedom of choice about how we are to organize our economy and society. At the same time, growing numbers of people around the world recognize that this same system may spell our doom because it destroys the resources needed to sustain a population of billions of human beings. “Realism” indicates that only minor tinkering with the system is feasible; at the same time, a different kind of realism tells us that this tinkering is ridiculously inadequate. For example, the Kyoto Protocol is claimed to be at one and the same time the best agreement that world leaders could possibly achieve to attempt to reduce carbon dioxide emissions, and a far cry from what would be necessary in order to actually stop further global warming. We face the predicament that “realistic” action is insufficient to ward off real dangers, and is implicitly based on the wishful thinking that the problem (including the potential for massive population collapse and ecological destruction) will just go away if we ignore it long enough. Actions sufficient to prevent the real dangers, meanwhile, are considered utopian, because people would not accept the reimposition of scarcities that they believe we have long overcome.
In this book, I argue that it is possible to overcome this yawning chasm between realisms, that it is possible to work toward individual freedom, social justice, and ecological sustainability all at the same time, if we fundamentally reconceive our notions of scarcity and abundance, thereby creating a new approach to studying human needs and wants and their fulfillment, and applying the insights of that study to our actions. In this project, I build on a wide range of literature in the social sciences—after all, people have been criticizing capitalism ever since it emerged, and various among them have pointed out how scarcity is consciously created by at least some capitalist institutions (examples include Illich 1974, 1975; Harvey 1974; Lappé and Collins 1977; Gorz 1989, 1999; Xenos 1989; Yapa 1993, 2002; Korten 1995, 1999; Lietaer 1999; Loy 2002, 2006; and May and Sell 2006). There are also numerous books seeking to establish economic principles for a sustainable and socially just society (examples include Gibson-Graham 1996, 2006; Korten 1999; Daly and Farley 2004; and Porritt 2005). Yet more people have been working at integrating economics with other social sciences more effectively (see, for example, Söderbaum 2008; Nelson 1996). Organizations such as the Institute of Green Economics and the US Solidarity Economy Network are working to connect people who can convert these ideas into reality, and are fostering research to help build alternatives from the ground up. Without the work of these and many other people, I would not have been able to write this book.
However, to my knowledge, no book has been published that uses a systematic critique of the economic concept of scarcity as a window on the entire political economy of today, and as a basis for constructing alternatives that point the way beyond our current social and ecological impasse.10 I attempt to do this first by analyzing how scarcity-generating institutions work (Part I: “The Production of Scarcity”) and then exploring ways in which we can work toward greater abundance (Part II: “Paths Toward Abundance”). Part I moves from modes of scarcity generation that depend on the outright denial of choice and social advancement (Chapter 2: “Oppressive Scarcities”), to modes that constrain choice and thereby help to expropriate people of the products of their labor (Chapter 3: “Exploitative Scarcities”), to modes that create scarcity by manipulating people’s choices so as to increase demand (Chapter 4: “The Creation of Needs”). This is followed by discussions of how multiple scarcitygenerating institutions work together (Chapter 5: “A Global Geography of Scarcity”) and of institutions that ensure that most people play by the rules that favor only an elite few (Chapter 6: “Systems of Control”). Part II opens with a philosophy of living that can serve as the basis for an economics of abundance (Chapter 7: “The Art of Living”) followed by discussions of property rights (Chapter 8: “Resource Use Rights”) and of strategies to promote individual and community-level self-reliance and cooperation (Chapter 9: Reclaiming Self- Reliance and Cooperation”) in support of that philosophy.
Throughout history, we can conceive of social power as having been based in part on the construction of scarcity, but the methods of producing scarcity have continuously changed as a result of changing social circumstances, new technologies, and differing natural environments. Every historical period is characterized not only by varying combinations of methods to create scarcity, but also by specific ways of institutionalizing these methods—that is, its own scarcity-generating institutions. In this chapter, I begin the discussion with several such institutions which are normally considered neither economic nor modern, but which continue to persist and interact with modern economic institutions. Any attempt to avoid the scarcities invented in modern times should also avoid the scarcities created by these older institutions—romanticizing the past will not lead us forward. What these institutions have in common is that they explicitly prohibit people from engaging in certain types of behavior or expressing deviant thoughts, often based on the “station in life” into which they were born. In a word, they oppress.
The conventional means to political power is to take control of the state, whether by revolution, political activism, party politics, or financial control (the latter method being restricted to those with the requisite means). Yet, the state is to a large extent a scarcity-generating institution in its own right, and liberation cannot be achieved through restrictive laws.11 Indeed, leftist or centrist parties throughout the world seem rather ineffective vehicles for bringing about changes that are far more modest than those envisioned here. This is because the institutions of the state often depend far more on the cooperation and support of powerful oligopolies than on voters. This does not mean that we should give up trying to influence the state. It does mean that we must regard the state as being a follower rather than a leader, and that the state will only promote changes along the lines envisioned here (including reforms of property law, laws governing exchange relationships, how public schools are run, what research is supported by public funds, and how common property resources are managed) if the forces impinging on the state change substantially.
Political activism, as a force in itself, has a role to play here, but it cannot stand alone. The agents of scarcity generation throughout society must be weakened directly (a benefit in itself) while also weakening their power over the state. In many ways, the state itself should be made irrelevant if it cannot prove its worth by creating abundance rather than scarcity. The most effective strategy for achieving these aims is not to oppose force with force, because the state and related institutions thrive on being attacked (because attacks help to legitimate repressive responses). Instead, we should seek to render the forces of scarcity ineffective. The most promising way to pull down the colossus of scarcity generation is to liquefy the ground beneath its feet. All scarcity-generating institutions need a ground to stand on—namely, the willingness of ordinary people to support them, to believe their promises and to play by their rules. Even outright opposition gives a handle for the exercise of power.
However, evasion, avoidance, and learning to do without the “services” of powerful institutions by fulfilling one’s needs independently constitute the “weapons of the weak” as described by Scott (1985) with reference to Malaysian peasants. Using the image used by the Community Economies Collective of Gibson-Graham and others in their community-planning outreach work, the institutions we typically identify as “the economy” are only the tip of the iceberg of a diverse economy.12 They cannot be anything more than that, because they must draw on the abundance of everyday human activities to create their scarcities (see also Mies 1998). If abundance-generating activities are flexibly networked so as to support each other more effectively and provide less certain support for scarcity-generating institutions, the latter will have to adapt or sink in the swamp.
In addition, we can build on the recognition that everyone suffers from at least some scarcity-generating institutions. Not even the wealthiest and most privileged people can insulate themselves from the social conditions pervading society around them. Wealthy people, too, fall ill and may succumb to iatrogenic disease, or be prone to the debilitating effects of an unhealthy environment. Even highly successful entrepreneurs may fail because of financial turmoil brought about by institutions beyond their control. Corporate executives may wish to organize the production of the companies they control in environmentally and socially responsible ways, but be forced by the competition to cut costs. “Insiders” such as these may contribute to melting the colossus rather than the ground beneath its feet.
Thus, an extraordinary array of people might engage in the effort to create alternative spaces for abundance. Coalitions of like-minded people (such as those portrayed in Bennholdt-Thomsen, Faraclas, and Werlhof 2001) will vary, depending on the specific scarcity-generating institution and locality in question. For example, a Catholic male farmer in Colombia is likely to be concerned about a different set of issues than a female Chinese urban worker and adherent of Falun Gong, or a transgender Zoroastrian schoolteacher in Iran. Table 9.1 indicates some examples of groups from which activists against specific scarcity-generating institutions may be drawn. Some of these groups are extremely broad, potentially including the vast majority of the world’s population. The broadest groups, however, tend to be the most amorphous and thus the least likely to find a common purpose. More narrowly defined groups may provide stronger organizational bases, but may be at odds with each other—note, for example, the interminable debates within the Left about which is most important: class, gender or race. Nevertheless, countless political movements and other organizations which promote abundance as defined here already grow out of these milieus, no matter how fragmented they may appear to be.
Perhaps the ideas expressed here could help provide a common framework, a vision of working towards abundance, which would provide greater scope for mutual support among diverse groups. A common vocabulary could help oppose the dominant strategy that divides and conquers by labeling each group as representing a different “special interest.” In fact, the outcomes of struggles for abundance need and should not be the same from one place to another. For example, in some regions and countries, property reforms might be seen as the greatest priority, while in others it might be seen as most important to change the dynamic of creating ever new needs. Thus, paths toward abundance would vary widely between different places, as is consistent with true democracy. The vision of abundance could enable us, however, to see and convincingly represent the unity in all this diversity, and thus strengthen oppositional movements everywhere. Not only is another world possible (as the World Social Forum reminds us), but indeed many different worlds are possible and can support each other, as long as we can recognize that they represent diverse paths towards greater abundance.
A core of activists may be drawn from environmentalists and advocates for social justice and civil liberties, since these issues are implicated in virtually all scarcity-generating institutions. What is more, scarcity theory could be used to forge closer coalitions between these two groups, which are too often distinct. For example, as pointed out by Porritt (2005) among others, in the United States, many environmental groups consist largely of affluent whites, while many ethnic minority activists consider environmental issues to be of marginal importance.13 Ray and Anderson (2000), however, present considerable evidence that there is strong potential to overcome this gap.
Their book portrays the “cultural creatives” in the United States—people who question many of the tenets of modernism and especially of consumerism, while believing in the values of personal liberty and growth, environmental protection, and social justice. They are deeply distrustful of both government and big business. Individual leaders of this type are portrayed by Henderson (2006). Based on numerous opinion polls and individual interviews, Ray and Anderson estimate that cultural creatives comprise about a quarter of the US population, having grown to this proportion from almost nothing before the 1950s. They are far less visible than their numbers would suggest because they have not developed a sense of common identity, and because much of their work has been occurring at a cultural level rather than the political level that attracts media attention. Furthermore, the weakening elite of conservative “moderns” (mostly secular Republicans) have shored up their power by engaging in a coalition with “traditionals” (those reacting against modernity by trying to revive an imagined past). Ray and Anderson see the cultural creatives as already being engaged in the process of building up the institutions needed to help our civilization reach a higher level, the next stage, for which they have no name, and which we may or may not reach. A major problem these authors perceive is the lack of a common story or vision that can provide a guide to action, a shared purpose.
I hope that the idea of life as art, and abundance for all based on a revised appraisal of human needs, can provide such a common vision. Cultural creatives, who according to Ray and Anderson are at the core of both the environmental movement and the “consciousness” movement (people interested in new forms of personal growth and spirituality), would be most likely to adopt and further develop this vision. Such people are most definitely not confined to the United States; according to Inglehart (1997), the percentages of people expressing similar values are similar in Japan and considerably larger in much of Western Europe. In some countries they are far more organized politically as well as culturally (in Germany I would regard the Green Party as consisting largely of cultural creatives). If one adds to these people all those who have never had the opportunity to be cultural creatives in the sense of Ray and Anderson, but who would support a more just distribution of resources in very material terms —that is, who would benefit from agrarian reform and the opportunity to live in less polluted rural or urban environments—then a movement for abundance has the potential to reach out to a mass following, including people in almost all walks of life in all parts of the world. As exemplified by Table 9.1, I believe that there would be plenty of people who could benefit from a movement for abundance.
The appeal must also extend to people who do not have the time, inclination, or resources to engage in extensive activism. Therefore, an abundance movement must create new opportunities for many people by nurturing its own culture, and building supporting organizations (on this point, see also Lodziak 1995: 92 ff; Korten 1999: 209–275). This broader cultural movement can include artists, academics engaged in relevant research,14 teachers supporting free inquiry by their students, doctors and healers encouraging healthy, non-addictive lifestyles among their patients, restaurant owners interested in excellent food made from local produce, organic farmers, peasants, lawyers who champion civil rights cases, artisans and industrialists who have pride in the quality of their manufactures and a commitment to producing them in socially and environmentally sound ways, gays and lesbians and others who believe in their own and others’ freedom to live in ways that do not conform to dominant norms of gender and sexuality, spiritual seekers opposed to narrow religious dogma and interested in the intensely personal experience of transcendence, and all kinds of people who enjoy wholesome food and a less frantic lifestyle, less attached to purchased commodities. This list is illustrative rather than exhaustive, but it does show that such a movement could potentially embrace the majority of humans and involve their day-to-day activities both in and outside their jobs. If it reached that point, the “swamp” of resistance would produce beautiful flowers (wetlands harbor great biodiversity!).
The work of independent enterprise consistent with the vision of a truly free market, as well as of building up new forms of common property institutions, would demand entrepreneurial talents of people not normally associated with political activism. There is a huge scope of action for “ecopreneurs” and social innovators; if these people can be brought into collaborative relationships with environmental and social justice movements, a powerful force for change may result.
Cultural organizations could also help address the problem of coordination among diverse groups working for abundance. Central coordination is rarely a good idea, because it creates many new costs (scarcities), such as interminable meetings that slow down decision-making processes and hamper all organizations involved. A much more positive approach would consist of associations that support abundance-generating projects on individual or collective levels, by exploiting the power of inspiration, the power of empowering others, rather than the power of coercion and scarcity. Kasmir (1996) describes an informal practice along these lines in Basque towns: workers meet their friends by doing the rounds of all the local bars, allowing demonstrations to be organized overnight, with very little formal organization. Shorthose (2004) discusses a more formal institution in Nottingham’s Lace Market, the Broadway Media Centre, which provides technical resources and production spaces for independent film and video-makers, as well as a cafébar where they can network with each other, serving as a key resource in the vibrant cultural life of this part of the city.
Where similar practices already exist, they can continue to evolve organically, but new “Abundance Arts Centers” could complement and add to these activities. Such centers could issue local currencies, provide a café and meeting place for creative people, provide spaces for talks, seminars, or workshops teaching the arts of abundance (arts in the conventional sense, meditation and other methods of self-exploration, self-reliant skills, the study of scarcity and abundance), host gallery exhibitions and musical or theatrical performances, and run libraries with relevant literature. The point would not be to replace any local organizations already active in any of these endeavors, but to complement existing activities and promote networking among them.
Alternatively, existing organizations could expand their scope of activities in order to become abundance arts societies along the lines suggested here. By accepting payments in a local currency or in the form of in-kind contributions, abundance arts societies would be able to offer their services to people otherwise unable to afford them. These societies would facilitate encounters among like-minded people who have new visions, and build an organizational and cultural core that is independent of either government or oligopoly business. They would galvanize the powers of inspiration rather than the powers of coercion, and transform movements of opposition into movements of affirmation.
Creating abundance will always be an unfinished project, since scarcity-generating institutions do not just die, and are an inescapable part of the human condition. They change with the times, and they engender new ways of creating scarcity. The creation of scarcity is likely to creep even into those organizations which have been conceived as a means towards abundance.
However, perhaps a vision of life as art, along with an appropriate institutional base, can help fill the vacuum left by the apparent demise of socialism and the unfulfilled promises of capitalism, and contribute to a somewhat more joyful and non-dogmatic, exuberant, liberating, unruly, life-affirming, geographically and culturally diverse, and always imperfect and impure Age of Art to replace the Frantic Age that appears set to destroy the very basis of human life on Earth. There is not much time for this to happen: the time is now."
Many of our current property rights are designed either to allow a small number of people to monopolize those resource (imposing scarcity on everyone else), or to promote their unsustainable use (creating extreme resource scarcity for future generations). If we wish to generate abundance instead, i.e., the condition that all people, both now and in the future, are able to thrive, we need to fundamentally redesign our property rights. The flow chart shown here offers a framework for the kinds of property or resource use rights that would promote abundance, tailoring them to each specific type of resource and how it is used. This framework is explained in detail in my book (The Economics of Abundance: A Political Economy of Freedom, Equity and Sustainability, published by Gower in 2010, pp. 147-166); the following is a summary. Note that the flowchart shown here is slightly modified from the one that appears in the book.
The first question in the flowchart asks “How does this resource use affect the quantity and quality of the resource?” There are three possible answers: negatively, positively, or not at all. In conventional economics, the “positively” and “not at all” answers are usually lumped together to define “non-rivalrous” resources, but I separate them out because they have different consequences. I thus call them “contributory” and “neutral,” respectively, while following conventional usage in calling “rivalrous” those uses that damage a resource.
Patents represent an attempt to make knowledge artificially scarce in order to ensure that companies which invested in creating that knowledge can reap the profits of their investments. While there is some justification for this policy from the point of view of profit-oriented investors, there are inherent problems with this approach, which trades a scarcity of knowledge against a presumed scarcity of innovation that would occur in the absence of patents. Three problems are especially noteworthy (discussed in more detail earlier in the book, pp. 43-7). First, our patent regime favors patentable innovations over those that are not patentable, even if they are more important for our future (for example, it favors the development of new chemicals over research about the ecological impacts of those chemicals, or the development of low-tech methods that rely on fewer chemicals). Second, the contributions of many people involved in an innovation are often ignored (for example, indigenous peoples in various places may have been instrumental in the development of new medicines, but they rarely get any recompense for their contributions). In these cases, patent rights serve to exploit the people (often including tax-payers) who made that research possible. Third, patents stand in the way of the timely dissemination of new technologies from the most technologically advanced to other countries, and therefore help maintain the division of the world into rich and poor countries.
Instead of relying on patents to promote research and innovation, I suggest we should focus on fostering innovation in ways that do not create knowledge scarcity, and that rely on a variety of motives for innovation, such as “the intellectual joy of discovery, the satisfaction of imparting new knowledge to others and thereby making a positive contribution to society, and the prestige of being recognized for advancing one’s field of study” (p. 151), i.e., motivations that are crucial to academic research. Research grants, for example, stimulate research without creating knowledge scarcity. In fact, an area where innovation is greatly needed is the invention of new ways to stimulate research without fencing in knowledge!
Similar considerations apply to other kinds of intellectual property rights such as copyrights. By the same token, education and learning should be made as broadly accessible as possible, through educational institutions as well as through libraries, the Internet, and other methods to disseminate knowledge and information.
In the case of non-renewable resources such as petroleum and mineral ores, property rights can address the potential problems of monopolizing the resource (where a small group of people gains all the benefits, charging high prices from everyone else), and of depleting the resource (creating scarcity for future generations). Question 3 asks “Does the resource provide large rents relative to the regional economy (based on its scarcity and evenness of distribution?” Rents here refer to unearned income (nobody has created those natural resources!) which is greatest if the resource is in high demand but is found only in a few localities. “I would argue that ownership of non-renewable resources should be widely shared – for example, among the citizens of a nation in the case of scarce and patchily distributed resources that yield the largest rents, or among residents of a county or district in the case of more abundant and evenly distributed resources, which nonetheless generate large rents relative to the local economy” (p. 160). While I consider it most desirable that the most commercially valuable mineral resources be owned in common by the residents of a nation independently of the state, state ownership may also be acceptable as long as there is a high degree of democratic accountability. In the case of non-renewable resources that generate rather low rents, such as common types of rock from quarries, private ownership can be perfectly acceptable.
Turning to renewable resources, question 4 asks “Can the resource be effectively managed by dividing it into parcels?” Some resources, such as air, flowing water (surface as well as groundwater), and oceanic fisheries, simply cannot be subdivided, and so we have no choice but to treat them as common property if we are to protect them from degrading uses (the only other alternative is “open access,” i.e., nobody’s property). The challenge is to devise institutional mechanisms to enforce the rights of all residents to resources such as clean air and water, so that polluters and users must pay for their use and are prevented from over-exploiting a resource; pages 166-175 of my book are devoted to this issue, as is a wide range of literature on the commons (some of which is cited among the references below).
Concerning renewable resources that can be divided into parcels, question 5 asks “If the resource is to be managed efficiently, can it be divided into many units?” There are some kinds of (man-made) resources or services that can really only be divided into relatively few units, that are best divided on a territorial basis, with only one service provider in a given territory. These are called “natural monopolies” and include such things as electric utilities, water supply, sewage treatment, and garbage disposal. “Regardless of whether these facilities are owned by the public or private entities, there is a great danger of the monopolistic creation of scarcity, either through charging excessively high rates or not delivering adequate quality. In such cases, a third alternative would consist of ownership by the customers. The customers would have an interest in efficient service delivery but not in maximizing profits; their ownership would thus offer the opportunity to obtain the best of both worlds, of private and public ownership” (p. 163). Some customer-owned electric utilities do exist, but in general the concept of customer-ownership of natural monopolies remains underexplored, and a lot of institutional innovation is needed in this area.
The final question in the flowchart addresses renewable resources that can be divided into many units: “Can the smallest efficient management units be equitably managed if they are controlled as private property?” In some cases, this question has to be answered in the negative, particularly in the case of local natural resource commons – such things as grazing lands, freshwater or coastal fisheries, forests, irrigation facilities serving a large number of farmers, local or regional groundwater sources shared by a large number of users. If a small number of users get to control these resources as private property, the others are left with nothing, which is inequitable; if no-one has property rights, there may be a scramble for resources where the one who uses them up fastest “wins” – for a very short time. The equivalent of customer-owned utilities in this context is common property of all the users (a commons in the traditional sense of that term), and in many cases commons of this type have sustainably managed their resources for centuries. It is important to strengthen such commons so that they can again, or sometimes for the first time ever, do their job of sustainably and equitably managing local resources. A similar strategy to make businesses more equitable is to make all or most of the workers co-owners of the business, i.e., to create worker cooperatives, in order to overcome the contradiction between employers and workers.
Finally, some renewable resources may be equitably owned under private property – for example, agricultural land may be owned by a multitude of small farmers each owning their own parcel of land. As long as land-ownership does not get concentrated in the hands of a few people, such an arrangement can be equitable. Small private businesses can also be under private ownership with little danger for social equity. Large businesses pose greater challenges, but if workers are able to effectively defend their interests through unions or other mechanisms (including the option of forming worker coops of their own or taking over the company if it fails), then private ownership of large companies can still be compatible with social equity. Personal property such as a house to live in and personal belongings also fit into this last category where private property is appropriate.
In combination, a reform of property rights along the lines suggested here would lead to more effective conservation of natural resources, while also ensuring greater social equity through various forms of shared ownership that distribute the benefits of the property among a larger number of people. The example of a factory might illustrate the results: “Factory owners or a workers’ cooperative would own a factory and the land it occupies, as well as the profits it generates. They would: respect everybody’s common property in clean air and water and ecosystems (and pay adequately for any pollution the factory causes); abide by the rules of common or state property institutions governing transportation and communication infrastructures (for example, by paying taxes or fees for their maintenance); acknowledge local or national-level common property in natural resources (and thus pay adequately for their extraction or use); recognize workers’ rights to a livelihood (paying adequate wages and attending to workplace safety); and refrain from claiming exclusive property rights in the knowledge required to produce the factory’s products” (p. 180).
As a final note, while reformed property rights are in my view an important and indeed essential part of an economy of abundance that assures environmental sustainability and social equity, they are not in themselves sufficient. Other chapters in my book discuss other changes that are needed in order to build up such an economy.
URL = http://www.gowerpublishing.com/isbn/9780566089404
" This book critiques capitalism as being based on the creation of scarcity in order to yield profits, and proposes an alternative path. "
Contents
[hide]Description
"The “economics of abundance” is based on a critique of our present economic system, which finds value only in scarce commodities – i.e., things which can be sold at a high price because demand exceeds supply. Because this economy depends on demand always outstripping supplies, it also depends on “scarcity-generating institutions” – institutions that either manipulate supply or demand in order to keep us in a constant state of need.An economy of abundance seeks to dismantle or reform these scarcity-generating institutions in such a way as to affirm our freedom to live life as art (self-expression to others), social equity (so that everyone can live life as art), and sustainability (so that all life can thrive into the future). Among other things, this implies a much greater role for various forms of shared property, individual and community-level self-reliance, and participatory decision-making." (http://shareable.net/blog/event-the-economics-of-abundance)
Contents
Wolfgang Hoeschele:Of particular interest to P2P Foundation readers:
The beginning of chapter 2 gives a brief discussion of what I mean with "scarcity-generating institutions." The next several chapters are an in-depth treatment of this.
"The section "Wholeness and the art of living" in chapter 7 explains what I mean with art of living and why this offers a way forward; we'd obviously have to use only a part of this.
Chapters 8 and 9 provide my discussion of solutions. I call "contributory" are the ones which increase the more they are used, especially knowledge). Chapter 8 as a whole discusses what kinds of property rights are appropriate for what kinds of resources and resources uses, delineating all the different types of resource uses where common property is either the only alternative to open access, or where it is more appropriate than private or state property (a flow chart on p. 149 condenses a lot of this argument into one page). Since there are so many areas where common property needs to be further developed, I go into some of the management issues for common property in "Managing the Commons," for example, by discussing water distribution systems.
In Chapter 9, I first define the "self" in self-reliance as somebody living in relationships to a larger community that supports life as art, I then discuss things such as land refom, community gardens, water harvesting, transport policies in favor of non-motorized mobility, creation of health-promoting environments, and local generation of renewable energy as self-reliant/cooperative production, and alternative currencies and the like as forms of equitable exchange. The chapter ends with a discussion of strategies for change, focusing on coalition building and a suggestion to establish "Abundance Arts Centers" that could help bring people together and create synergy among them."
The TOC of the book:
1 The Paradox of Our Times 1
Human Needs and Wants 2
Creating Addiction 9
Depletion and Degradation of Natural Resources 12
Is There an Alternative? 14
Part I The Production of Scarcity
2 Oppressive Scarcities 19
Religion and Ideology 20
Privilege and Subordination 22
Violence 28
3 Exploitative Scarcities 31
Property 31
Monopolies and Oligopolies 41
Exchange Systems 50
4 The Creation of Needs 61
Transportation 64
Healthcare 66
Education 69
Time 70
5 A Global Geography of Scarcity 73
The International Division of Labor 74
Commodity Networks 77
Population 102
6 Systems of Control 111
The State 111
Finance 114
Knowledge Control 120
The Military 124
Frenzy 127
Part II paths towards abundance
7 The Art of Living 131
Wholeness and the Art of Living 132
Civil Rights and Liberties 144
8 Resource-Use Rights 147
Contributory Resource Uses 150
Neutral Resource Uses 157
Rivalrous Resource Uses 159
Managing the Commons 166
Undermining Monopolies 176
9 Reclaiming Self-Reliance and Cooperation 181
Self-Reliance and Cooperation in Productive Activities 182
Equitable Exchange Relationships 195
Strategies for Change 201
Bibliography 209
Index 233
Review
Wouter Tebbens:"Now let me intent to summarise Wolfgang Hoeschele's book:
The creation of scarcity
In the first part of the book, Hoeschele addresses the production of scarcity. The mechanisms designed to create artificial scarcity he calls "scarcity generating institutions". This concept proves a strong guide to analyse the root causes of social wrongs, or in his words: "the economic concept of scarcity as a window on the entire political economy of today".
While mainstream economics defines economics as a science about the allocation of scarce resources, most resources are considered scarce in the light of unlimited human wants. Instead we can observe that human wants are in fact not unlimited, but capitalist institutions seek to continuously generate new forms of scarcity by creating ever new needs. "Once scarcity has been generated, it can be exploited to ccumulate power and yield profit." Scarcity is a means toward the end of profit maximisation. In order to counter this vision of the economy, Hoeschele brings together alternative approaches, which challenges the most basic current suppositions, and aims at putting an end to scarcity by creating abundance.
First of all we can take a critical look at human wants: instead of asking whether our needs are indeed unlimited, we could revise which wants are real needs. The multiplication of desires leads to unhappiness. "But contemporary economic discourse discourages from considering any methods to increase happiness that do not maximise consumption. Modern economic thought is the first system of thought to support the idea that greed is good, or at least that it is universal among our species, and that it can be used as a force for "progress". While greed maybe widespread among our species, it is also a trait that makes it more difficult, if not impossible to be happy. The greedy person deludes herself into believing that acquiring the next thing will make her happy, and it is this very powerful delusion which is exploited by the forces that promote economic growth. The aim of this exploitation is not happiness, but profit, which is itself a delusion, because the greedy person grabbing the profit has come no nearer to happiness herself."
About the radical monopoly of the car: once most people own a car and public transport is destroyed or limited, neighbourhood shops disappear because they cannot achieve the economies of scale enjoyed by the big stores that can attract customers from large distances. The downtown declines, because it becomes difficult to access, instead, suburban towns take over. After a point, it becomes impossible to reach many destinations without a car. In short, car ownership is enforced, even for people who must go into debt to buy a car. The same can be observed with mobile phones. Once most people own a mobile phone, those few who don't, get isolated. Similar with Internet access. In many social contexts certain levels of consumption are considered obligatory in order to "belong". Thus, constantly escalating consumption is enforced. This represents a loss of freedom for those people who either do not want to buy these things or cannot afford them. However, increased consumption is always represented as pure progress...
About the depletion and degradation of natural resources Hoeschele observes that fossil fuels have been treated as more abundant than renewable energy resources. They are however only "abundant" in the sense that, once they have been located, mined, and transported, very large quantities can be used at any given place and time. They are ultimately scarce, because they cannot be regenerated within a timescale relevant for human civilisation.
Scarcity can be generated in three ways: a) by reducing the total amount of a good or service ; b) by placing barriers between people and a good (a bottleneck), c) new wants or needs can be creaed, or existing ones modified, so that demand for a commodity exceeds supply.
Religion and ideology places barriers between people and spiritual development. They act as a bottleneck between people and their own peace of mind. Additionally, most religions and ideologies have created hierarchies, distinguishing people who are considered superior from those considered inferior. Privileging of men and subordination of women ranks surely as one of the most ancient forms of hierarchies in human society and create dependency releationships, and thus scarcity.
Some form of violence is involved in arguably all modes of scarcity generation. Oppressed people will resist if they can, which is however suppressed in many cases. The means of violence are controlled by a small group, constituting another "scarce" commodity: security.
About property: Hoeschele discusses public, private and common property and observes how unlimited wants in the West deplete fishing waters in other regions. At the same time, a commons, or common property, as governed by its own members can constitute a practical form of abundance, in the case of fishing, with fishing seasons and rules set to manage the fisheries despite the commercial pressures.
When private ownership is more or less equally distributed, a private property regime can lead to abundance. However "a highly unequal distribution of property allows for the emergence of monopolies and oligopolies. If only a few sellers (or a few buyers) dominate a market, they can create botllenecks and therefore scarcities for others by manipulating prices, and therefore secure extraordinary profits." And that is what we see in many of the most profitable economic sectors.
As we have observed elsewhere, patents are one of the most used legal instruments to create oligoplies (see also Michel Boldrin and David Levine: Against Intellectual Monopoly). Hoeschele discusses the damage patents have caused by creating artificial scarcities in many industries. Initially he handles the issue of patents with caution, presenting it as a "two-edged sword: excessive patent protection will enable the creation of overly powerful monopolies that are extremely difficult to destroy, but insufficient patent protection would slow technological progress." This is indeed the rationale behind patent rights as they were initially designed. However, in the Age of the Internet, innovation has shown to evolve much more rapidly when developers and inventors can freely build on the ideas of others, leading to dynamic, accelerated innovation. It has been argued by a growing numer of researchers that with the increasing complexity of high-tech products and production processes, one can easily infringe on an idea of others, and a legal minefield has grown, which tends to slow down innovation and leads to stark market concentrations. Cf. the mobile phone market or software. Software patents in particular have been fiercely resisted by small companies and civil society in Europe (FFII/software patents) and also in the USA, one of the few countries where software patents are instituted. As Hoeschele correctly points out: "more research may be needed to find out whether one's own innovations violate some patent or copyright, than to develop the software itself".
On a more critical note he points out the geography of scarcities, "..if patents either did not exist or provided far fewer privileges for patent-holders, it would be extremely difficult for any group of countries to retain a monopoly over the technologically advanced industries of the world, and hence it would not be necessary to discuss the "problem" of technology transfer. Far more people all over the world would be enabled to make use of new techologies, and technical knowledge would be used to empower rather than to control."
Development: if the goal is to end poverty, it is primarily necessary to redistribute productive assets to the people who actualy use them (by such means as "land to the tiller" agrarian reform, for example) and to provide for comprehensive basic education and health care, deploying teachers, doctors and nurses from within the country who can be paid in local currency. This goal requires practically no foreign currency (as happened in Kerala, India). If the goal is to promote domestic industries geared towards producing affordable goods for ordinary people, a modest degree of protectionism plus a disregard of foreign patents will also be quite effective, while requiring little finance from abroad. Such policies will produce no miracles, but neither will they produce long-term debt dependency, nor require governments to be responsible to foreign sources of finance rather than to their own people.
Let us analyse the conditions for monetary transations in a market that can create abundance for all parties involved:
a) both parties to the exchange must be free to withdraw from the exchange if they wish;
b) both buyers and sellers have good information about the market and the goods offered,
c) no outside force (such as a State) imposes prices or somehow manipulates supply and demand,
d) there is little fraud, e) there are means available to resolve conflicts and enforce contracts.
These conditions were first expressed for a "free market" by Adam Smith and were later further developed by many others. It is clear that in many actually existing markets these conditions are not fulfilled or not completely and they create scarcity for some of the participants. Or to put it more bluntly: no real free market has been observed ever. In the book "Markets not Capitalism" edited by Gary Chartier and Charles Johnson (book), the concept of the Freed Market is introduced, to signify a non-capitalist market that adheres to the above mentioned conditions. As markets can contribute, and have done so for millenia, to enhance the freedoms of its users to exchange their produce, maybe we should indeed talk about freed markets (or liberated markets) to avoid confusion with neoliberal "free market" discourse.
Is there an alternative?
TINA: "There Is No Alternative" was Margaret Thatcher's slogan in the 1980's ("es lo que hay" in Spanish, "that is what there is"). In other words, people believe there is no freedom of choice about how we are to organise our economy and society. We're trapped in the belief that real change is not possible.
Paths towards Abundance
Hoeschele points out several important aspects of the path towards abundance. In order to escape from the cycle of ever new scarcity generation, we need to create abundance-generating institutions and break down or reform scarcity-generating institutions so that they work towards abundance generation.
First of all, we should adapt our lifestyle to want what we really want. In line with the degrowth movement, he suggests to change from consumerism towards "wholeness and the art of living". While this may sound a spiritual exercise, it is clear that we can't go on to always want more; as Maslow showed with his pyramid of human needs, after material needs are covered, we can focus on self-realisation. But this can only be realised if income and GNP are much better distributed. Both social democratic reformism and communist revolution tend to regard increasing equity of income distribution as a zero-sum game: resources need to be redistributed from the rich to the poor; the gains of the poor are the losses of the rich. In both ways, state intervention is needed, which by doing so, reduces individual freedom.
Wholeness, or "life as art" contrasts with "life as profit maximisation", which depends on others failing to make profits, in a regime where the desire for "freedom" is played against the desire for social justice, while ignoring that any freedom that not be enjoyed by everybody at once is merely privilege.
Imagining a society that revolves around life as art, Hoeschele foresees public action to reduce scarcities to enable people to practice life as art, even if one has little income, and by ensuring that everyone has access to the resources they need. To show the changed attitute he mentions: "The phenomenon that ssome people cannot be happy even at a high level of material consumption will not be seen as a justification for more consumption, but rather as a pathology akin to alcoholism or overeating." He calls them the "pleonexics" or "consumptives" (the ancient Greeks called this the "malaise of the soul" or pleonexia).
Civil Liberties
The first requirement for an abundant life is that all individuals are free to live life as art as they see fit. This requires strong foundations for the civil liberties and human rights, like freedom of expression and well, in short, the founding principles and values we defined for the Free Knowledge Insitute: diversity, equity, solidarity, transparency, ...
Resource-Use Rights
Resources can differ in several forms, like whether its usage depletes the resource, has no effect or improves it, whether it is renewable or not, whether a resource can be effectively managed in case it is divided into parcels or small or bigger lots, etc. Hoeschele has designed a flowchart that helps to choose the most suitable property regime for different cases, be it Open Access, with or without incentives to further expand the resource (e.g. medical research), Common property (e.g. air, water, oceanic fisheries), Common or State Property (e.g. petroleum), Local Common Property or Private Property (quarries, aquifers).
Stakeholder trusts
In line with the ideas of David Bollier and Peter Barnes (Capitalism 3.0), Hoeschele argues for a commons trust that owns and protects our air. "... keeping air to breathe as an open-access resource demands air pollution be strictly limited, at the cost of the polluters." Barnes proposes the set up of a commons trust that owns all the air of a country. Each citizen owns a non-transferable share and is represented in the management. The trust would auction a set number of permits to pollute the air on an annual basis. Oil and coal companies would have to buy these permits and pass on the costs to the consumers. The revenue of the trust would be paid out to everyone equally, providing a kind of Basic Income. On the one hand such system would make it expensive to deplete or degrade natural resources, and on the other it would provide a basic income. The latter in turn could liberate the labour market in unprecedented ways, if the income from the shared ownership of the natural resources would be sufficient to survive on, assuring that individuals would be free to withdraw from the labour market either fully or partially, if they would prefer so.
Stakeholder trusts could also be set up for other common property resources, such as municipal water infrastructures. Such customer-owned corporations would have an interest in minimising costs and maximise efficient service provision. Public regulation would however still be needed, "to ensure that these water companies maintain river water quality, but there would be no need to regulate prices."
Anti-trust and policies to favour small over big companies
This is one of my favourites: instead of helping the big organisations, we could reform certain policies and legislations to help the small companies by hindering the big ones. After all, market dominance is one of the core problems of actually existing markets, and reduces the freedom of all other participants. A company's economy of scale is only of social benefit if it is forced by its competitors to pass on the benefits to consumers. Hoeschele suggests three techniques: 1) reduce barriers to entry for new competitors, while weakening other mechanisms that favour market concentration; 2) transfer scarcity-generating mechanisms from the control of the monopoly to the control of a public institution, and 3) deprive the company of the scarcity-derived profits (rents) after the fact.
He makes a case for Open Access in research and the avoidance or limitation of patents: "if governments insisted that results of publicly supported research be made part of the public domain and generally restricted the scope of patent potections, new technologies would become available to many more new and existing businesses."
With respect to the third point, he suggests that inheritance laws could be modified in such way that passing on a company to its employees would be burdened with far fewer taxes than passing it on to the owner's descendants. Taxation could also help to reduce the size of companies: to make near-monopolies pay higher taxes in the benefit of smaller competitors, "thus gradually leading to a deconcentration of the respective economic sectors." "Simply reforming the policy environments so that they hinder, rather than facilitate, the creation of monopolies, could have major positive impacts." We should revert the current "small is beautiful, big is subsidised."
Reclaiming self-reliance and cooperation
The last chapter of the Economics of Abundance deals with cooperation. Hoeschele mentions local exchange and trading systems (LETS), parallel currencies and even a different monetary design, with negative interest, such as suggested by Silvio Gesell and Lietaer. Furthermore the Tobin Tax is discussed. But the big absent in the book is the forms of cooperation that have emerged through the Internet, in particular digital commons, based on free and copyleft licenses. I would have expected the abundance generating mechanisms so clearly observed in free knowledge, free software and free culture projects as one of the building blocks towards abundance. Futhermore the third mode of production, peer production, as extensively discussed by Michel Bauwens and Yochai Benkler. Other authors who inspired Hoeschele or gave him feedback include Roberto Verzola, Lawrence Lessig and David Bollier, all of which describe clearly the emergence of commons-based peer production and free knowledge communities. Hopefully this part of the equation is included in other (or future works). I would suggest the inclusion also of the free hardware movement and its potential for a commons-based industrial production, very much in line with the abundance economics.
For the rest it was a very good read and impressive list of references Wolfgang Hoeschele has integrated into a coherent and sensible vision for a more sustainable and freedom respecting future for the world population. Let us hope more people can work on making important parts of this vision a reality." (http://freeknowledge.eu/blog/wouter/wolfgang-hoeschele-economics-of-abundance)
Excerpts
- Preface : http://www.gowerpublishing.com/pdf/SamplePages/Economics_of_Abundance_Hoeschele_Cont.pdf
- chapter 2 : http://www.gowerpublishing.com/pdf/SamplePages/Economics_of_Abundance_Hoeschele_Ch2.pdf
Introduction
Wolfgang Hoeschele:Is There an Alternative? (pp. 14-16)
In light of considerations such as these, there is a widespread belief that “there is no alternative” to the capitalist system; there is even an acronym for this phrase (TINA). In other words, people believe that there is no freedom of choice about how we are to organize our economy and society. At the same time, growing numbers of people around the world recognize that this same system may spell our doom because it destroys the resources needed to sustain a population of billions of human beings. “Realism” indicates that only minor tinkering with the system is feasible; at the same time, a different kind of realism tells us that this tinkering is ridiculously inadequate. For example, the Kyoto Protocol is claimed to be at one and the same time the best agreement that world leaders could possibly achieve to attempt to reduce carbon dioxide emissions, and a far cry from what would be necessary in order to actually stop further global warming. We face the predicament that “realistic” action is insufficient to ward off real dangers, and is implicitly based on the wishful thinking that the problem (including the potential for massive population collapse and ecological destruction) will just go away if we ignore it long enough. Actions sufficient to prevent the real dangers, meanwhile, are considered utopian, because people would not accept the reimposition of scarcities that they believe we have long overcome.
In this book, I argue that it is possible to overcome this yawning chasm between realisms, that it is possible to work toward individual freedom, social justice, and ecological sustainability all at the same time, if we fundamentally reconceive our notions of scarcity and abundance, thereby creating a new approach to studying human needs and wants and their fulfillment, and applying the insights of that study to our actions. In this project, I build on a wide range of literature in the social sciences—after all, people have been criticizing capitalism ever since it emerged, and various among them have pointed out how scarcity is consciously created by at least some capitalist institutions (examples include Illich 1974, 1975; Harvey 1974; Lappé and Collins 1977; Gorz 1989, 1999; Xenos 1989; Yapa 1993, 2002; Korten 1995, 1999; Lietaer 1999; Loy 2002, 2006; and May and Sell 2006). There are also numerous books seeking to establish economic principles for a sustainable and socially just society (examples include Gibson-Graham 1996, 2006; Korten 1999; Daly and Farley 2004; and Porritt 2005). Yet more people have been working at integrating economics with other social sciences more effectively (see, for example, Söderbaum 2008; Nelson 1996). Organizations such as the Institute of Green Economics and the US Solidarity Economy Network are working to connect people who can convert these ideas into reality, and are fostering research to help build alternatives from the ground up. Without the work of these and many other people, I would not have been able to write this book.
However, to my knowledge, no book has been published that uses a systematic critique of the economic concept of scarcity as a window on the entire political economy of today, and as a basis for constructing alternatives that point the way beyond our current social and ecological impasse.10 I attempt to do this first by analyzing how scarcity-generating institutions work (Part I: “The Production of Scarcity”) and then exploring ways in which we can work toward greater abundance (Part II: “Paths Toward Abundance”). Part I moves from modes of scarcity generation that depend on the outright denial of choice and social advancement (Chapter 2: “Oppressive Scarcities”), to modes that constrain choice and thereby help to expropriate people of the products of their labor (Chapter 3: “Exploitative Scarcities”), to modes that create scarcity by manipulating people’s choices so as to increase demand (Chapter 4: “The Creation of Needs”). This is followed by discussions of how multiple scarcitygenerating institutions work together (Chapter 5: “A Global Geography of Scarcity”) and of institutions that ensure that most people play by the rules that favor only an elite few (Chapter 6: “Systems of Control”). Part II opens with a philosophy of living that can serve as the basis for an economics of abundance (Chapter 7: “The Art of Living”) followed by discussions of property rights (Chapter 8: “Resource Use Rights”) and of strategies to promote individual and community-level self-reliance and cooperation (Chapter 9: Reclaiming Self- Reliance and Cooperation”) in support of that philosophy.
Oppressive Scarcities (pp. 19-20)
The discussion in Chapter 1 claims that needs and wants can be consciously generated in order to create profitable scarcities. However, it is important to go beyond such general claims and systematically examine the various methods of scarcity generation. Scarcity, we must remember, is the condition when available goods do not meet current demands. There are basically three ways in which scarcity can be generated. First, the total amount of a good or service can be reduced. For example, the expansion of market activities may reduce the amount of goods provided by nature (such as clean air) or by nonmarket mechanisms (for example, self-provisioning of food, free exchange of knowledge), or those that result from the absence of commercial activities (such as silence and open space). Second, barriers can be placed between people and a good. Of potentially many ways to obtain that good, only one or a few may be left available, leading to the creation of a bottleneck. People can be made to pay in various ways for taking goods through the bottleneck. An example of this mechanism is the elimination of diverse forms of movement to the point that “mobility” is reduced to the use of a privately owned car. Monopolies also fit into this category of scarcity generation—a particular good is available, but must be purchased from a single seller. Third, new wants or needs can be created, or existing ones modified, so that demand for a commodity exceeds supply—for example, by means of advertising, ideological indoctrination, or legal standards. All three basic mechanisms not only increase scarcity, but also curtail freedom by forcing increased expenditures on people and reducing available options of how to satisfy their needs.Throughout history, we can conceive of social power as having been based in part on the construction of scarcity, but the methods of producing scarcity have continuously changed as a result of changing social circumstances, new technologies, and differing natural environments. Every historical period is characterized not only by varying combinations of methods to create scarcity, but also by specific ways of institutionalizing these methods—that is, its own scarcity-generating institutions. In this chapter, I begin the discussion with several such institutions which are normally considered neither economic nor modern, but which continue to persist and interact with modern economic institutions. Any attempt to avoid the scarcities invented in modern times should also avoid the scarcities created by these older institutions—romanticizing the past will not lead us forward. What these institutions have in common is that they explicitly prohibit people from engaging in certain types of behavior or expressing deviant thoughts, often based on the “station in life” into which they were born. In a word, they oppress.
Conclusions: Strategies for Change
"Finally, a fundamental question concerns how change in the direction sketched in this book can be brought about. Enormous concentrations of power have been built on the profitable scarcities discussed in this book, and powerful people and institutions rarely give up their power without a fight. How can we overcome such opposition?The conventional means to political power is to take control of the state, whether by revolution, political activism, party politics, or financial control (the latter method being restricted to those with the requisite means). Yet, the state is to a large extent a scarcity-generating institution in its own right, and liberation cannot be achieved through restrictive laws.11 Indeed, leftist or centrist parties throughout the world seem rather ineffective vehicles for bringing about changes that are far more modest than those envisioned here. This is because the institutions of the state often depend far more on the cooperation and support of powerful oligopolies than on voters. This does not mean that we should give up trying to influence the state. It does mean that we must regard the state as being a follower rather than a leader, and that the state will only promote changes along the lines envisioned here (including reforms of property law, laws governing exchange relationships, how public schools are run, what research is supported by public funds, and how common property resources are managed) if the forces impinging on the state change substantially.
Political activism, as a force in itself, has a role to play here, but it cannot stand alone. The agents of scarcity generation throughout society must be weakened directly (a benefit in itself) while also weakening their power over the state. In many ways, the state itself should be made irrelevant if it cannot prove its worth by creating abundance rather than scarcity. The most effective strategy for achieving these aims is not to oppose force with force, because the state and related institutions thrive on being attacked (because attacks help to legitimate repressive responses). Instead, we should seek to render the forces of scarcity ineffective. The most promising way to pull down the colossus of scarcity generation is to liquefy the ground beneath its feet. All scarcity-generating institutions need a ground to stand on—namely, the willingness of ordinary people to support them, to believe their promises and to play by their rules. Even outright opposition gives a handle for the exercise of power.
However, evasion, avoidance, and learning to do without the “services” of powerful institutions by fulfilling one’s needs independently constitute the “weapons of the weak” as described by Scott (1985) with reference to Malaysian peasants. Using the image used by the Community Economies Collective of Gibson-Graham and others in their community-planning outreach work, the institutions we typically identify as “the economy” are only the tip of the iceberg of a diverse economy.12 They cannot be anything more than that, because they must draw on the abundance of everyday human activities to create their scarcities (see also Mies 1998). If abundance-generating activities are flexibly networked so as to support each other more effectively and provide less certain support for scarcity-generating institutions, the latter will have to adapt or sink in the swamp.
In addition, we can build on the recognition that everyone suffers from at least some scarcity-generating institutions. Not even the wealthiest and most privileged people can insulate themselves from the social conditions pervading society around them. Wealthy people, too, fall ill and may succumb to iatrogenic disease, or be prone to the debilitating effects of an unhealthy environment. Even highly successful entrepreneurs may fail because of financial turmoil brought about by institutions beyond their control. Corporate executives may wish to organize the production of the companies they control in environmentally and socially responsible ways, but be forced by the competition to cut costs. “Insiders” such as these may contribute to melting the colossus rather than the ground beneath its feet.
Thus, an extraordinary array of people might engage in the effort to create alternative spaces for abundance. Coalitions of like-minded people (such as those portrayed in Bennholdt-Thomsen, Faraclas, and Werlhof 2001) will vary, depending on the specific scarcity-generating institution and locality in question. For example, a Catholic male farmer in Colombia is likely to be concerned about a different set of issues than a female Chinese urban worker and adherent of Falun Gong, or a transgender Zoroastrian schoolteacher in Iran. Table 9.1 indicates some examples of groups from which activists against specific scarcity-generating institutions may be drawn. Some of these groups are extremely broad, potentially including the vast majority of the world’s population. The broadest groups, however, tend to be the most amorphous and thus the least likely to find a common purpose. More narrowly defined groups may provide stronger organizational bases, but may be at odds with each other—note, for example, the interminable debates within the Left about which is most important: class, gender or race. Nevertheless, countless political movements and other organizations which promote abundance as defined here already grow out of these milieus, no matter how fragmented they may appear to be.
Perhaps the ideas expressed here could help provide a common framework, a vision of working towards abundance, which would provide greater scope for mutual support among diverse groups. A common vocabulary could help oppose the dominant strategy that divides and conquers by labeling each group as representing a different “special interest.” In fact, the outcomes of struggles for abundance need and should not be the same from one place to another. For example, in some regions and countries, property reforms might be seen as the greatest priority, while in others it might be seen as most important to change the dynamic of creating ever new needs. Thus, paths toward abundance would vary widely between different places, as is consistent with true democracy. The vision of abundance could enable us, however, to see and convincingly represent the unity in all this diversity, and thus strengthen oppositional movements everywhere. Not only is another world possible (as the World Social Forum reminds us), but indeed many different worlds are possible and can support each other, as long as we can recognize that they represent diverse paths towards greater abundance.
A core of activists may be drawn from environmentalists and advocates for social justice and civil liberties, since these issues are implicated in virtually all scarcity-generating institutions. What is more, scarcity theory could be used to forge closer coalitions between these two groups, which are too often distinct. For example, as pointed out by Porritt (2005) among others, in the United States, many environmental groups consist largely of affluent whites, while many ethnic minority activists consider environmental issues to be of marginal importance.13 Ray and Anderson (2000), however, present considerable evidence that there is strong potential to overcome this gap.
Their book portrays the “cultural creatives” in the United States—people who question many of the tenets of modernism and especially of consumerism, while believing in the values of personal liberty and growth, environmental protection, and social justice. They are deeply distrustful of both government and big business. Individual leaders of this type are portrayed by Henderson (2006). Based on numerous opinion polls and individual interviews, Ray and Anderson estimate that cultural creatives comprise about a quarter of the US population, having grown to this proportion from almost nothing before the 1950s. They are far less visible than their numbers would suggest because they have not developed a sense of common identity, and because much of their work has been occurring at a cultural level rather than the political level that attracts media attention. Furthermore, the weakening elite of conservative “moderns” (mostly secular Republicans) have shored up their power by engaging in a coalition with “traditionals” (those reacting against modernity by trying to revive an imagined past). Ray and Anderson see the cultural creatives as already being engaged in the process of building up the institutions needed to help our civilization reach a higher level, the next stage, for which they have no name, and which we may or may not reach. A major problem these authors perceive is the lack of a common story or vision that can provide a guide to action, a shared purpose.
I hope that the idea of life as art, and abundance for all based on a revised appraisal of human needs, can provide such a common vision. Cultural creatives, who according to Ray and Anderson are at the core of both the environmental movement and the “consciousness” movement (people interested in new forms of personal growth and spirituality), would be most likely to adopt and further develop this vision. Such people are most definitely not confined to the United States; according to Inglehart (1997), the percentages of people expressing similar values are similar in Japan and considerably larger in much of Western Europe. In some countries they are far more organized politically as well as culturally (in Germany I would regard the Green Party as consisting largely of cultural creatives). If one adds to these people all those who have never had the opportunity to be cultural creatives in the sense of Ray and Anderson, but who would support a more just distribution of resources in very material terms —that is, who would benefit from agrarian reform and the opportunity to live in less polluted rural or urban environments—then a movement for abundance has the potential to reach out to a mass following, including people in almost all walks of life in all parts of the world. As exemplified by Table 9.1, I believe that there would be plenty of people who could benefit from a movement for abundance.
The appeal must also extend to people who do not have the time, inclination, or resources to engage in extensive activism. Therefore, an abundance movement must create new opportunities for many people by nurturing its own culture, and building supporting organizations (on this point, see also Lodziak 1995: 92 ff; Korten 1999: 209–275). This broader cultural movement can include artists, academics engaged in relevant research,14 teachers supporting free inquiry by their students, doctors and healers encouraging healthy, non-addictive lifestyles among their patients, restaurant owners interested in excellent food made from local produce, organic farmers, peasants, lawyers who champion civil rights cases, artisans and industrialists who have pride in the quality of their manufactures and a commitment to producing them in socially and environmentally sound ways, gays and lesbians and others who believe in their own and others’ freedom to live in ways that do not conform to dominant norms of gender and sexuality, spiritual seekers opposed to narrow religious dogma and interested in the intensely personal experience of transcendence, and all kinds of people who enjoy wholesome food and a less frantic lifestyle, less attached to purchased commodities. This list is illustrative rather than exhaustive, but it does show that such a movement could potentially embrace the majority of humans and involve their day-to-day activities both in and outside their jobs. If it reached that point, the “swamp” of resistance would produce beautiful flowers (wetlands harbor great biodiversity!).
The work of independent enterprise consistent with the vision of a truly free market, as well as of building up new forms of common property institutions, would demand entrepreneurial talents of people not normally associated with political activism. There is a huge scope of action for “ecopreneurs” and social innovators; if these people can be brought into collaborative relationships with environmental and social justice movements, a powerful force for change may result.
Cultural organizations could also help address the problem of coordination among diverse groups working for abundance. Central coordination is rarely a good idea, because it creates many new costs (scarcities), such as interminable meetings that slow down decision-making processes and hamper all organizations involved. A much more positive approach would consist of associations that support abundance-generating projects on individual or collective levels, by exploiting the power of inspiration, the power of empowering others, rather than the power of coercion and scarcity. Kasmir (1996) describes an informal practice along these lines in Basque towns: workers meet their friends by doing the rounds of all the local bars, allowing demonstrations to be organized overnight, with very little formal organization. Shorthose (2004) discusses a more formal institution in Nottingham’s Lace Market, the Broadway Media Centre, which provides technical resources and production spaces for independent film and video-makers, as well as a cafébar where they can network with each other, serving as a key resource in the vibrant cultural life of this part of the city.
Where similar practices already exist, they can continue to evolve organically, but new “Abundance Arts Centers” could complement and add to these activities. Such centers could issue local currencies, provide a café and meeting place for creative people, provide spaces for talks, seminars, or workshops teaching the arts of abundance (arts in the conventional sense, meditation and other methods of self-exploration, self-reliant skills, the study of scarcity and abundance), host gallery exhibitions and musical or theatrical performances, and run libraries with relevant literature. The point would not be to replace any local organizations already active in any of these endeavors, but to complement existing activities and promote networking among them.
Alternatively, existing organizations could expand their scope of activities in order to become abundance arts societies along the lines suggested here. By accepting payments in a local currency or in the form of in-kind contributions, abundance arts societies would be able to offer their services to people otherwise unable to afford them. These societies would facilitate encounters among like-minded people who have new visions, and build an organizational and cultural core that is independent of either government or oligopoly business. They would galvanize the powers of inspiration rather than the powers of coercion, and transform movements of opposition into movements of affirmation.
Creating abundance will always be an unfinished project, since scarcity-generating institutions do not just die, and are an inescapable part of the human condition. They change with the times, and they engender new ways of creating scarcity. The creation of scarcity is likely to creep even into those organizations which have been conceived as a means towards abundance.
However, perhaps a vision of life as art, along with an appropriate institutional base, can help fill the vacuum left by the apparent demise of socialism and the unfulfilled promises of capitalism, and contribute to a somewhat more joyful and non-dogmatic, exuberant, liberating, unruly, life-affirming, geographically and culturally diverse, and always imperfect and impure Age of Art to replace the Frantic Age that appears set to destroy the very basis of human life on Earth. There is not much time for this to happen: the time is now."
Table 9.1: Coalitions for change
Coalitions for change: scarcity-generating institutions and the groups who may support their change- Organized Religion: People who wish to make up their own minds concerning religious matters, and believe others should
- Doctrine of Infinite Wants: Various religious groups; people interested in a simple lifestyle; the poor; people with unconventional
- Violence: Peace advocates; civil and human rights groups; victims of oppression; states that can achieve more of
- Gender Roles: Women, especially feminists; men who do not fit common male gender roles; anybody whose sexuality
- Oppression by Race, Caste, etc.: Oppressed groups within all societies, such as ethnic or racial minorities, low castes.
- Property Relations: Degradation of Open-Access Resources: Residents of polluted places; the poor and the homeless; people interested in liveable places.
- Oligopoly Ownership: Almost everybody except the owners (major shareholders) and managers of oligopoly companies.
- Enclosures of Commons: Ordinary people who benefit from commonly-owned resources, such as villagers in most of the world.
- Intellectual Property: Small and medium entrepreneurs who can more rapidly take advantage of new or existing knowledge. This is of particular relevance in PIC, PIN and LIN countries.
- Transport: People who cannot afford a car or would rather spend their money otherwise; people interested in
- Healthcare: People who can not afford present forms of healthcare (a large share of the world population), or who
- Education: People interested in an education promoting personal growth, including teachers, parents and
- Energy: Consumers (including businesses) who pay too much for energy; entrepreneurs in renewable energies;
- Exchange Systems: Unemployed and underemployed people, economically depressed or crisis-prone regions and
- Time Scarcity: People who wish to have more unrushed, leisure time, without thinking that they need to fill it with
- Virtually All Scarcity-Generating Institutions: Advocates of social justice and civil rights, environmentalists, cultural creatives.
Resource Use and Property Rights to Minimize Scarcity
Wolfgang Hoeschele:Many of our current property rights are designed either to allow a small number of people to monopolize those resource (imposing scarcity on everyone else), or to promote their unsustainable use (creating extreme resource scarcity for future generations). If we wish to generate abundance instead, i.e., the condition that all people, both now and in the future, are able to thrive, we need to fundamentally redesign our property rights. The flow chart shown here offers a framework for the kinds of property or resource use rights that would promote abundance, tailoring them to each specific type of resource and how it is used. This framework is explained in detail in my book (The Economics of Abundance: A Political Economy of Freedom, Equity and Sustainability, published by Gower in 2010, pp. 147-166); the following is a summary. Note that the flowchart shown here is slightly modified from the one that appears in the book.
The first question in the flowchart asks “How does this resource use affect the quantity and quality of the resource?” There are three possible answers: negatively, positively, or not at all. In conventional economics, the “positively” and “not at all” answers are usually lumped together to define “non-rivalrous” resources, but I separate them out because they have different consequences. I thus call them “contributory” and “neutral,” respectively, while following conventional usage in calling “rivalrous” those uses that damage a resource.
Contributory resource uses
If a resource use is “contributory,” the resource grows if it is used more. The most prominent example of such a resource is knowledge: if more people learn something, more people know (they don’t make anybody forget), and they are also likely to contribute more new knowledge to the existing knowledge base by applying it in different contexts. As stated in my book, “the most important means to ensure that innovation can proceed is to ensure that everyone seeking knowledge has access to it. Any barriers to the dissemination of knowledge should then be regarded as a kind of knowledge pollution, particularly since they impede any efforts to correct errors, or to criticize others’ use of knowledge on ethical grounds (for example, that it is being used to favor some people over others). Knowledge that helps empower people depends on openness, while knowledge that is used to coerce, to exert power over the disempowered, thrives on secrecy” (p. 150).Patents represent an attempt to make knowledge artificially scarce in order to ensure that companies which invested in creating that knowledge can reap the profits of their investments. While there is some justification for this policy from the point of view of profit-oriented investors, there are inherent problems with this approach, which trades a scarcity of knowledge against a presumed scarcity of innovation that would occur in the absence of patents. Three problems are especially noteworthy (discussed in more detail earlier in the book, pp. 43-7). First, our patent regime favors patentable innovations over those that are not patentable, even if they are more important for our future (for example, it favors the development of new chemicals over research about the ecological impacts of those chemicals, or the development of low-tech methods that rely on fewer chemicals). Second, the contributions of many people involved in an innovation are often ignored (for example, indigenous peoples in various places may have been instrumental in the development of new medicines, but they rarely get any recompense for their contributions). In these cases, patent rights serve to exploit the people (often including tax-payers) who made that research possible. Third, patents stand in the way of the timely dissemination of new technologies from the most technologically advanced to other countries, and therefore help maintain the division of the world into rich and poor countries.
Instead of relying on patents to promote research and innovation, I suggest we should focus on fostering innovation in ways that do not create knowledge scarcity, and that rely on a variety of motives for innovation, such as “the intellectual joy of discovery, the satisfaction of imparting new knowledge to others and thereby making a positive contribution to society, and the prestige of being recognized for advancing one’s field of study” (p. 151), i.e., motivations that are crucial to academic research. Research grants, for example, stimulate research without creating knowledge scarcity. In fact, an area where innovation is greatly needed is the invention of new ways to stimulate research without fencing in knowledge!
Similar considerations apply to other kinds of intellectual property rights such as copyrights. By the same token, education and learning should be made as broadly accessible as possible, through educational institutions as well as through libraries, the Internet, and other methods to disseminate knowledge and information.
Neutral resource uses
If a resource use has no impact on a resource, there is no need for it to be regulated; in other words, there can be “open access.” This applies, for example, to breathing air, walking on the earth’s surface (wherever this does no damage to a resource such as a farmer’s crops or the habitat of an endangered species), drinking water from a lake or river, utilizing sunshine or the wind, or enjoying scenic beauty. However, such resources need to be protected from those types of resource use that do degrade the resource, for example, pollution of air and water. These fall under the next category of “rivalrous resources uses.”Rivalrous resource uses
Rivalrous resource uses need to be socially regulated somehow in order to ensure equitable distribution and sustainable use, which means that property in some form is important. We now come to the second question in the flowchart, “Is the resource renewable (through natural regeneration or human effort) or non-renewable?”In the case of non-renewable resources such as petroleum and mineral ores, property rights can address the potential problems of monopolizing the resource (where a small group of people gains all the benefits, charging high prices from everyone else), and of depleting the resource (creating scarcity for future generations). Question 3 asks “Does the resource provide large rents relative to the regional economy (based on its scarcity and evenness of distribution?” Rents here refer to unearned income (nobody has created those natural resources!) which is greatest if the resource is in high demand but is found only in a few localities. “I would argue that ownership of non-renewable resources should be widely shared – for example, among the citizens of a nation in the case of scarce and patchily distributed resources that yield the largest rents, or among residents of a county or district in the case of more abundant and evenly distributed resources, which nonetheless generate large rents relative to the local economy” (p. 160). While I consider it most desirable that the most commercially valuable mineral resources be owned in common by the residents of a nation independently of the state, state ownership may also be acceptable as long as there is a high degree of democratic accountability. In the case of non-renewable resources that generate rather low rents, such as common types of rock from quarries, private ownership can be perfectly acceptable.
Turning to renewable resources, question 4 asks “Can the resource be effectively managed by dividing it into parcels?” Some resources, such as air, flowing water (surface as well as groundwater), and oceanic fisheries, simply cannot be subdivided, and so we have no choice but to treat them as common property if we are to protect them from degrading uses (the only other alternative is “open access,” i.e., nobody’s property). The challenge is to devise institutional mechanisms to enforce the rights of all residents to resources such as clean air and water, so that polluters and users must pay for their use and are prevented from over-exploiting a resource; pages 166-175 of my book are devoted to this issue, as is a wide range of literature on the commons (some of which is cited among the references below).
Concerning renewable resources that can be divided into parcels, question 5 asks “If the resource is to be managed efficiently, can it be divided into many units?” There are some kinds of (man-made) resources or services that can really only be divided into relatively few units, that are best divided on a territorial basis, with only one service provider in a given territory. These are called “natural monopolies” and include such things as electric utilities, water supply, sewage treatment, and garbage disposal. “Regardless of whether these facilities are owned by the public or private entities, there is a great danger of the monopolistic creation of scarcity, either through charging excessively high rates or not delivering adequate quality. In such cases, a third alternative would consist of ownership by the customers. The customers would have an interest in efficient service delivery but not in maximizing profits; their ownership would thus offer the opportunity to obtain the best of both worlds, of private and public ownership” (p. 163). Some customer-owned electric utilities do exist, but in general the concept of customer-ownership of natural monopolies remains underexplored, and a lot of institutional innovation is needed in this area.
The final question in the flowchart addresses renewable resources that can be divided into many units: “Can the smallest efficient management units be equitably managed if they are controlled as private property?” In some cases, this question has to be answered in the negative, particularly in the case of local natural resource commons – such things as grazing lands, freshwater or coastal fisheries, forests, irrigation facilities serving a large number of farmers, local or regional groundwater sources shared by a large number of users. If a small number of users get to control these resources as private property, the others are left with nothing, which is inequitable; if no-one has property rights, there may be a scramble for resources where the one who uses them up fastest “wins” – for a very short time. The equivalent of customer-owned utilities in this context is common property of all the users (a commons in the traditional sense of that term), and in many cases commons of this type have sustainably managed their resources for centuries. It is important to strengthen such commons so that they can again, or sometimes for the first time ever, do their job of sustainably and equitably managing local resources. A similar strategy to make businesses more equitable is to make all or most of the workers co-owners of the business, i.e., to create worker cooperatives, in order to overcome the contradiction between employers and workers.
Finally, some renewable resources may be equitably owned under private property – for example, agricultural land may be owned by a multitude of small farmers each owning their own parcel of land. As long as land-ownership does not get concentrated in the hands of a few people, such an arrangement can be equitable. Small private businesses can also be under private ownership with little danger for social equity. Large businesses pose greater challenges, but if workers are able to effectively defend their interests through unions or other mechanisms (including the option of forming worker coops of their own or taking over the company if it fails), then private ownership of large companies can still be compatible with social equity. Personal property such as a house to live in and personal belongings also fit into this last category where private property is appropriate.
In combination, a reform of property rights along the lines suggested here would lead to more effective conservation of natural resources, while also ensuring greater social equity through various forms of shared ownership that distribute the benefits of the property among a larger number of people. The example of a factory might illustrate the results: “Factory owners or a workers’ cooperative would own a factory and the land it occupies, as well as the profits it generates. They would: respect everybody’s common property in clean air and water and ecosystems (and pay adequately for any pollution the factory causes); abide by the rules of common or state property institutions governing transportation and communication infrastructures (for example, by paying taxes or fees for their maintenance); acknowledge local or national-level common property in natural resources (and thus pay adequately for their extraction or use); recognize workers’ rights to a livelihood (paying adequate wages and attending to workplace safety); and refrain from claiming exclusive property rights in the knowledge required to produce the factory’s products” (p. 180).
As a final note, while reformed property rights are in my view an important and indeed essential part of an economy of abundance that assures environmental sustainability and social equity, they are not in themselves sufficient. Other chapters in my book discuss other changes that are needed in order to build up such an economy.
Key References on resource use
In-text citations were omitted in the above summary of the book chapter. Instead, the list below indicates the main sources used in writing the chapter.- Bakker, K. (2003), An Uncooperative Commodity: Privatizing Water in England and Wales (Oxford: Oxford University Press).
- Barnes, P. (2001), Who Owns the Sky? Our Common Assets and the Future of Capitalism (Washington, DC: Island Press).
- Bollier, D. (2003), Silent Theft: The Private Plunder of Our Common Wealth (New York: Routledge).
- Bromley, D., and Feeny, D. (eds) (1992), Making the Commons Work: Theory, Practice and Policy (San Francisco: ICS press).
- Brosius, J. P., Lowenhaupt Tsing, A., and Zerner, C. (eds) (2005), Communities and Conservation: Histories and Politics of Community-Based Natural Resource Management (Walnut #Creek, CA: Alta Mira Press).
- Feeny, D., Berkes, F., McCay, B., and Acheson, J. (1990), “The Tragedy of the Commons: Twenty-Two Years Later,” Human Ecology 18:1, 1-19.
- Gibson-Graham, J.-K. (2005), “Surplus Possibilities: Postdevelopment and Community Economies,“ Singapore Journal of Tropical Geography 26: 1, 4-26.
- Gibson-Graham, J.-K. (2006), A Postcapitalist Politics (Minneapolis: University of Minnesota Press).
- Gorelick, S. (1998). Small is Beautiful, Big is Subsidized: How our Taxes Contribute to Social and Environmental Breakdown (Darlington: International Society for Ecology & Culture).
- Gorz, A. (1989), Critique of Economic Reason (London: Verso).
- Lessig, L. (2001), The Future of Ideas: The Fate of the Commons in a Connected World (New York: Random House).
- May, C., and Sell, S. (2006). Intellectual Property Rights: A Critical History (Boulder, Colorado: Lynne Rienner Publishers)
- Ostrom, E. (1990), Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge: Cambridge University Press).
- Simms, A., Drury, J., Trathen, K., and Boyle, D. (2003), Limits to Property: The Failure of Restrictive Property Regimes in the Modern World (London: New Economics Foundation).
- Weiszäcker, E. U. Von, Young, O., and Finger, M. (eds) (2005), Limits to Privatization: How to Avoid too Much of a Good Thing: A Report to the Club of Rome (London: Earthscan).
- Williamson, T., Imbroscio, D., and Alperovitz, G. (2002), Making a Place for Community: Local Democracy in a Global Era (New York and London: Routledge).
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