System diagram of the vicious cycle of the Industrial Economy (red, top) and the virtuous cycle of the Natural Economy (green, bottom)
One of the things Ferananda Ibarra and Jeff Clearwater stress in their New Economy workshops is the importance of not framing the terms and concepts of this economy the same way the old Industrial Growth Economy is framed. It’s much like getting sucked into debating conservative or Orwellian terms like “right to life”, “entitlements” or “freedom” (as in “free” trade etc.) in the frames in which proponents of a particular worldview on these subjects argue from. Or trying to explain how to meditate using intellectual language. You’re at a disadvantage before you start.
I’m planning a workshop on the New Economy (also known variously as the Gift Economy, Leisure Economy or Natural Economy) this spring. First task on the agenda is to explain what an “economy” is, and hence the difference between the current Industrial Growth Economy and the New Economy that will emerge when the Industrial Growth Economy collapses. Complicating matters is that the New Economy already exists in some ways and places, and the Industrial Growth Economy is likely to fall apart slowly, so the two will co-exist for at least the next few decades.
So my first task is to create a new ‘frame’ to explain the New Economy, a ‘skin’ that it naturally fits within, instead of trying to explain it in terms of the Industrial Growth Economy’s vocabulary and core concepts. This will also help me explain (a subject for a future article) what community currencies are and why they’re beneficial and will soon be essential.
The very word ‘economy’ has come to mean something very different from its original meaning. Its etymological meaning is “stewardship of the village or household”, and that’s what it meant until the 17th century, when industrial society began using the word as a shortened form of “political economy”, to mean “governance of the wealth and resources of a region or nation”. The industrial growth economy pushed the definition even further, so that the economy became about the means to increase wealth and resources (i.e. perpetual growth) and about its allocation and distribution (who gets what wealth and resources for what purposes). Neoclassical ‘capitalist’ (political-) economists believe the ‘market’ (i.e. those who have wealth and power) should make decisions about allocation and distribution of wealth and resources. Their policies have inevitably led to ever-greater concentration of wealth and resources (those that have, can get more; those without continue to get none). Socialist (political-) economists believe government should intervene in decisions about allocation and distribution of wealth and resources, sufficiently to ensure reasonably equitable allocation and distribution. The power of money ensures that capitalist politicians (and corrupt politicians that can be bought) prevail in most nations.
So now, immersed in the newspeak of neoclassical economics, we take for granted that “free” (i.e. unregulated, easily corrupted) markets are the ‘best’ way to allocate and distribute wealth and resources, that ‘private’ ownership and ‘enclosure’ (legally preventing others from accessing or using wealth and resources that used to be part of the Commons) are in everyone’s best interest, and are inalienable ‘rights’, and that ‘economic growth’ (i.e. perpetual, exponential increases in the use of resources, production of goods and creation of ‘wealth’) is inherently good for all, or at least for all humans.
To try to explain the New Economy to people who have accepted these (recent) ‘economic’ developments as the way things always have been, are and must be in a ‘democratic’ world, is immensely difficult. It is hard, when you’ve never known anything else, to conceive of a world without centralized ‘market-based’ economic decision-making, without (fiat currency) money, without ‘private’ property, and without debts. Depending on your worldview, such an economic world probably seems either anarchic (and dangerous) or utopian (and naive). No wonder discussion of the New Economy has so many people rolling their eyes.
The first thing we have to explain is that the Industrial Growth Economy that began in the 17th century and is now global in reach (and in political, philosophical and, some would say, religious acceptance) is a modern aberration, not the historical norm in human societies, and that most human cultures throughout history and across the world would find our acceptance of the Industrial Growth Economy unfathomable and pathological. What we’re talking about when we talk about the New Economy is, essentially, the economy (in its original meaning) of the vast majority of human cultures throughout history.
To explain this, we have to ‘reframe’ the terms and concepts of the Industrial Growth Economy into a New Economy framework.
Such a framework has no place (or equivalents) for some of the accepted and essential concepts of the Industrial Growth Economy: (personal or corporate) assets, wealth, capital and property, debts (liabilities), revenues and income, expenses, customers, suppliers, financing, marketing, and work. Instead, this framework is based on the concepts of the Commons, sufficiency, sustainability, well-being, stewardship and generosity.
There is considerable evidence that most indigenous peoples had no need for money, and consensual exchange between tribes (although such exchanges were apparently rare, since tribes were economically self-sufficient and often distrustful or belligerent) were not money-denominated or barter transactions, but rather arose from generosity and as a gesture of welcome. While there is much controversy about the degree to which indigenous peoples in various parts of the world recognized individual property rights, it is doubtful that they recognized them to the extent of modern property ‘ownership’, carrying with it the unrestricted right to sell, use exclusively, and protect (fence off, defend with arms) that we accept today.
Most indigenous tribes, from what I can see in my research, had established territories and a buffer zone between their territories and those of neighbouring tribes. These territories were Commons, not individually owned but stewarded collectively by the members of the tribe for the benefit of all members, to provide sufficient resources and well-being for all in a sustainable (ecological) way. This is an evolutionary success strategy in both human and non-human animal populations, one that our modern culture has forgotten.
Their ‘economies’, inseparable parts of their cultures, were simple: Steward and harvest enough, varied food, medicines and other resources for all members of the tribe to live comfortably even through periods of bad weather and poor growing conditions. Leave the land as you found it. Respect, even revere, the other creatures that play essential roles in the balance of the ecosystem and the food cycle. Don’t take what you don’t need. Live within your means. There was no ‘work’ in these societies, and the responsibilities of stewardship and harvesting generally took no more than an hour per day, leaving the rest of the day for leisure and self-invented recreation. (To be fair, this became less true the further the tribe migrated from the rich rainforest whence the human species first arose.)
It is hard to imagine transplanting such an economy to our modern, globalized culture. We no longer have identifiable ‘tribes’, communities or boundaries. We are not at all self-sufficient, and our massively swollen populations depend utterly on the theft (from the poor, from struggling nations, from our desolated natural environments and from future generations) and importation of huge quantities of complicated manufactured goods and raw materials, and on a fragile economy of just-in-time production and delivery that leaves no room for error or disaster, natural or man-made. The Industrial Growth Economy depends on the wage slavery of all, working at paid and unpaid jobs to eke out just enough to live an unhealthy, violent, fiercely competitive, endlessly stressful life.
Yet the New Economy already co-exists, uneasily, with the dying Industrial Growth Economy it will eventually replace. When we look after each other’s children, when we engage in philanthropy or volunteer our time, when we buy and trade at local community markets, when we share our tools, our knowledge (including expert scientific knowledge among peers), our ideas (online and at community events), our couches, our potluck meals and our files (Open Source), or when we donate used clothing and goods, we are creating and supporting the New Economy. In the process we are at war with wealthy, corrupt corporatists and privatizers and ‘enclosers’ using their media and lawyer mouthpieces to propagandize and threaten us so they can hoard and transfer yet more resources and scarce financial wealth from the poor to the rich.
This New Economy is occurring because, for an increasing number of people, the Industrial Growth Economy is now priced out of reach. The old economy increasingly depends on the rich, and corporations that receive billions in taxpayer subsidies through extortion, graft, bribery and theft, buying more and more stuff from each other, while most citizens can only participate at the marginal Wal-Mart level. Change in human societies generally occurs only when there is no choice but to change, and for the poor and disappearing middle class that time has come, and the New Economy is taking over. Those now living increasingly in the New Economy realize that record Dow Jones market performance is not a sign of economic health, but of the inequality of wealth and the volume of over-priced trade among the rich, their lackeys and apologists and addicted dependents. They realize that real rates of inflation and unemployment are 2-3 times the ‘official’ political rates, and that they will never decline, because the Industrial Growth Economy offers no solution for either problem.
And it is just beginning. Look at your monthly expenditures and you will probably discover that most of your money (rent, financial and consumer purchases) continues to support the Industrial Growth Economy. But as the housing market collapses, as governments run out of money to pay for financial corporation bailouts and subsidies and the big financial institutions and subsidized corporations collapse, as oil costs and climate change events make massive movement of goods uneconomic and import/export markets seize up, driving large centralized corporations out of business, you will find, slowly but surely, that you are more and more a part of the transition to the New Economy.
What will that New Economy look like, once the transition is substantially complete in a few decades? Here’s what I foresee:
- As growth- and debt-dependent fiat currencies collapse, we will try many alternative standards for exchange (gold, barter etc.), but none of them will work. We will start giving what we have, beyond our personal needs, away to those who need it, without charge, not because we are generous but because there will be no viable currency to use instead of the collapsed currencies. We will reluctantly trust that, by doing so, we will receive enough of the generosity of others to compensate us for our own generosity and will end up with all we need for a comfortable, healthy life. At first, this will seem hopeless and naive. But slowly but surely we will discover that it works, especially among local, coherent communities whose members we know and (perhaps reluctantly at first) come to care about.
- In part because of our doubts about whether such an economy can work, we will instinctively devote much more time to building local communities. There will be no formula for doing this, no ideal community size or location. Pre-existing wealth will not be a success factor, but collective practical knowledge and skills will, as will the health of the local land and ecosystems. We will have time for this community building because we will, with few exceptions, no longer have jobs in the Industrial Growth Economy.
- As we rediscover the value of community, we will rediscover our own gifts and passions and the community’s (many, many) now-unmet needs. We will relearn quickly and joyfully how to make a living for ourselves, in what I have called “Natural Enterprises”, meeting those needs in partnerships and in cooperatives with other community members with complementary knowledge and skills and shared passions. We will develop a deep understanding of what our community needs, so there will be no waste, no losses, no need for ‘marketing’, no risk of failure. We will give away what we produce because we can, because we know it’s needed, and because we care. And we will receive what we need from others in the community.
- We will learn to live with much less, and discover to our astonishment that we are happier than when we had much more ‘wealth’ (and much more debt offsetting it). We will discover the freedom of self-sufficiency, not having to be dependent on big corporations for jobs, on lawyers and bankers for money, on ‘professional’ entertainers and commercial media for fun, on lawyers for compensation for corporatist abuses, on medical professionals and drugs for our well-being, on schools for learning, on our cars to get us everywhere we must be, on stock market growth for financial security, or on the propagandizing media for information.
- We will find ourselves with much more leisure time than we ever imagined. It will change our relationship with time, and with each other, and our priorities of what is important in the world.
- There will be much hardship during the transition, but we will be so busy coping with it, and being astonished at the joys and freedoms that this new economy brings us, that we will not feel as if we are living in times of hardship. Nevertheless, in the process of relearning to look after our own nutrition, health and well-being, many people will die from serious illnesses and injuries who might have lived a while longer (with variable quality of life) under the old Industrial Growth Economy. It will take us a while to wean ourselves off the addictions of the old economy: sugars, salt, corn products, fats, alcohol, drugs, antibiotics and other overused chemicals. In the meantime our lives will remain malnourished and unhealthy and we will suffer accordingly. Birth rates will plummet and death rates rise moderately, until our population begins a rapid decline that will, in concert with the final collapse of the Industrial Growth Economy, eliminate remaining resource scarcities. We will learn to eat and act healthier because in the New Economy there will be no alternative. And our population will drop to each community’s natural carrying capacity because there will be no alternative.
Our tribal natures, encoded for a million years in our DNA, will probably re-emerge. But just as in times of crisis humans tend to pull together and help each other, my guess is that this new tribalism will take a while to reassert itself — possibly until population has dropped enough to provide space between communities and communities have developed a strong sense of loyalty and identity.
Or possibly not. Inter-tribal warfare predates the Industrial Growth Economy by millennia, and we can only speculate on whether it was rare or endemic, and what precipitated it. There are arguments that we have inherited the belligerent genes of our chimpanzee cousins rather than the more peaceful ones of our other cousins, the bonobos, and that we slaughtered our hominid Neanderthal cousins to extinction long before the discovery of agriculture and the possibility of ‘permanent’ settlement. So while we might make the difficult transition to the New Economy, our ability to transition to a new, peaceful political society is a different issue. There is some evidence that human societies have worked to create nations in part precisely for the purpose of reducing inter-tribal strife. Yet those nations have yielded both inter-national and internal wars that dwarf in scale and ferocity the battles between pre-civilization tribes.
That’s the paradox we’re going to face in the coming decades. There’s lots of evidence that humans, prior to the Industrial Growth Economy, were capable of evolving economies of abundance, peace and leisure within tribal groups. But there is little evidence that we have been successful at evolving political systems and cultures that allow these thriving tribes to co-exist with each other.
That shouldn’t stop us from working to enable a transition to the New Economy, community by community around the world, and to help undermine and end the Industrial Growth Economy that is desolating our world and has imprisoned us all. But it should give us pause to wonder whether this is enough, and whether, despite our economic ingenuity and evolutionary capacity, our fierce political nature will yet get the better of us, and undo us all.
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Dave, I have come to the realization that there are (at least?) three layers to this picture: the Mythos, the Logos and Nomos; the Why, the What and the How. The economy, as we are accustomed to it, exists in the Nomos layer of management and control, colonization and exploitation, contract and property, resource and commodity, goal and objective, linear time and progress, etc. I would argue that these have meaning only to a species such as ours, that acts as if it were separate from and in control of the complex natural, cultural, social systems in which actually we are inextricably, inalienably embedded. I think the term “gift economy” is actually a misnomer, sometimes used to trick us into thinking that the principles, values and dynamics of the gift are empowered by the Nomos layer of management and control. This is the source of some people’s legitimate fear of generosity: that giving is or might be politically enforced. However, gift is instead a principle of ecology, which exists in the underlying Logos layer of learning and understanding, relating and adapting, seeking and finding niches, cyclical time and emergence, etc. I prefer to speak instead of “gift ecology,” or better yet, the “ecology of generosity.” The power of the Nomos layer depends for its existence and even its possibility upon the health of the Logos layer, even as it suppresses, weakens and impoverishes the relationships that form and inform the latter. I think the “New Economy” is actually not economy, but rather ecology, and has always existed, although it is presently suppressed and impoverished by the growth-imperative economy. There is a third layer upon which both the Nomos and the Logos depend for their meaning: the Mythos. This is the layer of myth and cosmology, vision and story, principles and values, infinite-now time and timelessness, etc. From this layer, we can understand that gift is an element of the story of abundance, which flows inexhaustibly through everything. I’m not quite sure in which layer(s) to place stewardship; depending on our particular mythology, I think it may appear in any or all layers. I think stewardship exists alongside sovereignty, which I understand as responsibility for our identity (individually and collectively) and for the integrity of the complex systems that we are.
Another great piece Dave. Thanks for sharing.
I live in a metropolitan area, and I don’t think we could make the full transition to a New Economy in several decades. We are not nearly self-sufficient in producing food, clothing, and perhaps shelter; we import huge quantities of such necessities. How will we maintain that trade while the Industrial Growth Economy fails? I imagine it will be primarily through wage slavery (or more extreme forms of servitude), supplying cheaper and cheaper labor in the face of decreasing demand for manufactured goods. (The Dot Com bust and the Crash of 2008 will seem like little blips in comparison to the deepening depression.) Gifting of goods may increase, but the total supply we can afford will decrease faster than the population. Any sense of abundance will have to wait until the population falls way down to the carrying capacity of the local region, when we no longer must rely upon imports from other regions. Meanwhile there will be pressure to expand our “local” region to include as many “resources” (especially productive land) as possible, through ownership arrangements backed by force of arms. As people see their material futures diminishing, blame will be spread abroad and at home, and “strong men” will find mass support. The economy will certainly transform, but I think we’ll have to wait a long time for homeostasis and a chance for peace.
Awesome Dave – I so love following your thought and words and work – Thanks for the mention – and I’m so delighted that you are developing workshops! YES! We will look to be promoting your work – so do keep us in the loop – love to sit in that audience or be a fly on the wall.
This article is so right on! a tour de force. Will link to my blog and promote you in any way we can. Your generosity and gifting to us and the world ring true and the reverberations will go far.
Look forward to our next in person visit – Ferananda will be moving up to to live with me soon and I so look forward to sharing more and advancing our common work.
Great article! I always love your diagrams! Thank you for sharing.
Your article is indeed a tour de force, but I have to ask, are you not leaving something out of the conversation? America has always been about the search for community as well as an exercise in all the excesses that selfishness and greed can generate. But isn’t the question one of focus and perspective? As you say, “framing the argument” in terms that are already loaded with preconceptions creates a skewed vision of reality. Do we not need a more accurate model or a different perspective on how we and the natural world really works?
I would respectfully suggest you look at David Korten’s analysis of the myths that have driven us (http://www.yesmagazine.org/happiness/religion-science-and-spirit-a-sacred-story-for-our-time). I think you are essentially saying the same things about where we are as a human society.And the futility of continuing the industrial model divorced from a concept of “the commons”.
Perhaps what is needed is a valence change in our understanding of our true relationship to each other and to our brother and sister species on the planet. In addition to the battle of words, there is a battle for a true understanding of what our science has demonstrated about the earth and how it works. The resistence on the right from fundamentalists is because a strictly scientific analysis or orientation leaves any sense of what is holy out of the equation. Until we can align what we know scientifically with a new reality (myth) that includes a sense of the divinity of life and ourselves and the planet, those folks of wealth who are corrupt (deluded about their true relationship to the Planet) will continue to rule by keeping the cauldron bubbling and everyone busy arguing. Divide and Conquer has been the standard ploy since the Romans. As long as people allow all the petty arguments to keep them divided and as long as we refrain from embracing a cohesive and unifying new ethic which addresses All of the variables including a concept of the essentially spiritual and holy nature of the Planet, we will be allowing a deluded few to define the debate and to continue policies which are antequated and inaccurate. But religion and the idea of God have been used by the cynical and self-absorbed to manipulate the masses throughout history. But that does not change the reality of God. If we do not acknowledge the essentially holy nature of our amazing Planet and also ourselves as part of the tapestry of miracle life, we leave out the very keystone of all the arguments we are trying to make. Choose your terms carefully and frame your argument well, but do not neglect the very thing that gives your ideas truth and life.
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