This is a post from about 5 weeks ago, before the Occupy Wall Street protest started. It was lost on a server transfer so I’m reloading it now. It makes interesting reading when thinking about the Occupy movement and what its core concerns are. I think the post below encapsulates those concerns, namely: measurement, institutions and values. Our current system externalises as many costs as possible, has institutions cuorrupted by money, and has lost any sense of meaningful values, other than monetary gain. Not only has our economy become monetised, so has our society. In terms of how values have been set aside and how they may be recovered, this piece by Chris Hedges is revealing. On to the original post.

Economics is quite popular these days. It’s not so much the traditional discipline, itself, that is the focus, but a constant flagellation of its representation. Simply put, it’s not delivering the goods. Many trained economists would argue that economics is not the problem but the solution. To paraphrase “it’s the politicians, stupid!”.

The word “economics” also seem to be creeping into the title of every other book, blog or column. “The Economics of…….sex, drugs, football, hairdressing (i made that one up) and so on. The message is clear. People want to know how the world works and seek to understand it through the lens of economics, which is, as I’m repeatedly informed, only about the allocation of resources. We’ve also had Freakonomics followed up by SuperFreakonomics, just in case you didn’t get it the first time.

Diane Coyle is a serial offender is this area with 2 recent books called “Sex, Drugs and Economics” and “The Economics of Enough” (I would recommend both and happy to lend them to anyone local). These books do help us to make more sense of the way our economy works and, therefore, how our society is structured. Economics describes how people transact with each other and for what reasons. Getting into the nitty gritty of personal life seems an odd place for economics to be but research continues to show that how we make decisions is very much dependent on variables which can, to some extent, be measured and quantified. Put bluntly, incentives and pay offs do matter (unless you have no impulse control at all – read male teenagers – but this can be controlled and measured as well).

“The Economics of Enough” is a well written account of  the economic challenges facing us and how we can move forward to create more even prosperity and happiness. Diane outlines what is importance to people: happiness, nature, posterity, fairness and trust. She then looks at where the problems are: our measurement system, our values and our institutions. She then finishes off with a “Manifesto of Enough”, a ten point programme for shifting to a world of “Enough”. It’s all very useful and accurate in its conception. What I like about the book is the realisation that our values have become warped (seen readily in the fiasco of the Global Financial Crisis and its response) and our institutions have become corrupted by those same values. Changing that will require some serious reform and will face major resistance by the vested interests happy with the current situation.

Slipping nicely alongside this book is a new film called “The Economics of Happiness“, which I screened last night in Christchurch to an audience of 115 people, including 2 local MPs. This film, by Helena Norberg-Hodge, Steven Gorelick and John Page, visits themes raised by Diane in her book, but it does so in a more poetic fashion. Drawing on many years research and living in Ladakh, Helena pulls together a picture of a severely fractured global population struggling to maintain its humanity in the face of the onslaught of globalisation. The film dismantles many myths around the benefits of globalisation, describing it is ultimately a process designed for major transnational corporations to increase profits at the expense of people and planet. It’s naturally tends towards the polemical but it’s hard to dispute the evidence. Median incomes do not tell us the whole story. The constant externalisation of environmental and social costs produce a massive hidden subsidy to the global business network. The global institutions (IMF, WTO and World Bank) support and embed this process and remove sovereignty wherever possible so that business faces no impediment. We don’t pay the true costs but some one else picks up the tab.

This links back to Diane’s discussion around measurement. Economics can only be of use if the variables, that are plugged into the models, have integrity. As both Diane and Helena note, the value of integrity is missing. The pressure of profit takes few prisoners and if a cost can be ignored, it will be. Whilst Diane is still in favour of economic growth, she recognises it must come within a properly constructed framework. Helena goes further in promoting a more localized world, where we are in touch with, and close to, our processes and means of production. This approach brings the connection back into our lives and this, ultimately, is the root of the happiness we are looking for.

The clear message from these works (and others like it) is clear. There is a desire for a new approach to our economy and there is evidence to support it. The various manifestos, blueprints and proposals for reform are starting to merge in content and structure. Slowly but surely a solid platform for re-envisaging our society is coming together and a renaissance in economics may not be far away.

I was asked recently to give a talk to a small but distinguished group on “how to survive the global financial and ecological crises”. Easy uh! Well you have to start somewhere and have a rough idea of where you’re headed. For me, the more difficult the situation gets, the simpler the solution becomes. Essentially, changes that once would have been rejected flat out as unworkable, implausible and idealistic, are suddenly deemed more acceptable.

We are all conditioned to think and live within a certain paradigm or system. For many of us (especially readers of this blog), it’s considered to be democratic, liberal capitalism. More realistically it’s a neo-liberal system where free markets dominate at the expense of any concept of the public good. Markets will solve any problem. Actually that’s a truism. It’s the outcome that is often of dubious merit.

When I look at the Occupy Movement, I see a protest against this system, a system where people are secondary to profit, and the public is considered to be a wasteful and unnecessary construct. As John Key noted of the Christchurch post-EQNZ insurance problem, eventually the markets will sort it out. Again they will but there may not be any insurance for anyone for a while. This mirrors the government’s approach to managing our prisons: simply contract it out to private operators, who will manage it more “efficiently”. The belief in the idea of the “public” is slowly being eaten away by this neo-liberal fantasy that for profit organisations will always achieve the best outcome.

It will be interesting to see how this protest develops but it feels like it has legs. The outrage is fair and justified: the corruption at the heart of the political-financial system; the gaping inequalities; the disenfranchisement and the feeling that the whole system is built on sand. Over time the picture will be clearer and the protests may coalesce around a series of concrete demand but the consultative and participatory process is a fascinating starting point. Participatory, as opposed to representative, democracy is messy, frustrating, turgid, slow, tedious and annoying but that’s the whole point. It is built on allowing all people a voice and on allowing a process to develop. It is a far cry from the many bills rammed through under “urgency” in the NZ Parliament, with little debate or scrutiny for even our partially elected representatives.

I wish them well in their endeavour. In the meantime, I have three simple proposals to offer, as a starting point:

1) Monetary Dialysis - No more public debt; new public money; raise limits on bank credit.

2) Trucost pricing - Start pricing ecosystem goods and services.

3) Participatory Universal Income - Basic Income for all those participating in society; rebalanced tax system; provision of key public goods.

I focused on the first 2 ideas in my presentation, the outline of which is below. By repricing our economic system, both in the cost of goods and services, as well as the creation and volume of money, we will immediately realign it towards a path of lower volume but higher quality consumption. We will reduce the burden of compound interest, this alleviating the constant pressure to produce and consume. The UPI will restore the public good in reflecting all contributions to society and laying the foundations for a more stable, harmonious and prosperous world. Far fetched? Not really, when you think about it for a bit. My turn is over for now. Who is next in the stack?

30 years on from the ’79 Revolution comes an awakening in Iran. And it bears similarities to Tiananmen, some 20 years ago, in the wave of uprising, despair, hope…a faint whiff of momentary freedom to express, dissent and simply let out some long building frustration.

As with all decent revolutions students are to the forefront and are certainly bearing the brunt of reprisals. And those reprisals will come thick and fast, hard and long, brutal and deadly. That’s just the way it is.

The Iranian authorities are somewhat stunned looking like they have been slapped by a wet fish.

“Where is my vote” people ask. Down the back of the sofa in Ahmadinejad’s office probably but the reality is that we don’t know that answer. But certainly the polling in advance of the election suggests the actual result might be rather different to the official one.

This is a big story and like Tiananmen it has captured the interest and hearts of many around the world. The connected generation has been pounding keyboards collating and disseminating information through social media with Twitter, especially, providing an outlet for up to the minute street reports.

Journalism schools will be setting 140 word max reports as part of their testing soon.

@persiankiwi has been a star with 24,000 hasitly assembled followers. Streaming news just took on new meaning. Instead of having the same story respooled and playing non-stop for 24 hours, we are getting a blow by blow account of what’s happening on the ground. It will be interesting to see how traditional media outlets can respond to this.

Given that most of them have been expelled they may not be much help. It suggests that any concerned citizen in any given country on any given day can provide a source of news. You just need a phone and away you go.

Imagine if we’d had mobile phones and Twitter in Tiananmen Sqaure. I wonder what difference it would have made to how China handled the situation.

What interests me most about this is that its an internal action. No regime change here…no hordes of US soldiers and targeted bombs..no neo-con fantasy of parachuted democracy. It’s the Iranian people trying to have their say. That is such a difference to its poor neighbours to the east and west who are mired in US inspired conflict.

In a way the outcome in Iran right now isn’t that important. It could end up really ugly or not. It’s hard to tell but the wheels have been set in motion. The world is watching and supportive of the process of peaceful demonstration.

There may be punishment, deaths, torture but realistically the authorities have limits in that area given the widespread dissent.

As Gandhi once said of British authorities trying to crack down on peaceful protest:

“But how many can be given such punishment? Try and calculate how much time it will take of Britishers to hang 300 million of persons”

I always remember this day and this event. Mainly because it screwed up my plans to cross China and get the Trans Siberian railway home after 20 months backpacking. As it was my girfriend and I were in Sust the last village before the Khunjerab Pass that links Pakistan with China and is the highest order crossing the world. It was a glorious spot with the towering Karakorams in the distance. Anyway the plan was set until we met this English bloke walking down the road to us. He’d just crossed over the border which had been shut and told us what had happened.

Remember this was BG (before google!) and before email even. News came via GPO Poste Restante and the travellers grapevine. So that was the end of that idea. It’s actually the closest I’ve ever been to China which is still on my list on places to visit.

But a lot has changed since that fateful day in Tiananmen Square and yet much has remained the same. The Chinese authorities began their media clampdown many months ago by suspending YouTube and more recently by blocking Twitter (what a compliment!) and Bing (Crosby??). As well as the usual quiet word in the ear of any one thinking about protesting or even acknowledging the anniversary.

So fear still rules. But fear of what exactly? Many Chinese are pretty happy with the way their economy has grown and how the modern world has been welcomed in. Sure not everyone has benefitted but there is a certain pride within the nation that much has been accomplished in recent times. Times like this are a real test for an authoritarian society. Dissent cannot be tolerated at any level.

But truth is a slippery ball and when one looks across to Hong Kong, where over 100,00 people gathered to mark the occasion, one can see that the attempt to censor and punish any kind of inquiry or examination is really a waste of time. People know.

China is a unique country with a long history and strong culture. Change comes slowly but hopefully those in charge will come to see the futility of repressing protest completely and censoring mass media. One thing though is for sure:

Tank Man is an enduring image of the 20th Century and no amount of propaganda or control can ever change that.