12 February 2011

Preserving Nature - Does It Condemn the Poor to Poverty?

Reposted in full from The Ecologist, 14 May 2010

'Oxford Economics Professor and former head of Development Research at the World Bank, Paul Collier on reconciling romantic environmentalism and mainstream economics to help poor countries

Matilda Lee: How do environmentalists and economists reconcile vastly differing views about the value of nature?

Paul Collier: The distinction is whether our duty to nature is preservation or stewardship. The romantic wing of environmentalism is uncomfortable with modern life. This view is utterly antipathetic to the fight against global poverty. Romantic environmentalists think the modern economy is the problem. It's not, it's the solution. The challenge is to take it to the parts it hasn't reached.

At the same time, nature is special in the sense that we've got fewer rights over how we use natural assets than over how we use man-made assets. This distinction has not been made so far in economics. The ethical framework that economists use is utilitarianism, which I think is very ill equipped to deal with the problem.

I'm trying to build a simple ethics of nature - different from the conventional economic ethics of the future and also different from the romantic environmentalist position.

What economics has missed - and what I think environmentalists spot immediately - is that natural assets and liabilities are different from other assets and liabilities. What's different is our limited rights over them.

ML: How do you build an ethics of nature in economics?

PC: I'm trying to insert the concept of rights into economics. The future has rights over natural assets. Utilitarianism is very uncomfortable with rights; it's focused on how much happiness I get from consuming in the present - which means that the idea of the future climate is seen as a bit of a nuisance.

If you take a rights-based view, we don't have the right to plunder our natural assets and not leave anything to the future or plunder our natural liabilities and leave a huge load for the future.

The question is: what is the nature of these rights? This depends upon how much value is created when we burn down nature.

Sometimes, in poor societies, it is very important to burn down nature and convert it into more productive assets and hand these on. This is the ethical imperative - that's what stewardship is. Using natural assets productively, creating more value and passing them on is how we will reduce poverty.

But in other cases, the same thought experiment will come up with a different answer - the future may say you are proposing to leave us a nasty climate and we will be awash in man-made assets. The answer is - once you've done that thought experiment - depending on which natural assets, at that stage you have to be pragmatic. There is no substitute for saying, well, what can we convert these natural assets into, and would that be more or less valuable to the future than the natural assets themselves?

Once you come from a doctrinal, ideological position that ‘nature has to be preserved', it will condemn poor societies to poverty.

ML: Over the next ten to 20 years, you argue, by hook or by crook the natural assets in poor countries that are still yet undiscovered will be found and exploited. Wouldn't the future be better off leaving these natural assets untouched?

PC: The amount of money that could come into poor countries is staggering - it dwarfs aid and everything else. One of my nightmares is the idea that the world uses its power over these poor countries to inflict on them solutions that we are not prepared to take ourselves.

If future carbon is going to be a problem then the right answer is to reduce our emissions, but we should do that by taxing the activities which use carbon. That would make coal much less valuable. A lot of the coal in low-income countries would be left in the ground. Oil, no - it's too valuable.

ML: In your book The Plundered Planet, you paint a very grim picture of how the extractive industry functions - with more power, knowledge and resources than most poor country governments, its negotiations over resource rights are very unfair. If these countries are going to exploit these natural assets, how do you propose to ensure the financial benefits go to the countries themselves?

PC: Despite what the Guardian may say, I'm not a utilitarian and I'm not in favour of the extractive industries plundering countries. What I'm trying to advocate is how these poor societies can capture the value of these assets for themselves, and use them well.

Resource extraction companies know the true value of these things much better than governments. The attraction of auctions is that, through competition and bidding, they reveal value.

In the UK, the auction for mobile phone rights earned the Government £20 billion when the Treasury had initially valued the rights as £2 billion.

I also favour aid donations being used to perform geological surveys and prospect for resources. This idea was floated 30-40 years ago in the World Bank and do you know what killed it? A mixture of two interest groups - one the romantic environmentalists and the other the Reagan administration, because of all its links to extractive companies that didn't want to lose these revenues. It was a worst case scenario.

ML: You have an innovative idea of assigning the rights to fish in international waters to the United Nations - do you have any support for this view?

PC: From the UN, sure. 'Think of a better idea' is my challenge. We need to create what economists call rents - it's the intrinsic value of that natural asset. Policing the oceans is not feasible, but you could impose a tax point on the docks at the wholesale fish market, where the large amounts of fish are priced and sold. That would discourage consumption and you could fine tune the tax according to how threatened the fish is, and generate revenues/rents. These could pay for the UN's World Food Program.

ML: You talk about reaching a critical mass of ordinary citizens realising the importance of nature. What are you asking people to do?

PC: One big hole in the governance of natural assets is in the countries of the bottom billion - where governance is weak and there is an intense pressure on governments.

In Ghana, which discovered oil in 2006, and which is a democratic society with decent economic policies, they didn't have a critical mass of understanding of the decision chain and harnessing assets for the benefit of society - so they blew it. Within three years they managed to spend 2/3 of the entire value of the oil, before it was even out of the ground. The oil was plundered by the present generation.

Then we need a critical mass in the more developed countries on transnational issues. It's easy for Russia and Norway to reach a deal on the Arctic, because what they agreed to do is both plunder what is international territory. Why should the countries that border on the Arctic just be able to extend their territories?'

11 February 2011

Could the Money System Be the Basis of a Sufficiency Economy?

Reposted in full from Sharing the World's Resources, 7 October 2010 (originally published in Real World Economics Review; see link for article references)

'In Issue 53 of the real-world economics review Richard Smith called for ‘a practical, workable post-capitalist ecological economy, an economy by the people, for the people, that is geared to production for need, not for profit’ (2010:42). He suggests economic theorists should ‘go back to the drawing board’ to re-frame how such an economy would operate. In my book The Future of Money I have explored whether the money system could be a possible mechanism for achieving a socially just, democratically administered, sufficiency economy (2010a). A sufficiency economy would be one oriented to meeting people’s material needs to the minimum necessary to enable a high quality of life for all. My case for advocating the money system is that as a socially constructed intangible economic form it is most immediately amenable to collective social action. As Geoffrey Ingham has argued ‘money...is the most powerful of the social technologies’ (2004: 202). A major proviso is that even radial reform of the money system will not eliminate the private ownership and control of tangible economic resources, a key element of the capitalist economy, but it could provide a stepping stone to radical social change.

Those arguing for an ecologically sustainable economy point to the destructive nature of the capitalist market (Scott Cato 2006). This is mainly in terms of externalities and the drive for growth (Scott Cato 2009). Value is attributed to those activities and resources that can immediately access and generate money. Resources not already in private ownership are treated as free goods, and market prices do not take account of long term damage to the environment. The capitalist financial system also drives growth as the search for profits drives competition and expansion together with the reliance on debt-based bank credit to fund the monetary circuit (Rossi 2007, Parguez & Seccareccia 2000). Ecofeminist political economy adds to the ecological critique by pointing out that much of women’s work and lives is excluded from the money-based economy (Mellor 2010b). The market economy and the public economy both frame their activities in money terms, externalising unpaid community and domestic activities. The real economy in ecological and feminist terms would embrace all aspects of the provisioning conditions for human existence to include unpaid work and environmental resources , damage and resilience.

So why see money as the key to developing a sufficiency economy? It is true that money has had a bad press. Love of it is the root of all evil. It commodifies and alienates human relationships. It is the mechanism of the extraction of profit and capital accumulation. At the same time it is arguably a symbol of social trust in that people honour it in their dealings, and it can be, potentially if not actually, an instrument of social policy. What is even more important is the evidence, particularly in the recent financial crisis, that the only mechanism that stands behind money systems is the state as representing the collective economic resilience of the population. While the state can create and circulate money ex nihilo, it still relies on social trust and acknowledgement of that money to enable it to circulate, its power to tax and the collective activities of the people in accepting that money as a reward for labour.

So why not do away with money?

A range of greens, social transformers and social libertarians have made the case for abolishing or reforming national systems of money (Large 2010 Greco 2009, Bennholdt -Thomsen et al 1999). Feminists have also debated long and hard about whether domestic work should receive a wage and often rejected it as crystallising the inequalities inherent in domestic labour. My case for not rejecting a national (or international) money system is that I do not see how complex societies can operate without a generalised mechanism of valuing human activities and fairly allocating goods, services and resources. This case is enforced by the fact that most examples put forward for how local economies would operate involve either localising the existing market system (e.g. farmers markets, craft fairs, etc.) or building new local economic systems based on some alternative means of accounting. In the later case there needs to be either a prior issue of local tokens (Ithaca Hours, Stroud Pounds, etc.) or a central system of recording the interchange of activities as in a LETS scheme (North 2009). What is notable about such local innovations is that it is the money/accounting system that creates the economic circuit, not the interchange of activities that produces an organic emergence of some form of represented value.

This will come as no surprise to social theorists of money. The most important aspect of money is not that it circulates to enable economic exchange, but that it has to be created and issued. This is often skated over in the conventional discussion of money in market systems. The commodity view of money sees it as emerging out of an original market that is assumed to be based on barter. One commodity is adopted as a medium of exchange to solve the problem of finding suitable mutual exchanges. A valuable, durable, divisible and portable commodity is chosen such as gold or silver. From this ‘metallist’ perspective, money is both natural and neutral. It is natural in that the value of money is assumed to relate back ultimately to the intrinsic value of the commodity, usually based on its scarcity or special qualities. It is neutral because commodity money only represents a prior value as between relative goods.

While the shift from barter to gold/silver, to paper representation is still told, the commodity theory of money has been extensively challenged. As Parguez & Seccareccia argue ‘the very notion of a commodity money is an illusion’ (2000:106).The opposing view is a social theory of money (Innes 1914/2004, Ingham 2004, Smithin 2009). This rejects the barter story, pointing out that money had a variety of early uses such as tribute, wergeld (injury payment) or temple money (offerings). It is also pointed out that money has appeared in many types of society and in many different forms. The emphasis on metal coinage in western economic thinking reflects the fact that in Europe coin emerged a thousand years before banking. However in historical terms the banking and accounting functions are thousands of years older than coinage. Even in the case of coin, the link with precious metal was tenuous as Mitchell Innes pointed out as early as 1913. Rarely was the nominal value of coins the same as the value of the metal of which it they were made (Innes 1913/2004). Given the varying amount of precious metal in coins, the only guarantee of the worth of the coin became the authority behind the minting. Far from being a precious commodity that had become readily accepted through trade as the barter theorists thought, money as coin has generally been issued by fiat, that is, issued and guaranteed by an authority, such as a powerful leader, an office-holder or a religious organisation. In fact, as Davies has argued, when coins were too closely associated with scarce precious metal, economic activities became restricted. Economies flourished where coins were plentiful, such that ‘long run trends in depression and prosperity correlate extremely well with the precious metal famine and surplus of the Middle Ages’ (Davies 2002:646). Even debasement of the coinage through reducing the precious metal content was not in itself a problem as the countries which experienced the greatest economic growth were those whose leaders had ‘indulged in the most severe debasement’ of their coinage’ (Davies 2002:647).

As Rossi argues, money cannot be a commodity because its value would need to be established using another standard of value such that ‘infinite recursivity makes this measurement logically impossible’ (2007:13). Money value is therefore much less certain than even an arbitrary measure such as an inch. Once an inch is chosen as a unit of measurement it stays constant whereas money as a unit of measurement can never be assumed to be constant no matter what it is made of. For Ingham money does not in itself embody a value, it measures relative values. He argues that the market could not exist without a means of establishing relative value and therefore money as a unit of measurement is ‘logically anterior and historically prior to market exchange’ (2004:25). Measuring value in economic exchange is much more important than the actual medium used to transfer value. Money should be seen not as a ‘thing’ but as a social form (2004:80) and the idea that there is some ‘invariant monetary standard’ is a ‘working fiction’ (2004:144). ‘Sound money’ is a product of society, not of nature. Money is something that people trust to maintain its value or be honoured in trade, while its actual value can vary. Effectively when we say people trust in money they are trusting in the organisations, society and authorities that create and circulate it, other people, traders, the banks and the state. Money, whatever its form, is a social construction not a natural form. However as a social form it represents power (Hutchinson, Mellor and Olsen 2002:211).

Power and the issue of money

Power is central to the issue and circulation of money. As Wray (2004), Ingham (2004) and others have pointed out, states or other monetary authorities have used their power to establish the circulation of money either as accounting records or as physical tokens such as clay tablets, tally sticks or coin. Money systems can also be established by consent as indicated earlier for local money systems, but establishment through power or authority has historically been the main mechanism. The state theory of money was set out by Georg Knapp in the early 1900s (1924). Central to his ideas was a link between the issue and circulation of token money and state taxation. Rather than demanding goods and services directly, states ‘buy’ goods and services issuing what is effectively an IOU while at the same time demanding tax payment in a form of money that it designates. As Wray points out, ‘what Knapp called the state money stage begins when the state chooses the unit of account and names the thing that it accepts in payment of obligation to itself - at the nominal value it assigns to the thing. The final step occurs when the state actually issues the money things it accepts’ (2004:243). Why should people give up their labour, goods or resources for a worthless accounting record, tablet, stick or coin? Because tax is demanded that must be paid by that same mechanism. As those people not directly subject to state ‘purchase’ also need to pay taxes, the money-tokens circulate more widely in the economy and become generally accepted. Taxation must also not reclaim all the IOU’s otherwise there would be no mechanism for general circulation. The state must therefore always be in deficit, an important lesson for today’s advocates of a balanced budget.

State money theorists point out that there is no artificial limit within a monetary system to how much money a state or political authority can issue, provided it doesn’t outstrip the capacity of the people to produce and circulate goods and services. There is no need for a state to contract any debt other than through the issue of its own IOUs. As Nersisyan and Wray argue in Issue 53 of the real-world economics review ‘there is no financial constraint on the ability of a sovereign nation to deficit spend’ (2010:123). Quite the contrary ‘every recession since World War II was preceded by a government surplus or a declining deficit-to-GDP ratio (2010:120). The problem is that the state role in the issue of money has been virtually obliterated in modern economies. Money has been privatised through the issue of money through banks as debt.

Debt-based bank issued money

Modern market economies do not rely on the state to initiate a monetary circuit, they create money endogenously within the market system through the issue of credit via the banking system. This is now so extensive that governments have become clients of the so-called ‘money markets’. This endogenous theory of money describes a monetary circuit where ‘the creation of money is essentially tied to bank credit’ (Rossi 2007:21). In what Rossi describes as the ‘monetary production economy’ (2007:32) bank deposits are created by firms ‘monetising’ their production costs’ since ‘ if there were no workers to remunerate bank deposits could not exist…as there would be no production at all and financial markets would be meaningless’ (Rossi 2007:34). The new money issued pays the cost of production. This is then repaid in the process of exchange and consumption, and the circle turns again.

The most important aspect of the shift to money issue through bank debt is that banks (like the state) create money ex nihilo. While it is widely assumed that banks issue multiples of deposits placed ‘on demand’, intermediating between savers and borrowers, this does not explain where the savers got their money from in the first place. Money must be issued before it is saved. As it is the bank, not the depositor, who creates the money, logically debt-based money issue must come before deposits are made. Even when debt issued money is lodged as a ‘new’ deposit there is no tangible link between deposits and loans. As Steve Keen argues, neo-classical theorists continue to theorise banking as a barter between savers and borrowers despite the fact that no matter how much the bank lends out, individual savers can still get their money back on demand (2001:289). As Galbraith observed, conventional theory would imply that money within the banking system could be in two places at once (1975:19).

Anyone who takes on debt is creating new money. In Galbraith’s well recorded words, ‘the process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent’ (1975:18-19). James Tobin has described bank issued money as “fountain pen money” (1963:408). The most important outcome of the dominance of bank issued money is that the supply of money is largely in private hands determined by commercial decisions, while the state retains responsibility for managing and supporting the system, as has become clear through the financial crisis. While the public collectively bears ultimate responsibility for the failures of the privatised money creation system, there is no direct public influence on the overall direction of how that finance is invested or used. As Chick points out, ‘money confers on those with authority to issue new money the power to pre-empt resources’ (1992:141).

For Smithin, money is a social relation that makes possible ‘both market exchange and the more extensive set of relationships known as capitalism’ (2009:59). Modern banking and the capacity of virtually unlimited creation of money through debt, has enabled capitalist expansion. For Ingham, ‘the essence of capitalism lies in the elastic creation of money by means of readily transferable debt’ (2004:108). Far from money representing prior market activities as the barter theorists claimed, it is the prior issuing of bank credit that is essential to bringing profit-seeking activities into being. Capitalism would collapse if everyone paid their debts, or if no further debts were taken out. However, as Ingham points out, ‘the state and the market share in the production of capitalist credit money’ (Ingham 2004:144). The modern banking system brings together private banking in relation to trade and the currency creating powers of the state.

Early commercial bankers issued their own credit notes drawn on the bank, but as money issue and banks became more regulated, the money the bank issued was declared legal tender, that is universally recognised money authorised by the state. Through this process privately generated debts in the market sector were being turned into transferable state money through the banking system. The significance of this is vital to state responsibility for the viability of the banking system. Commercial debt issued as commercial paper between traders is a liability on the issuer. Commercial debt exchanged for a bank credit note is a liability on the bank. But, commercial debt exchanged for bank money that is recognised as legal tender, is a liability on the state. State endorsement of bank debt through its designation as national money means that ‘banks are…able to issue liabilities at will’ (Parguez & Seccareccia 2000:105).

If banks are issuing new money designated in the national currency, they are issuing what is, or should be, a national resource. Certainly they are issuing money that carries a public liability as is clear from the recent financial crisis. Even when money was deposited within another banking system (as in the case of the Icelandic banks), default became the responsibility of the British state. Equally, the Icelandic people, through the state, were forced to take on financial liabilities that were created by their private sector banks. This is the peculiarity of the political and social nature of the banking system. If a company produces a car which goes bust the owner does not go to the state asking for a new one. However, for bank deposits and certain other financial investments such as pensions, that is exactly what the holder of that money will do. If conventional economics and neoliberal ideology tells us that money is a private matter, the stampede of people towards a government guarantee of bank deposits in the event of default tells us otherwise.

Money: Endogenous or Exogenous?

As Ingham argues in the preface to his long researched and immensely useful ‘The Nature of Money’, ‘deciphering some economic ‘lexicons and idioms’ was ‘slow-going’. He had particular problems with ‘endogenous’ and ‘exogenous’ money which ‘took a little time to unravel’. He reports that when he asked ‘exogenous to what?’ he found at least three meanings which, unfortunately he does not elaborate in the book (2004:ix). Advocating the reclaiming of the money system from the market would seem to be making a case for exogeneity. This is particularly the case if money issue is to be used to democratically influence economic priorities.

The endogenous, circuit theory of money has explained how credit creation is central to the development of capitalism. This is in contrast to exogenous views of the nature of money whether based on commodity theory, monetarism or a theory of state money. Endogenous theorists are quite right to point to the impotence of the state and central banks in the face of capitalist financial expansion where capitalist finance controls money issue as bank-generated debt. The monetary experiments of the 1980s were a great failure as it proved impossible to control the amount of money circulating in the economy. Warburton argues that the Anglo-Saxon economies lost control of credit creation in the 1980s and this was the basis of the impressive performance of global equity markets in the ensuing speculative boom years (1999:8). This should not happen according to Rossi’s version of the endogenous theory of money creation which argues that producers call forth money in order to launch the circuit of production. On this basis there should never be a problem of money inflation as the new money would always be accompanied by new production and consumption. However it is clear that in the late twentieth and early twenty-first centuries, the bank credit creation system was not just responding to the needs of production but the demands of speculative inflation. Rossi discounts the possibility of borrowing for pure speculation: ‘we leave financial speculation aside, as at the end of any purely speculative …transaction there is always consumption’ (Rossi 2007: 122).

While neoliberal ideology would quickly pounce on the possibility of the state borrowing or creating money, citing the problem of inflation, the massive issue of credit for speculative finance went largely unremarked. It was no less inflationary, but this was presented as ‘wealth creation’ through rises in asset price. Certainly it made many people very rich and some of the money found its way in to state coffers through tax. However, as states were receiving the product of uncontrolled credit creation, the public would eventually have to pay the price in its role as guarantor of the money system. It would appear that the endogenous circuit of money could destructively expand out of the sphere of production and exchange to launch leveraged speculative booms. Following Minsky, Steve Keen has been particularly forceful in his view that private debt has escalated to such an extent that the economy is threatened by total collapse (http://www.debtdeflation.com/blogs/).

Keynes certainly thought that money was a force independent of market forces. For Keynes ‘money plays a part of its own and affects motives and decisions…we live.. in a monetary economy’ (Smithin 2009:60). Central to Keynes’ ideas was the severe impact on the productive economy if the money system malfunctioned. Markets were not necessarily efficient and money might not circulate: money could be created but people might not spend it. The government might therefore need to intervene to maintain the circulation of money,(that is, liquidity), so that effective demand continued within the economy, (that is, demand backed by money) (Chick 2000). The current economic downturn has certainly revealed how the productive economy is dependent on the functioning of the money system. However, recent experience of quantitative easing shows the limits of monetary policy that rests on a conventional view of monetary theory. The experience has been very much Keynes notion of pushing on string. In the UK the Bank of England was relying on the multiplier theory of bank credit issue. The quantitative easing of £200 billion was expected to translate into many times that in volume of loans. As endogenous money theorists would point out this is a fallacy. There is no direct link between deposits and loans, or government ‘high powered money’ and loans. If people or companies do not wish to borrow, no amount of money supply will encourage them to do so.

Even when working effectively, debt-based bank-generated money issue cannot achieve the aim of a sufficiency economy. The demand for repayment with interest creates a growth imperative with the need for an ever expanding increase in debt-based money as more money must be paid back than was originally issued. In order to repay their debts, people must also find work and debt driven labour can have social and ecological implications if people have to work unnecessarily hard or long, or engage in ecologically destructive patterns of production and consumption. As Stigliz points out, only 2% of the US labour force is needed to produce all necessary food and exports (2010:288). For the rest, labour is necessary to gain access to money and therefore to an entitlement to share in the goods and services produced by the society. The most important change that a sufficiency economy would require is to establish the right to livelihood independent of the need to ‘earn’ it through labour. While there would be an obligation to share in necessary work, this would be independent of the right to livelihood itself, that is, necessary sustenance. At the same time, excessive work or consumption could be discouraged by adverse taxation.

Another major problem with seeing money issue as endogenously based in the capitalist market system is that it cannot support an extension of money issue to take account of the wider ‘real economy’ of the environment or women’s unpaid work. To achieve such an extension the externalised activities would need to be incorporated into the monetary circuit of production, possibly as a reproductive and environmental ‘charge’ added to all productive activities. However, this would not change economic priorities. A practical alternative to escape the framework of commercial activities for profit would be the issue of an income as of right free of debt such as a citizen’s income. This would shift the money circuit from one dominated by anticipatory production in search of profit, to one dominated by consumer demand. The more equally the power of the consumer was spread in such a system the more likely that the demand expressed would reflect needs rather than discretionary expenditure. However such an approach must mean that a money issue system based on a democratically determined allocation of money must be exogenous, certainly to the present conception of ‘the economy’. However such an issue of money would not be exogenous to society as a whole. This would mean that there would be no externally determined exogenous limit to money issue and circulation. As Ingham said, the question in relation to the endogeneity or exogeneity of money must be endogenous to what? Exogenous to what?

The democracy deficit

The possibility of a more democratically based and ecologically sustainable economy through a radical reform of the money system has been made much more difficult by a major triumph of neoliberalism, its ideological attack on the idea of public action. The general condemnation of the state has brought even welfare systems into disrepute and undermined any notion of a right to livelihood with the castigation of ‘benefit scroungers’. This is compounded by the privatisation of the money supply which has forced states into higher taxation or more public borrowing. As a result there is very little political base from which to launch the idea of an egalitarian sufficiency economy. The issue of money through the banking system has also removed from the public sector any direct control over the direction of money use. This means that those who take on debt are making vital choices about the direction of the economy and, as the financial crisis reveals, those choices can rebound on society as a whole. Despite the obvious problems of the capitalist economy and financial system, making the case for money as a national resource and the need to democratise or socialise the money system is very difficult. Yet it must be done. A starting point is the financial crisis itself and the demonstration that the money system is an essential national utility. It is clear that while the benefits of money creation have been privatised and largely piled up in the financial sector itself, the costs have been socialised.

This point has been made many times but some of the detail is telling. At the peak of the boom hedge fund and private equity managers in the US were earning up to 19,000 times the average wage compared with around 350 times for non-financial corporate executives (Stiglitz 2010: 350). Banks fed the speculative credit frenzy by creating ‘complex pyramids of loans to each other’ (Korten 2009:50). Using Phillip’s calculations (2008) Korten points out that US financial sector debt at the height of the boom was about equivalent to US GDP ($14 trillion) and comprised 32% of all US debt. For Korten, ‘Wall Street has been engaged in class warfare pure and simple’. It has used its control of money supply to create ‘phantom wealth’ on which it collected interest, dividend and financial service fees. A modern form of ‘debt bondage’ (2009: 52-3).

There are many voices challenging the status quo, not least in this journal. However, analysis alone will not create social change, but the real experience of people in their daily lives might. The task must be to link the critical analyses being made here and elsewhere with the real-world experiences of the wider public.

Money in a Sufficiency Economy

This paper has argued that the money system is a national resource that should be taken seriously as a mechanism for radical social change. The case has been made that money cannot be anything other than social, as there is no ‘natural’ base for it. While the money system is both social and public, its administration has been privatised, particularly the issue of new money. This is important because the ability to issue money in a society creates the ability to define what is to be seen as valuable (in money terms). Letting the market harness the allocation of money has prevented the recognition of value created by the environment, non-market activities and public investment. Largely, the financial sector has been able to allocate value to itself by issuing money to itself. Allocating money to citizens as of right or to public investment would give a completely different message about what is important in society.

Such a system of money allocation would not require growth other than to meet need because most money would be issued free of debt. Security of money allocation for consumption and production would remove the need to undertake unnecessary work and enable people to be confident of a sufficiency of material goods with more emphasis on the quality of life. Overall priorities would also put public welfare first (hospitals, education, transport) which would make people feel more secure about their future. This would mean they did not need to accumulate money savings. The problem with aiming to achieve future security in money terms is that there is no way people can know what their money will buy. While sufficiency can be calculated in real terms (how much bread will I need?), there is no basis for sufficiency in money terms (what will bread cost in thirty years’ time?). Returning the money system to democratic control would not be a total answer but it would be an incredible step forward towards creating a socially just and ecologically sustainable sufficiency economy.

Where would that leave ‘the market’? It would not be able to access new money from banks. Any money for investment would be a direct transfer of savings as equity or timed loans. However where firms (for profit or not for profit) were meeting democratically identified priorities they could request loans or grants from national, regional, or local democratically controlled banks. Firms would earn money by providing the goods and services that citizenssocially determine. Instead of money circulating through the market to create ‘wealth’ which is then taxed (under much protest) for public use, public benefit would be the basis for the allocation of money. Administration via a public money system would avoid both the rigidity of a command and control economy and the speculative exploitation, waste and inequality of a capitalist market. From a public perspective the fiscal and monetary systems would be two sides of the same process. Public expenditure would not require taxation but taxation would be used to regulate the economy, redistribute wealth and influence resource use or social benefit (including fair labour policies). The endogenous money circuit of capitalist production would be replaced by the endogenous money circuit of a public economy. As such it would respond not to the demands of profitable production but the provisioning of social need.'

10 Steps to Creating Your Own Local Currency

Reposted in full from The Ecologist, 8 June 2010

'Local currencies ensure that money spent at local shops gets reinvested in the community and fosters community spirit and involvement. Learn all you need to know to get one started in your area...

In March 2007 Transition Town Totnes launched the UK's first Transition Currency - a complimentary currency, backed by Sterling, that strengthens the local economy. Since then three other Transition Towns have followed. The value of these projects is that they raise the profile of local businesses and start community-wide conversations around issues like the fragility of the international banking system, climate change and peak oil. Lambeth council estimates that the positive media coverage generated by the Brixton Pound is worth around £100,000. And since systemic risk is still alive and well in the international financial system, having an alternative currency could play a useful role in plugging the gap when the dominant system fails.

So if you want to do this in your own locality, how would you go about it? Just follow our ten-step guide...

1. Start a Transition Initiative

Starting up a local currency is an ambitious undertaking that is best built on a strong foundation. If your neighbourhood has launched a Transition Initiative you will have a ready-made pool of people who will understand a lot of the issues involved and are ready to get going on a project. If you don't have an established sustainability network, consider getting one going first. Also consider whether skill-shares, time banking or a Local Exchange Trading Scheme (LETS) might be more suitable models for your area.

2. Organise an open meeting on a topic related to money

This will bring in interested people and start seeding the idea in your community. The evening could include a speaker (from a group that has already launched an alternative currency or from a thinktank such as the New Economics Foundation), a film showing (try Money as Debt or one of the films made by established local currency projects) and a group discussion. Start thinking about the kind of people you want to get involved and make sure they are amongst the targets of your publicity. Take people's email addresses so that they can be kept informed as the project develops.

3. Identify and engage your stakeholders

Your main stakeholders are likely to be local residents and local traders - the two groups of people who make the currency work in practice. Lewes had the idea of signing up 100 members in advance in a scheme they called the '100-Club'. The scheme was so successful that 300 people took the pledge to buy a certain amount of Lewes Pounds and to give periodic feedback on how the scheme was working. Then Brixton went one better with their '1000-Club'. Get traders involved early so that there is plenty of choice about where to spend your money when the scheme goes live. Brixton had 70 traders signed up at the time of their launch.

Securing the support of the local authority can be useful in giving credibility to the initiative and helping with profile-raising. In Lewes the town council publicly endorsed the project and the town hall became one of the issuing points for the currency. In Brixton, the local council has given £6,000 in start-up funding.

4. Set-up a management team

Oliver Dudok van Heel of the Lewes Pound team recommends a mixed team of traders and residents. Although the team will move forward collaboratively, he suggests that individual members take up responsibility for the roles of treasurer, trader liaison, community liaison, press liaison and design. Peter North also recommends a facilitator, directory producer or webmaster, events co-ordinator and a secretary.

5. Decide on the model

Take your time to research the various models and engage your stakeholders as much as possible in a public discussion about this. The most straightforward and user-friendly option is to make your currency exchangeable on a 1:1 ratio with Sterling. You will also need to consider what denominations to issue, how much total value to issue and how long the notes will be valid for.

Think about where to draw the line with traders. The four English Transition Currencies so far seem to welcome all traders as part of the scheme without them being required to fulfil any particular ethical criteria relating to local sourcing or environmental impact, although Josh Ryan-Collins, co-founder of the Brixton Pound and a researcher at the New Economics Foundation does see a case for ruling out corporations that are publicly listed and accountable to shareholders.

6. Launch a design competition

This is another opportunity for engaging the local population and for generating publicity. Brixton held an online 'Vote the Note' poll to choose which local figures should be celebrated on the different denominations.

7. Decide on your legal structure

You can launch a currency as an unincorporated association but if you are serious about this endeavour, at some point you will need to incorporate. Stroud chose the co-operative route to allow for democratic control and management of the currency by residents and traders, but this does necessitate administering a membership fee. Lewes chose the Community Interest Company (CIC) route because they felt it offered a modest administrative burden, gave the ability to trade the currency and eligibility for Government and foundation funding.

8. Generate start-up funding

You'll need money for publicity materials and for printing the notes. Security measures to avoid forgery can mean the latter gets expensive. In Brixton, the council gave a grant of £6,000 and four or five local businesses put in a couple of hundred pounds each in a sponsorship deal. Lewes also sold collector's packs to raise money and both groups have dabbled in souvenirs such as t-shirts, badges and posters.

9. Organise a memorable launch event

This is the big one. You've done all that work - you might as well celebrate, capitalise on your biggest publicity and marketing opportunity and design a memorable, preferably historic, occasion.

10. Nurture and develop the scheme

'After the honeymoon effect the key thing is what you put in place to keep things going and maintain the enthusiasm,' says Josh. 'Having somebody paid is vital for that. We have a development manager, who works three days a week.' Local councils sometimes have pockets of money that can be tapped into if you approach the right person in the right department.

How big can a local currency grow? Bernard Jarman, co-founder of the Stroud Pound, says that the Steiner-inspired Chiemgauer in Southern Germany has an annual turnover equivalent to €1/2M. 'It's a similar sized town [to Stroud] and there are 600 business involved. They're able to employ a full-time administrator to run it. If we could do that we'd have cracked it in some way.'

The Schumacher-inspired BerkShares scheme in Great Barrington, Massachusetts, is said to have the equivalent of $2M in circulation and 12 local banks issuing the money.

How else might your scheme develop? Would electronic transactions help? Could the reserve generated by a currency issue be used for ethical lending? Would making currencies more regional make them more effective? What about intra-regional trading? Would an energy-backed currency be more useful in future than one backed by a national currency such as sterling?'

Using Nature's Genius in Architecture

Sourced from TED.com, February 2011

'How can architects build a new world of sustainable beauty? By learning from nature. At TEDSalon in London, Michael Pawlyn describes three habits of nature that could transform architecture and society: radical resource efficiency, closed loops, and drawing energy from the sun.'

Campaign Hero: Tom Crompton, Change Strategist at WWF-UK


It's de rigour at present for campaigners to remind each other that King didn't start his speech by intoning 'I have a nightmare...'...

Many modern-day environmentalists are intoxicated with the notion that progress on environmental issues can only be made by demonstrating the economic case for action. But King didn't start his speech, they might have done, by crying: 'I have a cost-benefit analysis'!

Reposted in full from
The Ecologist, 8 February 2011

'What motivates people to act? Tom Crompton, WWF's point man on behaviour change, believes he has the answers. And they go against the grain of conventional campaigning...

What has been your most successful campaign to date?

I'd highlight some work that doesn't really qualify as a campaign, and that isn't really mine! It's more of a way of thinking that helps to augment campaigns - and I've been involved in helping to develop it, with many academics, and many other NGOs drawn from a wide range of domains. It's laid out in a recent report, published by COIN, CPRE, Friends of the Earth, Oxfam and WWF, called Common Cause: The Case for Working with Our Cultural Values. It's an appeal for people working in the third sector to become far bolder in expressing the values that lead to public expressions of concern about environmental and social challenges - and then to begin to campaign in ways that strengthen those values in society.

And has it been successful? If success is measured by the range of people who are joining the conversation, and the number of organisations that are responding to the challenges that we are helping to lay out, then yes - it's becoming wildly successful.

What has been your least successful campaign to date?

I used to lead WWF's work on international trade and investment policy - campaigning on WTO negotiations, for example. That's difficult. Critically important, but very difficult. The pace of change is glacial, and the full weight of the international economic architecture is bearing down in the opposite direction to most of the changes you would like to see. I was campaigning on the relationship between international trade rules and international environmental agreements: which should take priority, when the aims of each conflict? I don't think I made any progress. It taught me how difficult it is to promote the environmental interest when this comes into conflict with international economic interests. And yet this is exactly where most work is needed. It was an unsuccessful campaign, but experiencing it has convinced me that we need to ask deep questions about how we campaign, so it was also really educative.

What gets you out of bed when you're at your lowest?

My three-year-old daughter shouting to be lifted off the loo.

Corporations: work with them or against them?

Well the easy answer is both. But what does that mean? Knowing when we should work with them or against them is the difficult bit. Green consumerism is a cul-de-sac. As a strategy for responding to environmental challenges it risks reinforcing all those values that underpin apathy about environmental problems, and resistance to tackling them.

But business plays a crucial role in shaping cultural values - for example, through culture in the workplace, pay structures, and its marketing and advertising activities. There are businesses which recognise this, and take this responsibility seriously. It is their work that NGOs should be championing.

What is the best way to motivate people?

Despite the insistence of some campaigners, it's not by appealing to people's extrinsic goals - their desire for social status or financial success. Rather, it's by connecting with their intrinsic goals: their connection to family, friends, wider humanity and the natural world. That isn't just my experience. It is also demonstrated by a huge volume of research looking at people's motivation to engage in a wide range of different behaviours. Pursuit of these intrinsic goals leaves a person far more motivated to act, and that motivation is likely to persist far longer.

What is the best way of reaching politicians?

Through citizens. Talking to politicians is fine for trying to persuade them to embrace incremental changes. But it seems likely that the ambitious changes which are needed will only be delivered with far greater public appetite, and active public demand.

What is the most important thing to avoid when campaigning?

Undoubtedly, the most important thing to avoid is undermining prospects for fundamental change by ignoring the bigger picture. So often the possibility to help create tangible yet fairly insignificant change is dangled in front of us. It's so easy to loose sight of the bigger picture and pursue this consolation prize - without asking: what principles and values is this change helping to embed? Are these principles and values that will stand us in good stead as we begin to have to tackle more difficult changes entailing more fundamental change? Or are we pouring our energy into pursuing another pyrrhic victory?

Most important thing government could do this year?

Government should acknowledge that public policies, and people's experience of living with these policies, has a profound and inescapable effect on the values that come to dominate culturally. (Margaret Thatcher, for one, was forthright about this, famously declaring that 'economics are the method - the object is to change the heart and soul'.)

Government should then conduct an enquiry into the cultural values that must necessarily underpin public engagement in a ‘big society'. The evidence shows that the values which motivate volunteerism are closely related to those which motivate concern about domestic social problems, climate change, global poverty and biodiversity loss. Government should then review the whole panoply of public policy, to examine how current policies serve either to strengthen or undermine these values. It should then reorient public policy -making sure that this serves to build further commitment to these values.

Most important thing individuals could do this year?

We should find out about the values that motivate the NGOs or political parties that we support, and the organisations for which we work. We should then ask: are these intrinsic values, focussed on improving our relationships with one another, and with the natural world?

If not, then we should work with these organisations to change the values that motivate them: pointing to the mass of evidence that we will only confront environmental and social challenges with the level of ambition that these demand through appeals to intrinsic values.

If these organisations profess to be motivated by these values, then we must hold them to account: we must make sure that these values do genuinely infuse all that they do, and challenge these organisations where they fail to embody these values.

What makes a good campaigner?

Of course, a good campaigner must understand power, and know how to work to create political leverage. But, far more importantly, she must be able to keep a cool head when she scents such leverage. She must be able to stand back from the campaign that she is running, and ask: am I making progress on the bigger picture here, or am I caught up in the possibility of creating some specific change - while losing sight of its wider impacts? A good campaigner is always paying close attention to how her work contributes, however slightly, to creating systemic change.

What (other) campaign has caught your attention recently?

There are many NGOs grappling with these issues in their work. Many are small, fleet of foot organisations like PIRC or PLATFORM, which are beginning to apply an understanding of cultural values to their own work. But other larger NGOs - like Oxfam, and my organisation, WWF-UK - are also beginning to respond to these challenges.

Who is your campaign hero (past or present)?

It must be Martin Luther King, as immortalised in his speech in Washington in 1963. But I like it for the wrong reasons. It's de rigour at present for campaigners to remind each other that King didn't start his speech by intoning 'I have a nightmare...'. It's taken as proof that successful social change movements must avoid examining what's wrong, and focus on being up-beat and positive. But this is a misconception. King may have been up-beat, but he certainly didn't pull any punches in highlighting all the bad things about the political situation that he confronted.

So I prefer to focus on a different aspect of the counterfactual history here. Many modern-day environmentalists are intoxicated with the notion that progress on environmental issues can only be made by demonstrating the economic case for action. But King didn't start his speech, they might have done, by crying: 'I have a cost-benefit analysis'!

No, he knew what he stood for, and was unequivocal in articulating this. He was well aware of the dangers of deflecting pressure for fundamental change through short-term sops. 'This is no time,' he said, '...to take the tranquillizing drug of gradualism.'

Pets in the City

There are environmental costs to owning pets, but there are also huge social and health benefits; but how do we reconcile having critters as family members in an urban environment where people are choosing apartments, townhouses and other forms of residential living other than the traditional detached house?

Sourced from Pets in the City

'Pets in the City (PDF, 3.97 MB) has been prepared by the Petcare Information and Advisory Service (PIAS) to assist people residing in higher density living to enjoy the many benefits offered by pets. The guide can help you decide whether you should have a pet, what the most suitable type of pet might be for you and how to enjoy life with your pet. Australians love their pets. In fact, we have one of the highest rates of pet ownership in the world – more than half of all Australian households own a dog and/or a cat. Pet ownership seems to have always been part of the Australian way of life, something so normal we almost take it for granted. But things are changing.

Once, the great Australian dream was owning your own home on a quarter-acre block, with a BBQ, a Hills Hoist and a Blue Heeler in the backyard. But these days, that quintessential Australian scene is changing. Australians are more frequently living in townhouses, apartments and units, often within big cities. They’re increasingly likely to live in a strata development with a BBQ on the balcony and a communal laundry.

According to Australian Census data, 77% of Australian households live in separate houses; 13% live in semi-detached, row, terrace or town houses; and 9% live in units or apartments. A total of 22%, or almost a quarter of all Australian households, are accommodated in what could be considered to be medium or high-density housing. The idea of high-density living in strata or rental accommodation with limited, or no, yard space may not be particularly conducive to owning animal companions. Yet we know that Australians are adaptable and keen to find a way to keep their beloved pets in high-density environments. That’s why we’ve produced Pets in the City, a “how to” guide covering everything you need to know about successfully keeping dogs and cats in apartments and inner urban areas.

As part of the preparation of this guide, PIAS commissioned a research agency to investigate pet ownership in high-density housing. We’ve used the research outcomes to provide information that will help both pet owners and those who would like to own a pet. Look out for our tips, the comments from experts and case studies.

Whether you already own a companion animal or are contemplating getting one, this informative and helpful guide shows you that owning a dog or cat in the city can be easy with the correct selection, care and management.'

Connected Conversations - Tackling Big Issues By Linking Small Conversations

Reposted in full from the new economics foundation, 10 February 2011

'Reflecting on nef's decade of experience in democracy and participation, Connected Conversations argues that tackling the biggest issues, from climate change to social inequality, needs to start with small conversations between friends and neighbours. By linking these small groups together we can sow the seeds for new social movements.

On 21 April 2010, seven members of Age Concern met in the echoey hall of a community centre in Ilford to talk about who they trust with their most sensitive personal information. Armed with the key facts, they discussed what their health records meant to them, how they should be safeguarded and who should have access. After 90 minutes they were better informed, more opinionated and more engaged. When it came to their health they left more ready to be active citizens. As participation goes it was nice, although hardly earth-shattering.

That spring and summer, though, a lot of other people were having the same conversation. Students in lecture theatres, families in living rooms, patients in doctors’ surgeries. In total 1,500 people used the same information to draw their own conclusions at more than 100 events across England. Another 1,500 learned more about the issues at stalls in libraries and museums, while 3,000 young people talked about the same issues in school science lessons. And more people used materials specially designed to help people with learning difficulties to get involved.

All told, more than 6,000 people talked about the topic of health and patient records that spring and summer. Those conversations were linked through a project called Who Sees What, an attempt to stimulate hundreds of conversations and link them together to create a rich picture of public views, with the potential to inform and shape public policy.

Meeting future challenges

The UK faces an interlinked set of economic, environmental and political challenges that have led nef to call for a ‘great transition’ – a fundamental shift to a more sustainable, socially just way of living. But transition cannot be achieved from the top down. It will require central and local government, businesses, communities and individuals to develop their own understandings of sustainability and social justice and to debate and negotiate with each other about the way forward.

At the moment, however, there is no easy way to get this kind of debate to happen. Our social fabric is fragmented, and opportunities for debate are few and far between. There is little space for groups to deliberate about complex, pressing issues and even less space for them to share their views with each other. The internet is at best a partial solution: there is no substitute for face to face discussion.

Processes such as Who Sees What offer a clue as to how problems like this can be overcome. We call this kind of approach ‘connected conversations’. Unlike many forms of public engagement, connected conversations are not about settling issues or reaching consensus. They simply let citizens engage in public discussion with friends, family or colleagues in their existing networks and then link these discussions together. Rather than seeking to generate a collective decision, they reflect that tackling the biggest issues means making many small decisions and then finding the links between them. They are, in effect, talking shops – and we are proud to describe them as such.

Many of the biggest issues are ‘wicked problems’: thorny topics that bring about disagreement about the very nature of the problem and repeatedly defy solution. Policy interventions in wicked problems often bring about unintended consequences. For example, efforts to reduce the harm caused by illicit drugs by restricting their supply have led to drugs that are available being adulterated with more harmful chemicals, leading to greater health risks to users.3 Such problems cannot be fully solved but they can be managed. Successful management involves drawing on the information, insight, ideas and energy of as many of us as possible.

The connected conversation approach has evolved over more than a decade of work at nef, primarily in the field of science communication. Through projects such as Democs, Open Up and Science on the Street we have explored how and where deliberation can take place and what can link it together. We are grateful for the support of the Wellcome Trust, which has consistently been willing to support innovative and untested work in this area.

Our understanding of the connected conversations approach owes a debt to other work, including Involve’s recent work on distributed dialogue. Such publications have identified the need for distributed engagement approaches. This paper is our own contribution to the growing body of literature in this area, drawing on our experience to suggest a practical model for societal debate. It sets out what we mean by connected conversations, and explores the role they can play in addressing some of the major challenges we will face over the next decade.

Our paper is divided into four chapters, each covering one of the four features that define the connected conversations model. These chapters are entitled ‘Openness’, ‘Deliberation’, ‘Information’ and ‘Connections’.

‘Deliberation’ and ‘Information’ describe the way in which individual conversations take place, and explore the specific challenges encountered when running events at arm’s length. ‘Openness’ and ‘Connections’ describe the structures that link the conversations together.

Connected conversations that embody these four features can help mobilise individuals, civil society groups and government to solve the challenges of the twenty-first century and to ensure that they are not only taking action, but doing so together.'

Getting 'FoodWise' About Wasting Food

Reposted in full from the Australian Broadcasting Corporation, 8 February 2011

'Food is the one thing that unifies us. We love it. We eat it. It brings us together and it sustains us. The sights and smells of food encourage us to eat more, but as we do, we also throw more of it away.

The latest Federal Government figures indicate that Australians are throwing out 7.5 million tonnes of food waste every year. Some 4.45 million tonnes of this is from households and 3.12 million tonnes is from commercial and industrial sources. Research by Do Something shows that Australians are spending $7.8 billion on food that we buy but don't eat. When you consider how many people worldwide are starving, it's almost criminal that Australians are wasting so much food.

Food waste is a waste of money

IBISWorld research shows that Australians are spending $71 billion each year on food that we consume in the home. On top of that we spend $16.5 billion on takeaway food and a further $7.7 billion on food that we buy in restaurants and cafes. With so many household budgets under strain, it's surprising how much food Australia throws away. Every day we literally create mountains of food waste.

Garbage bin analysis in NSW, Victoria and South Australia shows that 40 to 41 per cent of the contents of our household garbage bins is food.

Overseas, the story is the same. Every single day, Britons throws away five million potatoes, a million slices of ham, four million apples and seven million slices of bread.

In Australia, some experts believe that we're throwing away at least 20 per cent of the food that we buy. That's the equivalent of buying five bags of groceries and throwing one away. Given the cost of today's food, that's clearly not sustainable for the family budget.

The environmental impact

Neither is it sustainable for the environment. When food waste rots in landfill it produces methane, a greenhouse gas that's 25 times more potent than the CO2 pouring out of your car's exhaust. The British Government estimates that the UK food chain accounts for a fifth of their carbon emissions. That problem has become so big that stopping food waste in the UK would be equivalent to taking one in five cars off their roads.

In preparing this article, I rummaged through people's bins and took long walks on landfill sites. It wasn't pleasant. There's something rather sad about seeing so much good food turning into a rotting mash of glunk. For me, it was an eye opener into what's wrong with our modern busy lives.

Indeed, the explosion in resource use that has come from the growing, processing, packaging and transportation of modern food is frightening.

A recipe for disaster

When I was a child, I grew up in a country community where food production and consumption was a far simpler process. Farmers grew the food and brought it fresh to the local market. Food was grown seasonally and people adjusted their meals to match their locally available food.

Today's food system, however, is a recipe for environmental disaster.

Food is often grown, refrigerated and transported hundreds of kilometres into centralised warehouses. From there, it's trucked to supermarkets spread out into distant communities. The pre-packaged convenience food we buy contains ingredients that can criss-cross a continent. Even out of season food is flown around the world to ensure that nature doesn't cramp our ability to eat what we want, when we want it.

As a result, when we throw away food, we also waste all of the resources, fuel and energy that was used to get that food from the paddock to our plate. That's even if it gets to our plate. Far too much of our food doesn't even get that far before we bin it. In Queensland, research revealed that 60,000 tonnes of bananas don't even make it past the farm gate every year.

The 'cosmetic retail standards' required by major supermarkets and others, means that millions of bananas are chopped up and put straight back on to the land. According to Primary Industries Minister Tim Mulherin, nearly a third of the crop is graded out. The reason? They're too small or they have minor blemishes.

Australians also throw away food because we forget about it. We leave it lingering in the depths of our fridges and cupboards, unused and unloved. When we do use it, we use too much and even then we don't use the leftovers. It's an approach to food that's anathema to older generations.

Learning from the past

What I loved about my grandmother was that she could always make meals from leftovers. I'm not sure that I ever got to see the original meal, but she could make a meal from anything. She was from a wartime generation that truly valued food and made the most of every scrap. This cooking of leftovers was the earliest form of recycling and your table options were to take it or leave it. If you left it, you went hungry. So you ate it.

Take water, for example. Australians live on the world's driest inhabited continent, but we were profligate with the amount of water we used. Recent droughts combined with education saw us cut our water use in record numbers. We changed for the better. But despite that, most of us are still unaware of how much water we waste when we throw out food.

According to CSIRO data, dumping a kilogram of beef can waste the 50,000 litres it took to produce that meat. Throwing out a kilo of white rice will waste 2,385 litres. The water and energy used to produce our crops and livestock is out of sight and out of mind when we throw it in the bin.

To that end, there's a real disconnect between the food we buy and the impact that it has on the environment when we waste it. Values such as moderation and thrift have seemingly bypassed a younger generation of Australians. It's far easier to throw out food and buy more. With eyes bigger than our bellies, too many of us fall prey to 'two for one' deals and supersize offers. The result? More discarded food.

How do we solve the problem?

So what's the solution? Despite the popularity of cooking shows, there is still a poor understanding among Australians of how to store, purchase and prepare food.

Whether we like it or not, the price of petrol and the cost of living will continue to rise. One simple way to offset this increase is to become 'foodwise' and save money. When it comes to food shopping, the first rule is to get a lot smarter about what you buy and when you buy it.

Eradicating bad shopping habits is crucial. Planning for what you're going to eat for the week ahead is the first place to start. Writing a shopping list that takes into account the existing food in your pantry or fridge is essential if you're only going to buy what you need. Thinking twice about 'two for one' offers is also vital and don't go food shopping when you're hungry. You'll always buy more than you need.

Keeping an eye on the 'best before' and 'use by' dates in your pantry and fridge is also essential. You must always abide by 'use by' dates but lots of food can be eaten after the 'best before' tag (except for eggs - they should be thrown out when they reach their 'best before' date). Plain common sense and your eyes and nose should tell you whether it's usable or not. If it starts to wilt, you can always throw it in a soup.

Cooking extra portions for the freezer or freezing your leftovers in airtight containers saves food for another day. If you do end up with food waste, composting at home can reduce landfill and provide you with free nutrients for your garden. If you don't have a garden, get yourself a worm farm. Worms can eat their own weight in food every day and their castings are great for household plants.

It's time to get FoodWise

By now, you're hopefully aware of the scale of the problem. So how do we change?

George Bernard Shaw once said "there is no love sincerer than the love of food." He was right. We should love food. We just need to hate waste. It's vital that we change our behaviour and learn new food habits.

If we can switch to green bags and shorter showers, then surely we can learn to save food? That is why I launched Do Something's FoodWise.com.au campaign.

Wasted food is a waste of money. Eradicating the waste and being wiser with food means you'll end up saving the planet and your wallet at the same time.

From an environmental standpoint, we're currently eating ourselves out of house and home. If we don't mend our wasteful ways, we'll be eating ourselves out of an environment that can sustainably support future generations of Australians.

That's not an outcome any of us want. It's not just caring about food and saving money. It's about creating a safer future for Australia's kids. That's a responsibility we must all live up to.'

10 February 2011

How Rooms & Architecture Affect Mood & Creativity

Even if you don't read the article, look at the pictures :)

Reposted in full from
Ouno Design, 2 May 2009

Jonas Salk claimed that it wasn’t until he left his basement lab in the States and went to clear his head in a monastery in Assisi that he became able to solve the puzzle of polio. He thought that Assisi’s colonnaded walks, serene architecture and hillside views had provided the right mental conditions for the necessary creative and intellectual leap.

This story is from the April edition of Scientific American, in an article on neuroscience by Emily Anthes titled “How Room Designs Affect Your Work and Mood.”

Salk was so certain of the effect of Assisi’s architecture on his work that he later hired Louis Kahn to build the now famous Salk Institute (photos below), and the influence of Assisi is clearly visible – the simple, harmonious colonnades, the long vistas, the pale buttery colour of the stone.

Some of the scientific findings in the article confirm what we might already have guessed, while others are more surprising. Lighter, brighter spaces with full-spectrum lighting increase alertness and help guard against depression and, later in life, against cognitive decline.

Conversely, rooms intended mainly for relaxation should feature darker colours, dimmer lighting, fewer sharp edges on furniture and bookshelves (these activate the part of the brain that alerts us to danger), and more carpeting.

Lower ceilings improve performance in detail-oriented tasks, whereas high ceilings encourage abstract creative thought. Views of nature, particularly distant trees and green space, are proven to significantly aid in creativity, concentration and memory (and in combatting ADD in children).'

The original Scientific American article, 22 April 2009

Building Around The Mind

Brain research can help us craft spaces that relax, inspire, awaken, comfort and heal

By Emily Anthes

'In the 1950s prizewinning biologist and doctor Jonas Salk was working on a cure for polio in a dark basement laboratory in Pittsburgh. Progress was slow, so to clear his head, Salk traveled to Assisi, Italy, where he spent time in a 13th-century monastery, ambling amid its columns and cloistered courtyards. Suddenly, Salk found himself awash in new insights, including the one that would lead to his successful polio vaccine. Salk was convinced he had drawn his inspiration from the contemplative setting. He came to believe so strongly in architecture’s ability to influence the mind that he teamed up with renowned architect Louis Kahn to build the Salk Institute in La Jolla, Calif., as a scientific facility that would stimulate breakthroughs and encourage creativity.

Architects have long intuited that the places we inhabit can affect our thoughts, feelings and behaviors. But now, half a century after Salk’s inspiring excursion, behavioral scientists are giving these hunches an empirical basis. They are unearthing tantalizing clues about how to design spaces that promote creativity, keep students focused and alert, and lead to relaxation and social intimacy. Institutions such as the Academy of Neuroscience for Architecture in San Diego are encouraging interdisciplinary research into how a planned environment influences the mind, and some architecture schools are now offering classes in introductory neuroscience.

Such efforts are already informing design, leading to cutting-edge projects, such as residences for seniors with dementia in which the building itself is part of the treatment. Similarly, the Kingsdale School in London was redesigned, with the help of psychologists, to promote social cohesion; the new structure also includes elements that foster alertness and creativity. What is more, researchers are just getting started. “All this is in its infancy,” says architect David Allison, who heads the Architecture + Health program at Clemson University. “But the emerging neuroscience research might give us even better insights into how the built environment impacts our health and well-being, how we perform in environments and how we feel in environments.”

Higher Thought

Formal investigations into how humans interact with the built environment began in the 1950s, when several research groups analyzed how the design of hospitals, particularly psychiatric facilities, influenced patient behaviors and outcomes. In the 1960s and 1970s the field that became known as environmental psychology blossomed.

“There was a social conscience growing in architecture around that time,” says John Zeisel, a Columbia University–trained sociologist who, as president of Hearthstone Alzheimer Care, specializes in the design of facilities for people who have dementia. Architects began to ask themselves, Zeisel adds, “‘What is there about people that we need to find out about in order to build buildings that respond to people’s needs?’ ” The growth of the brain sciences in the late 20th century gave the field a new arsenal of technologies, tools and theories. Researchers began to consider “how can we utilize the rigorous methods of neuroscience and a deeper understanding of the brain to inform how we design,” says Eve Edelstein, a visiting neuroscientist at the University of California, San Diego, and adjunct professor at the New School of Architecture and Design, also in San Diego.

Now research has emerged that could help illuminate Salk’s observation that aspects of the physical environment can influence creativity. In 2007 Joan Meyers-Levy, a professor of marketing at the University of Minnesota, reported that the height of a room’s ceiling affects how people think. She randomly assigned 100 people to a room with either an eight- or 10-foot ceiling and asked participants to group sports from a 10-item list into categories of their own choice. The people who completed the task in the room with taller ceilings came up with more abstract categories, such as “challenging” sports or sports they would like to play, than did those in rooms with shorter ceilings, who offered more concrete groupings, such as the number of participants on a team. “Ceiling height affects the way you process information,” Meyers-Levy says. “You’re focusing on the specific details in the lower-ceiling condition.”

Because her earlier work had indicated that elevated ceilings make people feel physically less constrained, the investigator posits that higher ceilings encourage people to think more freely, which may lead them to make more abstract connections. The sense of confinement prompted by low ceilings, on the other hand, may inspire a more detailed, statistical outlook—which might be preferable under some circumstances. “It very much depends on what kind of task you’re doing,” Meyers-Levy explains. “If you’re in the operating room, maybe a low ceiling is better. You want the surgeon getting the details right.” Similarly, paying bills might be most efficiently accomplished in a room with low ceilings, whereas producing great works of art might be more likely in a studio with loftier ones. How high the ceiling actually is, Meyers-Levy points out, is less important than how high it feels. “We think you can get these effects just by manipulating the perception of space,” she says, by using light-colored paint, for instance, or mirrors to make the room look more spacious.

Natural Focus

In addition to ceiling height, the view afforded by a building may influence intellect—in particular, an occupant’s ability to concentrate. Although gazing out a window suggests distraction, it turns out that views of natural settings, such as a garden, field or forest, actually improve focus. A study published in 2000 by environmental psychologist Nancy Wells, now at Cornell University, and her colleagues followed seven- to 12-year-old children before and after a family move. Wells and her team evaluated the panoramas from windows in each old and new home. They found that kids who experienced the greatest increase in greenness as a result of the move also made the most gains on a standard test of attention. (The scientists controlled for differences in housing quality, which turned out not to be associated with attention.) Another experiment demonstrated that college students with views of nature from their dorm rooms scored higher on measures of mental focus than did those who overlooked entirely man-made structures.

Green play space may be especially beneficial for students with attention disorders. Landscape architect and researcher William Sullivan of the University of Illinois and his colleagues studied 96 children with attention deficit disorder (ADD). The scientists asked parents to describe their children’s ability to concentrate—say, on homework or spoken directions—after the kids engaged in activities such as fishing, soccer and playing video games in which they were exposed to varying amounts of greenery. “The parents reported that their children’s ADD symptoms were least severe after they’d been in or observing green spaces,” says Sullivan, whose results were published in 2001.

Such findings may be the result of a restorative effect on the mind of gazing on natural scenes, according to an idea developed by psychologists Stephen Kaplan and Rachel Kaplan, both at the University of Michigan at Ann Arbor. By this theory, the tasks of the modern world can engender mental fatigue, whereas looking out at a natural setting is relatively effortless and can give the mind a much needed rest. “A number of studies have shown that when people look at nature views, whether they’re real or projected on a screen, their ability to focus improves,” Stephen Kaplan says.

Nature views may be more rejuvenating than urban scenes are, Sullivan adds, because humans have an innate tendency to respond positively toward nature—an explanation dubbed the biophilia hypothesis. “We evolved in an environment that predisposes us to function most effectively in green spaces,” he says. In a December 2008 paper in Psychological Science, Stephen Kaplan also proposes that urban settings are too stimulating and that attending to them—with their traffic and crowds—requires more cognitive work than gazing at a grove of trees does.

Using nature to boost attention ought to pay off academically, and it seems to, according to a study that will be published in spring 2009 and that was led by C. Kenneth Tanner, head of the School Design & Planning Laboratory at the University of Georgia. In their analysis of more than 10,000 fifth-grade students in 71 Georgia elementary schools, Tanner and his colleagues found that students in classrooms with unrestricted views of at least 50 feet outside the window, including gardens, mountains and other natural elements, had higher scores on tests of vocabulary, language arts and math than did students without such expansive vistas or whose classrooms primarily overlooked roads, parking lots and other urban fixtures.

Seeing the Light

In addition to greenery, the natural world has something else to offer building occupants: light. Daylight synchronizes our sleep-wake cycle, or circadian rhythm, enabling us to stay alert during the day and to sleep at night. Nevertheless, many institutional buildings are not designed to let in as much natural light as our mind and body need.

A lack of light can be a particular problem for schoolchildren. “You take a child who probably didn’t get enough rest, dump them off in front of a school where there’s very little natural light, and guess what? They have jet lag,” Tanner says. A 1992 study followed Swedish schoolchildren in four different classrooms for a year. The research showed that the kids in classrooms with the least daylight had disrupted levels of cortisol, a hormone that is regulated by the body’s circadian rhythms.

Adequate sunlight has also been shown to improve student outcomes. In 1999 the Heschong Mahone Group, a consulting group based in California that specializes in building energy-efficient structures, collected scores on standardized tests of math and reading for more than 21,000 elementary school students in three school districts in three states: California, Washington and Colorado. Using photographs, architectural plans and in-person visits, the researchers rated the amount of daylight available in each of more than 2,000 classrooms on a scale of 0 to 5. In one school district—Capistrano, Calif.—students in the sunniest classrooms advanced 26 percent faster in reading and 20 percent faster in math in one year than did those with the least daylight in their classrooms. In the other two districts, ample light boosted scores between 7 and 18 percent.

Retirement homes can also be too dark to keep circadian clocks ticking away normally. In a study published in 2008 neuroscientist Rixt F. Riemersma-van der Lek of the Netherlands Institute for Neuroscience and her colleagues randomly selected six of 12 assisted-living facilities in Holland to have supplemental lighting installed, bringing the luminosity to approximately 1,000 lux; the other six provided dimmer lighting of around 300 lux. On tests taken at six-month intervals over three and a half years, the residents of the more brightly lit buildings showed 5 percent less cognitive decline than occupants of the six darker buildings did. (The additional lighting also reduced symptoms of depression by 19 percent.) Other studies show that circadian rhythms keep the brain functioning optimally by calibrating hormone levels and metabolic rate, for example. Elderly people—especially those with dementia—often have circadian disruptions. Providing bright daytime light, the researchers believe, could have helped restore their proper rhythms and thus have improved overall brain function.

The wavelength of light is also crucial. Our circadian systems are primarily regulated by short-wavelength blue light; the photoreceptors that feed back to the suprachiasmatic nucleus, a part of the hypothalamus that regulates our daily rhythms, relay the most nerve impulses to the brain when they detect blue light. This short-wavelength light—present in sunlight—lets the brain and body know it is daytime. (In contrast, our rods and cones, which are responsible for vision, fire maximally when exposed to green or yellow-green light.)

Researchers recommend using blue light-emitting diodes (LEDs) and full-spectrum fluorescent lights in buildings during the day; both have enough blue light to trigger the circadian system and keep occupants awake and alert. After dark, buildings could switch to lamps and fixtures with longer-wavelength bulbs, which are less likely to emit light detected by the circadian system and interfere with sleep at night. “If you can give people a lighting scheme where they can differentiate between day and night, that would be an important architectural decision,” says Mariana Figueiro, program director of the Lighting Research Center at Rensselaer Polytechnic Institute.

A Room to Relax

Although bright light might boost cognition, recent work suggests it counteracts relaxation and openness—effects that might be more important than alertness in some settings. In a 2006 study counselors interviewed 80 university students individually in either a dim or a brightly lit counseling room. The students then completed a questionnaire about their reactions to the interview. The students questioned in the dim room felt more relaxed, viewed the counselor more positively and shared more information about themselves than those counseled in the brighter room did. The findings suggest that dim light helps people to loosen up. If that is true generally, keeping the light low during dinner or at parties could foster relaxation and intimacy.

A room’s contents can be similarly soothing—or the opposite. Neuroscientist Moshe Bar of Harvard Medical School and Maital Neta, then his research assistant, showed subjects photographs of various versions of neutral objects, such as sofas and watches. The examples of each item were identical except that some had curved or rounded edges, whereas others had sharp, squared-off perimeters. When asked to make snap judgments about these objects, subjects significantly preferred those with curves. Bar speculates that this preference exists because we associate sharp angles with danger. (The brain may sense a greater hazard, for instance, from a cave in which jagged rocks protrude from the walls than from one in which rounded rocks do the same.) “Maybe sharp contours are coded in our brains as potential threats,” he says.

Bar provided some support for this theory in a 2007 study in which subjects again viewed a series of neutral objects—this time while their brains were scanned using functional magnetic resonance imaging. The neuroscientist found that the amygdala, which is involved in fear processing and emotional arousal, was more active when people were looking at objects with sharp angles. “The underpinnings are really deep in our brain,” Bar explains. “Very basic visual properties convey to us some higher-level information such as ‘Red alert!’ or ‘Relax, it’s all smooth; there’s no threat in the area.’ ” He acknowledges that an object’s contour is not the only element that informs our aesthetic preferences, and his research is still in its early stages. But all other things being equal, filling a living room or waiting room with furniture that has rounded or curved edges could help visitors unwind.

Furniture choices can also influence human interaction. Some of the earliest environmental psychology research focused on seating plans in residential health care facilities; scientists discovered that the common practice of placing chairs along the walls of resident day rooms or lounges actually prevented socializing. A better plan to encourage interaction, researchers found, is organizing furniture in small groupings throughout the room. A 1999 study by psychologists at the Otto-von-Guericke University of Magdeburg in Germany and Uppsala University in Sweden examined seating in a different setting. Over eight weeks and more than 50 lessons, the researchers rotated a class of fourth-grade students between two seating arrangements: rows of desks and a semi circle of desks around the teacher. The semicircle configuration increased student participation, boosting the number of questions pupils asked. Other studies suggest that putting desks in rows encourages students to work independently and improves classroom behavior.

Carpeting can also grease the social wheels. In hospitals, carpet increases the amount of time patients’ friends and families spend visiting, according to a 2000 study led by health care design expert Debra Harris, now president and CEO of RAD Consultants in Austin. Such social support may ultimately speed healing. Of course, carpeting is much harder to clean than traditional hospital flooring—and may present a health hazard in some settings—so it may not be appropriate for places such as an emergency room, where there is high patient turnover and plenty of mess. But rooms, buildings or wards that are home to long-term patients, such as assisted-living facilities, may benefit from carpets.

So far scientists have focused mainly on public buildings, such as hospitals, schools and stores. Thus, a homeowner interested in boosting his or her mind through design must do some extrapolating. “We have a very limited number of studies, so we’re almost looking at the problem through a straw,” Clemson’s Allison says. “Now we need to find more general patterns. How do you take answers to very specific questions and make broad, generalized use of them? That’s what we’re all struggling with.”

The struggle should pay off, experts believe, because when designers fabricate buildings with the mind in mind, the occupants benefit. Well-designed special care units for Alzheimer’s patients reduced anxiety, aggression, social withdrawal, depression and psychosis, according to a 2003 study by Zeisel and his colleagues. And school design can account for between 10 and 15 percent of variation in elementary school students’ scores on a standardized test of reading and math skills, suggests a 2001 report by investigators at the University of Georgia.

“Because of advances in neuroscience, we can begin measuring the effects of the environment at a finer level of detail than we have before,” U.C.S.D.’s Edelstein says. “We can understand the environment better, we can understand our responses better, and we can correlate them to the outcomes. I just get chills when I think about it.”'