The Next Economy: Understanding the Problem, Envisioning Solutions III

George Catlin interviews Roar Bjonnes, coauthor of Growing a New Economy

A Four-Part Interview Series on the Next Economy

Part Three

Catlin:   Earlier, we went over the nature of the problem posed by the current neoliberal, capitalist economic structure, and now we want to concentrate on the solutions to those problems that are suggested in the book. But before we get into those solutions, it seems to me that it would be a good thing to just review the essence of the problem that we’re trying to solve. So, my first question would be, in a nutshell, what’s wrong with capitalism?

Bjonnes:   Okay. That’s a good question and also a big question, but I think it is important to acknowledge the big difference between, for example the PROUT economic system and capitalism. I think a major difference is that PROUT acknowledges two broad human sentiments. One is the sentiment of selfishness, of selfish pleasure, and the other is the sentiment of sharing and cooperation. PROUT economics is based on those two sentiments, we could say. Capitalism, on the other hand, is based on the first sentiment primarily and not the second. In fact, Adam Smith, the so-called Father of Capitalism, he said in so many words that if the individual makes profit, we will all profit. We will all benefit. In other words, capitalism is based on this idea that we have a selfish gene so to speak and this selfish gene is the main driver of economics, of inventions and of productivity and in capitalism in general. And as we all know, capitalism is what we think of as economics in many ways. So, if the individual is successful, according to capitalism, then the group will also be successful, but as we also know, this is not always the case. In fact, it’s often not the case. In economic terms, the selfish human gene leads to profit, yes, but that is also the problem with capitalism because this profit motive, when that is the main driver of economics, then that is the sole focus.

…the average fast food worker makes about $19,000 a year while the average fast food CEO makes about $23 million in annual salary, that’s 1200 times difference between the lowest pay and the highest pay, an incredible inequality.

It leads to inequality and exploitation of humans and nature. That single focus of the profit motive or the selfish gene is really the main problem of capitalism, as I see it. The need to accumulate and create and innovate leads to competition, which to some extent is healthy, but only up to a point. When competition is the main driver of economic trade, it eventually leads to inequality because some will get very rich and some not so rich. A stark example in our economy in the United States is that the average fast food worker makes about $19,000 [which is barely enough to survive] a year while the average fast food CEO makes about $23 million in annual salary, so that’s a huge difference, some 1200 times difference between the lowest pay and the highest pay, so an incredible inequality.

And as we have seen during the growth of capitalism, unfortunately, the inequality has risen, has grown, rather than shrunk. It has not, as Adam Smith envisioned, benefitted the masses, at least not in the global sense. Even in the United States, we know that there’s a lot of inequality and a lot of issues regarding this. So that is the reason we need to limit capitalism to small enterprises, because if capitalism is allowed to fulfill its basic philosophy then it grows too big and turns into monopoly capitalism. We end up with a few people controlling the economy to the detriment of the masses. Because we don’t have unlimited resources, even though we have unlimited needs, or unlimited wants, there are not enough resources or money to fulfill those unlimited wants. The book and the film The Secret says that if you have the right spiritual intention, then there’s unlimited amount of everything for everybody, but in reality that’s not the case. So that point needs to be part of the equation in economics, as the basics of economics, but it is not part of capitalism. It hasn’t been recognized by capitalism.

So, in a sense, capitalism is based on a myth, and we are trying to demonstrate in the book that this myth has been explained away by economists using mathematics to try to justify this myth. That’s one major problem. So that reality is not built into the capitalist economy, and that is the main problem to take into account, that we have limited resources on the physical level. Private enterprises need to have a ceiling on growth and on expansion. And that basic issue is not accounted for in capitalism. Reform capitalism, of course, has tried to deal with this through taxation, by taxing the rich, taxing corporations and so on. In some decades in the ’50s and ’60s, we did quite well doing that. Corporations were taxed heavily. The rich were taxed heavily and the wealth was spread around in many different ways in a much more just way than we see today, but since the ’70s, that has again changed with trickle-down economics, neoliberalism, and so on. And we see this now again with Trump. The tax package that Trump presented is doing the same thing, basically giving incentives to the rich to become richer.

…we need to limit capitalism to small enterprises, because if capitalism is allowed to fulfill its basic philosophy then it grows too big and turns into monopoly capitalism.

This has also benefited the speculative economy, as we talked about earlier. The speculative economy is now the largest portion of the economy. In other words, speculation produces more money than the real economy, much more money. Private accumulation of wealth needs to be limited. Otherwise, we won’t create a healthy economy. Corporate capitalism creates a few winners and many losers. The second problem with capitalism is that it views nature as a free commodity, something to be exploited, that nature only has value if it is turned into a commodity. Again, using Adam Smith as an example, he imagined nature as a field, as a fallow field, and it is of no use to the economy until you start plowing and cultivating that field.

According to Sarkar (propounder of PROUT) again, nature has both value as a commodity and it also has an existential value. It has value in itself. It has life and that life has value and the right to exist. So, for human beings, we could say that nature has a value for the economy as a resource, but it also has value in the form of recreation and peace, a place to meditate, to enjoy. It has value as an ecological system and that ecology is again the source from which all life and economics comes from. Without nature, there wouldn’t be any economy at all. So, this is a vital, important aspect that is not acknowledged by capitalism.

Nature has both value as a commodity and it also has an existential value. It has value in itself. It has life and that life has value and the right to exist.

However, again, we see that green capitalism is taking this into account and is trying to reform capitalism. That’s a good sign, but still the problem of profit is not dealt with by green capitalism, and that is why I think we need a new system. We need to restructure the economy and not just keep reforming it. So if we focus on these two main problems with capitalism, the selfish gene which leads to accumulation of profit and the fact that nature is seen as a free commodity, then we get the kind of world we have today, one with material inequality on the one hand and environmental destruction on the other. Some other problems with capitalism are the dynamics between centralization and decentralization of the economy. Capitalism tends to centralize economics, again because of the profit motive. It leads to a centralized economy, a more monopolistic economy, with large corporations, since it does not put proper value on decentralization or the local economy.

We could use American agriculture as an example, which has literally killed off small farming over the last few decades. Although it is coming back through the environmental movement, with an increase in small, organic farms and farmers markets, but on the whole, that is a drop in the bucket. The big agribusiness farmers have decimated the small farm economy. Small farms are no longer able to compete with the big agribusinesses, which again are competing with China. An example of that is that China has become the major garlic producer for American garlic lovers. Honey from China is more common in the US than American honey, so these are just some simple examples of the problems with capitalism when we don’t take care of the local economy.

The Chinese now also own large interests in American food giants and food companies making food production into a global business and a global competitive market. Capitalism, due to the sole emphasis on the selfish profit motive, leads to destructive competition and therefore to increased inequality and increased environmental degradation. The shallow view it has on nature as a free commodity leads to the destructive exploitation of the environment. So those two issues—the profit motive and seeing nature as a free lunch—are the main problems with capitalism.

Catlin: It’s fascinating to me to hear this, Roar, and when I think about it, I realize that it also partially explains why capitalism has had such a good run for 150 years or so because these problems really just emerged with time. It’s almost like early stage capitalism was relatively benign, but now in its more mature stage, we really run into the problem of this single motivation of profit, profit, profit. It’s created these tremendously rich, self-centered people who are controlling more than they really should be and who are apparently not very concerned about the rest of the world. Is that an evaluation or a way of looking at it that you would agree with?

Bjonnes: In some ways, that is true. On the other hand, if we look at the beginning of the Industrial Revolution when capitalism really took off, we saw factories with child laborers and adult laborers working 12 to 14 hours a day. They didn’t have holidays. They were working on Saturdays and sometimes on Sundays, so there was tremendous exploitation I think from the very beginning of capitalism. However, on a global scale, we didn’t see the problems at that time. It started in England with the industrial revolution, and then it spread throughout Europe and then to the United States. What we’re seeing now is that the economy on a global scale, in the form of global warming, is one issue. You were just mentioning the floods and the fires, so we’re seeing these effects that global capitalism has on the environment. We’re seeing it in terms of the inequality on the planet where the North is relatively rich and the South relatively poor and tremendous economic exploitation in so many ways.

…it was justified that this is how nature works: you have to be strong, you have to be tough; thus discounting the fact that nature is also very cooperative.

So I think that capitalism has been a mixed bag since the beginning, but it has been justified by a philosophy that was embedded in the system itself and held up by, for example, the justification of social Darwinism, the survival of the fittest. That is really, we could say, the source of the philosophy behind capitalism. And so it was justified that this is how nature works: you have to be strong, you have to be tough; thus discounting the fact that nature is also very cooperative. I think it was Peter Kropotkin, a Russian anarchist, actually, and also a biologist, who was one of the first to point out that nature is also very cooperative. But again, the philosophers, the spokespeople for capitalism, has not taken that into account. They focused on the competitiveness in nature. In sum, I think yes, you’re right in many ways that it has become worse, but as I said earlier, the systemic defects of capitalism have been there since the beginning.

Catlin: That makes really good sense to me, and I’m convinced by that argument that right from the beginning there was a flaw in capitalism.  And part of me wants to think that that’s a flaw that has to do with human nature, that there is this kind of greedy aspect of every one of us, the selfish piece of ourselves that’s worried about our own survival first and foremost. And then once that part starts getting oriented toward taking care of me first, it never knows when it’s done enough of that and just keeps going.

And then there’s this other voice in all of us, that’s relatively quiet in many, but nevertheless cares about the good of the whole and is interested in some kind of cooperative model where everyone does in fact benefit from what we do. We need to be thinking about taking care of everybody and taking care of nature as well. Is that something you’d agree with? Do you see a kind of gradual evolution of consciousness toward a kind of state wherein we’re more willing to bring in the second aspect, the sharing principle?

Bjonnes: Yes, I think that that is well put. I do think that there is an evolution, and I think that is our hope. I think that we’re seeing a groundswell of consciousness rising around these issues. At the same time, as I said earlier, it is also getting worse in so many ways. We are in a very interesting situation now where, yes, the consciousness and the awareness, the need to share the wealth and to share the habitation and utilization of this planet with our friends, animals and plants, that consciousness is on the rise, for sure. At the same time, we see also a backlash of a degenerative consciousness of nationalism, me first, and a tremendous growth of the corporations as well. But I’m very hopeful that the cooperative consciousness of sharing, that that awareness will win out in the long run.

Catlin: Let me ask you a more practical question around education. Economic Democracy Advocates is ultimately an advocacy organization, so ultimately, we’re going to be advocating for specific changes in laws and practices at national, state and local levels. But before we get to those specific changes, it seems to me anyway, that a great deal has to be done to introduce people to all the ideas that you’ve been discussing tonight and all the ideas that would stand behind economic democracy. So, I’m thinking of a kind of two-step or at least two-tiered process that we’re going to have to pursue: one being a major educational effort and another being the advocacy effort. Is that a breakdown that makes sense to you?

Bjonnes: Yeah, absolutely. I think that education is so important. Creating an awareness, a change of consciousness, I think that is absolutely important. So yes, I would think that that’s the right way to do it, to educate, to study, to learn and spread the awareness about these issues. That is very important, because when you do advocacy then you can explain the reasons behind the advocacy so much better. And it is also very important to study the situation on the ground. Let’s say for example if you’re working in a local area and you want to improve the local economy, it is very important to study and learn and to be educated about what’s going on in the local economy. What are the resources, for example, here in Western North Carolina where I live? What are these resources in terms of water, in terms of land, in terms of agricultural sources, and so on? So yes, this kind of education is very, very important. And then when you go out and do advocacy work, activist work, you’re so much better equipped to convince policymakers about what you’re about, and also the voting populous, so yes, I would agree with that way of doing it.

It is very important to study and learn and to be educated about what’s going on in the local economy. What are these resources in terms of water, in terms of land, in terms of agricultural sources, and so on?

Catlin: Roar, what I want to do next is to digress for a minute into the work of George Lakoff, who’s a cognitive scientist at Berkeley who addresses the importance of framing conversations in a way that supports one’s core values. The thing I like most about Lakoff is that I think he’s got a really good insight into the models of life that separate conservatives and liberals in our country now. This is a question I’ve been scratching my head about pretty consistently over the last year. I just want to run his model by you and see if it makes any sense to you and then, if it does, what does that have to do with all the things we’re talking about. So, in his model, Lakoff says that what conservatives really seem to endorse is a model with a strong male leader and it’s a model of family and of life in general. So their model is based on a strong, dominant male who knows what is right and what is wrong, and it’s his job to direct the rest of the family. Children are seen as inherently pleasure-oriented and need to be disciplined into a moral and productive approach to life. And with this view, morality and productivity go together. In fact, producing a lot, being prosperous, is seen as the highest form of morality. And it’s believed that if everyone maximizes their own personal gain, just like what Adam Smith said, that will create the optimal society.

You can see how this model would strongly oppose all entitlement programs to those who have not earned their benefits by being productive. It would also foster a view of international relations in which the most prosperous and powerful country — that would be us — is expected to impose its superior moral vision on the rest of the world. And so Lakoff is saying that conservatives in general basically come from this mindset, and that’s how the world and family should be ordered. And then he says that liberals, on the other hand, favor what he calls a nurturing parent model of the family and life in general. And within this view, children are good and need to be supported in developing their unique capabilities. Underprivileged populations are seen to be deserving of whatever support they need to have a fair chance in life, and the aspirations of the so-called developing nations needs to be understood and supported by the wealthy states. This conceptualization makes a lot of sense to me, and I think it explains a good deal about the inability of liberals and conservatives to respect one another in this country right now. I’m thinking that whatever progress is going to be made in our country going forward is best coming out of an informed awareness of this possible underlying difference in world views. So I’m wondering if you have any thoughts about that way of thinking about things and how it might fit into your model.

Bjonnes: Well, I do think that it makes a lot of sense, what Lakoff was saying, that there definitely are these two ways of looking at the world. Certainly, here in America, I think that these worldviews are very, very strong. I think that if I’m not mistaken, Paul Ray, who developed the idea of cultural creatives had a similar idea, and he was saying that it is the cultural creatives, the liberals that will bring about the change and that’s where the change is going to come from.

I think that rather than pitting the liberal and the conservative against each other, we need to think about a common ground.

In many ways, I would agree with that. On the other hand, it may be a little more complex and I would like to throw in a different model coming from India and from Sarkar, which are four different types of psychologies. One is the warrior, one is the intellectual, one is the merchant, and one is the worker. Sarkar said that society is often controlled by either one of them or at least either one of the three. The worker rarely controls society, but the warrior often does, the intellectual and the merchant, and now we are in this merchant era, the capitalist era. So this is of course a different way to look at it, but I think it is important to acknowledge that there are different archetypes and I think that what is important for liberals to acknowledge is perhaps that this patriarchal — we could maybe call that the warrior, is an archetype that is real and that we need to acknowledge it `and that it has a role, but the problem becomes, Sarkar says, when the patriarch or the warrior becomes an exploiter or becomes the only leader in town. That’s the problem. The same thing if you have an intellectual leadership and we see that — for example, Sarkar talks about the evolution of society. From the worker society, which was the society that Karl Marx actually studied and became in many ways the inspiration to his idea of communism. In other words, early societies were living together in large families, in large tribes, sharing everything together. And as we know, Karl Marx also studied American Indians and learned from them about the idea of sharing and what he envisioned as the perfect communist society without the state and all that. So yes, I do think that the cultural creatives or the liberal mindset is very, very important. At the same time, family values are important. Morality is important. Working hard is important.

So rather than pitting one against the other, I think that we need to try to see the positive aspects in the different models and find ways to collaborate and to appreciate each other’s strengths and of course also acknowledge some of the weaknesses. For example, I live in a part of the country where the conservatives are maybe not in the majority, but there are plenty of them around here and many of them are my neighbors. I have to deal with them, and so I face these issues on a daily level and I think it’s very important for America to build bridges. And so going back to trying to put all of this together, what Sarkar was saying that the future of humanity belongs to the person that has an integral personality that embodies the warrior, the intellectual, the merchant and the worker, but who is not embedded in either one of them fully. In other words, it’s a kind of wise person, a kind of detached person that knows how to fight if that’s necessary, knows how to stand up for his rights, knows how to study and knows how to create a business and knows how to work hard.

So I would hope that the future of humanity and the future of America is more of a hybrid personality, or you could say — Sarkar called this person  a “sadvipra”, which is a Sanskrit term, but it basically means a person that has an integrated personality. Actually, Ken Wilber has — I don’t know if you’re familiar with Ken Wilber, but he had a similar concept of the integral leader. I think that rather than pitting the liberal and the conservative against each other, I think we need to think about a common ground. However, when it comes to the uses of economics and what we talked about earlier regarding selfishness and all that, I would say that the conservatives have definitely something to learn and some issues to overcome. That is for sure, and that is one of the challenges in America. For example, in Norway where I come from, the people living in the countryside and the people living in the city have a much closer relationship. They’re not so much pitted against each other. Their values are much more similar, so I see that this kind of an integration is possible, and I think that that is the future.

George Caitlin is the former president of Economic Democracy Advocates.

Read Parts I and II of the interview

Photo by Alex Wing