Think Locally, Act Globally?

A Dialogue

The following discussion between Hal Horvath and Lindy Davies took place over a two-week period in the Economic Justice Discussion Room. It explores many of the questions whose answers are sought at Understanding Economics.

Hal: It seems to me that there's nothing to stop us from simply obsoleting capitalism. We would develop an independent economy -- an entire national or continental economy that is largely unaffected by the current capitalist economy. We could simply develop the principles and then join it, like a club, and begin living the new way. We need a new name, not communist or socialist, because it is not really political or about changing the outside economy. Instead, it is about simply establishing and living in an alternative economy!

Lindy: Well, this has been thought of many times...tried many times. The problem is that an economy is not something that is consciously designed. It is an aggregation. The larger the aggregation, the more efficiently it works together (unless, of course, other factors work to poison that efficiency!)

Hal: I think we could do it! My first idea is we simply begin to help each other, like the Amish do, as a network of "friends".... The person being helped then feeds and shelters the helpers and perhaps gives them gifts, etc. Not barter, because barter is legally taxable -- gift-giving instead. That's a nice way of living, to be that free and communal. Individuals would give as they wish to those they wish to. Hard workers and needy people alike would elicit gifts. We would have carpenters, gardeners, computer experts, auto mechanics, physical therapists, interior designers. We would start by just joining or creating the neighborhood branch of the "______ Society" (perhaps even something as innocuous as "Friendship Society").

Lindy: Lots of people are working right now on just that sort of thing, Hal. You and me, for starters. But have you noticed how difficult the mainstream economy makes it for folks who want to work that way? For example: I built my own house. It's on a post foundation -- very sturdy, anchored on bolted crosspieces five feet down. The thing ain't gonna frost-heave! But now we can't get homeowners insurance because it doesn't have a conventional cellar.

Another example: in my local county here in Maine there is a labor-exchange system, one of those alternative-currency sorts of arrangements, where people barter their skills. But it has never really gotten off the ground, because it has never solved the liability problem! Who's responsible if something goes wrong, and somebody sues? Local artisans and workers can't afford hefty liability policies, but they aren't willing to risk losing everything they have!

And yet, even with all those frustrations, people are constantly working to create their own kind of life-affirming economy. But they do so against the prevailing trends of the rentier/taxcollector economy. True economic justice would enormously facilitate the kind of cooperation we want. But until we get it, I don't think we can design a new economy on our own.

Hal: Lindy, when you say how can we compete with the advantages that the current rent-collecting class have built for themselves, my question is why would we want to? As I see it, once members of this new society buy land for themselves, they are ready to establish a large amount of independence from the regular economy. True, they will still pay taxes, but a larger and growing portion of their work and activity would be oriented into the "economy" of the new society, and thus they would on average pay less sales and income tax than before they joined.

It would be a progression of independence. As the society grew, more different services would become available within the society and thus its economy would become richer and more complete. The rent paid to the outside decreases. By the way, kudos for designing your own style of foundation for your house!

Lindy: Thanks! But I'm afraid you're missing my point, Hal. Yes, land trusts can provide themselves with a fair degree of autonomy -- once they've gotten control of the land! But the economy or society can never be transformed by that means, because there will never be enough people who can afford to acquire the land. And that goes, more or less, for all forms of "alternative economies" that must function within the greater status quo. You say, why would we want to compete with the disgusting yucky-burban status-quo? But we have no choice: compete we must, because the current owners of resources aren't going to relinquish their status-quo without a fight. In the big picture, since we do face such stiff competition, efficiency is something we can't afford to ignore.

Hal: As I see it, it really comes down to a quality of life issue. What about your personal quality of life? Wouldn't you want to live in a personalized economy, a community, instead of an anonymous, alienated one? You want a certain amount of efficiency in doing things you don't like to do, so that they cost less time, money, etc. But for activities you truly enjoy, efficiency is a very questionable goal, often decreasing your enjoyment. Would you want to play your favorite music "efficiently"? More to the point, if you deeply enjoyed gardening, would you want to be "more efficient" at it? "Efficiency" is one of the great hallmarks of the unhappy drivenness of our age. We go faster and stronger towards.....where?

That realization is why this alternative life style and economy is a real possibility. It would be an improvement in quality of life. When we become less "efficient" we begin to find ourselves and each other.

Lindy: In terms of individual life, I agree with you completely, of course, and I think it is a very important insight. But the economic aggregate is different. And in the aggregate, efficiency is very, very important.

Now hold on before you blow a gasket! I know that all sorts of awful things are promulgated in the name of "efficiency" (but in that sense, you really should read "profits"). I would say that real efficiency is measured by the overall capacity of the economy to satisfy human desires. Whatever those desires are.

Please indulge me in a quote of myself here, from a recent op-ed piece in our Georgist Journal:

"The Limits to Growth", taking its name from the famous "Club of Rome" study from the 70s, has become a Green slogan. It has the most honorable intentions, but I believe it embodies a dangerous misconception. The basic thesis, of course, is that an economy dedicated to "growth" cannot be sustainable, that we must, in Malthusian fashion, learn to do with less, or face dire consequences. The "Limits to Growth" mentality tends to forget what the basic purpose of economic behavior is. We do not, fundamentally, engage in production in order to get "stuff". We engage in production in order to get satisfaction of desires. If the economy puts out more stuff, we can not automatically say that it has grown! Perhaps, like old Soviet factories, it has merely produced a lot of stuff that nobody wants. By squandering its opportunity to produce satisfactions efficiently, an economy that has produced useless stuff has actually shrunk! It is entirely possible -- in fact, it has become our responsibility -- to create an economy that grows in its production of satisfactions while shrinking its output of pollution. We must learn this point well, for the alternative is another round of Malthusian hopelessness.

Hal: I like your idea that more stuff doesn't mean the economy has grown. That "growth" would mean growth in satisfaction of true desires. That kind of growth is slow in today's America. I personally suspect in fact that America is shrinking somewhat in that regard, in spite of much creative effort. It's hard to say. I would like to see your definition of "economic growth" out there in the mainstream. But until it gets there: what do you think of forming an alternative economy?

Lindy: I'm for it! In whatever little ways we can, I'm glad for those of us who are taking steps in that direction! Ultimately, we need both the local and the global reforms. Unless the whole economy can be reformed in a more just and sustainable way, local efforts, though good in themselves, will never gain enough momentum to create wholesale change.

Hal: All right! No disagreement there! But in the meantime, we have lives to live right here and now, in our days, and we want to live them well and fully. For individuals like you and me, that will include engaging the nation for reform. But we also have the private side of our lives.

There are two main impulses here I'm referring to. First the human desire to live in a real community. Second, the human desire to propagate and have stability of resources and physical support. Both of these can be satisfied in such a new society as I am proposing.

As to how practical it is economically, I think that depends heavily on your definition of quality of life. For me, and several people here in Austin, Texas that I know, quality of life does not depend heavily on money or stuff, but instead on access to nature, music, community, books, etc. So if we have to continue to pay various taxes and rents, we still can succeed if we have given up the false desires and are pursuing the real desires. One question I want to ask you is do you want a shiny new car, lots of nice restaurant eating, etc, that depends heavily on the current economy and economics?

Lindy: No, I don't! I don't think that sort of stuff is worth the effort. I still believe, though, that economic efficiency is a very important thing. We could, after all, clean up pollution, educate children, manufacture clean, wholesome products, and do these things efficiently. So we could do them more effectively. It is a mistake to see efficiency per se as a death-force.

Hal: About "efficiency", it is still a problematic goal, in spite of its virtues. It is very similar to technological "progress". Sometimes it is progress, sometimes it isn't. You know what I mean. Like yourself, I am an optimist about technology and "efficiency". I think generally such innovations are a good thing. However: the general public's reaction to the word "efficiency" is more ambivalent than it used to be or than that of economists. Most people are tired of overworking and want to slow down anyway. They'd like to be "less efficient." So I think we need to be cautious how we use this term.

Lindy: True enough! I guess the only thing that I would add at this point is that economic efficiency is not a value-loaded thing. It is simply a process, and it is entirely good. But, many things that aren't good get conflated with that term and poison people's ideas about it. You cite lots of good examples of this. I mean, is it efficient to work like a dog to afford a modern suburban house with all the latest gadgetry -- stuff that one doesn't understand, yet can't do without, machines that make people prisoners? Feh!

Hal: Well, another side of all this is that humanity needs to grow up to handle its powerful tools and weapons appropriately. That is still true. In the subtler psychological sense, our nation and the World in general does not have (on average) the maturity to handle drugs (caffeine, sugar, nicotine, ritalin, etc.etc.) well. In general, it is common that people are drugging themselves and not in touch with their inner selves. This makes it easier to make war, produce random mass killings, trash the environment, etc. I think we face a constant struggle to mature Americans, lest we create even greater harm on the World through war and greenhouse gases and drugs and, indeed, through technology. This does not make me a luddite, though I do believe that living simpler and more physically would aid people to be in touch with themselves and each other.

Lindy: Hey, you can't that much of a luddite, 'cuz you're on the Net ;)

I agree that the focus on personal day-to-day value is vital -- it can't change the overall economy, perhaps, but it can change the culture! I just want us to be clear about some basic principles.

Hal: I'd say that actually the focus of personal daily life will largely determine the future shape of our economy in its particulars, of course, but also in its gross dimensions --Whether we drive more or less, whether we eat more or less, whether we emit more or less CO2, whether we gradually develop subdivisions over most of our beautiful natural land or just part of it. For example, will we live in land-hungry quarter and half acre lots of just 2-3 people in each house in the country-side, or will we live more communally and thus leave more natural lands undeveloped. These questions will be gradually answered in the next 20-40 years.

One of our beliefs, that I think is a kind of myth -- is that we must always grow economically and technically in order to be okay. We can't image easily some other kind of lifestyle that would not depend on "economic growth". In a sense, this is true. We have set things up so that we must either "grow" or suffer .... or change.

Now, as I envision it, we had best change, and will in some way or another. The only question is will it be a good overall change, or less good. In any case, the change will happen gradually, unless our course collides us with some crisis we cannot surmount. Allied in our work to make the change good is the human heart and soul, which don't really like cars and drugs so much!

Lindy: Quiet as it's kept! Another thing the heart and soul ain't so keen on (despite all the clamor for more jobs!) is putting in time at some heartless, soulless production just to put bread on the table. Locally and globally, I think we're both trying to minimize that, to make life richer and more meaningful for everyone. And I hope you're right about avoiding catastrophe. We'll see...

July, 1999

What Folks Have Been Saying

Thanks. Some agreement here. A few thoughts: Disordered growth is known as "cancer" in biology, so why is "growth" seen as unquestionable dogma by economists? "Effectiveness" may be more important than "efficiency."
The Agrarian <[email protected]>
- Tuesday, July 27, 1999 at 14:02:26 (EDT)
It's a simple matter of definition -- and the connotation you're suggesting here is entirely appropriate, I think. The wholistic (and theoretically correct, I argue) view of economic growth is that it is not disordered -- that dysfunctional ("disordered") growth that piles negative externalities onto the community is not growth at all, but actually shrinkage!
- Wednesday, July 28, 1999 at 09:30:13 (EDT)
Want to find some answers?

Progress & Poverty - Definitions - Capital - Law of Rent - Booms & Busts - The Remedy - Links