How would you describe what you do?
I’m trying to be a practicing social innovator. My goal, of course, is just to weigh in on the side of life in human evolution — that’s all. I don’t really have any big pretensions about how much of a difference I’m going to make. I always knew I was unemployable, so I invented my own job and I have been self-employed for twenty-five years.
What progress has been made since you put forth your first economic theories?
A lot of things I’ve been envisioning and working on since writing Creating Alternative Futures, I thought would never come to fruition until long after I was dead. That’s a sort of English tradition, you know, that if you’re a poet or a great playwright, or whatever, you are doing it for all future generations, and not just doing it for your own time. And so it’s been a bit of a surprise to me over the past five years that suddenly all of my stuff is sort of clicking into place. I get slightly nervous that I’m not on the cutting edge anymore. I’m kind of like an ice-breaker and so in a sense the things that have come to fruition in the last five years urge me to move on.
Toward?
A global debate and dialogue is now going on about what we mean by “development.” I have been very much a part of this debate and it’s moving much faster than I ever thought. That’s so exciting to me. We shouldn’t throw that word out. Human development has been what it’s been about. And within sustainable limits of the earth’s ecology and carrying capacity. We confuse means with ends. This shining goal of human development got lost; it became equated with the means, which the economists gave us: that is, economic growth. Now, allies very high up in the World Bank are saying: “We have to ask this question: How much does economic growth actually have to do with development?” We have to be mulitdisciplinary in our approach. The idea that one discipline, economics, could pre-empt this complex development was really offensive to my sense of balance. In Rio, I made a proposal at one of the first press conferences: that economists who were doing macropolicy — macroenonomics — would need to be retrained. They would need to go back to school and learn all those courses that they hadn’t taken: ecology, cultural anthropology, social psychology, thermodynamics, and every other discipline concerned with human development. If they wanted to go on doing macropolicy targeted toward sustainable development they would have to be relicensed. Economists prescribe for whole nations, and get countries into a terrible mess — and they have less accountability than doctors or lawyers. We are making conceptual progress, that “politics of reconceptualization” I was calling for in Politics of the Solar Age.
Describe the politics of reconceptualization.
The core was going from what is popularly called reductionism to what is popularly called holism. I was tracing that through all of the disciplines and showing how we had reached a nadir of specialization and fragmentation. There was nothing else to do but to stitch the world back together again. We need to pull back and take a wide shot and see what the whole thing looks like. All of our colleges have buildings devoted to these boxes like geography and economics and all of the other separate disciplines. Today the problem is visible in capital cities like Washington, DC, where this fragmentation is all set in concrete. Buildings all over town that are named for departments of agriculture, labor, commerce, and other fragmented pieces of the agenda: they rarely talk to each other. These great capital cities are “the dinosaur’s brain,” the last place to get the message. Because they are constitutionally incapable. The good news is that there is a new force arising in the world which is going to be a real contender in the future. Today’s world order consists of two basic players: mega-corporations and countries. As we discovered in Rio, the countries are losing sovereignty because of the global economy. They can’t manage even their own domestic economies, let alone do all of these things that they promise their voters they’re going to do, such as create full employment or deal with cross-border issues. The other great force in the world, the mega-corporations, are overlooked in the UN charter, never thought about — just like the word “environment” isn’t anywhere in the UN charter, nor is “migration.” Neither is “global finance” or “multinational corporation.”
So there is no particular leadership from these institutions?
We cannot expect nation-state governments to lead, because of this loss of sovereignty; neither can we expect global corporations to lead. You’ll find a few executives in these companies,and they’ll try to do the best they can. But as long as they’re profit-maximizing and accountable to their shareholders, we shouldn’t expect any great leadership from them. So what we have emerging in the world is what my friend Elise Boulding dreamed of : a global civil society. This global civil society now is composed of a proliferation of citizens’ organizations, of every form and stripe — it was a marvelous thing to see them all in Rio at the global forum. And of course the United Nations still insists on calling them Non-Governmental Organizations, NGOs. I like to call countries and corporations and other great institutions Non-Civil Organizations, NCOs. The global civil society and this proliferation of citizens’ organizations are the social innovators.
Made up of people operating on the fringe?
They come from the periphery of the society; you always expect that’s where innovation comes from. It never comes from all those comfortable people who are running things — they don’t feel the need to innovate. We have this rich stew of social innovations and it’s just wonderful to see them all on the Internet, the Well, Togethernet, Econet, Peacenet, and everything like that. We have also to go beyond these elite computer networks, because they shut out 90 percent of the human family. Good as they are, we have to go beyond this kind of narrowcasting to broadcasting. We have to be on radio, television.
Describe barefoot television.
This is a television where people in indigenous societies have Super 8 cameras and are documenting their own cultures. This is happening now in Sri Lanka and Malaysia and everywhere in the Southern Hemisphere. Native people are at last getting a crack at producing their own stuff and not having CBS or the BBC interpret who they are. There’s this great new shift to multicultural alternative television which is now just below the surface. I have been involved with a consortium pulling a lot of these television resources together. The whole idea is that most of them are nonprofit, so instead of selling each other programs at enormous cost, they will barter programs, just like Ted Turner does with CNN’s World Report. It is one of the cheapest news programs on the air because it’s all bartered.
You’ve noticed that barter is on the rise?
Actually, barter is where the action is. Barter is a sort of early warning indicator to me of a malfunctioning macro-economic Management. When a country is managing its affairs inappropriately, many local barter systems and local currencies and local computer exchange systems are flourishing in that country. For example, in my mother country, Britain, which is one of the worst-managed countries around and has been for a long time, you have two hundred LET systems (Local Exchange Trading) and people are happily inventing money based on the name of the town that they live in: Bath money and Bristol money and Stroud money and Manchester money. It’s very similar with what’s going on in the US with Ithaca money [sidebar] and TimeDollars. People are beginning to understand that the evolution of money has come to the point now where we absolutely have to understand what money is: a symbol system. Money isn’t real. It’s a tracking system, a scoring system, to keep track of people’s transactions. The real resources are the human resources and the natural resources in these exchanges. We’ve gone from shells and barter to coins and paper money. Now we’ve gone to global electronic money. Suddenly people are realizing the possibilities in the “local information society.”
For example?
For example, a radio garage sale (we have one in the town I live in) where all the farmers tune in on Saturday morning and one of them will call up and say, “I’ve got some tractor time. Who’s out there going to exchange this for pepper seeds?” and all of that. When people can just do this on the radio or on pc bulletin boards, we’re beginning to realize that we don’t need bankers so much anymore.
We’re developing new forms of exchange?
Yes, and we can now visualize a society where, if you’re a small business and you want to raise money, you won’t have to do it even in the way that some of these local exchange systems work. If you need to expand your restaurant, you can do as a restauranteur in the Berkshires did a few years ago. He sold what he called Deli Dollars to local people who liked his restaurant. He sold the Deli Dollars for nine dollars and said that they would be redeemable in six months for ten dollars’ worth of delicatessen food or meals. That was the way he funded his expansion, because the bank wouldn’t give him a loan…..Already people are taking the business plans and uploading them to the Well and Internet. Bankers are suddenly starting to realize: “This really is The Death of Money” (to quote a recent book title). What has happened, as I’ve been predicting for many years, is that money and information have become equivalent. Often many, even bankers, prefer information because the information is traveling faster than money. People who want to fund their business plans need to understand all this. Dead capital laying around is far less important than the ideas it is chasing. So the ideas in a good business plan may be a hundred times more valuable than the money someone could put into it. These exciting things were in my Creating Alternative Futures vision. Many are now happening.
Your views on health care?
This is another reconceptualization I’ve been working on for a long time that is also coming to fruition: the reconceptualization of health. In the US we have this absolutely colossal medical-industrial complex which costs a trillion dollars a year, employing one of every ten working in the economy. It has very little to do with health outcomes. In fact, health outcome is far more highly correlated with secure jobs, and peace of mind, a good environment, good family relations, safe street, clean air and water. I was recently speaking to 2,500 executives of the medical-industrial complex who were dealing with how to downsize this industry. They must grapple with the whole idea that just like the military companies, they have to find their own conversion plan. All this restructuring is going on now, in obsolescent sectors based on too much energy and high technology use, and producer-driven rather than based on consumer demand. Being downsized is painful. These are necessary readjustments, driven by all these global forces that we’ve unleashed that have suddenly forced us into this interdependent world. It’s forcing us into holism and reintegrating all of our thinking and strategies.
You’ve been nurturing the notion of an alternative to the GNP as an economic guide, developing new quality-of-life indicators.
I have been proposing an alternative to the GNP for many years, one that would score the game a little more sensibly than GNP. People don’t realize that because GNP doesn’t differentiate between goods and bads and it all is added together as if the GNP is going up, most of our industries today are ameliorative; they’re around to clean up the mess and to replace all those services that we destroyed in our careless way. The GNP recipe for growing a society actually created the pathology. It always seemed so obvious to me because the society is a system, with circular flows that don’t fit onto economists’ input-output tables.
Because?
If you’re trying to use linear balance-sheet accounting to account for interactions in a system, you don’t know which are your costs and which are your benefits. One one side of the sheet it seems terrible: “Oh dear, we’re going to downsize this industry and lose jobs.” On the other side of the balance sheet: “Yes, but we’re going to save money in taxes.” And so you have this crazy conversation involving two warring paradigms. You have a circular system — the actual society with all these interactions — and the imposition on it of the linear grid system that is this kind of GNP balance sheet. And then you’ve got the public sector and the private sector. It’s getting absurd, and more and more obvious to ordinary people that people in Washington know that they have the wrong map and that they can’t lead us anywhere using that map. My sort of alternative to that has always been: First of all the new scorecard progress has to be interdisciplinary, that’s the first thing, because “progress” is a multidimensional concept and so is “quality of life.” My indicators, which I call Country Futures Indicators (CFI), are geared toward being more predictive of how well a country is managed for the longer term. Basically, it takes into account how well a country is investing in its own people, because they’re the wealth of nations, just as the resource base is the wealth of nations. If they’re investing in their people then they’re going to have healthy, responsible, educated, aware people — a fabulous resource. And then the CFI enables you to see whether they’re investing in the resource base. Are they shifting toward a more sustainable way of doing things? Are they properly accounting for their natural asset base and for their infrastructure? Since they’re measuring per capita income, I don’t want to do away with GNP — it’s okay to have it there — it just isn’t the most important indicator. So there are a whole lot of things in CFI that give perspective to GNP, like GNP measures per capita income and CFI looks at the poverty gap. Because with averages you can have a GNP per capita going up and you’ve created three or four billionaires and everyone else is going hungry. These are the crazinesses of over-averaged indicators. A sort of debate has been going on between economists who do macrostatistics, and the statisticians from other disciplines who need to be brought into the game. It is specifically unbundled so it displays the different statistics as they are — parts per million of carbon monoxide or sulfur oxides in the air.
The danger there is what?
We don’t want an economist to take that information into the back room and take a money coefficient that he thought up out of his head and dump it into this huge average formula where the economists are going to decide whether clean air is more important than better infant mortality rates or more money income or fewer jobs. We don’t want economists making those decisions; they are the essence of the political process. Country Futures Indicators give the valuing process back to the public. People have said to me, “Yes, but you can never get the media’s attention with that.” Why the GNP works is it’s one number: it goes up or it goes down. I say, ” Look, I have faith in my fellow journalists.” They’re not all idiots. A lot of them are very thoughtful people. In the last year, CFI partnered with the Calvert Group, an asset management firm in Washington, DC, that manages the Calvert family of social investment funds. It took me a little while to go through all the departments of the institution, quite rightly, to persuade them that they should do this, that it’s a real win-win, to partner this with me. The CEO, Stan Sorrell, loved it. He invited me into the company and I talked to everybody. We have a wonderful team of in-house statisticians that I’m joint venturing with. And the trademark is the Calvert-Henderson Quality of Life Indicators (for the US). They think it’s going to be just as valuable a service mark as Dow Jones. A version of our Country Futures Indicators is going to be rolled out in the fall.
Explain how it will work.
Every month when the GNP figures are updated or corrected, or there’s something out of the GNP Office, we will be able to say, “Okay. Here is our release this month with this aspect of quality of life. We’re going to focus on twelve very broad dimensions of quality of life. We’re very ecumenical; we are not reinventing the wheel. We are getting our statistics from all the good groups that collect these statistics, like the people at the World Bank who have never been able to get the attention of the economists up in the headquarters office. There are wonderful sociologists and ecologists and cultural anthropologists who work for the UN who have never been able to get the attention of the UN statistical office, the people who do the GNP. These people will be our data sources, along with the Children’s Defense Fund on children’s stuff, and the Urban Institute on workplace issues. And when we release these things each month, we’re hoping to do a syndicated column around it (which I will write) — a qualitative description of education, literacy rates and stuff one month, and then the next month we’ll do health, and the next month we’ll do cultural issues, art and music. That’s a very important thing, you know, is focusing on culture. That’s one of the visions: that everything is going to be multicultural and we will learn to savor each other’s cultures just as much as we savor each other’s food and art and music. We’re going to learn to dig all this diversity. What we are hoping to do is create a debate about what is valuable — to begin redefining wealth and progress.
Do you feel that our traditional economic models no longer hold water?
We have this new problem of jobless economic growth. The last symptom of the problem of the GNP growth model is that we’re now getting GNP growth by destroying jobs instead of creating them. The model has completely broken down, and it’s obvious that is has to be changed. The only way we’re going to deal with that really is at the local level, where people will have to create some of their own safety nets, and we’re going to have to match unemployed people with tasks that need doing in their communities using electronic debit and credit systems and smart credit cards, service credits — all of those new time-dollar systems. So I’m going to be quite closely involved with that as well as looking at the global end of it, which is: how do we create what you may call a Global Securities and Exchange Commission? The global capital markets are in the same shape that the US capital markets were in 1929. We needed an SEC to save Wall Street from itself. And we need that now on a global level. And I talk to currency traders and brokers all the time and they say, somebody’s got to come in and save us ’cause each one of us hedging our own risks creates risks at the system level, and the whole thing can come down.
You’ve kept a relatively low profile. On purpose?
I haven’t particularly wanted to be super-visible; I learned from my friend and mentor E.F. Schumacher to just float like a butterfly and sting like a bee. It’s often the best thing if you’re a social innovator to be a little anonymous. You don’t want to be highly visible because it’s just harder to get a whole lot of things done.
Your mail backs up?
I’ve always been tyrannized by my mailbox, by my “in” box, and have always been determined not to allow it to run my life. One thing I do when I feel that is happening is that I go to my favorite meditation place in the morning and ask the great spirit and mother Gaia, what is the best thing that I can work on today? I get much better ideas from that. When I come back I look at the in box and just set it aside and do something else. Otherwise you get run by the system, and the system is quite pathological; it’s not good to be run by it. That’s why I live on an island off the coast of Florida: it gives me a little perspective.
How have you dealt with the sexism and biases of traditional media in your career as an economist?
That’s just a fact of life. I realize that I’m operating in a patriarchy, but then every other country in the world is a patriarchy. The UN is the biggest patriarchy of all. I feel like Virginia Woolf. I have no country. I’m a woman. I have no country. That means my country is my planet.
How did you make this transition from housewife to activist to economist?
Just following my own nose and doing what I could, based on what I understood at the time. I always used to tell people: don’t wait for anyone else to deputize you or authorize you or empower you. You just have to start out with yourself — where you are, what you know, what your impulse is — and put one foot in front of the other, like our Buddhist friends laying down a path in walking. That’s all I did. I just laid down a path in walking. I was not quite sure where it was going to lead. I’m surprised and delighted that it led where it did, but I didn’t plan it that way.