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What Could a New Economy Look Like?

What Could a New Economy Look Like?. Joshua Farley Community Development and Applied Economics Gund Institute for Ecological Economics University of Vermont. What is Economics?. Allocation of scarce resources among alternative desirable ends

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What Could a New Economy Look Like?

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  1. What Could a New Economy Look Like? Joshua Farley Community Development and Applied Economics Gund Institute for Ecological Economics University of Vermont

  2. What is Economics? • Allocation of scarce resources among alternative desirable ends • The desirable ends and the characteristics of the scarce resources determine how we should allocate

  3. Leverage Points for Changing Complex Systems • Change the paradigm • What is possible? • Change the goals • What is desirable? • Change the rules • How do we allocate?

  4. Changing the Paradigm

  5. Changing the paradigm • What is biophysically possible? • Laws of physics • Laws of ecology • Basic requirements for sustainability • What is behaviorally possible? • Self-contained globules of desire vs. persons in community • Competitive self-interest vs. cooperative altruism • Behavior and institutions

  6. Changing the Goals • Efficiency: maximizing monetary value and economic growth? • Is it ecologically sustainable? • Is it just and efficient? • Income distribution • Food, water and eflornithine • Does it make sense? Food and energy • Or sufficiency? • Ecological sustainability • Social justice • Economic efficiency, redefined

  7. Justice and Efficiency • level of trust • mental illness and drug addiction • life expectancy and infant mortality • obesity • children’s educational performance • teenage births • homicides • imprisonment rates • social mobility

  8. Changing the Rules: Resource Use • Sustainability • Quantitative limits determined by science • Extraction and emissions • Inalienable property rights for future generations • Scale is price determining, not price determined • Just distribution • Who is entitled to resources created by nature and society as a whole?

  9. Changing the Rules: Energy and Technology • Fossil fuels vs. alternative energy • Rivalry and excludability • Green technologies and ecological problems • Minimizing costs • Maximizing benefits • From competition to cooperation

  10. Changing the Rules: Monetary Systems • Money as interest bearing debt • Creation and destruction • Won’t finance public goods • Growth and inequality or collapse

  11. Changing the Rules: Monetary Systems • Return seigniorage to the public sector • 100% fractional reserves • Creation • expenditures on public goods, full employment, green technologies, ecological restoration, etc. • Destruction • AEAs • Taxes • Spend and tax • Degrowth without misery

  12. Taxation and Justice

  13. Is Change Possible? • Economies are complex adaptive systems; constantly evolving • e.g. fossil fuel economy, speculative economy • Change is inevitable • Failed growth economy vs. planned degrowth • Adaptive management required

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