The latest ISEC message sent by Helena gives some feedback on the Economics of Happiness Conference, hosted in Portland, Oregon, from February 27 to March 1, 2015, including links to photos and proceedings.
We particularly valued a Local Futures blog by Steven Gorelick , Managing Programs Director at Local Futures (International Society for Ecology and Culture), author of Small is Beautiful, Big is Subsidized, co-author of Bringing the Food Economy Home, and co-director of The Economics of Happiness who frequently teaches and speaks on local economics around the US.
He summarises the growing awareness of economic inequality, referring to an Oxfam report, which tells us that the world’s 85 richest people now have as much wealth as the poorest 3.5 billion; that the richest 1% will own more than half the world’s wealth by next year; and that in the US, the wealthiest one percent captured 95% of income growth since 2009, leaving the bottom 90%
Cropped from shot taken in China by Taro Taylor: https://www.flickr.com/photos/tjt195/298982355/
Stephen asks if morality has any place in conventional economic thinking
He notes that ‘the overseers of the global economy’ are beginning to see problems with the wealth gap for reasons that are neither moral nor ethical, but purely practical: extreme inequality, they fear, might threaten the continuance of the system itself. Two examples:
- Billionaire and self-described plutocrat Nick Hanauer is even more concerned: “if we don’t do something to fix the glaring inequities in our society, the pitchforks will come for us.”
Gorelick revisits a famous memo signed by one of the most influential economists of our time, Lawrence Summers in 1991, when Mr. Summers was Chief Economist of The World Bank. In it he argues that heavily polluting “dirty industries” should be located in the less developed countries (LDCs). This is because the ‘cost’ of illness and premature death is based on lost earnings, and so the lives of the poor are less valuable than their wealthier counterparts.
He comments: “In other words, any moral qualms about dumping toxic waste in poor people’s backyards must be suppressed, because acknowledging the validity of those concerns would call into question the legitimacy of the entire “liberalization” package of deregulation and free trade pushed by The World Bank, IMF, WTO and other institutions”.
As a sister site points out from time to time, failure (incompetence, gross misjudgment and more) is rewarded. Not only did Summers hold on to his position at The World Bank, his career path continued ever upward and he eventually became Secretary of the Treasury where he presided over the deregulation of the financial industry was chosen by President Barack Obama to head his Council of Economic Advisers.
Gorelick records that in the following years dirty industries migrated to the less developed countries – accounting for both environmental improvements in the rich countries and blighted environments in places like China. Waste is now routinely traded to the South, with cargo ships bringing discarded plastic, e-waste, and other effluent of the consumer culture to Third World countries for disposal or “recycling”, at great cost to their environment and the health of their citizens.
The “impeccable economic logic” which Summer embraced is deeply troubling. people who are admired in their communities, loved by neighbors, friends, and family may have countless admirable traits, but the only one that matters to mainstream economists is their contribution to global economic output. If in that arena – measured by their monetized earnings – they are deemed deficient, their worth becomes negligible. And as the wealth gap grows, millions more are joining the ranks of the expendable every year.
Their only hope: that many more decision-makers grow to fear the extreme inequality which might threaten the continuance of their personally profitable system.