I’m an economist, cont.

What I noticed was the enormous houses cheek by jowl, hundreds of them. “How much do these places cost?” I asked Paul. In the $500,000 to $700,000 range he said. That was a little stunning to my naïve ears.

“How on Earth could they afford them?” I’d bought a house with six fellow
Urban Ecology members back in 1980 for $130,000 and sold it for about the
dead-level inflation value of $155,000 in 1989 so I thought I knew a little
about paying mortgages if not making a profit in the real estate market.
“Well, a couple with two incomes buying one of these houses figures the
market is going up and everyone is making a lot of money on it. Sell it a
year later for an extra $100,000. People have been doing that for a few
years now. The real estate agents are encouraging them to turn over the
houses – ‘flip’ them, they say. That way the agents can make their fees flow
in faster and bigger, too.” Which was the gist of what he said.

“That can’t go on forever!” said I. I was then and there a better economist
than the Pharaoh’s High Priest himself.

Proportionality, my friends. People unwilling to look the Big Ones in the
eye – or who refuse to for dreams of unearned profit or hard-held dogma –
can’t possibly be legitimate economists. You have to look at the truth to be
good at anything… good. To ignore the expanding bubble based on sheer
speculation, as opposed to actually making and selling something for good
solid delivery of goods and services or investing in same, is ignoring a Big
One (especially when even the economists themselves talk about bubbles quite
unselfconsciously – last time around). The same for turning your back on
corruption, which Greenspan thought would sort itself out with minimal or no
regulation from those with values other than simply making money.

But they would miss the biggest ones of all even if they paid attention to
such indicators if they failed to notice – and mainstream economists do and
are continuing to fail to notice – that you can’t have infinite growth in a
limited environment. That’s ecological law number one on this planet. No
eco, no economy. Get used to it. (Before it is too late.)

Multiple real economists out there

I’ve been emboldened to write a book largely on economics lately. That’s
because I notice economists ignore the real economy. Oddly the term “real
economy” turns up off and on even among mainstream infinite growth
economists. It seems everyone intuitively, “in their bones,” understands
that to use the word “real” means the economy of production of goods and
services and their utilization by whoever buys them, called by the rather
crude and final sounding term, “consumption.” That term consumption is, like
infinite growth, the economist’s usual linear thinking that avoids the
ecological cycles. One does not just “consume.” It comes out the other end.
You can compost the poop, and you can reconfigure certain materials – steel
and glass, for example – to cycle around human uses virtually forever. The
consumption is only one part of the circle. The very use of the word
“consumer” as if it went into us and didn’t come out indicates something of
the present, hopefully temporary, victory of today’s mainstream economists
over most of the rest of us. It also represents a very high level of
ignorance about ecology in society.

But that ignorance is far from universal. There are plenty of excellent if
generally ignored economists out there with good, solid theory and
conclusions ready for everyday micro- and macroeconomic application.
Realizing the scale of the disaster with current economics and another Big
One omitted by its high priests – the primacy of what we build and its
design, which is mostly the cities, towns and villages 95% of us live in –
and noticing all the good thinking that has gone on about economics in the
last one hundred years or so that is getting little attention I decided to
write a book. As usual in my work ecocities are at the core, but this time
the context is economics and companion Big Ones. Along with ecocities, they
are population, the agricultural/diet nexus, generosity (a giving attitude
about investment in the future) and education about the above four.

I started realizing how pivotal what we build is – ecocities could be the
foundation for that – noticing when the Great Downturn hit that the US
Federal Government was bailing out, as usual, the automobile companies and
building infrastructure rapidly for more cars, with only modest emphasis on
modes of far more efficient and people-serving public transportation. Much
less was there any comparable “bail out” or any direct investment in
building the architecture of dwelling, working and educating in relation to
resources, ecological dynamics and cultural history, meaning in other words
pursuing urban design heading resolutely toward ecocities. For me the most
dramatic local example of bailing out and thus building the wrong thing:
Just a few miles from the housing development I visited with Paul for my
wake up to my brilliance as an economist, is the Fourth Bore of the
Caldecott Tunnel through the hills that separate Oakland and Berkeley on one
side from Orinda and Walnut Creek on the other. That’s $420 million dollars
(before cost overruns) for drilling a new hole through the mountain all for
the car and nothing for the train, much less for cities that solve transport
problems by simply building mixed uses close together.

As I started to read more and more in economics I kept circling back to the
insights of little credited E.F. Schumacher, with his book “Small is
Beautiful” emphasizing the human scale where private initiative and public
values can coincide – whereas they fight viciously on the large
international corporate and banking scale, and if you don’t think so you
haven’t gotten to the essence of the anger and confusion of the Neo Tea
Party people yet. I reviewed Hazel Henderson with her “cake chart” to best
the “pie charts” of economists, her “cake” illustrating that nature’s
economy is the bottom layer of the cake on which all the rest rest. The
informal market of helping one another in non-monetized ways is the second
layer. The monetized black market mostly un-regulated and un-taxed is the
third layer. And the market ascendant that we all talk about as the free
market, both small and large, real and honest and full of deceit and
self-delusion but moving the money most of us use in daily life and
life-long economic strategies – that rests on all the layers below.

One of the most brilliant and the economist who connects human aspirations
and the building of cities and towns to economics most clearly is the
obscure author Kenneth Schneider, the planner who couldn’t keep a job
planning because he, not his prospective city government and professional
employers, knew how to plan for values in addition to short term monetary
values, and among such values, ones supporting an ideal of the good city. He
said law has the ideal of the just and art has the ideal of the beautiful
but there is no similarly discussed and theorized ideal to help guide city
and town design and planning despite the fact that’s where almost all of us
live. Maybe the most obscure and insightful was Peter Van Dresser, hands on
solar innovator, boat builder and architect, student of traditional village
banking and economics in Northern New Mexico and – a delight to me to have
known him – the man who coined the term “astronaut” when he was writing
science fiction tales to pay his way through the Last Great Depression.

Then the now famous Economic Hit Man, John Perkins and Naomi Klein, the
critic of Milton Freidman and his Chicago School of economists who wracked
such horror throughout South America bolstering their theories on the guns
of Pinochet and other dictators provided me lessons in the courage to face
the really hard facts about economics gone rogue. Repudiating governments’
responsibility to their people and Keynesian economics, Friedman’s economic
tough love proved anything but love based, as well as being a theory
completely discounting the future and foreswearing ecological knowledge as
if it didn’t even exist.  What about the courage to face down the sacred
cows of today’s mainstream economists, that is, the proscription to ever go
where the money is? By that I mean by way of properly taxing those who have
become astronomically rich since Ronald Reagan’s administration, and to
snagging money before the wars and cars get it: seriously graduated income
tax, vastly reduced military budgets around the world but especially in the
US and disinvestment in the automobile infrastructure so we can invest in
and build cities for people instead of cars. What about the vast populace
down on all new taxes categorically when they have nothing to lose and all
the safety, benefits and social/cultural/ecological/even economic services
to gain should the super rich and corporations, the wars and cars be taxed
for the benefit of the whole damn planet? How’d they get so bamboozled as to
identify with and vote for privileges for people far more wealthy than they
could ever hope to be? Behind all this: there’s the economic necessity,
recognized by so few, of simply knowing what it is we need to build, that
is, largely, learning how to spend government money in a healthy manner and
how to write zoning policy to reshape the cities, agricultural lands and
natural lands we human are responsible now for managing.

One of the interesting things about the work of obscure people like me,
definite outsiders, is that digging up other obscure people while we are
looking for realty quality ideas turns up interesting surprises. How about
Western economics historians claiming trade and profit motive started with
European exploration and mercantilism? David A. Warburton, a name that
doesn’t easily fall from the lips of many versed in economics, relates the
history of money and trade in “Macroeconomics From the Beginning” says not
so: it was going on for centuries. In fact, when the Europeans in the era of
their colonialism tried to join in the ancient trade with India, China, East
Coastal Africa and the Spice Islands they had nothing of the craftsmanship
of textiles, ceramics and useful products the other countries wanted and so
all they could do was trade their stolen gold and silver from the New World
for what the East could actually make.

For me all these explorations were just the beginning and revisiting the
theories of Adam Smith and John Maynard Keynes. Franklin Delano Roosevelt
and his advisors knew, as apparently Obama does not, that the country needed
massive investment in soil reclamation and reforestation. Teddy Roosevelt
knew about protecting and restoring natural areas, rather than drilling in
them, a point missed by mainstream economists today. The practices of FDR
turned up surprises totally consistent with the eco-economists and those
that these days call themselves members of the “degrowth economics”

So I’m writing another book

The puzzle I’ve thought most about, in the context of economics, as I began
about a year ago to get interested in writing a book dealing with the
confluence of what we build (mostly ecocities or carcities – choose) with
economics is why do the climate scientists, climate change solutions
activists and sympathetic journalists almost completely ignore cities,
largest creations of our species? Don’t they just happen to notice them kind
of lying around the landscape taking up millions of acres where agriculture
used to bloom and wildlife roam? Don’t they see the swarming, clogged up
arteries of transport exuding enough CO2 to change the atmosphere and
climate of a whole planet? How does one miss something that big? You’d think
they’d have a professional interest in all that. They too, like the masses,
have been bamboozled by mainstream economists, by hyper rich captains of
banking and investment like Hank Paulson, 74th Secretary of the Treasury of
the United States, an individual “worth” $600 to $700 million. Why turn to a
guy like that to design solutions for world economics when he is so
massively, personally compromised by greed beyond almost any means of
denial? Read the reports out of the United Nations Conferences on Climate
Change and see almost no one use the words “city design” or “urban planning”
in the hundreds of thousands of words supposedly headed toward climate
fixes. But if you can’t fix the largest thing you make, how can you fix the
economy? Isn’t the economy all about what we make and sell to one another?
Instead in a completely random fashion everyone is looking to a “market
solution” that trades carbon credits as yet another exotic (toxic?)
derivative of something else. Didn’t we get enough of derivatives and other
complicated economic instruments in 2008? Apparently our gaze has been
turned toward things that avoid what’s conventionally called hard work,
rigorous reasoning and moral responsibility.

But Biggest of all the Big Ones is knowing that prosperity is possible, and
for everyone, if we redefine prosperity around “enough” instead of “infinite
growth.” With happiness a serious part of prosperity, with ecologically
health needed and seen as a guide, maybe we can get there. Thus I’m calling
my book “Shrink for Prosperity – Last Chance for a Happy Future.” Well, it’s
a working title anyway, and now, back to writing that.

Richard Register can be contacted at ecocity@igc.org

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