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Averting The Apocalypse: Lessons From Costa Rica

It's Our Economy - 1 hour 18 min ago
Above Photo: Monique Quesada Google is blocking our site. Please use the social media sharing buttons (upper left) to share this on your social media and help us break through. Earlier this summer, a paper published in the journal Nature captured headlines with a rather bleak forecast. Our chances of keeping global warming below the 2C danger threshold are very, very small: only about 5%. The reason, according to the paper’s authors, is that the cuts we’re making to greenhouse gas emissions are being cancelled out by economic growth. In the coming decades, we’ll be able to reduce the carbon intensity of the global economy by about 1.9% per year, if we make heavy investments in clean energy and efficient technology. That’s a lot. But as long as the economy keeps growing by more than that, total emissions are still going to rise. Right now we’re ratcheting up global GDP by 3% per year, which means we’re headed for trouble. If we want to have any hope of averting catastrophe, we’re going to have to do something about our addiction to growth. This is tricky, because GDP growth is the main policy objective of virtually every government on the planet. It lies at the heart of everything we’ve been told to believe about how the economy should work: that GDP growth is good, that it’s essential to progress, and that if we want to improve human wellbeing and eradicate poverty around the world, we need more of it. It’s a powerful narrative. But is it true? Maybe not. Take Costa Rica. A beautiful Central American country known for its lush rainforests and stunning beaches, Costa Rica proves that achieving high levels of human wellbeing has very little to do with GDP and almost everything to do with something very different. Every few years the New Economics Foundation publishes the Happy Planet Index – a measure of progress that looks at life expectancy, wellbeing and equality rather than the narrow metric of GDP, and plots these measures against ecological impact. Costa Rica tops the list of countries every time. With a life expectancy of 79.1 years and levels of wellbeing in the top 7% of the world, Costa Rica matches many Scandinavian nations in these areas and neatly outperforms the United States. And it manages all of this with a GDP per capita of only $10,000, less than one-fifth that of the US. In this sense, Costa Rica is the most efficient economy on earth: it produces high standards of living with low GDP and minimal pressure on the environment. How do they do it? Professors Martínez-Franzoni and Sánchez-Ancochea argue that it’s all down to Costa Rica’s commitment to universalism: the principle that everyone – regardless of income – should have equal access to generous, high-quality social services as a basic right. A series of progressive governments started rolling out healthcare, education and social security in the 1940s and expanded these to the whole population from the 50s onward, after abolishing the military and freeing up more resources for social spending. Costa Rica wasn’t alone in this effort, of course. Progressive governments elsewhere in Latin America made similar moves, but in nearly every case the US violently intervened to stop them for fear that “communist” ideas might scupper American interests in the region. Costa Rica escaped this fate by outwardly claiming to be anti-communist and – horribly – allowing US-backed forces to use the country as a base in the contra war against Nicaragua. The upshot is that Costa Rica is one of only a few countries in the global South that enjoys robust universalism. It’s not perfect, however. Relatively high levels of income inequality make the economy less efficient than it otherwise might be. But the country’s achievements are still impressive. On the back of universal social policy, Costa Rica surpassed the US in life expectancy in the late 80s, when its GDP per capita was a mere tenth of America’s. Today, Costa Rica is a thorn in the side of orthodox economics. The conventional wisdom holds that high GDP is essential for longevity: “wealthier is healthier”, as former World Bank chief economist Larry Summers put it in a famous paper. But Costa Rica shows that we can achieve human progress without much GDP at all, and therefore without triggering ecological collapse. In fact, the part of Costa Rica where people live the longest, happiest lives – the Nicoya Peninsula – is also the poorest, in terms of GDP per capita. Researchers have concluded that Nicoyans do so well not in spite of their “poverty”, but because of it – because their communities, environment and relationships haven’t been plowed over by industrial expansion. All of this turns the usual growth narrative on its head. Henry Wallich, a former member of the US Federal Reserve Board, once pointed out that “growth is a substitute for redistribution”. And it’s true: most politicians would rather try to rev up the GDP and hope it trickles down than raise taxes on the rich and redistribute income into social goods. But a new generation of thinkers is ready to flip Wallich’s quip around: if growth is a substitute for redistribution, then redistribution can be a substitute for growth. Costa Rica provides a hopeful model for any country that wants to chart its way out of poverty. But it also holds an important lesson for rich countries. Scientists tell us that if we want to avert dangerous climate change, high-consuming nations are going to have to scale down their bloated economies to get back in sync with the planet’s ecology, and fast. A widely-cited paper by scientists at the University of Manchester estimates it’s going to require downscaling of 4-6% per year. This is what ecologists call “de-growth”. This calls for redistributing existing resources and investing in social goods in order to render growth unnecessary. Decommoditizing and universalizing healthcare, education and even housing would be a step in the right direction. Another would be a universal basic income – perhaps funded by taxes on carbon, land, resource extraction and...
Categories: Friends of GEO, SE News

Q&A: Yochai Benkler on the Benefits of an Open Source Economic System

Shareable - Commons - November 22, 2017 - 4:22pm

After the breakthrough of the internet, Yochai Benkler, a law professor at Harvard University, quickly understood that new online forms of collaboration such as Wikipedia or Linux responded to a completely new economic logic. Specializing in the digital culture of the networked society, Benkler worked on a coherent economic vision that guides us beyond the old opposition between state and markets.

Categories: Friends of GEO

Now Available: 2017 Workers To Owners Impact Report

It's Our Economy - November 22, 2017 - 3:00pm
Above Photo: Valentina Ortiz-Izquierdo/ Flickr The Workers to Owners 2017 Annual Impact Report, produced by the Democracy at Work Institute, covers context and data from the collective effort of a team of business, cooperative, community development, finance, and nonprofit sectors to promote cooperative employee ownership. The report includes the context for the collaboration, data points tracking the worker cooperative sector over the last three years, and analysis of the group’s progress. “The collaborative came together in 2016 to respond to a moment of generational opportunity. In the next 15 years, hundreds of thousands of businesses employing millions of people will be sold, consolidated or closed as Baby Boomer business owners retire. Our goal is to ensure the safety of these community economic anchors and local jobs, and to catalyze a wave of business conversions to cooperative employee ownership, which has been proven to increase equity in our most vulnerable communities” says Democracy at Work Institute Executive Director Melissa Hoover. This report shows tangible outcomes of the worker cooperative model, including growing press coverage, interest from minority business support organizations, implementation by the economic development community, and policy support at federal, state, and regional levels. The data contained in this report includes the latest data available, with the majority of information through Q2 of 2017 and select information we have collected from Q3 2017. Throughout the report we see a coordinated, strategic effort that, even in its short life, has moved the dial on employee ownership conversions, raising awareness and enlisting partners. The report points toward a promising future, prompting a greater investment of time and resources paired with a close eye on trends and deeper analysis. Click here to download the full report
Categories: Friends of GEO, SE News

40% Of Detroit Has No Internet, They Are Creating Their Own

It's Our Economy - November 22, 2017 - 2:00pm
Above Photo: From motherboard.vice.com Google is blocking our site. Please use the social media sharing buttons (upper left) to share this on your social media and help us break through. Being stuck without access to the internet is often thought of as a problem only for rural America. But even in some of America’s biggest cities, a significant portion of the population can’t get online. Take Detroit, where 40 percent of the population has no access to the internet—of any kind, not only high speed—at home, according to the Federal Communications Commission. Seventy percent of school-aged children in the city are among those who have no internet access at home. Detroit has one of the most severe digital divides in the country, the FCC says. “When you kind of think about all the ways the internet affects your life and how 40 percent of people in Detroit don’t have that access you can start to see how Detroit has been stuck in this economic disparity for such a long time,” Diana Nucera, director of the Detroit Community Technology Project, told me at her office. Nucera is part of a growing cohort of Detroiters who have started a grassroots movement to close that gap, by building the internet themselves. It’s a coalition of community members and multiple Detroit nonprofits. They’re starting with three underserved neighborhoods, installing high speed internet that beams shared gigabit connections from an antenna on top of the tallest building on the street, and into the homes of people who have long gone without. They call it the Equitable Internet Initiative. Image: Lara Heintz The issue isn’t only cost, though it is prohibitive for many Detroiters, but also infrastructure. Because of Detroit’s economic woes, many Big Telecom companies haven’t thought it worthwhile to invest in expanding their network to these communities, Nucera told me. The city is filled with dark fiber optic cable that’s not connected to any homes or businesses—relics from more optimistic days. Residents who can’t afford internet, are on some kind of federal or city subsidy like food stamps, and students are prioritized for the Initiative, Nucera told me. The whole effort started last summer with enlisting digital stewards, locals from each neighborhood who were interested in working for the nonprofit coalition, doing everything from spreading the word, to teaching digital literacy, to installing routers and pulling fiber. Image: Lara Heintz Many of these stewards started out with little or no tech expertise, but after a 20-week-long training period, they’ve become experts able to install, troubleshoot, and maintain a network from end to end. They’re also aiming to spread digital literacy, so people can truly own the network themselves. “We want to make sure that we’re not just installing all the equipment, but also educating the community,” said Rita Ramirez, one of the stewards working on the project in Detroit’s Southwest neighborhood. One component the groups are most eager to build out is the intranet that will result from connecting so many homes (about 50 in each neighborhood) to a shared wireless connection. They are encouraging local residents to take advantage of that intranet and build shared tools like a forum and emergency communication network that is completely localized and secure. In a city that is rebuilding after a decade of economic turmoil, the internet can no longer be a luxury for the wealthy. Detroit’s renaissance won’t happen without each of the city’s diverse communities having access to the basic tools of modern work, education, healthcare, and communication. All of Detroit (or, certainly, more than 60 percent) needs access to the internet and the current structure established by Big Telecom hasn’t made this an easy goal. “Communication is a fundamental human right,” Nucera said. “This is digital justice.”
Categories: Friends of GEO, SE News

Relative Poverty Rate Increased By 1.3 Points In 2016

It's Our Economy - November 21, 2017 - 1:00pm
Above Photo: Jon Collier / Flickr Google is blocking our site. Please use the social media sharing buttons (upper left) to share this on your social media and help us break through. Every year the Census Bureau publishes the official poverty rate and the supplemental poverty rate. The official rate groups all related people in a household into one unit, adds up all the cash income that flows into that unit (except tax credits), and then compares that income amount to a poverty line that varies based on the number of people in the unit. The supplemental rate works similarly except that it takes the cash income concept from the official rate, adds cash-like benefit incomes and tax credits to it, and then subtracts taxes paid, child support paid, child care expenses, work expenses, and medical out-of-pocket expenses. The supplemental rate uses a poverty line that varies geographically and by the number of people in the family unit. In addition to the official and supplemental rates, it can be useful to look at something called a relative poverty rate, which is more commonly used across the world. The relative poverty rate figures provided below are derived in the following manner: Each family’s income is determined by adding cash income, cash-like benefit income, and tax credits, and then subtracting taxes paid and child support paid. This is the same as the income concept used by the supplemental poverty rate except that I do not subtract child care expenses, work expenses, and medical out-of-pocket expenses, as those are not typically subtracted from income concepts elsewhere in the world. The income derived in (1) is equivalized by dividing it by the square root of the number of people in the family. So a four-person family whose income is $40,000 ends up with an equivalized income of 40,000 / ?4 = $20,000. An equivalized income is assigned to every person in the survey. After assigning equivalized incomes in (2), I find the poverty line by taking the median equivalized income and dividing it in half. There is no geographic adjustment. Anyone with an income below 50% of the median equivalized income is determined to be in poverty. Using this method, here is the relative poverty rate for the last eight years, compared to the official and supplemental poverty rates in the same years. The relative poverty rate is generally higher than the other rates and actually went up 1.3 points last year while the official and supplemental poverty rates declined. The next graph shows how much income a single person would have needed during each of the last eight years to be over the relative poverty line. To determine how much income families of other sizes would have needed, you can take the figures here and multiply them by the square root of the family size. So, for instance, a family of four will need double the income in this graph to be above the poverty line using this metric. Note that all of the dollar values are adjusted to 2016 dollars with the CPI-U-RS. The final graph compares the pure relative poverty rate to two anchored poverty rates over this period. The pure relative poverty series is just the rates from the first graph above converted to a line graph. For the 2009 anchored poverty series, I take the 2009 poverty threshold from the second graph above ($16,176) and use that as the poverty line for all of the years in the series. For the 2016 anchored poverty series, I use the 2016 poverty threshold ($17,390) as the poverty line for all of the years in the series. All three measures show the same basic trend until 2016 where the pure relative poverty line goes in the opposite direction of the other two. This is what you would expect given the second graph above where the poverty line shoots up in the last year due to a rise in the median income.  
Categories: Friends of GEO, SE News

3 Creative Ways to Transform Urban Spaces

Shareable - Commons - November 21, 2017 - 12:43pm

Open spaces are key to the health and vitality of cities. Walkable, safe, green spaces increase the possibilities for people to meet and nurture relationships beyond family, friends, and colleagues. But a discussion about Sharing Cities can't focus on open spaces alone. Gentrification should be a part of that discussion.

Categories: Friends of GEO

Landmark Study Links Tory Austerity To 120,000 Deaths

It's Our Economy - November 18, 2017 - 11:00am
Above Photo: Labour has called on Theresa May to match £6m pledged by Labour for health (Getty) Google is blocking our site. Please use the social media sharing buttons (upper left) to share this on your social media and help us break through. Government is accused of ‘economic murder’ The Conservatives have been accused of “economic murder” for austerity policies which a new study suggests have caused 120,000 deaths. The paper found that there were 45,000 more deaths in the first four years of Tory-led efficiencies than would have been expected if funding had stayed at pre-election levels. On this trajectory that could rise to nearly 200,000 excess deaths by the end of 2020, even with the extra funding that has been earmarked for public sector services this year. Real terms funding for health and social care fell under the Conservative-led Coalition Government in 2010, and the researchers conclude this “may have produced” the substantial increase in deaths. Is austerity really to blame for stalling life expectancy in England? The paper identified that mortality rates in the UK had declined steadily from 2001 to 2010, but this reversed sharply with the death rate growing again after austerity came in. From this reversal the authors identified that 45,368 extra deaths occurred between 2010 and 2014, than would have been expected, although it stops short of calling them “avoidable”. Based on those trends it predicted the next five years – from 2015 to 2020 – would account for 152,141 deaths – 100 a day – findings which one of the authors likened to “economic murder”. The Government began relaxing austerity measures this year announcing the end of its cap on public sector pay rises and announcing an extra £1.3bn for social care in the Spring Budget. Over three years the additional funding for social care is expected to reach £2bn, which Labour leader Jeremy Corbyn said was “patching up a small part of the damage” wrought by £4.6bn cuts. The study, published in BMJ Open today, estimated that to return death rates to their pre-2010 levels spending would need to increase by £25.3bn. The Department of Health said “firm conclusions” cannot be drawn from this work, and independent academics warned the funding figures were “speculative”. However local councils who have been struggling to fund care with slashed budgets urged the Government to consider the research seriously. Shadow Health Secretary Jonathan Ashworth said the Government must match Labour’s spending pledges in the Autumn Budget. Per capita public health spending between 2001 and 2010 increased by 3.8 percent a year, but in the first four years of the Coalition, increases were just 0.41 per cent, researchers from University College London found. In social care the annual budget increase collapsed from 2.20 percent annually, to a decrease of 1.57 percent. The researchers found this coincided with death rates which had decreased by around 0.77 percent a year to 2010, beginning to increase again by 0.87 percent a year. And the majority of those were people reliant on social care, the paper says: “This is most likely because social care experienced greater relative spending constraints than healthcare.” It also notes that a drop in nurse numbers may have accounted for 10 percent of deaths, concluding: “We have found that spending constraints since 2010, especially public expenditure on social care, may have produced a substantial mortality gap in England.” The papers’ senior author and a researcher at UCL, Dr Ben Maruthappu, said that while the paper “can’t prove cause and effect” it shows an association. And he added this trend is seen elsewhere. “When you look at Portugal and other countries that have gone through austerity measures, they have found that health care provision gets worse and health care outcomes get worse,” he told The Independent. One of his co-author’s, Professor Lawrence King of the Applied Health Research Unit at Cambridge University, said it showed the damage caused by austerity “It is now very clear that austerity does not promote growth or reduce deficits – it is bad economics, but good class politics,” he said. “This study shows it is also a public health disaster. It is not an exaggeration to call it economic murder.” The Department of Health stressed that no such conclusion could be drawn. A spokesperson said: “As the researchers themselves note, this study cannot be used to draw any firm conclusions about the cause of excess deaths. “The NHS is treating more people than ever before and funding is at record levels with an £8bn increase by 2020-21. We’ve also backed adult social care with £2bn investment and have 12,700 more doctors and 10,600 more nurses on our wards since May 2010.” And independent academics added that it is hard to prove cause and effect with this kind of study even if the underlying assumptions may be correct. Professor Martin Roland Emeritus Professor of Health Services Research, University of Cambridge said: “This study suggests that a change happened to cause deaths to stop declining around 2014. This is likely to be a correct finding. However, the link to health and social care spending is speculative as observational studies of this type can never prove cause and effect.” Cllr Izzi Seccombe, chairman of the Local Government Association’s community wellbeing board, said: “We would urge government to review the evidence behind this analysis. If correct, it would clearly reinforce the desperate and urgent need to properly fund social care Mr Ashworth, responding to the study, said: “This shocking mortality gap is a damning indictment of the dire impact which sustained Tory cuts to our NHS and social care services have had on health outcomes across the nation. “Ahead of the Budget, this appalling news must serve as an urgent wake up call to the Prime Minister. She must match Labour’s pledge to deliver an extra £6 billion for our NHS across the next financial year to ensure the best possible quality of care is sustained for years to come.”
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Prosperity Through Keystrokes: Understanding Federal Spending

It's Our Economy - November 18, 2017 - 10:00am
Above photo: From CNN Money. Google is blocking our site. Please use the social media sharing buttons (upper left) to share this on your social media and help us break through. Progressives Trigger warning: Compassion required. When is the last time you heard Greens, Berniecrats or Indie voters not acknowledge the distinct and pressing need for election reform, campaign finance reform, voting reform? More to the point, when haven’t they mentioned unleashing third parties from the fringe of irrelevancy and up on to the debate stage? That is mostly what is talked about, simply because it is low hanging fruit. It has long been known that our electoral system and methods of voting are corrupt, untrustworthy, and easily manipulated by less than savvy politicians, state actors, and hackers alike. The answers to many of these issues is the same answer that we would need to push for any progressive reforms to take place in the United States: namely, we need enlightened, fiery, peaceful, and committed activists to propel a movement and ensure that the people rise, face their oppressors, and unify to demand that their needs be met. What is not as well-known, however, is how a movement, the government, and taxes work together to bring about massive changes in programs, new spending, and the always scary “National Debt” (should be “National Assets”, but I will speak to that later). In fact, this subject is so poorly understood by many well-meaning people on all sides of the aisle that these issues are the most important we face as a nation. Until we understand them and have the confidence and precision necessary to destroy the myths and legends we have substituted in the absence of truth and knowledge, it must remain front and center to the movement. Progressives, like most people in the U.S., are almost religiously attached to the terms “the tax payer dollar,” and the idea that their “hard earned tax dollars” are being misappropriated. Often, the most difficult pill for people to swallow is the concept that our Federal Government is self-funding and creates the very money it “spends”. It isn’t spending your tax dollars at all. To demonstrate this, consider this simplified flow chart: These truths bring on even more hand wringing, because to the average voter they raise the issue of where taxes, tax revenue, government borrowing, and the misleading idea of the “National Debt” (which is nothing more than the sum of every single not yet taxed federal high-powered dollar in existence) fit into the federal spending picture. The answer is that they really don’t. A terrible deception has been perpetrated on the people. We have been led to believe that the U.S. borrows its own currency from foreign nations, that the money gathered from borrowing and collected from taxing funds federal spending. We have also been led to believe that gold is somehow the only real currency, that somehow our nation is broke because we don’t own much gold compared to the money we create, and that we are on the precipice of some massive collapse, etc. because of that shortage of gold. People in the United States have been taught single entry accounting instead of Generally Accepted Accounting Practices, or GAAP-approved double entry accounting, where every single asset has a corresponding liability; which means that every single dollar has a corresponding legal commitment. Every single dollar by accounting identity is nothing more than a tax credit waiting to be extinguished.  Sadly, many only see the government, the actual dollar creator, as having debt; that it has liabilities, not that we the people have assets; assets that we need more and more of as time goes on, to achieve any semblance of personal freedom and relative security from harm. In other words, at the Federal level it is neither your tax dollars nor the dollars collected from sales of Treasury debt instruments that are spent. Every single dollar the Federal Government spends is new money. Every dollar is keystroked into existence. Every single one of them. Which brings up the next question: “Where do our hard-earned tax dollars and borrowed dollars go if, in fact, they do not pay for spending on roads, schools, bombs and propaganda?” We already know the answer. They are destroyed by the Federal Reserve when they mark down the Treasury’s accounts. In Professor Stephanie Kelton’s article in the LA Times “Congress can give every American a pony (if it breeds enough ponies).” She states quite plainly: “Whoa, cowboy! Are you telling me that the government can just make money appear out of nowhere, like magic? Absolutely. Congress has special powers: It’s the patent-holder on the U.S. dollar. No one else is legally allowed to create it. This means that Congress can always afford the pony because it can always create the money to pay for it.” That alone should raise eye brows and cause you to reconsider a great many things you may have once thought. It will possibly cause you to fall back to old, neoclassical text book understandings as well, which she deftly anticipates and answers with: “Now, that doesn’t mean the government can buy absolutely anything it wants in absolutely any quantity at absolutely any speed. (Say, a pony for each of the 320 million men, women and children in the United States, by tomorrow.) That’s because our economy has internal limits. If the government tries to buy too much of something, it will drive up prices as the economy struggles to keep up with the demand. Inflation can spiral out of control. There are plenty of ways for the government to get a handle on inflation, though. For example, it can take money out of the economy through taxation.” And there it is. The limitation everyone is wondering about. Where is the spending limit? When we run out of real resources. Not pieces of paper or keystrokes. Real resources. To compound your bewilderment, would it stretch your credulity too much to say that the birth of a dollar...
Categories: Friends of GEO, SE News
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