Cost, value and the society we might have

[This was drafted around the time of the delayed budget in October 2020. Too much was happening and I suppose the world moved on before I could submit it anywhere.]

The budget frenzy does not just highlight the familiar, toxic social and political priorities of this Government and much of the Parliament, it prompts deeper probing into common assumptions, perceptions and framing. What kind of society is desirable? What kind of society is feasible? How could we create it?

The budget is an opportunity to spell out, again, how misguided are some standard economic precepts. It reveals how profoundly awry are our conception of an economy and a society, our operating assumptions on human nature and our place in the world, and the aspirations we fall miserably short of.

Yes, a budget is about money and spending, but our elevation of it to the biggest annual policy gabfest reflects our functional conception that society is mostly about the economy and the economy is mostly about money.

Here is a different view. Society emerges from the social interactions of a large group of people. People are highly social beings (why else would language have developed), so a human society is complex, in both the common and the technical senses of ‘complex’. An economy emerges in a society from the exchanges we make in the course of providing our material needs and wants. An economy is what we do to provide for ourselves.

Money is a social invention, a social contract, that dramatically expands the scope for us to exchange things. Modern money is trivially easy to create, as needed: it requires only a few keystrokes of a computer keyboard. Both the Reserve Bank and the commercial banks do it all the time. We are not limited by money.

We in Australia are rich in our human capacities, we have abundant physical resources of many kinds and we have many ideas of what we can do or might do.

What if we start by asking what we want for our society over the next year, and into the future? At the moment a significant proportion of us has been rendered idle by the virus, so we could simply choose to ensure everyone can survive this period with enough basics and with dignity. This is quite within our means, why would we not?

We could have a big national conversation about how we might adjust our social structures so as to limit the spread of this and any later viruses. We could encourage creativity and flexibility to explore options. It would help greatly to have media through which this conversation can be conducted, with moderators but no ring-masters. Come to think of it, that’s what our media should be all the time, not the plaything of a few monopolists and autocrats.

The Black Summer fires were our introduction to serious global warming. Of course we need to shift rapidly away from activities that exacerbate the warming, and the means to do so are well known and readily available. We can make a big difference within five years, and ten years. In the short term a lot more fire-fighting equipment is needed, to try to prevent any more megafires from taking hold. We can make a national project of spreading the knowledge and skills for small-scale cultural burning, to reduce the vulnerability of our landscape to catastrophic fires even as the world warms. Many people still need help to re-establish their lives, so of course that can be a high priority. Regenerative agriculture offers a complementary win-win-win: healthier landscape, healthier food and large-scale carbon capture and storage. Its promotion should be a high national priority.

More generally our society has become divided, fragmented and acrimonious. It is clear most of us do not want this, and our response to the fires and the virus has shown we still know how to pull together. So let us get on with the many ways we can help each other and ensure no-one is left isolated and struggling when they don’t have to be. Promoting local community would be a core part of such a strategy.

These thoughts offer a glimpse of how we could be proceeding. To implement such approaches we need to abandon some misguided economic mantras which I have summarised elsewhere. The implicit goal of our present system is the creation and discarding of more and more stuff. It’s a bullshit job in the words of David Graeber.

The Federal Government does not have to borrow anything, because it prints its own money, through the Reserve Bank. It converts some of that money into savings bonds that it pays interest on, but it does not have to. Modern Money Theory has finally been persuading some of the commentariat of these facts.

Commercial banks are incentivised to load us with debt (it’s their main income), so our housing and other assets have become grossly over-priced and the economy is vulnerable to a financial crash. A fundamental restructuring of banks is required to eliminate the major cause of booms and crashes and one of the main mechanisms driving inequality.

Growth of the GDP promotes ever-greater demands on the planet, and GDP is a measure of what we spend, not of our wellbeing. We need to switch immediately to measures of the wellbeing of ourselves and the landscape. Importing more people so the aggregate GDP increases is brain-dead. High immigration diverts enormous resources into providing durable assets for immigrants, and this is a huge opportunity cost to our society. Modest immigration would be feasible if we learn to look after the land better.

Unfettered markets do not work, in theory or practice. The incentives under which markets operate need to be managed, through taxes, subsidies and regulation of overtly harmful behaviour. Free-market theory is unrealistic nonsense and evidence of the failure of ‘free’ markets is all around us.

Contrary to the Treasurer’s deeply ignorant claim that lefties ‘hate’ neoliberalism because it has worked so well, Reagan’s and Thatcher’s policies have failed comprehensively. Trump is our inheritance from Reagan. Trump is the measure of the US Democrats’ and Obama’s failures. The present Coalition rabble is the measure of Labor’s failure.

The old political parties in Australia are small cliques dedicated to acquiring power on behalf of their clients. They are of course utterly corrupt, but the Coalition is now also captured – by executives from mining, gaming, arms, pharmaceuticals and other major interests. Labor is incoherent. Both sides have completely betrayed their origins.

If we were to imagine my preceding little manifesto might be implemented we would have to reject the old parties, and possibly all parties, and elect people to our parliament who might govern for our common good.

3 thoughts on “Cost, value and the society we might have

  1. Richard Swinton

    Thanks again, Geoff – clear and to the point. The biggest challenge we face (and have faced for a long time) is the ideology that capitalism is good for all because of ‘trickle down’ – B****t! The modern economic system is designed to transfer wealth to the already wealthy. They use their ‘power’ to convince politicians that if we look after them, everyone will benefit. _ enough said.
    We are what we measure, and we measure monetary flows and accumulation. What we should be measuring is community well being and sustainability. Then we might have a future to pass on to our children – (grandchildren in my case!) Yes I know its more complicated, but it least it is real.


  2. Richard Swinton

    Money is a construct originally designed to help us swap skills and products. Its hard to work a system if you want to trade a bit of a cow for a chicken! So a value is given to the owners of each recognised by the community and a symbol developed to carry that valuation forward – money! Cowrie shells, paper promises, and anything in between, but money is only a recognition of value…. until people realise that having money (even if you gained it by financial dealings rather than productive or social services) gives you power – until the rest of the people wake up to the fact that money today is just a blip in a digital computer system – has NO intrinsic value at all.
    So please – lets measure the important things like health, longevity, equality, – Oh and of course -sustainability – very important to make sure we provide for the futures of our children.



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