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  1. There has been a lot of debate about the real benefits of local production, especially that last-mile delivery is more harmful to the environment than the benefits it brings. In your experience, what is the ecological footprint of a product that has been globally designed and locally manufactured?

    Any production that is not hyperlocal ie. from materials sourced within a very short supply chain, has to find its way to the consumer somehow. With respect to environmental concern, the ‘last mile’ is a question of the existing production paradigm finding the most efficient and low carbon way to achieve its objective. I’m not sure that the last mile debate concerning the most carbon-efficient delivery by a globalised supply system can be compared to local production. Local production will have ‘last miles’ (and more energy used in transportation, depending on where the materials were sourced for the production), but in general, I’d be less worried about lots of last miles from local production, than many more tens of thousands of miles of transportation required with ‘remote’ production.

    It’s also worth noting that shipping is responsible for 17% of global emissions, but neither shipping and aviation are accounted for in international climate change negotiations due to the difficulty in allocating emissions ie. do they belong to the producing or consuming country? In general, local has many benefits, but it’s simplistic to assume local always equals ‘good’. It depends on so many things, for example, is the activity occurring in a water-scarce environment? How intensive is the production? Is the power source for the products generated from renewable energy?

    Life-cycle analysis (LCA) is one way of assessing the ecological cost-benefit of different methods of production, but it can get quite complicated. Descriptions can offer a sense of the impacts, however, measuring these and making the trade-offs is less clear and requires not only a lot of data but a lot of consideration and interpretation.


    Before even considering ecological footprints of production, one of the first things cities could do is look into ‘boomerang trade’ – the new economics foundation produced a report on this activity in the UK, where similar goods are being traded and transported across continents, or across the globe. There are also ridiculous examples, such as what I have dubbed ‘frequent flyer prawns’ – shrimp being flown to Thailand from Scotland, and then back because the labour needed to shell them is cheaper in Thailand.

    Trade used to be about genuine comparative advantage. If economics is supposed to be about the efficient allocation of resources, and this is what our systems of economics are incentivising, then we need new economics.


    Cosmo localism, or ‘design global, manufacture local’, certainly has some overlap with ‘glocalisation’, or the adaptation of globally marketed products to local culture, in that a shared global design can be replicated (or adapted then produced) locally. But by whom, and how?

    Glocalisation is about the top-down marketing of consumer products designed remotely, in a centralised way and then tweaked for local culture. Cosmolocalism, or Design Global Manufacture Local (DG-ML) is based on a different production logic, as explained by Jose Ramos and Chris Giotitsas in ‘A New Model of Production for a New Economy’:

    Traditionally corporate enterprises have solely owned the intellectual property (IP) they employ in the production of goods. They source the materials for the goods through national or global supply chains. They manufacture those goods using economies of scale in a set number of manufacturing centres, whereupon those finished goods are delivered nationally or globally.

    DG-ML is an inversion of this production logic. First of all, the IP is open, whether open source or creative commons or copy fair, so it can be used by anyone. Secondly, manufacturing and production can be done independently of the IP, by any community or enterprise around the world that wants to.
    http://magazine.ouishare.net/2017/11/...ducing-locally-really-save-our-planet
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  2. If there’s one person most often associated with the origins of of trickle-down economics, it’s President Ronald Reagan. Few people know, however, that the phrase was actually coined by American humorist Will Rogers, who mocked President Herbert Hoover’s Depression-era recovery efforts, saying that "money was all appropriated for the top in the hopes it would trickle down to the needy."

    Rogers’ joke became economic dogma within two generations, thanks in large part to Reagan. At the center of Reagan’s economic doctrine was the idea that economic gains primarily benefiting the wealthy—investors, businesses, entrepreneurs, and the like—will "trickle-down" to poorer members of society, creating new opportunities for the economically disadvantaged to attain a better standard of living. Prosperity for the rich leads to prosperity for all, the logic goes, so let’s hurry up with those tax cuts already. The legacy of Reaganomics continues to shape modern debates over macroeconomic policy in the United States, from the Bush tax cuts of the mid-2000s to the deficit hawks waging war over the federal budget in Congress.

    Now, nearly 80 years later, Rogers’ quip is getting the punchline it deserves: A devastating new report from the International Monetary Fund has declared the idea of "trickle-down" economics to be as much a joke as he'd imagined.
    Increasing the income share to the bottom 20 percent of citizens by a mere one percent results in a 0.38 percentage point jump in GDP growth.

    The IMF report, authored by five economists, presents a scathing rejection of the trickle-down approach, arguing that the monetary philosophy has been used as a justification for growing income inequality over the past several decades. "Income distribution matters for growth," they write. "Specifically, if the income share of the top 20 percent increases, then GDP growth actually declined over the medium term, suggesting that the benefits do not trickle down."
    https://psmag.com/economics/trickle-down-economics-is-indeed-a-joke
    Tags: , , , , by M. Fioretti (2017-12-27)
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  3. In 2007, the greatest financial crisis of of the modern age hit like a tsunami. What was the response from the UK? Well, it was to bail out the banks with public money. Of course, that raised levels of debt. Now, that was no big deal: governments can always print money, and during times of extreme crisis, whether famine or financial, they should. Furthermore, national debt is not the sum of your debt and my debt, and it has no real bearing on our live whatsoever: just as you can happily carry a credit card balance forever, and many people do, so prosperous nations can bear debt, and the strength of a nation is precisely to be able to do so.

    But the average person was tricked into believing the very opposite. They came to think, through sophistry masquerading as economics and punditry disguising itself as analysis and sheer propaganda that there was no way out of this mess except to rip the heart out of public life, to pay off the debt incurred by bailing out the banks by cutting public goods and services. Thus public goods — the NHS, BBC, transport, education, and so on — were eviscerated to pay off private debts, and even that is an understatement: the moneys spent went of course to lavish compensation packages and grand accoutrements, not really to “paying off debt”, which is still high, and still doesn’t matter a whit to the average person.

    Perma austerity killed the UK economy, by producing perma stagnation. And then came Brexit. Brexit was another misguided, maleducated response: since the UK needed to “save money” to “pay off its debt” the average Brit was again conned into believing that the next great cost, after public goods, was EU membership. “You’ll save millions a week!” the propaganda went. But who was “saving” and what precisely was being “saved?” Nothing at all, as it turns out, because now the economy is well and truly dead, stagnant into forever.

    So: this logic, that one must “save money” to “pay off the national debt” or else — who knows? Just like a mafia intimidation tactics, the threat is never really fully stated, is it? — has been proven to be wrong. It has killed the British economy dead.

    And it’s also precisely how the American economy died, too. Where do you think Britain learned this illogic from? From the American fringe. There, starting in the 1980s, American extremists championed a strange new set of concepts: “fiscal responsibility,” “personal responsibility,” “balanced budgets,” and so on, all of which really meant the above: “pay off the debt” by “saving money” — perma austerity, which also means that we can never invest in anything at a social level, because, of course, that would add debt for a few years. Why? Because cities and towns and countries don’t pay for things in cash or gold, they issue bonds, and that is how finance has always worked since the beginning of time. Do you think any society in human history has paid for a subway system or healthcare system in cash or gold? How? By sending supertankers of notes across the world? Perhaps you see the absurdity of perma austerity now.

    So. “Paying off the debt” to “save money,” “personal responsibility” and “fiscal responsibility” — these aren’t economic ideas: they are to economics what ancient aliens are to biology. They have no empirical basis, no factual reality, and no evidential proof. Indeed, the opposite is true.
    https://eand.co/econocide-a6ab1c808874
    Tags: , , , , by M. Fioretti (2017-11-23)
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  4. There is this funny story about the “Cobra Effect” based on an anecdote from British colonial time in Delhi.

    Apparently, the officials of the British government were terrified by a large number of venomous cobra snakes in the city. To solve the problem, someone came up with a brilliant idea of an exchange offer to the people of Delhi. Money for dead cobras.

    Guess what happened next? Soon, the enterprising Delhiites were breeding cobras. When the government found out, they scrapped the bounty scheme, whereupon the cobra breeders set the snakes free. And the cobra population went up, not down.

    A similar incident occurred in Hanoi under the French colonial rule. There were too many rats, so the rulers introduced a bounty scheme for, of all things, rat tails. Pretty soon, Hanoi was full of tail-less rats running around. The bounty hunters never killed them. Instead, they just severed their tails, released them back into the sewers, so that they could continue to procreate and make more rats, which of course, increased the rat catchers’ income.

    Why did both situations backfire? Because well-intentioned people who created the bounty schemes didn’t think about second order effects. They didn’t pause, reflect and ask how people will respond to their brilliant-sounding idea.

    Thinking about first-order effects is easy. Thinking about second or higher order effects is hard.

    It’s fascinating to observe how this problem keeps on repeating over and over again. One variant is called “you get what you measure.” For instance, if hospitals are asked to publish their mortality rate, the ones with the highest mortality rates are incentivised to turn away terminally ill patients.

    If someone is paid on a cost-plus basis (e.g. for generating electricity), you can be confident that there will be plenty of gaming in the form of cost padding.
    http://economictimes.indiatimes.com/m...m_campaign=socialsharebutton&from=mdr
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  5.  For a small but committed group of economists, academics, and activists who adhere to a doctrine called Modern Monetary Theory (MMT), though, #mintthecoin was the tip of the economic iceberg. The possibility of a $1 trillion coin represented more than mere monetary sophistry: It drove home their foundational point that fiat currency is a social construct, and that there are therefore no fiscal limits on how much a sovereign currency-issuing nation can spend.

     To a layperson, MMT can seem dizzyingly complex, but at its core is the belief that most of us have the economy backward. Conventional wisdom holds that the government taxes individuals and companies in order to fund its own spending. But the government—which is ultimately the source of all dollars, taxed or untaxed—pays or spends first and taxes later. When it funds programs, it literally spends money into existence, injecting cash into the economy. Taxes exist in order to control inflation by reducing the money supply, and to ensure that dollars, as the only currency accepted for tax payments, remain in demand.

    It follows that currency-issuing governments could (and, depending on how you lean politically, should) spend as much as they need to in order to guarantee full employment and other social goods. MMT’s adherents like to point out that the federal government never “runs out” of money to fund the military, but routinely invokes budget constraints to justify defunding social programs. Money, in other words, isn’t a scarce commodity like silver or gold. “To people who’ve worked in financial markets, who work at the Fed, this isn’t controversial at all,” says Galbraith, who, while not an adherent, can certainly be described as “MMT-friendly.”



    According to this small but increasingly vocal cohort of economists, including Bernie Sanders’s former chief economic adviser, once we change the way we think about money, we can provide for everyone: We don’t have to “find” the money to “pay” for universal health care by “cutting” the budget elsewhere. In fact, our government already works that way: Spending must precede taxation, or there would be no dollars in the economy to tax. It’s the political will to spend on certain things, not the money to afford it, that’s lacking.
    https://www.thenation.com/article/the...star-appeal-of-modern-monetary-theory
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  6. There’s a problem, however. De-growth solves the sustainability challenge by shifting the burden onto a much more challenging issue, which is to design and implement a de-growth economy. Nobody has the slightest hint as to how to render viable a world economy that would be structurally de-growing while ensuring social balance, individual and collective satisfaction, and peace between the large states. Even the slow-growing economy (at a less-than-1% growth rate) that results from my earlier demonstration remains an unsolved challenge, since we still don’t know how to ensure employment, innovation, useful investments, and even democracy at such a low pace of economic growth. Just think back to the social structures and the kinds of international relations that prevailed across the world before industrialization.
    https://arnsperger-perma-circular.com...uture-of-recycling-by-francois-grosse
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  7. Summary: This project will involve a quantitative and qualitative evaluation of “designed global, manufactured local” (DGML) products from an ecological economics perspective. We will conduct a life-cycle assessment (LCA) of 2-3 DGML technological solutions (e.g. a house, an open source 3D printer, a wireless data transmission, field sensor node). LCA will include an assessment of the energy and material uses of the product from cradle to grave, including during its use and operation. This will be compared against the life-cycle of a conventional technology. Different states will be distinguished, such as extraction of materials, production, transport, disposal of equipment, and the environmental impacts of each assessed. For the assessment, the CML 2 baseline 2000 will be used. Qualitative assessment will be based on observations of the application of the technology, interviews and focus groups such as farmers or makers. Technologies will be compared according to three key criteria for sustainability: (a) “autonomy”; (b) “resilience”; (c) “ecological adaptability”. The end result will be an actual comparison of the environmental and social costs and benefits of the applied technologies, as well as the development of a prototype approach for an ecological-economic evaluation of any DGML solution. Last but not least, this task will provide research and policy proposals in relation to the environmental performance of DGML products, and their implications in terms of resource and energy use, as well as their sustainability in a possible future of resource scarcity and altered environmental conditions.
    http://www.p2plab.gr/en/archives/1171
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  8. Poverty is an economic situation, but whether poverty grows or declines is, to a great extent, the result of political choices that we make. If we speak about poverty outside of the context of politics, we are fooling ourselves.

    Which brings us to the Summit on Technology and Opportunity, the invite-only event that just concluded on Stanford’s rarefied campus. I don’t wish to criticize the individual participants in the event—in isolation, they represent a wide array of worthy charitable endeavors and academic research. But I do wish the criticize the mindstate and political posturing that leads to the White House lending its imprimatur to such an event. With all of the do-gooder conferences in the world, why does the White House come to put its name on one that explicitly holds up technology and private philanthropy and public-private partnership as the solution to poverty? This summit did not spend its time discussing new taxes and government regulations to rein in inequality, or how to purge Congress of members hostile to poverty-fighting legislation; instead, its sessions touted “Philanthropy as a Catalyst” and “Technology to Facilitate Financial Access” and “Tech Talent for Public Impact and the Way Ahead.”

    This purge of politics from the language of poverty-fighting was not a mistake. It was the point. And that is why it is hollow.

    Poverty and wealth are inextricably linked. The economy is not a zero-sum game.

    Poverty is an economic situation, but whether poverty grows or declines is, to a great extent, the result of political choices that we make. If we speak about poverty outside of the context of politics, we are fooling ourselves.

    Which brings us to the Summit on Technology and Opportunity, the invite-only event that just concluded on Stanford’s rarefied campus. I don’t wish to criticize the individual participants in the event—in isolation, they represent a wide array of worthy charitable endeavors and academic research. But I do wish the criticize the mindstate and political posturing that leads to the White House lending its imprimatur to such an event. With all of the do-gooder conferences in the world, why does the White House come to put its name on one that explicitly holds up technology and private philanthropy and public-private partnership as the solution to poverty? This summit did not spend its time discussing new taxes and government regulations to rein in inequality, or how to purge Congress of members hostile to poverty-fighting legislation; instead, its sessions touted “Philanthropy as a Catalyst” and “Technology to Facilitate Financial Access” and “Tech Talent for Public Impact and the Way Ahead.”

    This purge of politics from the language of poverty-fighting was not a mistake. It was the point. And that is why it is hollow.

    Poverty and wealth are inextricably linked. The economy is not a zero-sum game, but the fruits of the economic growth that creates and fuels wealthy nations like ours are hoarded to a shocking extent by a tiny group at the top, which warps our political system

    Philanthropy is the privatization of the social safety net. That is not a desirable state of affairs. Social Security and Medicare and the CDC are robust government programs with millions of stakeholders; Mark Zuckerberg’s charity is ultimately at the whim of two people. We do not need a nation that turns to its tech-enriched kings and begs them to solve poverty. We need a nation that acts collectively to build an economy in which our wealth is shared.
    http://theconcourse.deadspin.com/pove...chnology-it-needs-politics-1789520902
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  9. by far the most important chart in explaining both the benefits and impact of globalization, free trade, and a changing economy to different constituencies. The greatest benefactors of the extension of the Bretton Woods System (free trade and globalization) following the end of the Cold War have been those who own capital and the poorest people in the world. Unfortunately, as money has moved from the Developed Economies to the Developing World in search of return and comparative advantage, the middle class in the United States and Europe have failed to benefit.
    https://medium.com/@boxerbk/confused-...is-resonating-1154c977697b#.pavz1kzi9
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  10. Imagine a bank that pays negative interest. Depositors are actually charged to keep their money in an account. Crazy as it sounds, several of Europe’s central banks have cut key interest rates below zero and kept them there for more than a year. Now Japan is trying it, too. For some, it’s a bid to reinvigorate an economy with other options exhausted. Others want to push foreigners to move their money somewhere else. Either way, it’s an unorthodox choice that has distorted financial markets and triggered warnings that the strategy could backfire. If negative interest rates work, however, they may mark the start of a new era for the world’s central banks.
    http://www.bloombergview.com/quicktake/negative-interest-rates
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