Page 12 RAIN . February-March 1979 It's important for those of us pushing the economies ofselfreliance to understand how we interface with the larger system and to know which public policies will truly help in our work. As Hazel Henderson, futurist and author of Creating Alternative Futures: The End of Economics (Rain, April '78) notes here, the historical management tools known as Keynesianism can no longer effectively control the nation's larger economy without huge inequities and chronic inflation. Yet economists have still not learned to account for the power of once and future non-monetary economies to support and even replace those expensive habits we cannot afford. It's time to put our good work up front and make it known that we are a societal force worth investing in. - SA Despite the latest OPEC price increase, it is useless to make scapegoats of the Arabs. They deserve credit for the thankless job of teaching Americans some of the global realities of the declining Age of Petroleum. New oilfields, whether in Mexico or China, do not belong to us. We must pay for our oil imports. This year we will pay $4 billion more, with the usual effects of worsening our balance-of-payments deficit and depressing the dollar while increasing domestic inflation. This, in turn, further depresses the dollar, and the cycle begins anew, as OPEC says it must raise prices again to correct for the fallen value of our dollar payments. The remedy involves correcting a long-standing conceptual error propagated by economists long before Keynes: the equating of our society's total socioeconomic productivity with that portion of it based on competitive, market-based cash transactions and the flows of money they generatemeasured as the Gross National Product (GNP). Economists only plot this "formal," "official" economy of market-based production of goods, commodities and services and the jobs they provide in the private sector, along with the taxes, jobs, services, subsidies and transfer payments that make up the public sector. But we are so used to this "money veil" (as economists admit) and its statistical illusions that we forget that alongside this "official" economy there is and always has been a shadowy, "unofficial" or "informal" economy. It is based on our traditional heritage of cooperation, reciprocity, barter and use-valued (rather than market-valued) productive activities. It includes home remodelling and fix-ups, mechanical repairs, home workshop and craft production, furniture refinishing, food growing and canning and all the vital community-based voluntary and unpaid household production (including parenting children, caring for the old and sick, ameliorating the stresses of the marketplace competitors and cleaning up the messes left by careless production and consumption.) Such socially indispensible work, though unpaid, has always provided the essential cooperative social framework which allowed the highly-rewarded competition of the marketplace to be "successful." This "informal" economy was estimated in 1969 as equivalent to some $300 billion annually (more than all the wages and salaries paid ·out by all the corporations in the U.S.) if it had been "monetized" and included in the GNP, according to Scott Burns in The Household Economy. As the GNP-measured "formal" economy declines, luckily this "informal" emerging Counter-Economy will continue its rapid growth, providing a safety-net for many and a bridge to a more balanced socioeconomy for the future. SEEING OUR ECONOMY WHOLE ... by Hazel Henderson The failure of Keynesianism can now be seen as our overreliance on the institutionalized, "formal," cash economy to provide for all our needs, goods, services and jobs. Instead, it is bogging down in debt and inflation. We are perilously dependent on the now-bankrupt economists' policy tools of centrally manipulating an abstraction called "total economic demand." A few simple levers are relied on: either continuing to print more money or administering the "old time religion" of arranging a recession by squeezing credit and hiking interest rates, or slashing the federal budget or de-regulating already high gas and oil prices. All of these policies are now inflationary. The old Keynesian tool-kit worked with much smaller rates of inflation back when we could expand the economic pie using cheap inputs of energy and resources, fuel our consumption with credit and provide larger slices to all the competing groups in society. Now these ineffective Keynesian band-aids are being peeled away to reveal underlying social conflicts about how to slice the now-stationary GNP-section of the pie. Some are intensified but familiar battles between special interests, as when older energy industries struggle to retain their subsidies in the face of newer upstarts, like the burgeoning solar energy industry. Others involve ominous new clashes that politicize credit, investment and debt: such as conflicts between city workers in Cleveland and New York and their bondholders and banks; labor and business arguing over wage/price guidelines; Wall Streeters fighting over capital availability and possible credit controls, over which investments are "productive" versus those that are "unproductive," or whether credit for homeowners must be squeezed as competing financial interests attempt to divert mortgage funds and force the housing sector to bear the brunt of recession. Similar crunches appear in the conflicting requirements between needed rates of saving, investment and consumption, where equally painful trade-offs will have to be negotiated. Yet we must avoid the "easy" route of allowing the poorest and most powerless groups to bear the brunt of stabilization efforts, through job layoffs and rationing by price. Politicians vied with each other at the last elections in offering voters phony tax cuts and escapism rather than helping us face the inevitable austerity period ahead as all industrial economies make the painful transition to less resourceintensive forms of production and consumption. Today we need to understand this transition and how the Soaring Sixties bogged down in the Stagflation Seventies. The Economizing Eighties will be a·period of belt-tightening and hard choices during which we can re-deploy our enormous assets and lay the groundwork for the sustained-yield productivity and renewable resource-based economies of the da, .1ing Solar Age
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