[phaster]

Just wondering is a "sustainable economy" an oxymoron? The reason I ask is because last night I watched a program on Frontline, about one woman who warned financial derivates many years back

http://www.pbs.org/wgbh/pages/frontline/warning/

And it got me thinking is it possible to design an economic system that is sustainable.

We know that people once exposed to a consumer economy have every growing economic expectations which means public revenues, or government spending always grows; yet "Sustainability" implies avoiding depletion or excluding constant growth.

If you watch the frontline program, what shocked me is dogmatic view of greenspan who believed in free markets (aka efficient market hypothesis ), and did pretty much everything in his power to prevent regulators from enforcing any government rules (including any government regulations to prevent fraud).

So if you were to design an economic system from the ground on up, what would features would you want included in your ideal economy? Would you want no rules so human ingenuity and Darwinism (i.e. survival of the fittest), make the rules. Or the other extreme would would want to micro manage every detail!

So care to share a list of ideas to create a "sustainable economy" for example one idea I think would help an economy become stable over the long run, is to condition people to invest for the long run and discourage short term speculation. I'd do this is by taxing any short term capital gains for any investment like stocks, commodities or real estate held a year or less at 50%, anything held between 1 and 10 years would have a cap gains tax rate rate of 30%, and anything held longer than 10 years would have a cap gains tax rate rate of 22%. Like everyone else I dislike paying taxes, but I acknowledge that some government is needed to set and enforce basic rules, and install basic infrastructure such as transportaion systems, and educate citizens so that people have the skill set needed along with confidence and certainity to participate in an economy.

[patience]

If you outlawed central banks, that would be a good start. Then, put some tight regulations on what banks, securities traders, and commodity traders are allowed to do. I'm of the opinion that free markets work, when they are truly free. Yes, you will have some ups and downs, but they will be based on real events and constraints, like resources, instead of contrived booms and busts designed to separate the little folks from their money. Add a constitutional amendment to require a balanced budget, and a mandate to base the currency on a basket of commodities, with PM's being a part of that, and a money supply limit based on GDP.

No, I haven't thought of everything, but it would be some helluva improvement over what we have now.

[Novus]

The ONLY sustainable economy is the steady state economy which does not grow by consuming more resources or increasing population. Anyone who tells you otherwise is trying to sell you something. I remember when the first round of stimulus hit in early 2007 the talking heads and commentators made it sound as if all we needed was the consumer to go out and buy a big plasma screen TV that all would be right in the economy again. Did anyone really believe that nonsense? I am not sure how dense people are today or if they still believe in that fairytale called growth capitalism. Any "thinking" man should know capitalism is a fools game.

There are hard reforms that could lead to a sustainable economy but the entrenched interests and TPTB would be against it for sure.

[kjmclark]

If you outlawed central banks, that would be a good start. Then, put some tight regulations on what banks, securities traders, and commodity traders are allowed to do. I'm of the opinion that free markets work, when they are truly free. Yes, you will have some ups and downs, but they will be based on real events and constraints, like resources, instead of contrived booms and busts designed to separate the little folks from their money. Add a constitutional amendment to require a balanced budget, and a mandate to base the currency on a basket of commodities, with PM's being a part of that, and a money supply limit based on GDP.

No, I haven't thought of everything, but it would be some helluva improvement over what we have now.

Except we were mostly there after the Great Depression, but the legislators, not the Fed, mucked it up by getting rid of the safeguards put in place.

Wait, you aren't being ironic by putting "Then, put some tight regulations on what banks, securities traders, and commodity traders are allowed to do. I'm of the opinion that free markets work, when they are truly free." back to back, are you? Not trying to be rude, but KevO thought he was being ironic yesterday.

You're right, it would take constitutional amendments. The problem with that is, when the bankers wrest control of the reins of power again, we end up with a financial crisis *and* a constitutional crisis. "Double your pleasure!"

[hillsidedigger]

I think a sustainable (static) economy at a very low-level is achievable but it would not involve any borrowing (financing) and all new construction would be offset by abandonment elsewhere.

[kjmclark]

Seems like for most of human history we lived in sustainable economies. OTOH, Ruddiman in "Ploughs, Plagues, and Petroleum" makes the case that we've been altering the climate since the start of agriculture. But really, since we should have started an ice age by now, you could argue that our early climate alteration *was* sustainable.

BTW, at first I thought "living machines" was a real oxymoron, but then I found out that it's a trademark for a kind of wastewater treatment system. It's still an oxymoron, but it made me think - if someone trademarked "sustainable economy", would that make it legitimate somehow?

And really, a sustainable economy doesn't have to be closed loop. It just has to use resources at rates that allow future generations to have good conditions as well. If we were a wise and benevolent species, we'd just switch to solar power and we could continue to grow the economy, sustainably, for the foreseeable future. Don't hold your breath for that.

[patience]

kjmclark,

RE: Regulation and free markets.

No, I wasn't being ironic. Yes, it does sound foolish. What I was thinking was that financials don't qualify to be part of the free market. People have conclusively proven that they are not capable of restraining greed in themselves. So, someone will have to do it for them. Some have suggested that banks and financials should be a government run utility, which has merit, but subjects it to the foibles inherent in a corrupt government. I don't have any perfect, idealistic answers. I was simply trying to address the obvious defects in what we have now.

At the micro level, free trade works, with supply and demand establishing price. Price feedback to producers balances the system as well as it can be. Greed is what mucks it up. Someone will always try to corner a market, or distort it in other ways to their benefit, so that is what needs to be dealt with. Monopolists of every stripe will always try to work their mayhem on the economy. Nothing will work perfectly, human nature being what it is. The huge concentration of wealth in a few hands has made our economics what they are. Conniving, nasty bastards, we are!

As to the OP question, sustainable means, as pstarr and novus pointed out, living within your means, something humans are loathe to do, being greedy. That must be addressed first, or as is the case now, nature will do it for us and we won't like it.

[Homesteader]

there is no "sustainable economy" without a sustainable infrastructure--closed loop and local nutrient-based agriculture, living machines, efficient solar industry based on recycling of previously smelted and manufactured products etc. We are so far from this and it is virtually impossible without a complete redesign of our suburban globalized model.

See McDonough, Lovins, Hawkins etc. Industrial ecology.

+1 What he said.

Sustainable activities by definition do no irreparable harm to the environment and do not exhaust nonrenewable resources.
What modern economic model could fit inside of that? Oh. . . none.

[katkinkate]

A sustainable market needs to work like an ecosystem. One business's/persons waste becomes someone else's raw materials. Capitalism works in small scale. It's only when things get unbalanced (monopolies, price fixing agreements, globalisation) that things stop working. So you need enough government legislation to control the business sector and keep individual businesses smallish, while having enough controls on the government to prevent them from getting to intrusive and unbalancing the system themselves. The bigger and more powerful the organisation, the more constrained they should be by regulation and the smaller the business the less regulation, so that to avoid excessive legislation you're encouraged to keep the businesses small and local.

Oh and you need to get rid of this business about corporations having the same rights as individual citizens. That just makes them bullies, cause they are more powerful and any individual can ever be. And we all need to get back to being citizens of a community, instead of loyal consumers of the corporations pap.