Making the transition to a new economy, but which economy?

I am continuing to explore the future of our economy and how it reconnects with nature. I finished Ulrike Herrmann’s book “The End of Capitalism”.

Ulrike, a German economic journalist, offers a survival economy based on the British Second World War economy that could transition us from capitalism to an economy where we only consume as much as we can recycle. The four parts of the algorithm are state supervision, rationing, private plan economy and consumption.

Where Nature decides how much growth that is possible, not the growth that decides how much nature we have left.

Capitalism takeaways:

• Capitalism was a progress with an underlying weakness: it does not only create growth. It must grow to be stable.

• Capitalism consists of credits, investments, profit and growth and is interdependent. If growth is absent over time, the system collapses.

• Whatever the future scenario, capitalism must die, and a new economy must be born. 

The British Second World War economy takeaways:

• GDP was created to measure the knowledge gap between what was needed to produce for the war and keep the population from starving. 

• During 1939-1945, the economic growth in the UK was 27%.

• The British government created a “private plan economy” where they decided what production was prioritised by distributing the resources, credits and workers towards those industries. 

• All business was kept under original ownership.

• The Brits did not starve and had enough calories to eat, actually more (2800 kcal) than the daily recommendation today (1900-2400 kcal). But it was a scarcity of meat, cheese, fat, sugar, tea and soap, which was rationed. 

• But in reality, they still ate meat, 540 grams of meat per person per week, and a soldier had 1400 grams.

• Brits reduced consumption by a third during the war in a very short period.

• Rationing was applied to all and equal to everyone. 

State supervision and private plan economy takeaways

• A private plan economy can reduce production under orderly forms

• The free market and state are not their opposites; in capitalism, there is already planning from both governments and companies happening

• Public supply is more effective and cheaper under state supervision; for example, the US spends 4x more per capita on healthcare than any other industrialised country.

• The state will decide what must be produced with limited resources.

• During the Covid-19 pandemic, masks, test equipment and vaccines were prioritised.

Rationing is already happening

• Rationing means that goods that are in shortage are shared equally

• CO2 budgeting is a form of rationing

• Access to water will become rationed in more countries

• Those who want ecological agriculture need to ration

The Wealthiest…

• EU emits 6,5 tonne of CO2 per capita, US 15, and China 7,4.

• The wealthiest 10% emits 48% of CO2, and the poorest 50% only 12%.

• The problem is not population growth, the problem is consuming too much.

• The richest will benefit and live longer in an equal society.

Unlike the British Second World War economy, that was about defeating an opponent. Today it is about saving humanity on Earth. An organised degrowth is possible, and in the end, It will offer growth, yet on a lower level.

My reflections

Ulrike suggests an economy that has been tested and worked. Watch the documentary Outgrow the System by Cecilia Paulsson & Anders Nilsson for other economies to be inspired. Indigenous people's economies also show perspectives that can change the world at its core.

A few days ago, the UNEP presented the Global Resource Outlook 2024, where two other significant factors, the dependency on resources and consumption, must also be part of the equation of our future economy. Focusing on the highest emitting areas are the built environment, energy systems, food and mobility, which stand for 90% of material demand.

My list of actions:

1. Budget my economy as the poorest 50% in my country and continue to reduce from there.

2. Eat according to Planetary Health Diet.

3. Consume sufficient products and detox my mind and reward system from consuming.

#degrowth #capitalism #survivaleconomy #reslienceeconomy #circulareconomy #regenerativeeconomy