Thrive in a New Economy that Works for All

Worried about surviving the financial collapse?  Concerned about making a living in turbulent times?   Here are four ways to bypass a dysfunctional economy:  revive the barter system, trade locally, create micro-businesses, and develop self-sustaining communities.

As the economic turndown worsens daily, business as usual is not a viable option.  Rather than attempting to fix a broken system based on greed and excess, it’s time to create a new, sustainable system that works for everyone and is earth-friendly.

A cashless economy in which buyers and sellers together determine the value of the products and services exchanged will make a comeback.  The new system will be based on relationships and shared values so that the planet and its interdependent inhabitants may survive.  Brokers of barter services will do well in the new economy, as they connect and expand markets for their customers.

Local currencies, already in use, could replace a collapsed U.S. and global currency.  A step beyond the barter system, local bucks create a recognized medium of exchange.

As big businesses depart from communities that can’t sustain their bottom lines, people will support their local merchants through the downturn so that essential goods and services will continue.  Shedding the unnecessary is a part of the new, sustainable lifestyle.

Creativity will be valued in the new economy, with thousands of micro-businesses forming as inspiration and an entrepreneurial spirit join to offer value for a minimal investment of capital.  Local lenders will step forward to support such cost-effective endeavors, just as they have in third-world countries like Bangladesh.
Having lost confidence in big banking, community associations are forming to offer loans to their neighbors with reasonable terms that benefit everyone.  Other communal efforts to ensure mutual survival and access to the means to own a home and make a living are likely to emerge in the next few years.  Grassroots economies will flourish, and businesses will do well by treating their customers as friends.

Community enterprises will be the hallmark of the new economy.  Co-housing and community gardens are making a comeback, as generations move in together and neighbors create common areas.  The concept of each household owning its own lawnmower will seem archaic, as tools are shared to save valuable resources.

Public transportation will improve in response to demand, and neighbors will carpool for shopping, work, and school.  Group home schooling will thrive, as public systems collapse under the weight of crumbling facilities and budgets.  In general, people will stay closer to home and adopt simpler lifestyles offering less stressful, more enjoyable lives.

As the world is transformed by crisis, a consciousness shift will cause people to recognize their interdependence and pull together to create new ways not only to survive but thrive in a new economy and a new era of sustainable living.

Dr. Laura Dunham is the author of Spiritual Wisdom for a Planet in Peril:  Preparing for 2012 and Beyond (www.spiritualwisdom2012.com).

Back to the Future

 I just had dinner with my friends K and MJ, who reported on the progress of the house that they are building in southwest Virginia. They plan to retire there when the time is right.

A big part of K and MJ’s plan is getting back to a more simple and satisfying existence. They are looking forward to having animals on their land. (K votes for a goat and a donkey, perhaps a border collie. MJ wants dogs, cats and perhaps a pony for the grandchildren.) Their house is being designed to incorporate natural light and energy-efficiency features, and K and MJ are looking forward to buying produce at the area farmers’ cooperative.

Another friend, JD, has been thinking about starting a new business: helping homeowners to plant and maintain organic produce, including vegetables, herbs and fruits, on their land. I’m enthusiastic about JD’s idea. It is a moneysaver in troubled economic times, counters soil erosion and stormwater runoff by installing vegetation, and offers a better quality of food on the table.

I think that my friends are part of a substantial cultural shift.  People are longing for simplicity and richer connections to the earth, to family, and to community.  As financial institutions and business transactions unravel and as governments struggle to halt the chaos, a return to home, hearth and garden seems more sane, satisfying and secure than braving the uncertainties of the broader world.

Heightened  interest in community and family is also affecting the urban planning and development fields.  In the U.S., the Congress for the New Urbanism (CNU) advocates the incorporation of agriculture into urban community settings.   Says architect Andres Duany, one of the fathers of new urbanism, “Agriculture is the new golf.”  An organic farm has been incorporated into New Town at St. Charles, a planned community just outside St. Louis.  And one of my clients, Philip Williams– a committed environmentalist and developer, has incorporated his family-owned greenbelt and a tree farm into plans for his Montgomery Farm community outside Dallas.

The Urban Land Institute will conduct a panel on self-sustaining communities at its May 12-13, 2009 green development conference in Los Angeles, addressing how communities might create their own power and water supplies and grow their own food.  In the UK, Prince Charles’s Poundbury is a human-scale, mixed use community that honors environmental responsibility and traditional architecture, and creates a self-sustaining economy by integrating places of work and residence.

As we search for comfort in chaos, the self-sustaining home and the urban village are old ideas made new again.

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The Power of One

 Our market is growing. According to the U.S. Census Bureau, the population of the world on February 19 totaled 6,761,616,432. By 2025, we’re supposed to hit 8 billion; by 2040, 9 billion. That’s a whole lot of loving going on.

However, the marketplace is not growing. This planet is not getting bigger to accommodate more people. Its girth is fixed. And Mother Nature is not interested in expanding her waistline. Take a hard look at the level of efficiency at which she operates – 96%. Something’s got to change. Moving to Mars or Venus isn’t really an option. So we had better think about improving our current ratio of inputs and outputs. We’re teetering on a change in how we view our productivity.

Historically, productivity was defined as a measure of success. People see it as a positive concept. Yet, it’s also an indicator of inefficiency. Productivity is above all a state of mind. It’s time to evolve our state of mind to embrace environmental quality by mimicking the efficiency of Mother Nature.

My particular interest is to connect with small business owners. Why? They are the idea generators in our economies. They are the source of innovations that will literally enable our future. We desperately need innovation to weather today’s economic storm, for innovation is a driver of economic growth. We also need innovators to rise to the market needs of 2025 and beyond.

So what small business does now matters, a lot.
It is highly unlikely that any small business will be the cause of an event like Exxon Valdez. However, the real challenge is the cumulative impact of seemingly trivial contributions of individual actions. It’s the day-to-day inefficiencies in our businesses that add up. Let’s do the math. There are 143 million small businesses (give or take 10%) operating around the world. They represent over 95% of the businesses on the planet. Innovation can be as simple as each small company doing one thing differently. Let’s walk though an example with chemicals. If over a year each small business spilled the equivalent of one cup of oil, this could contaminate groundwater equal to 143 million Olympic-sized pools. The impact is literally oceanic.

Now, let’s apply this new state of mind. For every ounce of chemical (oil is a petro-chemical) not spilled or misused, two kinds of benefits emerge. One, there is a quantitative benefit to the company at least 8-times greater than the spill because the oil is used productively. Two, this generates value to others because there is that much less chemical out there, and chemicals reactions do not respect property lines or political boundaries.

So, we need small business to treat chemicals with more respect as an innovation. One really low cost action every small business owner can do that would have a profound effect – read the instructions BEFORE using the chemical. You can save yourself a lot of grief if you adopt this one behaviour change and convince your peers to do the same. We will all gain value from better chemical management for pennies of effort. This is a ‘no brainer’.

But small business is capable of so much more genius. This is why we need to support them with the right-sized tools designed for their needs. We need to fuel the natural tendencies in every small business owner on the planet to think beyond the mess we’re in. We need to inspire them to green their productivity. This will create solutions that will improve their businesses and generate value to many others as they are the foundation of our economies and communities. Greening productivity is a better business proposition. It’s a smart idea. And it’s simple. A successful outcome means we meet the needs of a growth market by doing better with less. When small business figures this out, everybody

will benefit. And it will put green where it belongs; money in their pocket and a smile on Mother Nature. For the power of one is not a sum.

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Driving Change

In a recent Sunday New York Times I read an article that provided additional insight, perspective, and validation to my previous blogs; The Imperative of Trust and The Pursuit of Happiness.

Thomas Friedman, a vigorous proponent of green technology, policy and solutions to climate change and political and social conflict, wrote in his column, Yes, They Could. So They Did, of a chance meeting he had in New Delhi, India. It came about when he accepted a ride from two young women, Yale graduates, along with one of their mothers in a plug-in electric car fitted with solar panels for additional power. Freidman says, “It’s refreshing to know that the world keeps minting idealistic young people who are not waiting for government to act, but are starting their own projects and driving innovation.”

They arrived in New Delhi having just finished a climate caravan through India that highlighted solutions to global warming being developed by Indian companies and innovators. In a short ride around town, they passed the US and Chinese Embassies and pointed out that the roof of the US Embassy was littered with antennae and listening gear while the Chinese Embassy was fitted with solar panels.

In The Imperative of Trust I conclude that that the traditional hierarchical leaders, e.g. governments and large corporations, can no longer lead the way in creating solutions to global climate issues, as well as other critical problems intimately connected to sustaining a healthy planet. The primary reason is that their trust bank accounts are in the red. Solutions and change must and will be driven from the ground up. It will be driven by 23 year old women, with their mothers, driving electric solar powered vehicles in foreign countries. It’s telling that the US Embassy was devoid of solar panels, but not listening devices. The US continues to be divided on environmental issues, with some major corporate and government leaders in denial and trying to eliminate funding for green initiatives even at this late hour.

The level of mistrust in the US, internally and externally, hinders our ability to innovate and lead in a time when the planet needs us the most. Although the Chinese Embassy may have their own listening devices, unseen, their trust issues are not preventing them from advancing and capitalizing on science, innovation and leading. As we fiddle with our antennas to get a better listening advantage, the planet is burning.

There was another critical point from this article that involves how the brain in all of its majesty and complexity actually works against our ability to be innovative. The comment was made by one of the girls when explaining why and how this tour came about. “Well … the world needs crazy ideas to change things, because the conventional way of thinking is not working anymore.” This comment describes a process called repetition suppression, in which our brains strive for energy efficiency. When repeatedly presented with the same stimuli, the brain’s neurons respond with decreasing vigor. Repetition leads to smaller neural responses, thereby decreasing our brains’ capacity for creativity and innovation. The result is we become conventional thinkers and resist new perspectives; all to save energy!

Our opportunity for finding and implementing solutions to global problems will only come about as a result of breaking out of the brain’s natural process of repetition suppression. It is difficult enough to fight individually, but when re-enforced by organizational and group cultures that fear change and the loss of control, the process becomes monumental. The leaders who are best suited to meet the challenge will be the curious and courageous, young and old, daughters and mothers, who are willing, literally and figuratively, to create new neural pathways by traveling around India in electric and solar powered cars. Iconoclasts break molds, and they are able to it because they don’t allow their brains to get into ruts. By remaining open to new and different experiences, we can literally jolt our brains’ creative and innovative capabilities.

Remember I mentioned that this blog was tied to both blogs: The Imperative of Trust and The Pursuit of Happiness? Let’s agree that a tour of India to highlight solutions to global climate issues is a pursuit; now for the happiness part. One of the main points in the blog is that we have become infatuated with pleasuring ourselves under the illusion that we would find the fountain of eternal happiness. What we have experienced is that our pleasuring is spoiling our planet and leaving us unsatisfied. Meaningful and lasting happiness is derived from contributing to something that is beyond our self-interest. So why did these women engage in this pursuit? “We wanted to find a way to bring people together around existing solutions to inspire more action and more innovation. There’s no time left to just talk about the problem.” It’s not about them; it’s about making a contribution. And in their pursuit I’m willing to bet that they found happiness.

Renewable Energy, America, and the Globe

One could sense the new found energy among the more than 2800 plus participants at RETECH2009 which took place March 25-17, 2009. Not only was the energy vibrant, it was infinitely renewable.

The American Council for Renewable Energy (ACORE) does a fantastic job since its inception in 2001 to put the building blocks and alliances in place for accelerated take off of an industry that will significantly lower the carbon portion of humanity’s Ecological Footprint. Planet2025 Network

was proud to be a supporting organization of this milestone event.

Participants were particularly energized by the stimulus package and timely leadership from President Obama, who understands the strategic importance of a strong and dynamic renewable energy industry for the future of America in this 21^st Century.

During high-quality sessions we witnessed visions of industry leaders that painted the picture of an emerging future in which renewable energy may provide 25% of energy needs by 2025 going hand in hand with reaching 30% energy efficiency by simply using today’s technologies. Despite recent turmoil in the financial markets, this industry appears to have reached a turning point. Its future appears to be bright. Importantly, consumers are getting it; they want sustainable solutions. Old energy is no longer cool.

National security and oil independence are intimately linked to what happens globally as everything and all things are connected as components of one whole system. My DREAM message in response to President Obama’s challenge to the industry is that as the US is working towards the goal of Doubling Renewable Energy production and efficiency in AMerica in three years, it also needs to stimulate and invest in:

• demand creation for its products, services, and technologies in developing economies around the world to achieve a truly sustainable economic recovery
• global cooperation on lowering humanity’s total Ecological Footprint everywhere, such as by putting a price on carbon and the scarcity value of natural resources
• using its comparative advantage in film, media and advertising to communicate to raise global consciousness that big positive change is possible in the US and around the world, that it can be achieved rapidly knowing change has to start within you, me and all other global citizens in the world taking responsibility for creating the future now, and linked to all of the above
• engaging communities around the world to regenerate the planet’s ecosystems, remove CO2 from the atmosphere by planting of billions of trees as part of integrated agro-forestry initiatives that create sustainable livelihoods to alleviate poverty and convert CO2 into things people need, such as food, feed, fiber, fuel, fertilizers, and fertile soils.

Let us cooperate from the local to the global to ensure that we can reach a globally sustainable way of life by 2025. The immediate years ahead of us are crucial. We are one people on one planet with one future. We have the exponential power of one.

The New Financiers

A venture capitalist friend of mine asked me in a recent discussion about the financial meltdown, “who will be the new financiers?”

I answered immediately, “the new financiers will be the high-level information and knowledge brokers – and they will aggregate the new research on global change processes and lead in structuring the deals now creating the growing green economy.”  Today information and media drive markets.

These new financiers are already operating unseen by traditional Wall Streeters and asset managers.  They are largely invisible to current financial players and governments because information is their prime currency; rather than money.  The new deal-makers value the role of honest, well-managed currencies that remain dependable stores of value and mediums of exchange.  Money is a special kind of information, not a commodity in itself, but rather a brilliant invention of the human mind.  When backed by real-world goods and service, as well as strong contracts, money can accurately track and score human ingenuity, productivity and transactions interacting with the natural wealth of resources of our home: Planet Earth.

The problem with money is keeping it honest and keeping its “promise to pay” firm.  From the goldsmiths who over-lent against their piles of gold held in storage for their customers, to the kings who shaved of the edges of coins and today’s bankers who create our money out of thin air, we humans have found many ways to debase our currencies.

Human activities grew from traditional barter, mutual aid and gifting to the invention of money back around 3,000 BC.  Our money evolved from clay tablets, shells and cows to metal tokens, gold, silver, today’s paper money and electronic currencies that are blips on millions of financial trading screens.

As we expanded worldwide with the advent of the Industrial Revolution in Europe 300 years ago, our need to trade and exchange grew exponentially.  This required expanding our money systems of exchange.  Gold, which backed most currencies in growing international trade, became too constricting – there just wasn’t enough of if.  Many traders turned to silver and other precious metals.  Soon, the lack of gold led governments to issue paper “fiat” currencies backed only by promises and a fraction of actual gold.  Some countries shut their “gold windows,” including the USA in 1971, and restricted their citizens from owning gold.

Our current financial crises go beyond those earlier contractions, panics and recessions caused by the lack of gold or sufficient supplies of credible paper money.  Central bankers have learned the lessons of the Great Depression.  The money supply must keep up with, not surpass, the expansion of production and trading as a country grows and its real economy progresses.  Today, the interlinking of all countries’ economies due to the globalization of finance and technology caused money-creation to go wild, leading to a credit bubble and mountains of debt.

Computerization of finance and markets speeded up trading to seconds; satellite inter-linkage of round-the-clock stock and commodity exchanges led to the explosion of derivatives contracts, ever more exotic “securitization” of packages of mortgages, student loans and credit card debts.  Risk-analysis was relegated to ivory-tower mathematicians’ algorithms which ignored real-world conditions.  All this multiplied the creation of money and credit exponentially.

Reckless, poorly regulated financial firms on Wall Street sold their dubious, toxic “securities” to gullible investors and pension funds (which should have known better) around the world.  For example, the bets on who might default, called credit default swaps, grew unregulated to now comprise $683 trillion of contracts (Bank for International Settlements December 2008) – while real global production measures only the $62 trillion of global GDP (IMF October 2008).

The resulting crises were predicted by me and others over the past decades.  All that money and debt creation led to illusory gains and today’s inevitable losses and “de-leveraging.”  The bubble in finance and money itself has popped.  Central bankers and financiers, schooled in the world’s leading business schools and economics departments focus on money and global monetary circuitry.  They were rarely taught that money was simply one form of information – now deeply devalued as all the new forms of money-creation went wild.

Today, we see central bankers printing money on TV.  No amount of ink and paper can print enough new money to close the hole between that $683 trillion of false promises and the world’s real GDP of $62 trillion.  The only issue is who will take the hit.  Up to now, the political influence of financial sectors has forced taxpayers to bail out financiers. The blatant unfairness and stupidity of this has caused huge outcries from outraged citizens.  Those billions given to irresponsible bankers could have financed universal healthcare and college education.  This is the end of finance based only on money and fiat currencies.  We now know it’s about priorities and values.

Enter the new financiers: those high-level information and knowledge brokers who understand our Information Age and the great transition from the fossil-fueled Industrial Age to our new Solar Age.  Overloaded money-circuits have broken down and the huge new volume of transactions in the past decade have migrated to the internet.  Pure information-based exchange and sharing has led to the new hybrid economic model described by experts, including Lawrence Lessig’s Remix (2008), Yoichi Benkler’s The Wealth of Networks (2007), Don Tapscott’s Wikinomics (2008), Verna Allee’s Knowledge Evolution (1997) and my own work (www.ethicalmarkets.com).  This hybrid economy is half the old money-based competition and half information-based sharing, cooperation and exchange.  From electronic stock exchanges, Instinet, Archipelago, NASDAQ, Knight and Entrex to Google, e-Bay, Craigslist, Amazon, Facebook and Wikipedia, we are seeing how money-obsessed financiers are trailing behind.  The new financiers: those high-level information brokers go beyond economics to understanding whole systems and the human family on planet Earth.

Money may return to its honest base, reflecting real world values of Main Street productivity but may never again be the dominant medium of exchange.  Just as gold remains valuable but can no longer support the new volume of human transactions.  Money will be superseded by all the new digital currencies already circulating from local exchange trading systems (LETS) and complementary currencies like “Berkshares” and “Wirs” in Switzerland to Freecycle and many other barter sites, cell phone networks and radio shows.  Incumbent money-circuit players will try to get regulators to shut down these upstart, disruptive technologies and competitors.  The US Securities and Exchange Commission (SEC), for example, shut down the website Prosper.com which boomed by facilitating local residents and businesses in lending to each other.

The new financiers are operating these new digital trading platforms in many countries.  Many designs for global digital currencies are on the way.  They will complement the IMF’s Special Drawing Rights, another pure information-based currency for international development which is still conceptually tied to gold.  The new financiers will show why the old financiers and central bankers can no longer have a monopoly on money and its creation.  Information-based currencies and trading platforms will operate wherever necessary for evolving human communities so as to match needs with resources and create jobs – from local and regional to national and international exchange.

Today’s financial “crisis” is facilitating the evolutionary jump to the next stage of human development – shifting from faulty, money-measured GDP growth to the cleaner, greener sustainable economies.  Governments are realizing that they must now also correct those money-based indicators and GDP national accounts to adopt the new Quality of Life Indicators.  Pension funds have realized their errors in chasing only short-term money returns and are demanding that companies report their performance beyond the old single bottom line of money to the triple bottom line, including progress on social, environmental and governance performance.   Welcome to the Information Age.

Hazel Henderson, one of the new financiers, is also author of Ethical Markets: Growing the Green Economy (2006), co-created the Calvert-Henderson Quality of Life Indicators, updated regularly at www.calvert-hendeson.com, and co-organized the BEYOND GDP conference in the European Parliament, Nov. 2007 (www.beyond-gdp.eu).

For full disclosure, LONG: ORMAT, CREE, SUNTECH, CLIPPER, Google, US Geothermal, Nevada Power, World Water & Solar, Western Wind and pre-IPO companies, including Solaria, EnVision Solar, and Stirling Energy Systems.

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A New End: A New Beginning (Part 1)

For almost a decade now, I have been traveling broadly speaking to groups of all sizes and almost every discipline you can think of about the big change that appeared to be converging on the horizon.

Often characterizing the coming shift in terms of breakdowns and breakthroughs, I’ve tried to build integrated mental pictures of the extraordinary nexus of driving forces – both conventional and unconventional – that seemed destined to reconfigure the way we live on this planet. My book, Out of the Blue, introduced an approach for making sense out of big events that would otherwise be surprises, and my latest volume, A Vision for 2012: Planning for Extraordinary Change, uses the breakdown/breakthrough themes to propose a general approach for dealing with large scale change.

So, I’ve been thinking about this possibility for quite some time. (My wife would probably tell you that I think about it all of the time.)

I generally agree with the many thoughtful people who consider predicting the future to be a fool’s errand. It is intrinsically fraught with so much complexity and uncertainty that the best one can do with integrity is to array potential alternatives – scenarios – across the horizon, and then try to think about what might be done if one of those worlds materializes.

Scenario planning has certainly been an effective discipline, helping many organizations to imagine potentialities that probably otherwise wouldn’t have shown up in their field of view. But as I facilitate organizations going through these exercises, the little, nagging voice in the back of my head is not asking, “What is the array of possible futures?” – it is always wondering, “What is the future really going to be?”. It wants concreteness. It wants predictions.

I think that no one knows for sure what the future will bring, but after some time of being in this business one begins to be able to discriminate between what is substantive and structural and what is largely speculative. For me, at least, some things have an intuitive sense of being real and important, and the rest of the possibilities lack just enough gravitas that I know that they’re only “ideas”. That intuitive sense is supported when it becomes possible to triangulate from a number of independent sources that all point to the same conclusion – the possibility has substance.

People always ask me after my talks what I think is going to happen. “With all of these converging trends, what is 2012 really going to look like?”. It happened again last week in a radio interview. Mostly I hedge and dance a bit and say that I don’t know for sure. There will be a new world and a new human that will come out of all of this. The notion of cooperation will shape the way people see themselves and the rest of the world . . . and there will be new institutions and functions, etc. Pretty general stuff.

But, over a year ago, the notion that all of this big change could spell the substantial reconfiguration of the familiar country that I have lived in all of my life began to gel in a way that moved beyond the notion of being just a possibility – a wild card – into that space of plausibility. I now have come to believe that it is likely and will happen – soon.
Ideas like this are so big and disruptive that it is really quite hard to get to the place where we take them seriously. For most of us, our lives are evolutionary – punctuated, perhaps with trauma now and then, but mostly populated by events that are familiar, even if they don’t always make personal sense. The concept that EVERYTHING might change is so foreign to any experience that most of us have ever had that even if we say the words and talk about the possibility, we really don’t internalize what this might mean.

Therefore, along with most folks, I’m kind of late to this game. There are other notable thinkers who jumped to the natural conclusion quite some time ago. Dmitry Orlov, for example, first started to build a theory of superpower collapse that included the U.S. in 1995. Only in the last few years has he been talking publicly about his ideas and the ultimate direction of U.S. trends. His book Reinventing Collapse is recommended. He also gave a great speech about the subject recently.

James Howard Kunstler, a wonderfully entertaining and provocative writer, was very clear about the systemic and structural nature of the larger problem in his 2006 book, The Long Emergency. His always interesting blog is a weekly assessment of where we’re going wrong. He clearly sees the demise of America coming this way.

Our own David Martin first outlined the financial dominos that were going to fall in a talk at The Arlington Institute in July of 2006, which he has updated on two subsequent occasions here in Berkeley Springs. Implicit in his treatise was the collapse of the U.S. and global financial system, but again, it’s one thing to imply those words and quite another to really believe them.

I was aggregating my own perspectives and being influenced by some of these folks such that last year while in Singapore I even told my friends there that I thought we were seeing the beginning of the end of the U.S. as we’ve known it. I didn’t think they really believed it then but, in the months since then, they reportedly have made major leadership changes in their government investment company to reposition it in the future away from the U.S. and the US dollar.