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article imageOp-Ed: The political economics of Hazel Henderson

By Michael Terron     Apr 14, 2014 in Politics
The notion of 'externality' is a central concern of Hazel Henderson. This is the cost of producing a commodity that can be omitted or 'externalized' from the company's balance sheet to the public and Mother Nature.
This approach to economics, which is still being taught in many college classrooms, assumes that there is no cost to pay for polluting our natural environment. If there is a cost - and there is - citizens, consumers, animals and the rest of the affected natural world should pay. All of us, therefore, are to be sacrificed on the alter of maximizing profits to shareholders and management.
All of these uncounted hidden costs of our current unsustainable polluting production methods piled up during the 300 years of the Industrial Era. Today, we see a tipping point in the volume of waste, pollution and risks globally: loss of forests, biodiversity, massive debt overhangs, bailouts foisted onto governments and taxpayers, austerity, budget cuts, unemployment, offshoring production to pollution havens and unsafe factories in a worldwide race to the bottom.
There are other, often overlooked, examples of this. Externalizing costs in our agricultural industry produces obesity, diabetes and hunger, especially among low-income people when products are marketed with unhealthy ingredients, additives and preservatives. Pension fund managers bet on food futures to maximize financial returns. Once these costs are 'internalized' or actually accounted for, the price of products, according to Henderson, can be 'corrected'.
Prices for some goods will rise so we can make clearer decisions on what we buy and retail workers might get living wages. Gas-guzzling cars will be more costly to run if gasoline rose to the world average price of $7.00 a gallon (2013) while 50 mpg hybrids will be cheaper. Governments can ease these painful transitions by raising pollution taxes and standards to save consumers billions: energy efficiency in buildings, appliances, factories, government and military facilities. Most of these efficiency standards result in job-creating retrofits that save money and energy in payback periods of two years.
One of the most profound insights Henderson offers is her view of the total productive system of a typical industrialized society. Instead of the conventional pie chart, she likens the economy to a three-layer cake. The private sector is the icing on the cake. This sits on top of the next layer, the public sector. The former depends on the latter for roads, schools, sewer-systems, air-traffic controllers, military, etc.
Upholding the public sector is the 'underground' and (referred to in Part 1 of this article) the Love Economy, both of which are unaccounted for in the GDP and GNP. Of course, most of the 'underground' are illegal activities. The Love Economy, as previously mentioned, includes household maintenance, voluntary and charitable goods and services. The bottom layer or real bottom line, she informs us, under girding all of the above, is Mother Nature, without which, nothing - including ourselves - would exist.
Henderson points out, in Ethical Markets, that, "new research by scientists from many disciplines - mathematics, physics, biology, brain science and ecology - has invalidated most of the core principles of traditional economic theory. The core principle most in error is the assumption about human nature that individuals maximize their self-interest in competition with others. This bleak view of rational behavior also implies that cooperation, sharing, unpaid caring, volunteering and nurturing children are by definition irrational."(pg.230)
Contrary to popular understanding, what has been called "Social Darwinism" or "the survival of the fittest' does not accurately represent Charles Darwin's views on human nature. Drawing upon David Loye's book, Darwin's Lost Theory of Love, Henderson says that the great explorer and biologist was widely misinterpreted. In the December 24, 2005 issue of the London-based Economist magazine, it was revealed that it was the philosopher Herbert Spencer who coined the infamous phrase, which was used to justify cut-throat competition. New research - www.thedarwinproject.com - shows that Darwin thought that the human genius for bonding, cooperating and sharing was the real key to our survival, including the evolution of moral sentiments and altruism.
Hazel Henderson holds Honorary Doctor of Science degrees from the University of San Francisco, Soko University (Tokyo), Worchester Polytechnic Institute (Massachusetts) and is an Honorary Member of the Club of Rome. Other than Ethical Markets, she is the author of Building a Win-Win World, Beyond Globalization and Planetary Citizenship.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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