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A few well-written words can convey a wealth of information, particularly when there is no lag time between when they are written and when they are read. The IPS blog gives you an opportunity to hear directly from IPS scholars and staff on ideas large and small and for us to hear back from you.



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Entries tagged "sustainability"

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Yes, There is An Alternative

December 20, 2010 ·

It makes us angry when we hear—time and again—mainstream pundits and policy makers claim that there is no alternative to the past 30 years’ path of gearing economies toward the global market. Nothing could be farther from the truth. Currently, as financial markets stagnate and food prices swing wildly and the environment is under siege, more and more people, communities, and nations are taking steps to reduce their vulnerability to a volatile global economy. Many are proceeding to build what we like to call more “rooted” alternatives.

In the Philippines, for instance, we find a refreshing openness to new directions from the halls of the new Congress to the rice fields of the southern island of Mindanao. Many people have come to understand that the dominant approach to the economy since the final years of the Marcos dictatorship, building on 400 years of colonialism, has failed: This more vulnerable approach geared the economy toward the plunder of fish, forests, and minerals that enriched the few and impoverished workers, farmers, and fishers. It created an agriculture sector that is dependent upon unreliable imports rather than geared to feeding the people.

Industrialization occurred in export enclaves, mainly of electronics, that profited corporations but remains dependent upon unreliable overseas markets. And, the model depends upon the export of Filipino workers to other countries to send home money to relatives, since the economy is not providing for their needs. The result is a plundered environment and an economy that is vulnerable to the shocks of a shaky world economy.

We will tell you more about what we find in the Philippines in subsequent blogs, but today we want to deal head-on with the “there is no alternative” myth.

So, what is the alternative?

How about an economy that encourages the stewardship of forests, fisheries and land for community needs? One that encourages agriculture that is good for the soil, feeds everyone an adequate diet, and reorients industry for people’s needs? How about a finance system that helps small enterprises, and an economy that creates enough good jobs and livelihoods so that youth see a future at home?

Community rice farm, photo by Robin Broad

There is in fact an upsurge of efforts in this direction in the United States, in Europe, and in a number of poorer countries—including many parts of the Philippines. In the United States, the Institute for Policy Studies, YES! Magazine, and several other groups have come together to form a “New Economy Working Group.” They have proposed that in order to transform economies to meet the crises, economic life should be organized around three principles.

The first is “ecological balance"—ecosystems should be managed sustainably. This is best done when communities control the natural resources on which they depend. The second is “equitable distribution.” A growing body of evidence suggests that societies that share wealth more equitably enjoy greater health, less violence, and stronger communities. A final principal is “living democracy” (in the words of both Vandana Shiva and Frances Moore Lappé) which involves daily practices of civic engagement in decision making as well as broad participation in the ownership of community assets. People around the world are proposing alternatives and rebuilding parts of economic life based on these principles. Here are four key areas:

  • New indicators: What you measure is vital. The emphasis of most governments on measuring growth does not reveal much about the health of a society. So, a number of institutions, from the United Nations Development Program to a French government commission led by Nobel laureate Joseph Stiglitz, have developed new indicators that measure health, welfare, and different aspects of the three principals above. When governments around the world start paying more attention to such indicators and less to growth, there will be more incentives and even more popular demand for policies that enhance community and human welfare.
  • Close the financial casino: For two decades, there was competition in the financial centers of most countries to develop elaborate new-fangled financial instruments that enriched a new financial elite. This casino activity is what triggered the Wall Street collapse of 2008. Today, more and more economists, business people, and citizens are pressing for regulations that would ban such purely speculative financial activities. The U.S. government, for one, is now giving some incentives to boost local financial institutions offering credit to community enterprises and to individuals in need.
  • Sustainable agriculture: Around the world, millions of farmers are shifting from chemical-intensive agriculture to organic and sustainable agriculture. We find a frenzy of such activity on the ground in the Philippines, and in future blogs we’ll introduce you to farmers whose shift to organics has lowered costs, improved health, cleaned up the environment, and empowered individuals and families.
  • Global rules and institutions that support a new economy: Vibrant local communities depend upon governments to make rules at the national and global levels supporting such activity. Our governments should replace the World Trade Organization, which sets global trade and investment rules in ways that inhibit local and national governments from favoring local firms over global ones. In the Philippines’ case, the WTO has been central to the ripping open of agricultural markets, making the nation dependent on rice and food imports that led to the food price crisis of 2008. The alternative? Building global institutions and rules that support more rooted economies. For example, several governments and many citizen groups in the West are now pressing richer countries to place a small “speculation tax” on the sale of stock, currency and derivatives, and to steer the revenues toward jobs and climate finance in poorer countries like the Philippines.

So, in the spirit of the holiday season: Yes, Virginia, there are a multitude of rooted alternatives.

John Cavanagh and Robin BroadRobin Broad and John Cavanagh wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Robin is a Professor of International Development at American University in Washington, D.C. and has worked as an international economist in the U.S. Treasury Department and the U.S. Congress. John is on leave from directing the Institute for Policy Studies, and is co-chair (with David Korten) of the New Economy Working Group. They are co-authors of three books on the global economy, and are currently traveling the country and the world to write a book entitled Local Dreams: Finding Rootedness in the Age of Vulnerability.

Detroit's Unsustainable Casino Economy

June 30, 2010 ·

casino mapWhen people talk about Detroit, most are unaware that it is the largest metropolitan region in the US to offer casino resorts (unless, of course, they live around there, or they have read the city’s Wikipedia page). Although the casinos have provided a huge chunk of revenue to the City, it does not seem to be helping them create an effective budget that actually serves its residents.

The first thing a person notices when he/she walks around Detroit is how empty and deserted it is -- even though there are these beautifully constructed skyscrapers standing tall throughout the city. These skyscrapers are almost always abandoned and deserted, and they serve as a constant reminder that there was a time when Detroit was once one of the most prosperous cities in the country.

Another unsettling observation that you notice in Detroit is the lack of corporate chains/fast food restaurants in the city (and it pains me as a progressive to actually say that). It is a bizarre sight. Especially since those corporations are usually the first in line to abuse the economically disadvantaged. Yet, what you see on the streets is an empty city that even those motivated by greed are viewing as something of a lost cause because there is no wealth to exploit. The only lively thing about the City (besides the 15,000 people there for the US Social Forum) are the three casinos towering Detroit. So what is the deal here?

Motor City casinoOne of the main driving forces for the development of the MotorCity Casino, MGM Grand Detroit and Greektown Casino was the establishment of the Caesars Windsor across the Detroit River in Winsor, Ontario, Canada. The residents of Michigan were afraid that they would lose a huge chunk of its tourism to Winsor. So in 1996, they voted for Proposal E, which authorized three casinos to be built and operated in the city of Detroit.

Caesar's CasinoBy looking at the tax numbers, the establishments of these three casinos seem to be a good idea for the state and the city. According to The Michigan Gaming Control Board, the big three casinos have been contributing a sizable income to the state and the city of Detroit in the form of wagering taxes and licensing fees. In 2009 alone, the Detroit casinos made a whopping $1.3 billion in total, which yielded $122 million for the state and $149 million for Detroit. These are pretty big revenue numbers, and it makes up about 11.1% of the City’s revenue stream. However, are these casinos actually helping the residents of Detroit?

It is obvious that hardly any of this tax revenue is going back to the City’s residents. Just from a general observation of the players at the casino, most of them are senior local residents, people of color, who are there trying to stretch their social security checks and/or their minimum wage checks. We even heard a story of a mother who is there gambling so she can help pay for her studious son’s high school graduation that was being cancelled due to budget cuts. It was clear that she was not the only one there trying to make ends meet.

There is definitely something wrong with the way the City of Detroit is working if its residents are using the casinos as a way to make more money. These casinos were developed so it would create a constant revenue stream from attracting those outside of the locality. Yet, with the unemployment rate at 14.8% (April 2010) in the Detroit Metropolitan Area (not including the underemployed: part-time workers looking for full-time work, or those who have been unemployed for more than six months) these casinos are increasingly becoming a tool for the desperate to earn enough money to stay alive -- it is a lousy tool at that as well, since everybody knows that the house always wins.

Detroit’s city government needs to figure out a way to reconstruct its economy, to utilize its already established infrastructure, so its residents wouldn’t be sucked into the temptation of making it big through the slot machines or a round of Black Jack. Something needs to be done, and maybe here is a good way to start thinking about it all.

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