Why we need to solve wicked problems using systems thinking

Do we solve the big political problems one by one or as a whole system? We say as a whole system.You can't do it one by one.

In a system where everything affects everything else, if you change one element it has an effect on at least one other element and sets off a chain of responses.

We have assumed there is a need to change the tax system, the money system, the welfare system and the governance system. What happens if we don’t tackle it as a whole system?

Let’s just change the tax system. The result of taking off the deadweight taxes like income tax, GST and company tax and changing to charging a rent on the monopoly use of natural resources only, we still get an increased systemic pressure from the money system for growth. The result is continuing growth of private debt at interest. The banks become more powerful than ever.

If we change the money system but don’t tackle the tax and welfare system we get huge land and resource inflation resulting in inequality and booms and busts.

If we change two of them e.g. the tax and welfare system the result is more equality but still the growth of interest bearing debt.

Change all of these but not the governance system and the result is an equal but increasingly dissatisfied population. They are disenfranchised and don’t trust the government. Democracy deteriorates.

Everything in the political economic system affects everything else.

So we to change them all together by obeying Buckminster Fuller’s warning that “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

The new model that makes the existing model obsolete is this: Money is created at the smallest possible level of government by spending it into existence, not lending it into existence with interest. The rules governing the trade in that currency are made locally to turn the tax system on its head. The rules of rent are decided at local level to share the values of location of land and of monopoly resource use. A small Citizens Dividend growing to a full Basic Income is distributed. Power, function and revenue flow from the periphery to other centres to create a new system – a complex, dynamic and self regulating political economy.DSCF0029

Is there a future for Labour and what will happen if they move to the right?

The Labour Party, as they reflect on their biggest loss in 92 years, is struggling to come to terms with the consequences of being environmentalists. No self-respecting westerner these days would say they weren’t concerned about the deteriorating environment. The threat of global warming is a massive wake-up call. Even the Rockefeller Fund founded on oil has just divested from coal and tar sands. Politicians finally have to face reconciling protecting the environment with creating the fiscal and monetary conditions for a thriving economy.

That is a huge challenge. The Greens can talk all they like about ‘smart growth’ and a ‘green economy’ but unless they address the money system and stop the growth imperative at is source 'smart growth' will just continue to be nice rhetoric.

9115760Over the last few years we have noticed the Labour Party aligning itself more and more with the Greens. But in the last weeks of the campaign Labour leader David Cunliffe actually stole the Greens rhetoric. He said, “It's got to be a clean, green, smart, strong economy” (14 Sept, Stuff)

So while Labour has moved towards the Greens, for strategic purposes it had also to distance itself from them right at the beginning of the campaign. Doing the splits eh? Electoral realities dictated that it could no longer afford to align itself with a party who questioned every job creation initiative the National Government started. But there is a large faction in the Labour Party that wants expressways, deep sea oil drilling, mining in conservation areas and fracking – all for the sake of jobs.

But Labour’s resounding defeat in the 2014 election should really be seen in the international context. Labour Parties and Social Democrat parties are struggling all over the western world – in Australia, UK and Canada and even Sweden they are losing ground. Cunliffe hasn’t got it on his own. All social democrat parties are struggling to reconcile protection of the environment with the economy so voters just cast their lot with the conservatives who promise “economic growth” (no matter what kind of growth). IN the case of New Zealand you can add in a personable Prime Minister with the common touch, a Leader of the Opposition who is prone to lecture and the challenge is almost insuperable.

The price of West Texas oil on 23 Sept 2014 was $91.50 and Brent Crude was $97, due to falling demand. But it is costing $100 a barrel these days to produce “tight oil”, the sort that is costly and difficult to extract. As Richard Heinberg recently wrote “Extracting and delivering those resources at an affordable price is becoming a bigger challenge year by year.” We have the perfect storm of peak resources, climate change and economic instability and no Labour Party is has the facility to deal with them. Moreoever it is no good reminiscing about the great days of Micky Savage, Norman Kirk or David Lange. The Labour Party now has a huge leap to take to adapt to the real world of 2014.

While the Greens move towards the middle, the Labour Party probably has to move to the right for electoral purposes. With so many environmentalists in the party these days they are damned if they align with the Greens and damned if they don’t. The alternative is for the Greens to move over and let Labour occupy more of their territory.

The challenge requires much more than bandaid solutions of Kiwibuild, raising minimum wages and Working for Families. It requires the complete rethinking the political economy, one which works for a post fossil fuel age.

Over the last three years the New Economics Party has been doing this and we have come up with some proposals. We believe it requires a massive change to the tax system and fundamental currency reform so that we get public creation of money with strict inflation control. Furthermore it requires recognising we live in the age of automation so a Universal Basic Income must replace our welfare system. The Labour Party has been talking jobs, jobs and jobs. But it is more realistic to talk of having enough money and enough choices. Only a Basic Income will emancipate the welfare system, improve working conditions and provide a real incentive to work.

As Michael Bauwens, Founder of the p2p (peer to peer) Foundation said “any movement dependent on labour and the power of labour is futile, because labour is disappearing.” They are stuck in a Cold War narrative and have no stories for the future. The workforce has also been casualised as employees are made redundant. Many of them set up a small consultancy. The trend continues. Labour is bleeding and becoming freelanced.

Is the future 3D printers in microfactories in small towns ?

Is the future 3D printers in microfactories in small towns ?

There is another factor. According to economic historian Philip Mirowski the left doesn’t understand neoliberalism. When they don’t understand it, they underestimate the cleverness of their foe and simply cannot counter it. Neoliberalism has re-engineered society. We need to tackle Capital in a different way, by disempowering it through the empowerment of people. Through real democracy, through new technology allowing real people to own the means of energy and production. Maybe this is 3D printers in microfactories in small towns with a local bank. Many on the right will get on board with that.

Perhaps we have to write Labour off and accept they are not a movement of the future. Do they really have to move into National’s space to better “play the game”? Well, it’s not a game, it’s about survival and it’s about now. Fewer and fewer people will vote. Labour will be seen as a weak ineffectual version of National. And if the Greens continue to sing from Labour’s songbook, they’ll likely stay at 10% too. The more they try and portray themselves as CEOs the further they will lag behind the international Greens movement.

However, given the fact that the Labour Party is unlikely to adopt either the massive currency reform, tax reform and welfare reform required for a redesign of the political economy, it may either continue to thrash itself to death or stagger on as a less environmental party. Neither option is good. The challenges of the post fossil fuel age will indeed be very hard on social democracy parties with a proud history.

by Deirdre Kent and Aaron McLean

Alert: Environmentalists must start asking questions about currency design and tax reform

Oh goodness me. I have been doing some searches on “climate action economy” and “climate change” “economic growth” and I find myself mad as hell.

Heavens where are their brains? Economists from the World Bank and IMF, Nicholas Stern and many others are talking about the topic as though the economic system is a given. Shucks. How did they really think we got into this mess? Can’t they ask themselves some basic questions?

Environmentalist Hunter Lovins is just as much to blame. She, like others, thinks that there is an economic case for climate change, but fails to look at the currency system we have and fails to look at the tax system we have. Gosh when she visited New Zealand a couple of years ago I gave her a copy of my book but she can’t have read it or she would understand that if you allow the creation of the country’s currency as interest bearing debt then you have a growth imperative built in to the whole system.

Now calm down Deirdre. Why should an environmentalist be interested in examining why there are flaws in the economic system we assume to be the only one?

Actually there is more to think about than the currency system. You also have to design a thriving low carbon economy as well and you can’t do this without addressing the fundamental change necessary to turn the tax system on its head. It is time to stop taxing labour and sales and start taxing the use of the commons. A post carbon economy will have a flowing currency, but not flowing into the overuse of natural resources. Those avenues have to be blocked. And it can’t flow into housing bubbles either. That is a no-brainer.

That is why my first e-book is going to be about climate change. Its about how currency and tax reform can save us from global warming. I am writing it now, well actually I’m researching for it now. We need a land-backed currency introduced in every single country. Comments like those from the UK Chancellor, George Osborne, after Doha in 2011 “We are not going to save the planet by putting our country out of business” are going to be a thing of the past.

As resourceful human beings, if we are clever enough to have google glass this year, we are also clever enough to start redesigning the political economy so we have both a thriving low carbon economy and we halt the death rush to a burning planet and death from drowning, starvation or drought. We can do both. We must do both. We will do both.

Slideshow on the Post Fossil Fuel Economy – Jobs, leisure and innovation

The new slideshow is at http://www.slideshare.net/deirdrekent/steady-state-economy-jobs-for-a-postgrowth-economy. It addresses many of the questions our members have been asking and hopefully makes it easier to understand. There are presenter notes with most slides.