Enough is enough Enough is enough ! !

Klaus NürnbergerOct 2013

Enough is enough Enough is enough ! !

Enough is enough??

The world economy is run on the dogged insistence that ‘enough’ cannot and should not ever be enough.

No, No,

never! never!

Dominant economic wisdom says:

The free-market system will grow or collapse.

And there is no other viable system!

Scientific insight must grow.Technological innovation must grow.Capital investment must grow.

Economic output must grow. Energy supply must grow.

The population must grow. Income must grow.Consumption must grow.

Human life time must grow.

Session 1 deals with the fact that we are embedded in, and determined by, the free-market system.

The modern economy leads to growing discrepancies in life chances and escalating ecological destruction.

Session 3 deals with motivations underlying the modern economy and a Christian response.

The modern economy is driven by desire which is deemed natural and profitable.

Our aim is to find a valid and realistic Christian response.

Session 1

Basic economic

realities

OutlineOutline

1. Economic power in a free market

2. Growing discrepancies in life chances

3. The effects of globalisation

4. Stimulation of consumption with easy credit

5. Increasing money supply

6. The ecological fall-out of economic growth

First assumption:

“The free market balances out the economy”

‘Any bureacratic interference distorts the market, reduces output and therefore impairs human well-being’.

Supply

Demand

Pric

e

Quantity

The Market mechanism

Yes – but …

The reality:

The market balances out supply and demand. But it does not lead to a balanced economy!

Because of unequal endowments of economic power, free competition leads to growing economic imbalances.

PROFIT MOTIVE

NEEDS DESIRES

PRODUCTIVE POWER

PURCHASING POWER

SUPPLY DEMAND

BARGAINING POWER

MARKET

Feeding on itself, competitive power in the market grows exponentially, thus leading to widening income discrepancies.

World income distribution World income distribution

Second assumption:

Free competition enhances the wealth of the society as a whole.

Yes – but …

The reality:

1. The wealth of a small elite is enhanced beyond all proportions while a growing section of the population is being marginalised.

Combined wealth in trillion US$Average wealth 3 800 million US$

Thou

sand

s of

bill

iona

ires

Wea

lth in

trill

ions

US$

2000 2005 2010

NET WORTH OF

BILL GATES

US$ 72 000 000 000 (2013)

Which is more than the Gross Domestic Product of 128 of the 192 countries (67%) in the world today.

1. Billionaires and the great corporations have exorbitant power to influence society.

This power t can be used for beneficial purposes (Bloomberg, Gates, Buffet)

Or abused (transforming the US democracy into a plutocracy; Berlusconi in Italy).

2. The same is true for the lobbying power of large corporations and whole sectors (oil, agriculture).

(Many analysts allege that there is massive collusion and abuse of power in the American system.)

2. Superabundance and deprivation are consequences of one and the same process.

There is an economic centre where the economy grows while the population remains constant,

And an economic periphery where the population grows and the economy stagnates.

PERIPHERY PERIPHERYCENTRE

AFFLUENCE GAP

POVERTY GAP

CENTRE AND PERIPHERY

IN GEO-IN GEO-GRAPHICAL GRAPHICAL TERMSTERMS

IN TERMS OF LIFE CHANCESIN TERMS OF LIFE CHANCES

Trinity Yacht Lady Sura

The price is not provided – is it irrelevant for the monied?

Probably US$ 40 000 000 = R 400 000 000

Porsche Spyder € 781,155= R 10 000 000

3. An increasing number of people are pushed to the margins of the economic system,

and may become redundant in economic terms altogether.

4. A seriously skewed economy cannot accommodate the total population.

MARGINALISATION

OUTSIDERS ARE ECONOMICALLY REDUNDANT

INSIDERS ARE ECONOMICALLY RELEVANT

THE FORMAL ECONOMY CANNOT ACCOMMODATE THE TOTAL POPULATION

PROVINCE NUMBER OF POOR % OF POPULATIONin millions

GAUTENG 3.7 42%LIMPOPO 4.1 77%

WESTERN CAPE 1.4 32%EASTERN CAPE 4.6 72%

KWA-ZULU-NATAL 5.7 61%

SOUTH AFRICA 25.7 57%

The Gini-factor is growing 1991 0.68, 2001 0.77

Marginalisation is reflected by poverty levels:

Third assumption:

Globalisation (a free market across the globe)

leads to rationalisation thus greater efficiency thus greater productivitythus lower prices

Which is good for the consumer.

Yes – but …

The reality:

Globalisation means that local centres are integrated in the global centres, enhancing their reach and power,

Local peripheries are exposed to global competition and pushed out further than before.

Examples: SA shoe and clothing industries;agricultural dumping (e.g. poultry from the EU)

GLOBALISATION

I

CENTRES BECOME MORE INTEGRATED

PERIPHERIES ARE PUSHED FURTHER OUT

ENHANCED COMPETITION, ENHANCED GAINS ENHANCED MARGINALISATION

Again the third assumption:

Competition leads to rationalisation Rationalisation = enhanced productivity, lower costs, and lower prices, which is good for the consumer.

Yes – but …

Which consumer? Rationalisation = reduction of costs

= retrenchments,

greater gain for shareholders,greater packages for CEOs,greater purchasing power for the employed

Total loss of income for the retrenched.No chance for the unemployed.

The modern economy needs a diminishing number of highly trained workers.

LABOUR

TECHNOLOGY / ENERGY

As a factor of production, labour can no longer compete with technology and energy gained from fossil fuels.

Redundant labour is shifted into non-productive sectors, or it drops out of the system.

US jobs 2000-2010

COMPUTER TAKE OVER

“Increasingly sophisticated scheduling software has eliminated the need for many office assistants and secretaries; Labor Department statistics show a loss of 1.1 million such jobs in the decade between 2000 and 2010 (in the US).

The number of bookkeepers fell 26%, word processors and typists, 63%; travel agents, 46%; and telephone operators, 64%. Online services like banking have wiped out many teller jobs; self-service checkout lanes have whittled away at cashier jobs.”

This is a bakery – do This is a bakery – do where are the bakers? where are the bakers?

How many people How many people are working here? are working here?

NO WORKERS NEEDED!

In highly developed countries the productive sectors provide the wealth needed to support growing unproductive sectors.

In poorer countries the productive sectors cannot sustain bloated public sector and service sector employment.

Social grants to pick up the unemployed, though necessary, bleed an already struggling economy.

Fourth assumption:

A recession must be avoided at all costs, therefore a sluggish economy must be stimulated with easy credit.

Yes – but … The reality:

1. Easy credit leads to escalating indebtedness.

2. Consumer credit transfers purchasing power from consumers to lenders (credit institutions and sellers).

Cash price R 110 00060 m credit R 158 356 10.5%Loss R 39 000 33%

Corporate and private debts in South Africa (at present about 75% of disposable income)

Household debt to income

Fifth assumption: Fifth assumption:

““Boosting the money supply” will stimulate Boosting the money supply” will stimulate the economy. the economy.

(First step: lowering interest rates close to zero to induce borrowers to take out more loans. When interest rates are already close to zero, the central bank buys mortgage bonds from commercial banks to provide them with more money – called quantitative easing. It takes over the debt risk from the banks so that the banks are encouraged to give out more loans.)

Yes – but … The reality:

‘Quantive easing’ leads to massive state indebtedness.

Such state debts have to be shouldered by the average population for generations to come.

US STATE DEBT CEILINGS

Yes – but ..,

The reality:

1. The ‘financial economy’ grows, even when the real economy does not.

2. The speculators are gaining from the financial economy, rather than the consumers.

The surplus money must go somewhere – and it is invested in stocks.

The Johannesburg stock exchange just hit a series of all time highs,

while consumers are struggling to service their debts and pay their bills.

3. The real winners are the captains of the financial sector:

Total packages of banking CEOs in 2012 / 13

Gupta (DBS) 7.5 million US$ R 75 million Jain / Fitschen (Deutsche Bank) 6.2 million US$ R 62 million

Ramos (ABSA) R 16.7 millionJordaan (FNB) R 17 millionNxasana (First Rand) R 22.5 million

THE ECOLOGICAL FALLOUTTHE ECOLOGICAL FALLOUT

Sixth assumption:

Techological efficiency and economic productivity have led humanity to

a level of prosperity that previous generations could never have dreamt of.

Yes – but … The reality:

1.Wealth = economic throughput.

2. Economic throughput is the transformation of natural resources into waste.

3. Technology accelerates throughput, thus the depletion of resources and the accumulation of waste.

EXTRACTION

PROCESSING

DISTRIBUTION

CONSUMPTION

ECONOMIC THROUGHPUT

Money flow

Goods and services flow

RESOURCE BASE

WASTE

4. Wherever wealth is ‘created’, it goes at the expense of other humans or the natural world. (The law of entropy).

5. Human self-interests are blinkered.

They concentrate on human consumption irrespective of the costs for the natural world and future generations.

EXTRACTION

MANUFACTURE

DISTRIBUTION

CONSUMPTION

Money flow

Goods and services flow

RESOURCE BASE

WASTE

HUMAN CONCERNS

CONCERNS OF NATURE (GOD)

Modern humans began to colonise the earth some 100 000 years ago. Wherever they went their arrival had devastating effects on other creatures.

“Homo sapiens became the first species to stop living inside local ecosystems. All other species, including our ancestral hominid ancestors, exist as semi-isolated populations playing specific roles in local ecosystems. All other native plant species are now classified as “weeds” — and all but a few domesticated species of animals are now considered as ‘pests’.”

Economic growth,

population growth, growth of economic discrepancies and growth of ecological impact

are all part of the same process.

POPULATION GROWS IN THE PERIPHERY

ECONOMIC POWER GROWS IN THE CENTREECONOMIC

GROWTHECONOMIC GROWTH

THE ECOLOGICAL IMPACT GROWS

INCOME DISCREPANCIES GROW

Population growth

is a consequence of the modern economy and began in Europe!

Between 1700 and 1900 Europe’s population grew from 100 million to 400 million.

United Kingdom

1700 5 000 0001800 7 750 0001900 30 000 0002000 49 000 000

Germany

1700 19 600 0001800 21 700 0001900 56 400 0002000 82 000 000

United States

1700 250 000 (Whites only) 1800 5 300 0001900 76 200 0002010 310 000 000

 1 billion in 18042 billion in 1927 (123 years later)3 billion in 1960 (33 years later) 4 billion in 1974 (14 years later)5 billion in 1987 (13 years later) 6 billion in 1999 (12 years later)7 billion in 2013 (14 years later)

The world population grew exponentially since the onset of the modern economy.

Seen in the long term, humans posed no threat to nature until the tilling of the soil and the formation of the great empires led to power concentrations and technological advance.

Jesus 30

Luther 1550

Today 2013

200 million

600 million

7 000 million

Today there are 35 times as many people on earth as when the Bible was written

1900 1950 2000

South African population growth South African population growth 1900 - 2000

Simultaneous with the population explosion there was an explosion of material expectations (here represented by energy consumption).

The dynamics of the modern economy have gripped the imagination of poorer populations across the world,

Leading them to aspire to the life styles, the status and comforts of the rich.

USA 47 000 Brazil / RSA 11 000 China 7 500 Congo 320

150 x

Growth of material Growth of material expectations expectations

GDP US$ / capita

Now multiply the growing population with growing expectations!

This is a

tsunamitsunami not of seawater but of humanity

flooding the planet and destroying everything in its wake

For over four decades the warnings of ecologists were dismissed and refuted with ‘scientific’ arguments.

Neo-classical economists have legitimated the interests of large corporations (especially those dealing with fossil fuels).

Powerful lobbies in the corridors of power ( = a form of corruption) have made policy changes illusory.

Further neo-classical assumptions:

7. The benefits of economic growth are self-evident. Growth is indispensable.

8. Population growth enhances economic growth.

9. Consumers must be motivated to consume more because vibrant market demand enhances production and therefore economic growth.

10. Resource constraints are not an issue because resources are unlimited and the market will sort out deficiencies.

Yes, but – NO, not at all!

The reality:

Resources that cannot regenerate themselves (such as fossil fuels) are depleted,

Resources that can regenerate themselves (such as forests) are overexploited or destroyed.

Natural sinks (such as air and water) that process the waste are overtaxed.

While global warming may still be disputed, what cannot be disputed is:

Maritime resources are being decimated,Forests are being destroyed, Agricultural land is eroded and poisoned, Fresh water resources are running out,

Species are being eradicated in their thousands.

We are living through the sixth mass extinction in the earth’s history –

the first caused exclusively by humans!

Normal extinctions vary between 1 and 10 species per decade.

During the last century the rate was between 100 and 10 000 per year.

Responsible Policy Priorities Responsible Policy Priorities

1. The preservation of the resource base of the planet.

2. A modest but healthy livelihood for all.

3. Equity in the distribution of efforts and rewards.

4. Concern for the weak and vulnerable.

5. Balanced (material, social, spiritual) need satisfaction.

Actual policy priorities

The economy must grow.Capital investment must grow. Economic output must grow. Energy supply must grow.

The population must grow. Income must grow.Consumption must grow.

Preliminary conclusion:

Should enough be deemed enough? Quite definitely!

Frugality has become imperative!

1.Growing discrepancies between extravagance and misery are undermining any prospect of material adequacy for all and social peace.

2. Our avarice is destroying the planet, thus the future of our progeny and countless other organisms.

3. Our economic system is vastly out of kilter. Neo-classical economics reinforces the fatal trend rather than counter-acting it.

What are the alternatives?

African traditionalism is not an option because it stifles free initiatives and thus the development of the poorest of the poor.

The Marxist alternative failed, because (a) it misinterpreted human motivations, (b) it was based on the same quest for

human mastery, ownership and entitlement,(c) it was an oppressive system.

In the free market system there is no political will to change. Change is only possible when human motivations change.

Session 2 - Session 2 - Group Group

discussions discussions

Can Christians make a difference? Can Christians make a difference?

“Nur den Betern kann es noch gelingen,das Schwert ob unsern Häuptern aufzuhalten…”

Inner constraints:

Since Pietism and the Enlightenment, Christians have focused on:

Our eternal destiny at the expense of God’s mission,the spirit at the expense of the body, the individual at the expense of the community, the church at the expense of the society, humanity at the expense of the rest of nature.

Our faith has become as self-centred as the motivations of the modern society at large.

Outward constraints:

1. Does the church wield economic or political power?

2. Which groups are represented in our congregations – the youth, the men in their prime, the workers, the industrialists, the professionals, the politicians?

3. Are those who sit in our pews interested?

4. Do our sermons, liturgies and hymns reflect such concerns?

5. Are preachers trained to address such issues?

6. Are the motivations of believers different from those of the general public?

7. Are conference resolutions ever translated into actions?

8. Are we taken seriously by anybody in public arenas?

What if our enemy were not impotence, but fatalism and despondency?

Once we feel we cannot do much, we swim with the crowd.

Then we remain part of the problem rather than part of the solution.

Faith in God is a trust, a conviction, a mission and a determination that can ‘move mountains’.

If we were to make a difference, what would have to change?

Where could we begin? Which developments could we support?

1. What motivates us as Christians? Our clean conscience and peace of

mind?Our eternal destiny? Our standing in society and earthly

prosperity? Or God’s vision for his world?

2. Can our concept of salvation include the well-being of God’s creation as a whole?

3. Can our Christian worldview be transformed to match current scientific insight?

4. Does it matter whether individuals or households change their way of life?

5. How can the Word of God reach the decision-makers and role models of our times?

6. Can our theological training equip our pastors to work with secular experts and role players?

7. Should pastors include economic-ecological topics in their sermons and classes on a regular basis?

8. Can our church issue sporadic, concise and clear guidelines about economic and ecological issues?

9. Should our church leadership cooperate with other churches with similar concerns to play a public role?

10. Can our lay membership be motivated to think and act responsibly in their secular contexts?

11. Should we re-establish the Christian Academy, where such issues can be discussed between role players, stake holders and experts on an interdisciplinary basis?

12. Can you think of NGOs, Government Agencies, lobbies and advocacy initiatives that we would join?