Work status is determined by the supply of labor available for a particular position/occupation and the skill that occupation requires. The number of persons admitted to high skilled jobs that are allocated an adequate or more than adequate supply of crumbs–i.e. wages--is limited by admissions to education and training programs for those positions.
Western economy is presently structured such that a certain amount of poverty is necessary. In order for the corporations that control capital, natural and human resources to maximize–not optimize–profits they make sure that goods and services available to the universe of consumers is less than the need for those goods and services. A supply shortage keeps effective demand and prices high. In the United States usually about 15-16 percent of the population cannot afford the basic necessities and a decent quality of life. For the total population of the Earth, more like 35-40 percent cannot afford decent shelter, protective clothing, an adequate food supply, adequate transportation, access to health care and adequate education or training. They may afford some or most of the basic needs, but not all.
Gigantic transnational manufacturing, power generating, petroleum exploration, refining and distribution, food processing and distributing, holding and lending and credit granting corporations, as a class, demonstrate no sincere concern for the working people who produce their profits and the wealth of their upper level executives and major stock-holders. Most also demonstrate no concern for water, air and soil pollution or for the medical, environmental and economic health of the communities in which their plants and businesses are located and where many of their lower status production workers, clerks and laborers reside.
The economy of the developed or Western World is based on the following premises.
The World’s population must continue to increase to create new consumers and new markets as old markets become saturated.
"Competition is good," although in practice corporations seek to eliminate or at least reduce competition via hostile takeovers, mergers and buyouts of competitors.
Technology that reduces human error and labor costs is good. (Now days new state of the art technology tends to be more expensive than labor if not subsidized directly and indirectly)
Bigger is better because it permits economies of scale.
Big business development should have higher priority than community social, cultural and political development .
An economy so structured, based on the above premises cannot continue to sustain communities, vital resources and life on Earth as it has been sustained for thousands, perhaps millions, of years. The devastated core residential areas of the World’s cities and the many defunct small towns and villages are testaments to that.
Premises for the New Capital Economy
The first premise on which the new economy would be based is: the production of goods is primarily for the sustenance of, and a decent quality of life for, the community in which its elements –i.e. factories, stores, power plants, mines, farms, etc.–are sited. Secondarily the economy would produce goods to sustain communities in the adjacent region and thirdly for the rest of the nation and the World.
The second premise is that natural resources found in and nearby the settlement will be used parsimoniously. Our most precious resources are soil, water and air. They sustain all life on Earth and should be carefully husbanded. All agricultural activities use water. Some use more some less depending on the type of soil and climate where they are located and the particular needs of the crop. Many modern, capital and chemical intensive agricultural practices pollute and divert water, making it non-recyclable. Industrial activities also use water. By nature industry pollutes water, air, soil and otherwise abuses the environment. Therefore, we need to keep industrial activity to a minimum; just enough to ensure community sustenance. And we need to develop means to minimize the damage it does to its environs.
A third premise is that land will be used for what it is naturally best suited. Prime, fertile farm land would be used to grow and produce food and fiber. Wetlands would be left to filter and purify water that has been adulterated by human use. Land adjacent to wetlands and surface water would be preserved for forests and wildlife habitat. Steeply sloping land, foothills and dry, semi-arid land where top soil is light and shallow is best used for pasture and grazing. It should not be plowed because the loosened top soil is likely to be blown away. And to satisfy affluent humans demand for more meat, beef herds should not be increased so that pasture becomes over grazed. Mountainous land is best suited for forestation, wildlife habitat and clean water headlands. Land that has a heavy clay and/or gravel base is best suited for construction of homes, heavy and light industry, commerce and infrastructure. It is on such land that cities, towns, highways, subdivisions and shopping area should be located. Small portions of farm and forest lands can be designated for human habitation such as farm homesteads, foresters and loggers abodes and for small industry that converts natural resources such as trees, grains, other food stuffs and fiber to utile goods. If land were so used "urban sprawl" would cease. Local transportation would be reduced, helping to keep ambient air clean, minimizing emissions of climate changing greenhouse gasses. Neighborhoods and small towns could be rebuilt on a mixed use, walking scale.
Economic stability is the fourth premise on which the new capital economy would be based. Stability does not preclude population and market growth, but the economy envisioned here does not depend on it as today’s economy does. By producing to meet need instead of effective demand, every human being will have the necessities of life. Most also will have a few comforts and a few will have luxuries. In order to keep environmentally degrading and damaging industries to a minimum the manufacture of luxuries will be reduced significantly..
The fifth premise is that the economy will be driven by production rather than consumption. The settlement will sanction, positively, the production of just enough goods and services to meet needs, provide some comforts for its residents and an optimal excess to exchange for needed imports and emergencies rather than satisfy conspicuous consumption.
Opportunity for every resident of the community to adopt and perform a role that contributes to the general welfare of the community is a sixth premise on which a sustainable economy and sustainable communities would be established. Such a role would be socially, economically and spiritually rewarding. In such communities there would be no unemployment, no homelessness and no starvation. All would have access to what ever health care they needed and all would have access to the education and/or training they are capable of.
Foreseeable Consequences of Such an Economy
Since conspicuous consumption would be minimized, socio-economic class distinctions would be minimized also. There would be no utter impoverishment because every resident’s basic needs would be met. There also would be less concentration of wealth among a few families, individuals and companies because assets would be distributed more equitably than at present. Political power, defined as the capacity to acquire and control resources, (Parsons and Smelser) would be more broadly spread among households and cultural institutions of the settlement rather than concentrated in a few very wealthy persons or families.
Less damage would be done to the environment since use of natural resources including extraction of minerals and fossil fuels, and cutting down trees would be minimized. Use of fossil fuels, would be reduced. Alternative, renewable fuels could be substituted for fossil fuels economically if subsidies such as depletion allowances and immediate, 100 percent depreciation of oil and gas drilling equipment were eliminated.
Since land would be put to the use for which nature designed it, its highest and best use, fertile soil would not be contaminated with synthetic chemicals, nor would aquifers and nearby surface water.
Manufacturing would be primarily to supply the local and regional communities, plants would be smaller than now days and consume less land. They would be distributed more broadly which would tend to reduce the quantity of contaminated effluent in any specific locality. Local ecological systems would be better able to neutralize the reduced amount of toxic effluent.
With regard to agriculture, the agricultural colleges at The University of Nebraska and Iowa State University have experimented with organic and natural methods of growing grain using no or very few synthetic fertilizers. They have found that when doing so yields are not as high in ideal weather conditions as when synthetic fertilizers are used. In poor weather conditions, organic and natural methods produce higher yields than fields that use the synthetic fertilizers. Over a period of years, fields where natural and organic methods were used, varied less year to year than those subjected to high quantities of chemicals and income per acre was equal to or higher than those fields because input costs were much less even when mechanical methods requiring fossil fuel use were more frequent.
Reductions in crimes such as theft, armed robbery, breaking and entering, and check kiting can be expected. Since all community residents will have at least the basic necessities for survival and most will have some additional comforts, motive for such crimes will be minimized. Mental illness and crimes against persons probably would be reduced also because all residents will occupy a social role valued by the settlement, and social-emotional stress would be minimized.
A greater proportion of public decisions and policy would be made at the local and regional levels and less at the national level. With production of goods primarily for local and secondarily for regional consumption, there would be less need for international trade agreements, interstate commerce regulations, tariffs and excise taxes. They would not be eliminated altogether because some excess production would be exported out of the community and its region in exchange for needed goods the community and region cannot produce. To respond to international emergencies, national government would have to be involved. Some foreign trade would exist, but since all communities would be producing at primarily to meet their residents’ needs and comfort, external trade would be minimized.
Most political and coordinating functions would be localized and regionalized, government would
be decentralized. Thus national and state governments could down size and the expense of supporting them would decrease. National and state governments would continue to be necessary to provide for: national defense, foreign relations, immigration, management of national parks and other national lands and property, and provide support for, regulate and maybe even provide interstate and nationwide public transit. A new more equitable taxation system would be developed. Individual incomes would not be taxed to support national and state or provincial governments. Settlements would share some of the taxes they collect from local people, profit making businesses and institutions with regional and state government which in turn would share their revenue with the national government. Local and regional people would participate in determining state and national revenue shares.
Summary
In the first section of this essay serious flaws in the structure of the capital economy of today’s developed World were discussed. The major flaw is corporate control of the World’s resources–i.e. capital–and amassing of wealth which results in (1) the inequitable distribution of resources, (2) contrived shortages of goods and services to keep effective demand high and maximize–not optimize–profit, (3) market control and manipulation that makes a certain amount of poverty inevitable, (4) lack of concern for sustaining the environment and its natural resources.
Six premises–there may be more–on which today’s unsustainable economy is based were listed.
The second section describes in minimal detail a vision of a capital economy which is designed to increase the probability that communities, vital natural resources and life on Earth, as we know it now, can be sustained. It discusses six premises on which such an economy would be based.
In the third section foreseeable positive consequences–there may be negative ones--were discussed: socio-economic class distinctions and utter impoverishment would likely be minimized; damage to the environment would be reduced as the use of renewable fuel resources would replace fossil fuels; more land would be used for what nature designed it; both agriculture and industry would be less abusive to soil, water and ambient air; reductions in crime and social emotional stress can be expected; political power would be more broadly distributed and most public policy would be determined at the community and regional levels; most government functions would be decentralized and taxation could be more equitable.
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