The Ten Crucial Social, Political and Economic Imperatives for Securing Our Future
An Article in the Compendium of Market-Based Social-Ecological Economics
Key issues in view of the neoliberal crisis:
How can we guarantee employment and fair income?
How can we protect the environment effectively?
How should we shape the economic globalization?
What should the economic sciences contribute?
What must be the vital tasks of economic policy?
How can we legitimize economic policy democratically?
Table of Contents
Manifesto for the Citizens of Europe and the EU
The election to the Deutsche Bundestag (German Federal Parliament) in 2013 showed once again an irresponsible indifference towards the imperatives, the observance of which is indispensable for our social welfare and ultimately for our survival on this planet. This indifference is manifested in the platforms of the large political parties, currently reinforced by the grand coalition of CDU/CSU and SPD and the correspondingly low corrective influence of the opposition.
Since the party platforms are a reflection of the ideas widespread among the population, a more effective safeguarding of our future can only be expected through a process of general education and opinion-forming. This process can be accelerated if new parties, independent of powerful interest groups, succeed in formulating and communicating an economic order that does not primarily promise short-term economic benefits – that are mostly decisive for the electoral success -, but instead convincingly focuses on the long-term well-being of society. As will become apparent, the key to such an order lies in the political design of a subsidiary, citizen-oriented structure in politics and business. In this sense, the compendium at hand sees itself as a contribution to political and especially economic policy education, opinion-forming and transformation.
The question arises from what has been said, why does the economic order have such an existential significance for our future. The interdependence is clear: because in our society, based on a division of labor, we can secure our physical existence solely through mutual economic exchange, and it is our economic order that decides whether we preserve or destroy our social order and nature. In other words: sensible social and ecological demands can only be enforced if an appropriate economic order is in place. If reasonable demands are not backed up by economic policy, then, as always in economic history, the dispossessed and the weak, as well as nature, are exploited by the possessing classes and powerful economic players so that their existence is endangered under the emerging inhuman conditions. Ethical and moral norms are then trampled underfoot, for, as Bertold Brecht correctly stated, first comes food, then morals.
The following discussion of the ten obligatory imperatives is all about how the destruction of social order and nature can be prevented by economic policy regulations. In addition, for each imperative I will refer to articles in this compendium that offer a deeper insight into the respective topic. Finally, the article at hand is complemented by a manifesto, which is to be recommended to the citizens of Europe, especially those of the EU.
1. Nature-Friendly Agriculture and Forestry
The aim of this imperative is to ensure that the general public is supplied with food and renewable raw materials as independently and decentralized (locally) as possible. This presupposes that ecologically compatible methods are used in agriculture, animal husbandry and forestry to ensure the preservation of soil, groundwater and the atmosphere as well as biodiversity. The diversity of species also requires that commercially used and uncultivated areas are broadly balanced and the latter are widely networked in order to ensure genetic diversity within the species as well.
On the above caricature: A trade in emission rights for the greenhouse gas methane might not be a bad idea for restricting meat production!
I call the above mentioned independence of supply structural self-sufficiency. This means that self-produced food and renewable raw materials should suffice for quantitative and qualitative self-sufficiency, but not in the sense of ideologically based isolation, but rather as a basis for reciprocal and mutually beneficial international trade that is free of blackmail and increases the diversity of supply of all trading partners without ousting and destroying domestic economic structures and productions.
This above mentioned proximity of supply is ensured by subsidiary structures discussed below, i.e. political and economic decisions and the responsibility for them are taken at the lowest possible level (are graded bottom-up) to prevent centralist and monopolistic structures. Meaning that food and renewable raw materials should be produced and consumed/used as decentrally as possible, also to minimise transport routes.
Since ecologically produced renewable raw materials can be composted without residue after their consumption or use, they are an essential part of a biological recycling economy that is indispensable for safeguarding the future (the complementary technical recycling economy is dealt with in Chapter 4 below).
2. Sustainable Population Density
This imperative addresses one of the great social taboos. To this end, it is sufficient to point out that Germany’s industry demands ongoing immigration in order to counter the alleged shortage of skilled workers, even though the country, with its 230 inhabitants per square kilometre, is at least four times overpopulated in ecological terms. The figure shows that Germany is one of the most densely populated countries in the world. Not counting the very small countries, only the Netherlands with 405, Hungary with 372, Belgium with 341 and Great Britain with 256 inhabitants per km² are more densely populated in Europe. Throughout the world Bangladesh holds the record with 1084 inhabitants per km².
In principle, a nature-compatible population density applies for a certain geographical area if the inhabitants can feed themselves sufficiently from the ecologically produced yields of their own soil and waters (see structural self-sufficiency above in Chapter 1) and if they also have sufficient widely networked natural areas to safeguard biodiversity. As I said above, structural self-sufficiency is a prerequisite for blackmail-free foreign trade. As a supplement see the article Future-Proof Foreign Trade.
It is politically decisive that a nature-compatible population density can only be achieved and maintained by strict control within a politically autonomous area (a nation, an economic area). Given sustainable population density, an autonomous area has no reason to intervene in the ecological sphere of other areas just to provide its inhabitants with sufficient food or raw materials. However, the future of the planet can only be considered secure if the vast majority of mankind lives in areas with a nature-compatible population density and in structural self-sufficiency.
How many people each area and the earth as a whole can sustainably tolerate can only be answered in the context of the respective technological level of development. At the current level, the overpopulation of the earth as a whole is certainly similar to the factor in Germany. In order to obtain reliable figures, the vast majority of countries would have to agree at UN level to determine their respective nature-compatible population density and thus their corresponding population size in order to then jointly develop and implement measures for ecological adaptation on this basis. By its very nature, the adaptation would involve several generations of mankind, subsequently followed by a permanent stabilization of the compatible population density.
For a deeper insight I recommend the article Demography and Retirement Provision.
3. Decentralized Renewable Energies
The practical application of this imperative is crucial for limiting and ending the emission of carbon dioxide from the combustion of fossil fuels being responsible for climate change, and this imperative is just as well crucial for the final phasing out of the risky use of nuclear energy. It is mandatory to convert the energy supply to the use of all forms of direct and indirect solar energy and geothermal energy as quickly as possible. Moreover, the decentralized supply of renewable energy is urgently needed, for example through municipal companies, in order to make consumers aware of their local responsibility, and even more so to end the current dependence of consumers on transnational energy companies that operate outside economic policy regulations.
To achieve this objective, research and development has to be focused on technologies suitable for the decentralized use of renewable energies.
4. Closed Material Cycles
This imperative serves to prevent the waste of scarce economic resources and the associated environmental impacts. On the one hand, the renewable raw materials mentioned in Chapter 1 above, such as wood, are suitable for largely replacing non-renewable raw materials, such as minerals, in production processes. Meaning that renewable raw materials that grow as part of the biological cycle are used economically, are finally composted (recycled), and can make up an increasing proportion of the resources used, provided that technological research and development is focused on this use. In other words, it is ecologically necessary to replace non-renewable raw materials as far as possible by renewable raw materials to avoid external costs and irreversible environmental damages.
On the other hand, non-renewable raw materials that cannot be replaced must be reused in closed technical cycles. The development of such cycles requires major technological efforts and is one of the great challenges for the ecological transformation of our economy. After all, non-renewable raw materials must be recovered at the end of product life cycles without residue, that is, without loss of substance and sorted by type. This presupposes that research and development, focused on closed technical cycles, has to start at the beginning of the economic value chain, so that, for example, mixed varieties, which can only be separated with great effort later on, are avoided from the outset.
Conclusion: In a sustainable economy, renewable raw materials are repeatedly reused in closed biological cycles and non-renewable raw materials are repeatedly reused in closed technical cycles.
5. Subsidiary Political Structures
The development in the European Union towards a centrally administered federal superstate, which is progressing even in violation of the European treaties, gives reason to point to the destruction of democratic structures in Europe. Given – in the positive sense – the unique diversity and heterogeneity of Europe, the future of the continent can only be secured by a confederation of autonomous nation states. The urgent need therefore arises to strengthen federalism and subsidiarity in the Member States so that political decisions can be taken at the lowest possible level where people are directly affected and can take responsibility for their affairs.
At the same time, representative democracy in the EU member states must be supplemented by plebiscites (elements of direct democracy) that are thematically focused and limited with respect to preserving the graduated (reasonably allocated) sovereignties of the subsidiary political levels, so that »interventions« from above can be prevented or reversed by the sovereign (the people). Such focused referenda are of particular importance for the European integration process because, as the development in the euro zone shows, national governments and parliaments tend to transfer sovereignties, such as sovereignty over national budgets, to the European level, for example as an alleged unavoidable consequence of the euro crisis and under the pressure of industrial expansion. The economically unjustified introduction of the euro now offers its apologists – in face of the inevitable crisis – selfish justifications to take a turn for the »better« through centralist directives from Brussels.
For a deeper insight I recommend the article EU: Federal Superstate or Confederation.
6. Subsidiary Economic Structures
In the absence of economic policy regulation, entrepreneurs are encouraged to concentrate more and more power and productive capital in their hands. However, because concentrations generate external costs in nature and society (such as environmental damage and unequal income distribution) and undermine democratic participation and decentralized responsibility, this »natural« pursuit of economic players must be limited. As a result, it is imperative to decentralize economic structures time and again in a continuous process of economic governance, more precisely: to continuously direct the economy into subsidiary structures. I call this process dynamic subsidiarization. Economic and political subsidiarity (see above) are thus brought into line.
The aim of economic policy control must be to limit entrepreneurial units specifically by sector to a size that ensures full functionality in terms of production technology, but which makes further growth in size unattractive through progressive taxation. In this way, a geographical distribution of production is realized – also as a prerequisite for full employment – that makes it more difficult to externalize costs because they are, in conjunction with the other imperatives, predominantly incurred locally, become instantly visible there and can be avoided from the outset under local democratic responsibility. And: The destructive apparent productivity of centralist production with its supposedly efficiently produced quantities is replaced by an effective positive productivity, which is, as the result of the subsidiary production structure, socially and ecologically defined.
For a deeper insight I recommend the article Economic Subsidiarity.
For the practical construction of subsidiary economic structures under the conditions of the neoliberal globalization and as an entry point for a post-neoliberal economic order I recommend the article Building Subsidiary Economic Structures.
7. Bilaterally Regulated Foreign Trade
The subsidiary domestic economic structures can only be autonomously controlled and maintained if foreign trade is adapted to domestic conditions such that mutually profitable, prosperity-enhancing exchange is made possible. This results in the need to neutralize the differences in productivity and price levels between trading partners on average through well calculated bilateral exchange rates and for individual products additionally through customs duties. Further more, imbalances in market share between domestic and foreign providers as well as crowding out of domestic providers can be prevented through trade quotas. All these measures are aimed at constructive protection – they are not protectionist, because they are not aimed at unilateral advantages at the expense of trading partners – and must be subject to bilateral trade agreements in order to strike the right balance.
8. Progressive Income Taxation
The performance-based equal distribution of income and wealth in a society must be within a socially acceptable range, because every income is generated on the basis of all social resources and is never the result of an individual performance only, albeit a brilliant one. Therefore, the lowest and highest income in a society should not be more than factor 10 apart; factor 5 would be preferable. The simplest and most effective limitation can be achieved by a progressive taxation of all types of income. An existing unequal distribution of wealth (assets) can be reduced in the medium term by means of a corresponding wealth tax. Limiting the unequal distribution of income and wealth offers three advantages: It supports the sensible (socially and ecologically sound) willingness to perform among the population, ensures social peace, and stimulates economic cycles through general consumption expenditure.
For a deeper insight I recommend the article Sustainable Social Welfare.
9. »Citizens’« Insurances for all Life Risks
Citizens’ insurances are an imperative of social solidarity to which all members of a society must be committed. Solidarity means that every capable citizen contributes from his or her income in solidarity, and conversely that every citizen is entitled to solidarity benefits if he or she is demonstrably no longer able to make an economic contribution. Citizens’ insurance schemes should cover the financial risks of illness, old age, bringing up children and caring for the elderly and should be based on an apportionment (pay-as-you-go) system. Solidarity requires that every citizen pays a fixed and identical percentage of his or her income into the insurance schemes, with no capping applied, and that every citizen receives identical benefits from the insurances in the event of a claim, irrespective of his or her payments. Besides, every citizen is free to conclude additional privately financed insurance policies.
For a deeper insight I recommend the article Demography and Retirement Provision.
10. Sovereign International Cooperation
The sovereignty of nation states and their internal subsidiary structures are the political, economic and social foundations on which any supranational and international cooperation must be built. Without thriving sovereign states, every international cooperation and every form of globalization is built on sand and doomed to failure. The imperative of supranational / international cooperation is therefore: It can only flourish on a voluntary basis, and it need to be confined to the agreement of standards of all kinds for the coexistence and cooperation of mankind. Long-term contractual commitments to supranationally developed standards are ineffective under international law, because the sovereignty of the people of the (democratic) nation states can bring about new decisions at any time. The application and implementation of jointly developed standards are, by their very nature, subject to national sovereignty. Sanctions for non-compliance cannot therefore go beyond ostracism. A constant and sensible pressure exerted by the international community is the only way to achieve long-term consensus and to follow a path that can secure the future.
Typical areas for the development of supranational standards are human rights, defence against crime and acts of war, foreign trade, environmental protection, health care and population policy, primarily the limitation of population density.
Manifesto for the Citizens of Europe and the EU
Central question: How can we build a democratic Europe of social and environmental justice?
In other words: How can we shape the European integration in a democratic and welfare-oriented manner given the existing diversity (or inhomogeneity) of our nation states?
Rough answer: We must enforce the political subsidiarity invoked in the European Treaties – which is currently being undermined by the Brussels bureaucracy – at all national political levels and supplement it with economic subsidiarity.
What does that mean? We must be able to participate indirectly (representatively via parliaments) and directly (through referendums) in decisions at all national political levels (municipal, regional, national), and we must decentralize economic production as far as technically possible, so that we can participate in economic life from the local level up to the national level (bottom-up) and share in the benefits of economic life.
This requires two parallel economic policy steps:
Firstly, a decentralization (subsidiarization) of economic production controlled at the national level, which ensures that value creation, jobs, income and consumption are shifted to the lowest possible level of the economy, that transports are minimized, that a first protective wall is erected against attempts at competitive crowding-out through subsidiary structures, and that we are allowed to act autonomously in politics and economics at all levels.
Secondly, a reintroduction of national currencies in order to create a second protective wall within Europe and beyond against attempts at competitive crowding-out, and, on this basis, to be able to mutually increase prosperity and welfare through trade by neutralizing differences in productivity and prices by means of calculated exchange rates, customs duties and quotas.
What does democratic mean?
The prerequisite for democratic decision-making is our unrestricted national sovereignty of the people, which in Europe falls to us as individual national peoples or must be restored at all national and subnational levels. Our sovereignty is only given if we, as the respective people, have the final decision on our fate on the basis of our respective national constitution; this includes the decision as to whether and how we want to integrate ourselves into Europe as the respective sovereign people. Without our sovereignty as national peoples, or with the illusion of a pan-European sovereignty created by industrial intentions, our continent will go under the dictate of an oligarchy of industrial whisperers and political opportunists.
How should the European integration be shaped? Since a pan-European sovereignty of the people is out of the question given the historically determined diversity or inhomogeneity of our countries, there can also be no democratic decisions at the pan-European level, because otherwis any sovereign nation state could be outvoted by majority decisions of other nation states so that its sovereignty would be restricted. We can therefore only bring about democratically legitimized integration if our national representatives, possibly empowered by national referenda, agree at the European level on normative guidelines only – for example, for intra-European and extra-European trade, for a common foreign policy and for social and ecological goals – which are then implemented sovereignly by our nation states and with specific national time horizons, catchword: Europe of different speeds. The need for European institutions will be minimal when sovereign nation states unite, as opposed to a centralist federal superstate, that is currently being sought despite great national differences and increasing social and ecological devastation.
If we, as sovereign national peoples of Europe, act together under the outlined economic conditions to increase prosperity and welfare, our integration into a federation of sovereign nation states will progress inexorably and strengthen our European consciousness as well as the weight of Europe in the world.
Click here for the German-language version: Zehn Gebote der Zukunftssicherung