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xchrom

(108,903 posts)
Mon Jul 9, 2012, 07:17 AM Jul 2012

i'm gonna float this here -- it's as much about Rio+20 & the environment as financial crisis.

http://www.thenation.com/blog/168772/are-banksters-redeemable-interview-former-jp-morgan-director-john-fullerton

Are Banksters Redeemable? Interview with former JP Morgan Director, John Fullerton

John Fullerton is a former managing director at JP Morgan. Finance drives economics, he says, and economics largely determines the fate of the planet, yet the resources of the planet are finite. “The notion that exponential growth can go on indefinitely in a finite planet is in violation with arithmetic and basic physics.” As long as growth is the sine-qua-non of market economic ideology: “We are lost.”
If we don’t redefine self-interest, said Fullerton, in this conversation recorded in New York, in late June, “I think we will look back, and our grandchildren will ask us “What were you thinking?”
Today, Fullerton is the founder and Director of Capital Institute, whose “Third Millenium Economy” project released a potentially useful report in the run up to the RIO+20 United Nations Conference on Sustainable Development. You can download “Economics, Finance, Governance and Ethics for the Anthropocene," here.

Watch our conversation, and read the transcript below.

Laura Flanders: Let’s talk quickly about Rio. As we’re meeting, it’s pretty clear that not much came out of this. What was supposed to be a landmark follow up to the Earth Summit of 20 years ago. Why so little agreement, why so little progress?

John Fullerton: Well, I think that timing is probably part of it. I think the world has enormous very near-term challenges that are really overwhelming the agenda of the politicians. So from the people I talk to I think the expectations about any breakthrough were very low…

What do you make of the idea coming out of Rio that now is the time to put a value on our natural processes – in order to induce people like you -- people in the finance sector and businesss-- to tread more carefully.

The idea comes from the classic neoliberal economics frame which is to say, if we value something we need to put a price on it so that the price of that gets factored into the economic system. Right now we don’t have a price on carbon, for example so we’re free to pollute the atmosphere with as much carbon as we want without paying for it and that’s clearly a problem. This idea of valuing ecosystem services is to take that same idea and apply it to a broad range of ecosystem services.

Like what?

Such as bee pollination or a healthy water cycle, or such as the cleansing of rivers through natural systems

So you would say, “the work of all those bees is equal to this many million dollars?”

Yes, or what would it cost if we had to artificially pollinate our crops? If we had to breed bees bring them into agricultural zones, which people do and pay beekeepers to do that.

Isn’t this a horrible kind of concession to the idea that everything and everyone on our planet can be commodified and put a price on?

I have real mixed feelings about it. I think on the one hand, it’s taking the price system and saying well, we have externalities -- we have things that are not being priced -- so let’s internalize them into our economic system. That’s all well and good, but the logical extension of this thinking is that A) We’ll never know enough to put a price on all these systems. I mean there’s an enormous complexity within natural systems that we don’t even begin to understand much less put a value on them. Secondly, and probably more importantly, by putting a price on these services it implies that we can actually consume them and use them up, and what I’ve been taught by ecologists is that there is no ecosystem services if there is no ecosystem function! What’s important is to preserve the function, which in many cases is actually priceless.



***please feel free to move it if deemed inappropriate for this place.
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i'm gonna float this here -- it's as much about Rio+20 & the environment as financial crisis. (Original Post) xchrom Jul 2012 OP
"Redefine self-interest" Ghost Dog Jul 2012 #1
It's an interesting perspective. limpyhobbler Jul 2012 #2
When I first heard about it - it had something to do xchrom Jul 2012 #3
We all understand $$ RobertEarl Jul 2012 #4
It's a real double-edged sword caraher Jul 2012 #5
 

Ghost Dog

(16,881 posts)
1. "Redefine self-interest"
Mon Jul 9, 2012, 12:06 PM
Jul 2012

Indeed. No deeper concept upon which to well-inform oneself, meditate...

... and act.

limpyhobbler

(8,244 posts)
2. It's an interesting perspective.
Mon Jul 9, 2012, 06:01 PM
Jul 2012

The idea that we can meet our environmental challenges by attaching a money cost to polluting.

I think that's what Mr. Fullerton advocates, if I understand correctly.

It's better than nothing. But will it work?

For the large corporate entities that guide industrial development, is money really any object?

How many decades can we afford to lose dithering around waiting to see whether a market-model experiment with environmental controls really worked? Are we going to find 20 to 50 years later that the corporate polluters found a way to manipulate the system and keep chugging along, business as usual?

I'm not against it if it helps. But I doubt that it is a substitute for a planned out, science-guided transition to a sustainable economy.

xchrom

(108,903 posts)
3. When I first heard about it - it had something to do
Mon Jul 9, 2012, 06:14 PM
Jul 2012

With how indigenous people made a living out of a forest and what that was worth - it sounded interesting - I've grown very skeptical since then.

I don't think it's a pathway to wisdom and better use.

 

RobertEarl

(13,685 posts)
4. We all understand $$
Mon Jul 9, 2012, 08:30 PM
Jul 2012

We don't understand what we are doing to the ecology.

When we make the case that putting X amount of pollutant in the environment costs us Y amount of dollars, we may all gain some understanding of the ecological costs.



caraher

(6,276 posts)
5. It's a real double-edged sword
Tue Jul 10, 2012, 03:58 PM
Jul 2012

On one hand, since all a corporation "naturally" responds to is what might affect its bottom line, putting dollar values on what we value most would seem an effective way to protect those things (if imperfectly).

On the other hand, making such things just additional inputs into a calculation of self-interest also suggests that any particular depredation is OK provided one is prepared to pay the market price for doing so. In this instance the strategy could backfire horribly.

If, as RMoney says, "Corporations are people too, my friends," then I'm inclined to revise my opposition to capital punishment, at least for non-natural "people." Providing a particular structure of financial incentives is not the only way to shape the behavior of corporations. The other main one is a strong regulatory environment backed by force of law (and by agencies prepared to enforce those laws vigorously). We need to be able to revoke corporate charters - the "death penalty" for corporate "persons" - for ruining the commons.

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