# data[].attributes.body
Distributed Cooperative Organizations DisCo.COOP DisCOs are a P2P/Commons, cooperative and Feminist Economic alternative to Decentralized Autonomous Organizations (or DAOs).

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"Mainstream Economic theory claims that without intellectual property protection innovators lack incentive to bring new products to market because they cannot recoup their costs. But in collaborative commons, millions of innovators are defying this received wisdom."

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Intellectual property rights.
Origin story - Venetian glassblowers.
The rise of patents was followed by copyright and trademarks.

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In 1903, a leftwing feminist called Lizzy Magie patented the board game that we now know as Monopoly – but she never gets the credit.

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Lizzy Magie, inventor of the Landlord's Game, which we now know as Monopoly, in 1936. Photograph: Anspach Archives

One night in late 1932, a Philadelphia businessman named Charles Todd and his wife, Olive, introduced their friends Charles and Esther Darrow to a real-estate board game they had recently learned. As the two couples sat around the board, enthusiastically rolling the dice, buying up properties and moving their tokens around, the Todds were pleased to note that the Darrows liked the game. In fact, they were so taken with it that Charles Todd made them a set of their own, and began teaching them some of the more advanced rules. The game didn't have an official name: it wasn't sold in a box, but passed from friend to friend. But everybody called it 'the monopoly game'.

Together with other friends, they played many times. One day, despite all of his exposure to the game, Darrow - who was unemployed, and desperate for money to support his family - asked Charles Todd for a written copy of the rules. Todd was slightly perplexed, as he had never written them up. Nor did it appear that written rules existed elsewhere.

In fact, the rules to the game had been invented in Washington DC in 1903 by a bold, progressive woman named Elizabeth Magie. But her place in the game's folk history was lost for decades and ceded to the man who had picked it up at his friend's house: Charles Darrow. Today, Magie's story can be told in full. But even though much of the story has been around for 40 years, the Charles Darrow myth persists as an inspirational parable of American innovation - thanks in no small part to Monopoly's publisher and the man himself. After he sold a version of the game to Parker Brothers and it became a phenomenal success, eventually making him millions, one journalist after another asked him how he had managed to invent Monopoly out of thin air - a seeming sleight of hand that had brought joy into so many households. "It's a freak," Darrow told the Germantown Bulletin, a Philadelphia paper. "Entirely unexpected and illogical."

To Elizabeth Magie, known to her friends as Lizzie, the problems of the new century were so vast, the income inequalities so massive and the monopolists so mighty that it seemed impossible that an unknown woman working as a stenographer stood a chance at easing society's ills with something as trivial as a board game. But she had to try.

Night after night, after her work at her office was done, Lizzie sat in her home, drawing and redrawing, thinking and rethinking. It was the early 1900s, and she wanted her board game to reflect her progressive political views - that was the whole point of it.

The descendant of Scottish immigrants, Lizzie had pale skin, a strong jawline and a strong work ethic. She was then unmarried, unusual for a woman of her age at the time. Even more unusual, however, was the fact that she was the head of her household. Completely on her own, she had saved up for and bought her home, along with several acres of property.

She lived in Prince George's county, a Washington DC neighbourhood where the residents on her block included a dairyman, a peddler who identified himself as a "huckster", a sailor, a carpenter and a musician. Lizzie shared her house with a male actor who paid rent, and a black female servant. She was also intensely political, teaching classes about her political beliefs in the evenings after work. But she wasn't reaching enough people. She needed a new medium - something more interactive and creative.

There was one obvious outlet. At the turn of the 20th century, board games were becoming increasingly commonplace in middle-class homes. In addition, more and more inventors were discovering that the games were not just a pastime but also a means of communication. And so Lizzie set to work.

She began speaking in public about a new concept of hers, which she called the Landlord's Game. "It is a practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences," she wrote in a political magazine. "It might well have been called the 'Game of Life', as it contains all the elements of success and failure in the real world, and the object is the same as the human race in general seem[s] to have, ie, the accumulation of wealth."

Lizzie's game featured play money and deeds and properties that could be bought and sold. Players borrowed money, either from the bank or from each other, and they had to pay taxes. And it featured a path that allowed players to circle the board - in contrast to the linear-path design used by many games at the time. In one corner were the Poor House and the Public Park, and across the board was the Jail. Another corner contained an image of the globe and an homage to Lizzie's political hero, the economist Henry George, whose ideas about putting the burden of taxation on wealthy landowners inspired the game: "Labor upon Mother Earth Produces Wages." Also included on the board were three words that have endured for more than a century after Lizzie scrawled them there: GO TO JAIL.

Lizzie drew nine rectangular spaces along the edges of the board between each set of corners. In the centre of each nine-space grouping was a railroad, with spaces for rent or sale on either side. Absolute Necessity rectangles offered goods like bread and shelter, and Franchise spaces offered services such as water and light. As gamers made their way around the board, they performed labour and earned wages. Every time players passed the Mother Earth space, they were "supposed to have performed so much labor upon Mother Earth" that they received $100 in wages. Players who ran out of money were sent to the Poor House.

Players who trespassed on land were sent to Jail, and there the unfortunate individuals had to linger until serving out their time or paying a $50 fine. Serving out their time meant waiting until they threw a double. "The rallying and chaffing of the others when one player finds himself an inmate of the jail, and the expressions of mock sympathy and condolence when one is obliged to betake himself to the poor house, make a large part of the fun and merriment of the game," Lizzie said.

From its inception, the Landlord's Game aimed to seize on the natural human instinct to compete. And, somewhat surprisingly, Lizzie created two sets of rules: an anti-monopolist set in which all were rewarded when wealth was created, and a monopolist set in which the goal was to create monopolies and crush opponents. Her vision was an embrace of dualism and contained a contradiction within itself, a tension trying to be resolved between opposing philosophies. However, and of course unbeknownst to Lizzie at the time, it was the monopolist rules that would later capture the public's imagination.

After years of tinkering, writing and pondering her new creation, Lizzie entered the US Patent Office on 23 March 1903 to secure her legal claim to the Landlord's Game. At least two years later, she published a version of the game through the Economic Game Company, a New York-based firm that counted Lizzie as a part-owner. The game became popular with leftwing intellectuals and on college campuses, and that popularity spread throughout the next three decades; it eventually caught on with a community of Quakers in Atlantic City, who customised it with the names of local neighbourhoods, and from there it found its way to Charles Darrow.

In total, the game that Darrow brought to Parker Brothers has now sold hundreds of millions copies worldwide, and he received royalties throughout his life.

Lizzie was paid by Parker Brothers, too. When the game started to take off in the mid-1930s, the company bought up the rights to other related games to preserve its territory. For the patent to the Landlord's Game and two other game ideas, Lizzie reportedly received $500 - and no royalties.

At first, Lizzie did not suspect the true motives for the purchase of her game. When a prototype of Parker Brothers' version of the Landlord's Game arrived at her home in Arlington, she was delighted. In a letter to Foster Parker, nephew of George and the company's treasurer, she wrote that there had been "a song in my heart" ever since the game had arrived. "Some day, I hope," she went on, "you will publish other games of mine, but I don't think any one of them will be as much trouble to you or as important to me as this one, and I'm sure I wouldn't make so much fuss over them."

Eventually, though, the truth dawned on her - and she became publicly angry. In January of 1936 she gave interviews to the Washington Post and the Washington Evening Star. In a picture accompanying the Evening Star piece, she held up game boards from the Landlord's Game and another game that had the word MONOPOLY written across its center four times in bold black letters; on the table in front of her was the now-familiar "Darrow" board, fresh out of the Parker Brothers box. The image of Lizzie painted by the reporter couldn't have been clearer. She was angry, hurt and in search of revenge against a company that she felt had stolen her now-best-selling idea. Parker Brothers might have the rights to her 1924-patented Landlord's Game, but they didn't tell the story of her game invention dating back to 1904 or that the game had been in the public domain for decades. She had invented the game, and she could prove it.

The Evening Star reporter wrote that Lizzie's game "did not get the popular hold it has today. It took Charles B Darrow, a Philadelphia engineer, who retrieved the game from the oblivion of the Patent Office and dressed it up a bit, to get it going. Last August a large firm manufacturing games took over his improvements. In November, Mrs Phillips [Magie, who had by now married] sold the company her patent rights.

"It went over with a bang. But not for Mrs Phillips ... Probably, if one counts the lawyers', printers' and Patent Office fees used up in developing it, the game has cost her more than she made from it." As she told the Washington Post in a story that ran the same day: "There is nothing new under the sun."

It was to little avail. Much to Lizzie's dismay, the other two games that she invented for Parker Brothers, King's Men and Bargain Day, received little publicity and faded into board-game obscurity. The newer, Parker Brothers version of the Landlord's Game appeared to have done so as well. And so did Lizzie Magie. She died in 1948, a widow with no children, whose obituary and headstone made no mention of her game invention. One of her last jobs was at the US Office of Education, where her colleagues knew her only as an elderly typist who talked about inventing games.

As Charles Darrow reaped the rewards of the game's success, Lizzie Magie's role in the invention of Monopoly remained obscure. But in 1973, Ralph Anspach, a leftwing academic who was under legal attack from Parker Brothers over his creation of an Anti-Monopoly game, learned her story as he researched his case, seeking to undermine the company's hold on the intellectual property. The case lasted a decade, but in the end, Anspach prevailed, in the process putting Magie's vital role in the game's history beyond dispute - and building up an extraordinary archive of material, which forms the backbone of this account.

But Hasbro, the company of which Parker Brothers is now a subsidiary, still downplays Magie's status, responding to a request for comment with a terse statement: "Hasbro credits the official Monopoly game produced and played today to Charles Darrow." And even in 2015, on Hasbro's website, a timeline of the game's history begins in 1935. Over the years, the carefully worded corporate retellings have been most illuminating in what they don't mention: Lizzie Magie, the Quakers, the dozens, if not hundreds or thousands, of early players, Ralph Anspach and the Anti-Monopoly litigation. Perhaps the care and keeping of secrets, as well as truths, can define us.

And so the beloved Darrow legend lives on. It only makes sense. The Darrow myth is a "nice, clean, well-structured example of the Eureka School of American industrial legend," the New Yorker's Calvin Trillin wrote in 1978. "If Darrow invented the story rather than the game, he may still deserve to have a plaque on the Boardwalk honoring his ingenuity." It's hard not to wonder how many other unearthed histories are still out there -stories belonging to lost Lizzie Magies who quietly chip away at creating pieces of the world, their contributions so seamless that few of us ever stop to think about their origins. Commonly held beliefs don't always stand up to scrutiny, but perhaps the real question is why we cling to them in the first place, failing to question their veracity and ignoring contradicting realities once they surface.

Above all, the Monopoly case opens the question of who should get credit for an invention, and how. Most people know about the Wright brothers - who filed their patent on the same day as Lizzie Magie - but don't recall the other aviators who also sought to fly. The adage that success has many fathers, but we remember only one, rings true - to say nothing of success's mothers. Everyone who has ever played Monopoly, even today, has added to its remarkable endurance and, on some level, made it their own. Games aren't just relics of their makers - their history is also told through their players. And like Lizzie's original innovative board, circular and never-ending, the balance between winners and losers is constantly in flux.
* This is an edited extract from The Monopolists: Obsession, Fury, and the Scandal Behind the World's Favorite Board Game by Mary Pilon (Bloomsbury, £20). Buy it for £16 at bookshop.theguardian.com Monopoly

In 1903, a leftwing feminist called Lizzy Magie patented the board game that we now know as Monopoly - but she never gets the credit. Now a new book aims to put that right

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The secret history of Monopoly: the capitalist board game's leftwing origins

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One night in late 1932, a Philadelphia businessman named Charles Todd and his wife, Olive, introduced their friends Charles and Esther Darrow to a real-estate board game they had recently learned. As the two couples sat around the board, enthusiastically rolling the dice, buying up properties and moving their tokens around, the Todds were pleased to note that the Darrows liked the game.

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From Duncan's excellent presentation

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if the state invests in R&D, development and infrastructure  & takes a risk in developing technologies it should earn a return - currently earning very little direct revenue.
Tax loop holes
on twitter

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Erik Brynjolfsson
Andrew McAfee

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Technology replacing workers. Automation of repetitive tasks & jobs.
2016 example we used Blueprisim

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Google
Apple
Facebook
eBay
Paypal

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blending consumer & producer

Rise of the prosumer to have a transformative impact on the energy market, IT Oct 2020

*digital divide not addressed

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wealth hinges on how digital tech is owned and used
*implications in design, build processes of products & services especially AI, data - fair just societies
USE distributive design to switch from taxing labour to taxing use of non-renewable resources.

We need to look beyond traditional binary choices of market vs. states  - look to innovation taking place in creative commons = potential to transform the control of knowledge.

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we're in business to fix the broken coffee industry - to roast coffee in coffee growing countries, to help farmers earn a living income from their beans, to promote sustainable farming practices that protect forests and habitats and to bring radical transparency to all that we do.

We call this approach FairChain.

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Buy Coffee Online | Moyee Coffee | Radically Good FairChain Coffee

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Buy Coffee Online | Moyee Coffee UK & Ireland | Radically Good Coffee with Radical Impact

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employee owners
social enterprise

*create a list of alt business models  & enterprises - who is pushing boundaries here?
- there are legal limits here

ARUP - has a trust at its core.
Corporate Wellness Ireland uses VSM

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Find your Co-op | Irish Co-Operative Organisation Society

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Telephone: +353 23 8841409 Fax: +353 23 8844931 Email: admin@bandoncoop.ie Website: www.bandoncoop.ie

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alternative enterprise design
@marjorie_kelly

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Marjorie Kelly is the senior fellow and executive vice president of The Democracy Collaborative. She is a leading theorist in "next-generation enterprise design," specializing in the theory and practice of companies with embedded social mission and broad-based ownership. She cofounded Fifty by Fifty, a network initiative to catalyze 50 million employee owners by 2050. For her research on the role of capital in taking employee ownership to scale, she was named the Robert J. Beyster Research Fellow by Rutgers University. Her other work at TDC has included assisting local collaborative networks to scale employee ownership; working with community foundations on place-based impact investing; and leading The Learning/Action Lab for Community Wealth Building, a five-year project working with Native American organizations to build wealth in Indigenous communities. Kelly is coauthor of The Making of a Democratic Economy: Building Prosperity for the Many, Not Just the Few (2019, Berrett-Koehler Publishers), among other books.

Previously Kelly was a fellow at the Tellus Institute, a 40-year-old nonprofit research organization based in Boston, where she cofounded Corporation 20/20, a multi-stakeholder initiative to envision and advocateenterprise and financial designs that integrate social, environmental, and financial aims. She has advised private businesses on ownership and capital design for social mission. She served as a member of the resource team of the Ford Foundation project WealthWorks, working for wealth creation in rural communities.

She was cofounder and for 20 years president of Business Ethics magazine, known for its annual ranking of the 100 Best Corporate Citizens and Social Investing Awards. Advisory boards have included Boston Public Bank Working Group, the Center for Corporate Governance and Accountability at George Washington University Law School, the Strategic Corporate Initiative, CUNY School of Law's Community Economic Development Clinic, Donella Meadows Institute, Emerging ChangeMakers Network, and other projects.

Kelly has authored two other books, Owning Our Future: The Emerging Ownership Revolution (2012) and The Divine Right of Capital, which was named one of Library Journal's 10 Best Business Books of 2001. Her writings have appeared in many publications, including Fast Company, Stanford Social Innovation Review, Harvard Business Review, New England Law Review, Chief Executive, Boston Globe, Yes!, and San Francisco Chronicle.

She holds a bachelor's in English, cum laude, and a master's in journalism from the University of Missouri, where she received the Penney-Missouri Award for most promising young magazine journalist.

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Marjorie Kelly is the senior fellow and executive vice president of The Democracy Collaborative. She is a leading theorist in "next-generation enterprise design," specializing in the theory and practice of companies with embedded social mission and broad-based ownership. She cofounded Fifty by Fifty, a network initiative to catalyze 50 million employee owners by 2050.

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workers wadges flat line
GDP grows
Economist recognise 3 groups of people:

workers

landlords

capitalists

workers[produce]/shareholders [never]

broadening economic power from the few to the many

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Distributed Ledger technology
Decentralised networks
Blockchain technology is simply defined as a decentralized, distributed ledger that records the provenance of a digital asset. It is a database

1. Digital assets are distributed instead of copied or transferred.

2. The asset is decentralized, allowing full real-time access.

3. A transparent ledger of changes preserves integrity of the document, which creates trust in the asset.

Holochain

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Time provision
"voluntary assistance

rising third generation people mutual care and

strengthen social relationships. The 50+ appreciate their skills at a

to be able to use meaningful task. The helpers contribute to

that older people can stay in their own home for as long as possible"

? what is the social ripple effect of such schemes?

kind of like the babysitting circle I ran when my eldest was a baby.

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Alternative money

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Bangla Pesa started in 2014 has gains roots in Mombasa as a form of money transfer

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"the EU and member states did not take advantage of using the low interest rates provided by the ECB’s policy to scale up energy transition investments"
Positive Money Jan 2020
"he quickest route towards aligning the ECB’s monetary portfolios with the objectives of the Paris Agreement is for the ECB to stop buying brown assets."

Dec 2020 Green QE would only help climate a little, ECB paper finds

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Giving money reduces poverty, if governments will pay for it.

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Social Protection Support Project (Additional Financing) in the Philippines, Photo: Asian Development Bank, CC BY-NC 2.0

Is eradicating poverty, a goal the United Nations hopes to achieve by 2030, actually feasible? New research out of Ecuador says yes - if governments are willing to pay for it.

According to a study of Ecuador's Human Development Bonus ( Bono de Desarrollo Humano, or BDH) by the UNU Maastricht Economic and Social Research Institute on Innovation and Technology (UNU-MERIT), direct cash transfers have definitively improved social mobility, or the ability of individuals or households to move between social strata. And it has helped poor families climb out of poverty, especially when complemented by other economic-inclusion programs.

Cash on hand

Ecuador's BDH is a cash transfer given to extremely poor families each month, as long as their children are regularly attending school and health clinics. Since 2003, each beneficiary household has received US$15 every month, irrespective of household size (Ecuador uses the US dollar). The amount was increased to US$30 in 2007, US$35 in 2009, and US$50 in 2013.

Unlike similar programs in other Latin American countries, including Mexico's Prospera and Brazil's Bolsa Familia, where monitoring of student attendance and nutritional compliance is quite strict, in Ecuador conditionality is somewhat soft.

It's well known that cash transfers positively impact access to quality health and education services, as evidence from 30 developing countries shows. They are also proven to improve labour supply and familial asset accumulation, strengthen social networks, and stimulate local markets.

But the literature is scarce when it comes to the long-term effects of such transfers.

Using administrative panel data collected over ten years, the UNU-MERIT study analysed the determinants of social mobility in Ecuador on a multivariate welfare index, reflecting the importance of different dimensions of structural poverty conditions.

It sought to answer such critical macro-level questions, such as does more cash, with or without conditionality, actually increase the social mobility of the poor? And does an assured basic income establish the baseline security necessary for people to feel free to pursue their goals?

Preliminary results were released in a January 2017 working paper co-authored by Franziska Gassmann and myself. We showed that the BDH does have a positive long-term effect on individuals and families.

Between 2009 and 2014, households receiving the BDH increased their welfare index - meaning that their wealth grew, as did their ability to rise through the ranks of society, in both absolute and relative terms - by between 12% and 13.6%, compared to people who did not receive the cash transfer.

Our finding demonstrates that the BDH improves recipients' well-being not just temporarily, but in the longer term, thereby fostering social mobility among Ecuador's poorest sectors.

More money, less problems

Our study also showed that welfare increases in keeping with higher cash transfers. A 10% higher BDH transfer amount, or an extra US$3 per month, correlates with a rise in welfare of 0.79% to 0.86%.

The improvement is more marked among households that received the Human Development Loan ( Crédito de Desarrollo Humano, CDH), a variation of the BDH that pays a yearly amount of US$600 aimed at promoting productive investments. Households that received this wealth accumulation-oriented transfer have a 4% to 4.2% higher welfare index than those that receive only the BDH.

For economists and policymakers, our research results should confirm that cash transfers must not be seen as merely a way to ensure the minimum level of food consumption, education, and access to health for society's poorest. Rather, they are a tool for fostering longer-term social mobility.

The finding that size matters is also noteworthy. The more money families receive, the better their outcomes.

Finally, social transfers such as the CDH that have the explicit objective of starting a business have an even stronger effect on absolute mobility. Thus, to enable social mobility, anti-poverty policies should be geared towards improving access to physical capital and income-generating activities (vocational training, for instance, and financial services).

These findings are consistent with the idea that social safety nets play a productive role in society. It also confirms our intuition about promoting productive capacities.

In this sense, the role of social transfers can and should be to overcome so-called " poverty traps " such as credit constraints, opportunity and transaction costs, and the non-optimal decision-making that can come from extreme scarcity.

To mitigate poverty traps, policy instruments should consider household composition (gender, for instance, and age) and economic vulnerabilities (such as disability and level of formal education, amongst other things). A cash transfer does not mean the same thing to everyone; it must be designed considering each household's specific needs.

The study also confirms that governments must enact complementary policies if they hope to reduce social exclusion for society's most vulnerable, those who struggle with more than just poverty. Laws promoting reproductive health, fostering gender equity, and reducing opportunity gaps between ethnic groups or between urban and rural areas will give cash transfers like the BDH more bang for their buck.

The economic growth of developing nations is a necessary condition for poverty reduction, but it has never been sufficient. If correctly designed and complemented, cash transfers can have a transformative effect on society's poorest members. They can effectively and efficiently smooth consumption, foster social mobility - and, possibly, eradicate global poverty.

* * *

This article was originally published on The Conversation. Read the original article.

"Yes, Giving Money to Very Poor People Will Make Their Lives Better - Just Ask Ecuador" by Andrés Mideros Mora is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License. Permissions beyond the scope of this license may be available at The Conversation.

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Yes, Giving Money to Very Poor People Will Make Their Lives Better - Just Ask Ecuador - United Nations University

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Social Protection Support Project (Additional Financing) in the Philippines, Photo: Asian Development Bank, CC BY-NC 2.0 Is eradicating poverty, a goal the United Nations hopes to achieve by 2030, actually feasible? New research out of Ecuador says yes - if governments are willing to pay for it.

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2020 demonstrates that in crisis zero or near zero interest loans can be borrowed.
"borrowing of €20 billion this year at interest rates close to zero. And it will support the State’s plans to ask lenders for a further €20.5 billion next year.....
Most observers agree that running a large deficit to navigate the economic harm caused by the pandemic is in Ireland’s best interests."

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Ten words. That was the extent of the acknowledgement in Finance Minister Paschal Donohoe's Budget speech to the European Central Bank. The bank, led by Christine Lagarde, has engaged in extraordinary activities during the pandemic which bankrolled this week's Budget. It has enabled borrowing of €20 billion this year at interest rates close to zero.

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people working
archetypal renters = landlords, investors financiers, bankers.
boom and bust of property bubbles
*I want to understand this more & links to power

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SUMMARY
"money is a social relationship...based on trust to repay"
Current design:

creation

character

use

with the state, commons, market, co-existence of different types can money POTENTIAL to turn money monocuture to a financial ecosystem.

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pg 178

the story shared could be Irish - the audio is the same psyche I was raised with.

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SUMMARY
"redistributing ownership has historically been one of the most direct ways to reduce national inequalities"

"Approaches to distributed land design must fit people & place"  a combination of market, commons and state "may well work best".

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2009 awarded the Nobel Prize in economics. Ostrom, the only woman to ever win the prize, received it “for her analysis of economic governance, especially the commons.” She demonstrated “how local property can be successfully managed by local commons without any regulation by central authorities or privatization.”

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In 2009, Elinor Ostrom, along with oliver e. williamson, was awarded the Nobel Prize in economics. Ostrom, the only woman to ever win the prize, received it "for her analysis of economic governance, especially the commons." She demonstrated "how local property can be successfully managed by local commons without any regulation by central authorities or privatization."

In her research, Ostrom applied rational choice theory and insights from development economics to ecological preservation. Yet she had little formal economics training, having earned all her degrees in political science. Possibly for that reason, Ostrom differed from most modern economists, basing her research on case studies. She studied arrangements in irrigation, fisheries, and forest use in a wide range of countries, including Nepal, Spain, Indonesia, Nigeria, Bolivia, Sweden, and the United States.

Most economists are familiar with the late Garrett Hardin's classic article, "The Tragedy of the Commons" (see Tragedy of the Commons). Hardin's idea was that when no one owns a resource, it is overused because no one can control its usage and each person has an incentive to use it before others do. This insight has helped us understand much human behavior and has led people to advocate either having the resource privately owned or having it controlled by government.

Ostrom's work suggested, contrary to conventional thinking, that communities are able to self-organize in ways that punish those who free ride on the common resource. Examining dozens of real-world arrangements, she found instances of communal ownership that worked-that is, that did not lead to the tragic outcomes envisioned by Hardin-as well as ones that did not. Were there systematic differences? Yes, and interestingly, the ones that worked did have a kind of property rights system, just not private ownership. Based on her work, Ostrom proposed several guidelines, which the Nobel committee highlighted, for managing common-pool resources. Among them are that rules should clearly define who gets what, good conflict resolution methods should be in place, people's duty to maintain the resource should be proportional to their benefits, monitoring and punishing is done by the users or someone accountable to the users, and users are allowed to participate in setting and modifying the rules. Notice the absence of top-down government solutions.

In a 2006 article co-authored with Harini Nagendra, Ostrom wrote: "We conclude that simple formulas focusing on formal ownership, particularly one[s] based solely on public [government] ownership of forest lands, will not solve the problem of resource use." This, they believed, is largely because "When users are genuinely engaged in decisions regarding rules affecting their use, the likelihood of them following the rules and monitoring others is much greater than when an authority simply imposes rules."

Indeed, in a 2008 interview on EconTalk, Mercatus Center economist Karol Boudreaux noted that Garth Owen-Smith, who helped solve the common-resource problem of elephants in Namibia, drew explicitly on Ostrom's work. His solution was to ensure that local residents shared in the financial benefits from tourism and trophy hunting. If locals benefit from having a resident population of elephants, they are much less likely to poach and more likely to stop other poachers.

Forms of organization similar to those studied by Ostrom can be found in many other human interactions. Organized sports provide one such example. Sports organizations, from local pick-up games to the National Football League, create or codify internal rules and govern themselves. The U.S. Government never determined a "false-start" to be a football penalty, for example, and yet the rule is respected by the penalized team.

Some have summarized Ostrom's work by saying that institutions other than free markets often work well. But her findings do not conflict with a free economy: she observed communities sustainably managing shared resources without any central planning. Ostrom advocated dispersed decision centers, rather than a top-down hierarchy, because local actors possess information a central planning group cannot. Her skepticism about central planning was based, in part, on how badly top-down solutions worked in poor countries. Furthermore, institutional diversity allows ideas to compete.

Ostrom earned her B.A. degree in 1954, her M.A. in 1962, and her PhD in 1965, all in political science and all from UCLA. Getting a Ph.D. in political science at UCLA in the early 1960s was a challenge for a woman. In her biography on the Nobel site, Ostrom writes:

Political Science at that time was also skeptical about admitting any women to their Ph.D. program as they feared that only a city college would employ a woman with a Ph.D. That was not a good placement for building the reputation of the UCLA department. I was, however, admitted in a class of 40 students with three other women. We were told after we began our program that the faculty had a very heated meeting in which they criticized the Departmental Committee for admitting any women and offering them assistantships. Fortunately, our fellow male graduate students were friendly and encouraged us all to continue in our program.

She was a professor at Indiana University in Bloomington from 1965 to 1991. In 1973, with her husband, political scientist Vincent Ostrom, she co-founded the Workshop in Political Theory and Policy Analysis at Indiana University, where she was a co-director until 2009.

Selected Works

1990. Governing the Commons: The Evolution of Institutions for Collective Action. New York: Cambridge University Press

1997. "A Behavioral Approach to the Rational Choice Theory of Collective Action." The American Political Science Review Vol. 92, No. 1 (Mar., 1998): 1-22.

2009. Understanding Institutional Diversity. Princeton: Princeton University Press.

Footnotes

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In 2009, Elinor Ostrom, along with oliver e. williamson, was awarded the Nobel Prize in economics. Ostrom, the only woman to ever win the prize, received it "for her analysis of economic governance, especially the commons." She demonstrated "how local property can be successfully managed by local commons without any regulation by central authorities ...

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The story of the Irish Famine

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Watch all your favourite TV shows Live or On Demand on your PC, smartphone or tablet for free.

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A recent RTE documentary The Hunger explores the great Irish famine.
Opinion: The Hunger: The Story of the Irish Famine is a timely reminder of the event's central place in Irish history

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Opinion: The Hunger: The Story of the Irish Famine is a timely reminder of the event's central place in Irish history
'A few days ago there were two little boys found dead on the roadside at Bohalla in my parish. These were three days dead before I heard of it; on the evening of the third day they were buried thus - their coffins were the rags of clothes they wore, and their graves a sand pit; into which they were thrown without my knowledge and since a third...the mortality of my parish averages daily five deaths since the 1st of April 1847. Unless immediate steps be taken by the government to stay the destroying sword that is depopulating the land, it will be once more the valley of eagles and not the homes of Christians. May God in his mercy remove this calamity'. (Rev. Michael O'Flynn PP, Attymass, Co Mayo; as reported in the Freeman's Journal, June 1st 1847)

This year marks the 175th anniversary of the beginning of the Great Irish Famine (1845-1852) which resulted in the deaths of over one million people and the scattering of one million and quarter across the globe. It was a large-scale humanitarian disaster with tragic consequences, especially for those classes at the bottom of the social ladder: the cottiers and landless labourers whose families were almost entirely dependent on the potato for their survival.

While island-wide in terms of its impact, the Famine was particularly devastating for those counties in the west and south of the country. One of the great strengths of the Atlas of the Great Irish Famine (Cork University Press, 2012), that informs The Hunger: The Story of the Irish Faminedocumentary was the fact that it laid bare the local, regional, national, and international dimensions of the Famine narrative. As Cormac Ó Gráda et al point out, "famines are regional crises which can only be understood by the local story".
From RTÉ News, President Michael D Higgins address the 2016 National Famine Commemoration at Glasnevin Cemetery in Dublin
In foregrounding these regional and local contexts, the atlas allowed readers and scholars to view the Famine in all its social complexity. It revealed a society and its customs imploding, as was the case in Attymass in Co. Mayo, as starvation and disease took its deathly toll.

The new documentary is a timely reminder of not only the event's central place in Irish history, but also its place in the history of North America, Australia and Britain. It is also a timely reminder of the Famine's relative closeness in time to present generations. When I speak to UCC students amongst the ruins of Bahaghs workhouse located outside Cahersiveen, Co. Kerry, I am referring to events that are only five or six generations away. And it is the nature of the events themselves and their proximity in time that strikes an immediate chord.

This documentary is also opportune in that it captures ongoing research on the Famine. This provides new perspectives that both deepen our understanding of the event and pose important questions about the nature and structure of Irish society during the Famine years, not all of which can be neatly answered.
From RTÉ Radio 1's Blighted Nation, Myles Dungan explores how the Great Famine swept through Ireland in the mid-1800s and changed the country forever.
Famines are ultimately about failure. The failure of the potato impacted parts of Europe, but nowhere was it more devastating in its consequences than in Ireland. Why? The documentary examines the different national and international contexts in which the crisis unfolded, in particular the role of successive British governments - Tory and Liberal - in responding to the crisis in Ireland, the relief policies pursued and the political ideology and religious beliefs underpinning the response and the fallout from these policies.

It is important to note that there were also voices within the British establishment that condemned the nature of the response and what they saw as their government's mismanagement of Irish affairs. However, the nature of Irish society was also complex, and the crisis impacted men, women, children in different ways while the experiences of landlords, land agents, big farmers, small farmers, shopkeepers, and merchants also varied. The millions of cottiers and labourers and their families without access to money to buy food suffered the most in terms of mortality. Those with means managed to escape the horrors as best they could to forge new lives for themselves on foreign shores and in very often hostile environments.
From RTÉ 2fm's Dave Fanning Show, UCC's John Borgonovo on why a Native American tribe come to the help of Ireland during the Great Famine
Famines also bring out the very best and the very worst in human nature. Great acts of charity, kindness, and selflessness by relief workers and the members of the clergy of different denominations, for example, were frequently overshadowed by more numerous instances of a lack of compassion from those in positions of authority. There was also copious evidence of neglect, ignorance, and indifference to the scale of human suffering. Even amongst neighbours, the will to survive could eclipse all other loyalties and desperate acts committed in order to ensure one's own survival.

Television as a medium in ways demands an overarching narrative, one that always tidies away the messiness of history. However, the maps used in the documentary act as a counterpoint to this often-neat presentation of events and undermines the notion that all Irish people are descendants of those men, women and children who suffered and perished during the Famine. To use a phrase coined by Catriona Crowe in relation to research on the revolutionary period in Ireland, such maps in a sense 'complicate the narrative'.
UCC's John Crowley previews The Hunger: The Story of the Irish Famine documentary
The documentary in the end seeks to achieve a balance between information, insight and feeling. As the artist John Behan points out, "death is impersonal when it occurs in such large numbers - it is important to find the human signature." Beyond the absolute figures lie the individual stories such as that of the young boys found dead on the roadside in the parish of Attymass, Co. Mayo. It is in such reports that the real horrors of the Famine emerge. It is important to understand and remember what happened on such roadsides.
The Hunger: The Story of the Irish Famine airs on RTÉ One on November 30th and December 7th at 9.35pm. Read more on The Great Famine on RTÉ History The views expressed here are those of the author and do not represent or reflect the views of RTÉ

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Why you need to watch this new documentary on the Great Famine

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Opinion: The Hunger: The Story of the Irish Famine is a timely reminder of the event's central place in Irish history ' A few days ago there were two little boys found dead on the roadside at Bohalla in my parish.

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Fay Lewis 1914, vacant lot sign that later became a postcard described in Doughnut Economics as political performance art

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In the CAP, there is no recognition of common land 

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In the CAP, there is no recognition of common land 

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A thousand years ago, most of Europe’s pastureland would have been used by more than one farmer – they were common lands of some sort, shared by members of a certain community or the vassals of a certain lord, for example.

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A thousand years ago, most of Europe's pastureland would have been used by more than one farmer – they were common lands of some sort, shared by members of a certain community or the vassals of a certain lord, for example.

Over the following centuries, many of these were privatised in some way – shared out between large farmers, for example. One significant motivation from the 18th century onward was the introduction of 'Agricultural Revolution' techniques to increase production; semi-natural common land was converted over the years to improved grassland or even arable land.

Despite these historic pressures, a surprising area of common land survives in Europe. In more productive landscapes, for example in southern England, common land makes up a large proportion of the remaining semi-natural pasture land. In more marginal areas, especially in the uplands or on the coast, by no means all unimproved land is used in common, but common land is a very important factor in HNV farming systems.

The same legal and social factors which allowed semi-natural vegetation to survive on common land - that make common land HNV farmland – also mean extra costs and impediments for the graziers, who have to deal in many cases with extra regulation and administration and in all cases with their fellow graziers.

The legal and administrative frameworks for common land vary hugely between different regions: land may be jointly owned by the graziers, or by a private landowner or the local or national government; graziers may use the land as of right or under a grazing contract; common pastures may be fully integrated into official 'agricultural land' or may be classed as 'forest'; and so on. In the CAP, there is no recognition of common land per se and in general the needs of common land graziers are not taken into consideration when CAP and other reforms are being introduced. Graziers in every country think their problems are unique, but in fact there are many shared issues.

The significance of common land for HNV farming is recognised by EFNCP. We are working on:

Policy analysis

Capacity building and networking

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European Forum on Nature Conservation and Pastoralism

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A thousand years ago, most of Europe's pastureland would have been used by more than one farmer - they were common lands of some sort, shared by members of a certain community or the vassals of a certain lord, for example.

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SINGLE TAX MOVEMENT
...people should own the value they produce themselves,  the economic rent derived from land, including from all natural resources and the commons, should belong equally to all members of society...

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Georgism, also called in modern times geoism and known historically as the single tax movement, is an economic ideology holding that while people should own the value they produce themselves, the economic rent derived from land, including from all natural resources and the commons, should belong equally to all members of society. Developed from the writings of American economist and social reformer Henry George, the Georgist paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance which attempt to integrate economic efficiency with social justice.

Georgism is concerned with the distribution of economic rent caused by natural monopolies, pollution and the control of commons, including title of ownership for natural resources and other contrived privileges (e.g. intellectual property). Any natural resource which is inherently limited in supply can generate economic rent, but the classical and most significant example of land monopoly involves the extraction of common ground rent from valuable urban locations. Georgists argue that taxing economic rent is efficient, fair and equitable. The main Georgist policy recommendation is a tax assessed on land value. Georgists argue that revenues from a land value tax (LVT) can be used to reduce or eliminate existing taxes such as on income, trade, or purchases that are unfair and inefficient. Some Georgists also advocate for the return of surplus public revenue to the people by means of a basic income or citizen's dividend.

The concept of gaining public revenues mainly from land and natural resource privileges was widely popularized by Henry George through his first book, Progress and Poverty (1879). The philosophical basis of Georgism dates back to several early thinkers such as John Locke, Baruch Spinoza and Thomas Paine. Economists since Adam Smith and David Ricardo have observed that a public levy on land value does not cause economic inefficiency, unlike other taxes. A land value tax also has progressive tax effects. Advocates of land value taxes argue that they would reduce economic inequality, increase economic efficiency, remove incentives to underutilize urban land and reduce property speculation.

Georgist ideas were popular and influential during the late 19th and early 20th century. Political parties, institutions and communities were founded based on Georgist principles during that time. Early devotees of Henry George's economic philosophy were often termed Single Taxers for their political goal of raising public revenue mainly or only from a land value tax, although Georgists endorsed multiple forms of rent capture (e.g. seigniorage) as legitimate. The term Georgism was invented later, and some prefer the term geoism as more generic.

Henry George is best known for popularizing the argument that government should be funded by a tax on land rent rather than taxes on labor. George believed that although scientific experiments could not be performed in political economy, theories could be tested by comparing different societies with different conditions and by thought experiments about the effects of various factors. Applying this method, he concluded that many of the problems that beset society, such as poverty, inequality, and economic booms and busts, could be attributed to the private ownership of the necessary resource, land rent. In his most celebrated book, Progress and Poverty, George argues that the appropriation of land rent for private use contributes to persistent poverty in spite of technological progress, and causes economies to exhibit a tendency toward boom and bust cycles. According to George, people justly own what they create, but that natural opportunities and land belong equally to all.

The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.

-  Henry George, Progress and Poverty, Book VIII, Chapter 3

George believed there was an important distinction between common and collective property. Although equal rights to land might be achieved by nationalizing land and then leasing it to private users, George preferred taxing unimproved land value and leaving the control of land mostly in private hands. George's reasoning for leaving land in private control and slowly shifting to land value tax was that it would not penalize existing owners who had improved land and would also be less disruptive and controversial in a country where land titles have already been granted.

Georgists have observed that privately created wealth is socialized via the tax system (e.g., through income and sales tax), while socially created wealth in land values are privatized in the price of land titles and bank mortgages. The opposite would be the case if land rents replaced taxes on labor as the main source of public revenue; socially created wealth would become available for use by the community, while the fruits of labor would remain private. According to Georgists, a land value tax can be considered a user fee instead of a tax, since it is related to the market value of socially created locational advantage, the privilege to exclude others from locations. Assets consisting of commodified privilege can be considered as wealth since they have exchange value, similar to taxi medallions.[failed verification ] A land value tax, charging fees for exclusive use of land, as a means of raising public revenue is also a progressive tax tending to reduce economic inequality, since it applies entirely to ownership of valuable land, which is correlated with income, and there is generally no means by which landlords can shift the tax burden onto tenants or laborers.

Standard economic theory suggests that a land value tax would be extremely efficient - unlike other taxes, it does not reduce economic productivity. Milton Friedman described Henry George's tax on unimproved value of land as the "least bad tax", since unlike other taxes, it would not impose an excess burden on economic activity (leading to zero or even negative " deadweight loss"); hence, a replacement of other more distortionary taxes with a land value tax would improve economic welfare. As land value tax can improve the use of land and redirect investment toward productive, non- rent-seeking activities, it could even have a negative deadweight loss that boosts productivity. Because land value tax would apply to foreign land speculators, the Australian Treasury estimated that land value tax was unique in having a negative marginal excess burden, meaning that it would increase long-run living standards.

It was Adam Smith who first noted the efficiency and distributional properties of a land value tax in his book The Wealth of Nations.

Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expense. In every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground-rent. Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them. [...] Nothing can be more reasonable than that a fund which owes its existence to the good government of the state should be taxed peculiarly, or should contribute something more than the greater part of other funds, towards the support of that government.

-  Adam Smith, The Wealth of Nations, Book V, Chapter 2

Benjamin Franklin and Winston Churchill made similar distributional and efficient arguments for taxing land rents. They noted that the costs of taxes and the benefits of public spending always eventually apply to and enrich, respectively, the owners of land. Therefore, they believed it would be best to defray public costs and recapture value of public spending by applying public charges directly to owners of land titles, rather than harming public welfare with taxes assessed against beneficial activities such as trade and labor.

Henry George wrote that his plan for a high land value tax would cause people "to contribute to the public, not in proportion to what they produce ... but in proportion to the value of natural [common] opportunities that they hold [monopolize]". He went on to explain that "by taking for public use that value which attaches to land by reason of the growth and improvement of the community", it would, "make the holding of land unprofitable to the mere owner, and profitable only to the user".

A high land value tax would discourage speculators from holding valuable natural opportunities (like urban real estate) unused or only partially used. Henry George claimed this would have many benefits, including the reduction or elimination of tax burdens from poorer neighborhoods and agricultural districts; the elimination of a multiplicity of taxes and expensive obsolete government institutions; the elimination of corruption, fraud, and evasion with respect to the collection of taxes; the enablement of true free trade; the destruction of monopolies; the elevation of wages to the full value of labor; the transformation of labor-saving inventions into blessings for all; and the equitable distribution of comfort, leisure, and other advantages that are made possible by an advancing civilization. In this way, the vulnerability that market economies have to credit bubbles and property manias would be reduced.

Income flow resulting from payments for restricted access to natural opportunities or for contrived privileges over geographic regions is termed economic rent. Georgists argue that economic rent of land, legal privileges, and natural monopolies should accrue to the community, rather than private owners. In economics, " land" is everything that exists in nature independent of human activity. George explicitly included climate, soil, waterways, mineral deposits, laws/forces of nature, public ways, forests, oceans, air, and solar energy in the category of land. While the philosophy of Georgism does not say anything definitive about specific policy interventions needed to address problems posed by various sources of economic rent, the common goal among modern Georgists is to capture and share (or reduce) rent from all sources of natural monopoly and legal privilege.

Henry George shared the goal of modern Georgists to socialize or dismantle rent from all forms of land monopoly and legal privilege. However, George emphasized mainly his preferred policy known as land value tax, which targeted a particular form of unearned income known as ground rent. George emphasized ground-rent because basic locations were more valuable than other monopolies and everybody needed locations to survive, which he contrasted with the less significant streetcar and telegraph monopolies, which George also criticized. George likened the problem to a laborer traveling home who is waylaid by a series of highway robbers along the way, each who demand a small portion of the traveler's wages, and finally at the very end of the road waits a robber who demands all that the traveler has left. George reasoned that it made little difference to challenge the series of small robbers when the final robber remained to demand all that the common laborer had left. George predicted that over time technological advancements would increase the frequency and importance of lesser monopolies, yet he expected that ground rent would remain dominant. George even predicted that ground-rents would rise faster than wages and income to capital, a prediction that modern analysis has shown to be plausible, since the supply of land is fixed.

Spatial rent is still the primary emphasis of Georgists because of its large value and the known diseconomies of misused land. However, there are other sources of rent that are theoretically analogous to ground-rent and are debated topics of Georgists. The following are some sources of economic rent.

Where free competition is impossible, such as telegraphs, water, gas, and transportation, George wrote, "[S]uch business becomes a proper social function, which should be controlled and managed by and for the whole people concerned." Georgists were divided by this question of natural monopolies and often favored public ownership only of the rents from common rights-of-way, rather than public ownership of utility companies themselves.

The early conservationism of the Progressive Era was inspired partly by Henry George and his influence extended for decades afterward. Some ecological economists still support the Georgist policy of land value tax as a means of freeing or rewilding unused land and conserving nature by reducing urban sprawl.

Pollution degrades the value of what Georgists consider to be commons. Because pollution is a negative contribution, a taking from the commons or a cost imposed on others, its value is economic rent, even when the polluter is not receiving an explicit income. Therefore, to the extent that society determines pollution to be harmful, most Georgists propose to limit pollution with taxation or quotas that capture the resulting rents for public use, restoration, or a citizen's dividend.

Georgism is related to the school of ecological economics, since both propose market-based restrictions for pollution. The schools are compatible in that they advocate using similar tools as part of a conservation strategy, but they emphasize different aspects. Conservation is the central issue of ecology, whereas economic rent is the central issue of geoism. Ecological economists might price pollution fines more conservatively to prevent inherently unquantifiable damage to the environment, whereas Georgists might emphasize mediation between conflicting interests and human rights. Geolibertarianism, a market-oriented branch of geoism, tends to take a direct stance against what it perceives as burdensome regulation and would like to see auctioned pollution quotas or taxes replace most command and control regulation.

Since ecologists are primarily concerned with conservation, they tend to emphasize less the issue of equitably distributing scarcity/pollution rents, whereas Georgists insist that unearned income not accrue to those who hold title to natural assets and pollution privilege. To the extent that geoists recognize the effect of pollution or share conservationist values, they will agree with ecological economists about the need to limit pollution, but geoists will also insist that pollution rents generated from those conservation efforts do not accrue to polluters and are instead used for public purposes or to compensate those who suffer the negative effects of pollution. Ecological economists advocate similar pollution restrictions but, emphasizing conservation first, might be willing to grant private polluters the privilege to capture pollution rents. To the extent that ecological economists share the geoist view of social justice, they would advocate auctioning pollution quotas instead of giving them away for free. This distinction can be seen in the difference between basic cap and trade and the geoist variation, cap and share, a proposal to auction temporary pollution permits, with rents going to the public, instead of giving pollution privilege away for free to existing polluters or selling perpetual permits.

The revenue can allow the reduction or elimination of taxes, greater public investment/spending, or the direct distribution of funds to citizens as a pension or basic income/ citizen's dividend.

In practice, the elimination of all other taxes implies a high land value tax, greater than any currently existing land tax. Introducing or increasing a land value tax would cause the purchase price of land to decrease. George did not believe landowners should be compensated and described the issue as being analogous to compensation for former slave owners. Other geoists disagree on the question of compensation; some advocate complete compensation while others endorse only enough compensation required to achieve Georgist reforms. Some geoists advocate compensation only for a net loss due to a shift of taxation to land value; most taxpayers would gain from the replacement of other taxes with a tax on land value. Historically, those who advocated for taxes on rent tax only great enough to replace other taxes were known as endorsers of single tax limited.

Most early advocacy groups described themselves as single taxers and George reluctantly accepted the single tax as an accurate name for his main political goal-the repeal of all unjust or inefficient taxes, to be replaced with a land value tax (LVT).

Some modern proponents are dissatisfied with the name Georgist. While Henry George was well known throughout his life, he has been largely forgotten by the public and the idea of a single tax of land predates him. Some now prefer the term geoism, with the meaning of geo (from Greek γῆ gē "earth, land", as incidentally is in Greek the first compound of the name George (whence Georgism) < (Gr.) Geōrgios < geōrgos "farmer" or geōrgia "agriculture, farming" < gē + ergon "work") deliberately ambiguous. The terms Earth Sharing, geonomics and geolibertarianism are also used by some Georgists. These terms represent a difference of emphasis and sometimes real differences about how land rent should be spent ( citizen's dividend or just replacing other taxes), but they all agree that land rent should be recovered from its private recipients.

Compulsory fines and fees related to land rents are the most common Georgist policies, but some geoists prefer voluntary value capture systems that rely on methods such as non-compulsory or self-assessed location value fees, community land trusts and purchasing land value covenants. Some geoists believe that partially compensating landowners is a politically expedient compromise necessary for achieving reform. For similar reasons, others propose capturing only future land value increases, instead of all land rent.

Although Georgism has historically been considered as a radically progressive or socialist ideology, some libertarians and minarchists take the position that limited social spending should be financed using Georgist concepts of rent value capture, but that not all land rent should be captured. Today, this relatively conservative adaptation is usually considered incompatible with true geolibertarianism, which requires that excess rents be gathered and then distributed back to residents. During Henry George's time, this restrained Georgist philosophy was known as "single tax limited", as opposed to "single tax unlimited". George disagreed with the limited interpretation, but he accepted its adherents (e.g. Thomas Shearman) as legitimate "single-taxers".

Georgist ideas heavily influenced the politics of the early 20th century. Political parties that were formed based on Georgist ideas include the United States Commonwealth Land Party, the Henry George Justice Party, the Single Tax League, and Denmark's Justice Party.

In the United Kingdom, the Liberal government included a land tax as part of several taxes in the 1909 People's Budget intended to redistribute wealth (including a progressively graded income tax and an increase of inheritance tax). This caused a political crisis that resulted indirectly in reform of the House of Lords. The budget was passed eventually-but without the land tax. In 1931, the minority Labour government passed a land value tax as part III of the 1931 Finance act. However, this was repealed in 1934 by the National Government before it could be implemented.

In Denmark, the Georgist Justice Party has previously been represented in Folketinget. It formed part of a centre-left government 1957-60 and was also represented in the European Parliament 1978-1979. The influence of Henry George has waned over time, but Georgist ideas still occasionally emerge in politics. For the United States 2004 presidential election, Ralph Nader mentioned George in his policy statements.

Economists still generally favor a land value tax. Milton Friedman publicly endorsed the Georgist land value tax as the "least bad tax". Joseph Stiglitz stated that: "Not only was Henry George correct that a tax on land is non-distortionary, but in an equilibrium society ... tax on land raises just enough revenue to finance the (optimally chosen) level of government expenditure." He dubbed this proposition the Henry George theorem.

Several communities were also initiated with Georgist principles during the height of the philosophy's popularity. Two such communities that still exist are Arden, Delaware, which was founded in 1900 by Frank Stephens and Will Price, and Fairhope, Alabama, which was founded in 1894 under the auspices of the Fairhope Single Tax Corporation. Some established communities in the United States also adopted Georgist tax policies. A Georgist in Houston, Texas, Joseph Jay "J.J." Pastoriza, promoted a Georgist club in that city established in 1890. Years later, in his capacity as a city alderman, he was selected to serve as Houston Tax Commissioner, and promulgated a "Houston Plan of Taxation" in 1912. Improvements to land and merchants' inventories were taxed at 25 percent of the appraised value, unimproved land was taxed at 70 percent of appraisal, and personal property was exempt. This Georgist tax continued until 1915, when two courts struck it down as violating the Texas Constitution in 1915. This quashed efforts in several other Texas cities which took steps towards implementing the Houston Plan in 1915: Beaumont, Corpus Christi, Galveston, San Antonio, and Waco.

The German protectorate of the Kiautschou Bay concession in Jiaozhou Bay, China fully implemented Georgist policy. Its sole source of government revenue was the land value tax of six percent which it levied in its territory. The German government had previously had economic problems with its African colonies caused by land speculation. One of the main reasons for using the land value tax in Jiaozhou Bay was to eliminate such speculation, which the policy achieved. The colony existed as a German protectorate from 1898 until 1914, when seized by Japanese and British troops. In 1922 the territory was returned to China.

Georgist ideas were also adopted to some degree in Australia, Hong Kong, Singapore, South Africa, South Korea, and Taiwan. In these countries, governments still levy some type of land value tax, albeit with exemptions. Many municipal governments of the US depend on real property tax as their main source of revenue, although such taxes are not Georgist as they generally include the value of buildings and other improvements. One exception is the town of Altoona, Pennsylvania, which for a time in the 21st century only taxed land value, phasing in the tax in 2002, relying on it entirely for tax revenue from 2011, and ending it 2017; the Financial Times noted that "Altoona is using LVT in a city where neither land nor buildings have much value".

Various organizations still exist that continue to promote the ideas of Henry George. According to The American Journal of Economics and Sociology, the periodical Land&Liberty, established in 1894, is "the longest-lived Georgist project in history". Founded during the Great Depression in 1932, the Henry George School of Social Science in New York offers courses, sponsors seminars, and publishes research in the Georgist paradigm. Also in the US, the Lincoln Institute of Land Policy was established in 1974 based on the writings of Henry George. It "seeks to improve the dialogue about urban development, the built environment, and tax policy in the United States and abroad".

The Henry George Foundation continues to promote the ideas of Henry George in the United Kingdom. The IU is an international umbrella organisation that brings together organizations worldwide that seek land value tax reform.

The economist Alfred Marshall believed that George's views in Progress and Poverty were dangerous, even predicting wars, terror, and economic destruction from the immediate implementation of its recommendations. Specifically, Marshall was upset about the idea of rapid change and the unfairness of not compensating existing landowners. In his lectures on Progress and Poverty, Marshall opposed George's position on compensation while fully endorsing his ultimate remedy. So far as land value tax moderately replaced other taxes and did not cause the price of land to fall, Marshall supported land value taxation on economic and moral grounds, suggesting that a three or four percent tax on land values would fit this condition. After implementing land taxes, governments would purchase future land values at discounted prices and take ownership after 100 years. Marshall asserted that this plan, which he strongly supported, would end the need for a tax collection department of government. For newly formed countries where land was not already private, Marshall advocated implementing George's economic proposal immediately.

Karl Marx considered the Single Tax platform as a regression from the transition to communism and referred to Georgism as "Capitalism's last ditch". Marx argued that, "The whole thing is ... simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one." Marx also criticized the way land value tax theory emphasizes the value of land, arguing that, "His fundamental dogma is that everything would be all right if ground rent were paid to the state." Georgists such as Fred Harrison (2003) replied to these Marxist objections.

Richard T. Ely, known as the "Father of Land Economics",[citation needed ] agreed with the economic arguments for Georgism but believed that correcting the problem the way Henry George wanted (without compensation) was unjust to existing landowners. In explaining his position, Ely wrote that "If we have all made a mistake, should one party to the transaction alone bear the cost of the common blunder?"

John R. Commons supported Georgist economics, but opposed what he perceived as an environmentally and politically reckless tendency for advocates to rely on a one-size-fits-all approach to tax reform, specifically, the "single tax" framing. Commons concluded The Distribution of Wealth, with an estimate that "perhaps 95% of the total values represented by these millionnaire [ sic] fortunes is due to those investments classed as land values and natural monopolies and to competitive industries aided by such monopolies", and that "tax reform should seek to remove all burdens from capital and labour and impose them on monopolies". However, he criticized Georgists for failing to see that Henry George's anti-monopoly ideas must be implemented with a variety of policy tools. He wrote, "Trees do not grow into the sky-they would perish in a high wind; and a single truth, like a single tax, ends in its own destruction." Commons uses the natural soil fertility and value of forests as an example of this destruction, arguing that a tax on the in situ value of those depletable natural resources can result in overuse or over-extraction. Instead, Commons recommends an income tax based approach to forests similar to a modern Georgist severance tax.

Other contemporaries such as Austrian economist Frank Fetter and neoclassical economist John Bates Clark argued that it was impractical to maintain the traditional distinction between land and capital, and used this as a basis to attack Georgism. Mark Blaug, a specialist in the history of economic thought, credits Fetter and Clark with influencing mainstream economists to abandon the idea "that land is a unique factor of production and hence that there is any special need for a special theory of ground rent" claiming that "this is in fact the basis of all the attacks on Henry George by contemporary economists and certainly the fundamental reason why professional economists increasingly ignored him".

Robert Solow endorsed the theory of Georgism, but is wary of the perceived injustice of expropriation. Solow stated that taxing away expected land rents "would have no semblance of fairness"; however, Georgism would be good to introduce where location values were not already privatized or if the transition could be phased in slowly.

George has also been accused of exaggerating the importance of his "all-devouring rent thesis" in claiming that it is the primary cause of poverty and injustice in society. George argued that the rent of land increased faster than wages for labor because the supply of land is fixed. Modern economists, including Ottmar Edenhofer have demonstrated that George's assertion is plausible but was more likely to be true during George's time than now.

An early criticism of Georgism was that it would generate too much public revenue and result in unwanted growth of government, but later critics argued that it would not generate enough income to cover government spending. Joseph Schumpeter concluded his analysis of Georgism by stating that, "It is not economically unsound, except that it involves an unwarranted optimism concerning the yield of such a tax." Economists who study land conclude that Schumpeter's criticism is unwarranted because the rental yield from land is likely much greater than what modern critics such as Paul Krugman suppose. Krugman agrees that land value taxation is the best means of raising public revenue but asserts that increased spending has rendered land rent insufficient to fully fund government. Georgists have responded by citing studies and analyses implying that land values of nations like the US, UK, and Australia are more than sufficient to fund all levels of government.

Anarcho-capitalist political philosopher and economist Murray Rothbard criticized Georgism in Man, Economy, and State as being philosophically incongruent with subjective value theory, and further stating that land is irrelevant in the factors of production, trade, and price systems, but this critique is seen by some, including other opponents of Georgism, as relying on false assumptions and flawed reasoning.

Austrian economist Friedrich Hayek credited early enthusiasm for Henry George with developing his interest in economics. Later, Hayek said that the theory of Georgism would be very strong if assessment challenges did not result in unfair outcomes, but he believed that they would.

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Georgism, also called in modern times geoism and known historically as the single tax movement, is an economic ideology holding that while people should own the value they produce themselves, the economic rent derived from land, including from all natural resources and the commons, should belong equally to all members of society.

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Landlord wealth increases, renters struggle. Link

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The impact of people not owning their land

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land grabs page 180

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5. Design to Distribute: From ‘Growth Will Even It Up Again’
To Distributive by Design
We quoted him above, we’ll quote him again: Simon Kuznets, a guy who won a Nobel Prize in Economic Sciences for his contribution to the transformation of economics into empirical science.
Also: the guy who gave us this:

Above you can see the Kuznets curve which suggests – if it is not obvious enough already – that as countries get richer, inequality must rise before it will eventually fall.
In other words, if you want economic success then you’d better deal with economic inequality because that’s an inevitable stage of it; as for equality – that should come a bit later.
In other words, “development must be inegalitarian” (W. Arthur Lewis, also a Nobel Prize winner), so “poor countries should concentrate income in the hands of the wealthy since only they would save and invest enough of it to kick-start GDP growth.”
Good news – for the rich.
Bad news for just about everyone else.
Because, you see, even though you can apparently get a Nobel Prize for it and the Kuznets curve is still considered an economic law (so much so that Steven Pinker uses it as an argument), this theory is merely clever, but utterly and dreadfully wrong.
And you know how we know this?
Well, first of all, because Kuznets himself said that. Both in private correspondence – “no evidence whatsoever” – and (well, this is tragic) in the very texts where he introduced the idea, which, in his words, was based on “5 percent empirical information and 95 percent speculation, some of it possibly tainted by wishful thinking.”
And secondly, because when Thomas Piketty tested Kuznets theory empirically, he found out that it bears no relation to reality.
The solution?
To start thinking about creating a society where development is egalitarian.
Because it is possible.

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13 min read ⌚

Quick Summary: Doughnut Economics by Oxford academic Kate Raworth deconstructs the character of the rational economic man and challenges the necessity for never-ending economic growth by identifying seven critical ways in which mainstream economics has misled us, while sketching out an alternative plan on how we can satisfy humanity's needs without overshooting Earth's ecological ceiling.

Who Should Read "Doughnut Economics"? And Why?

Doughnut Economics is a book by an economist for people who are not interested in economy; also, for people who have had it enough with the discipline, believing (like us) that it's stopped being a science ever since it proclaimed itself as one.

Finally, it is a book for all those concerned that economic growth has all but destroyed our planet; this is one of the rare books by economists which prefers the latter to the former.

In fact, that's its main idea.

Doughnut Economics Summary

Unfortunately, economics has failed us - over and over again.

As the financial crisis of 2008 demonstrated - for the thousandth time - economics is not capable of predicting, let alone preventing apocalyptic events which cause the downfall of corporations and cost thousands of people their homes and even lives.

And you know why is that?

Well, as Nassim Nicholas Taleb - who fervently advocates the cancelation of the Nobel Prize for Economics - has made it clear on more than one occasion, it is because economics is not actually as scientific as all those equations and graphs would have you believe.

Simply put, financial crises happen over and over again because our existent economic model ( as Marx saw before anyone) has these crises embedded within it.

If you need an analogy to understand, our current economic model works something like the geocentric model before Copernicus: it explains a lot about our world, so we brush away the mistakes by thinking that they are outliers or anomalies.

But how many anomalies should we allow before realizing that the model might be wrong?

"You never change things by fighting the existing reality," Kare Raworth reminds us of Buckminster Fuller's well-known quote in the introductory chapter of Doughnut Economics. "To change something, build a new model that makes the existing model obsolete."

"This book," she goes on, "takes up his challenge, setting out seven mind-shifting ways in which we can all learn to think like twenty-first-century economists. By revealing the old ideas that have entrapped us and replacing them with new ones to inspire us, it proposes a new economic story that is told in pictures as much as in words."

So, before we proceed to the words of our summary, here's its pictorial version, provided by Raworth:

1. Change the Goal: from GDP to the Doughnut

Regardless of where you're living, there's a good chance that your government's main economic (and even political) goal is the country's GDP growth.

Interestingly enough, it wasn't always like that.

In fact, for most of history, economics wasn't interested in continual growth but in ways to properly manage the household (which is what the word economics actually means in Ancient Greek).

Consequently, nobody considered economics a scientific discipline for millennia: it was an art form, more akin to literature than to mathematics. Sure, there are some rules you should follow, but there are many impractical goals to achieve as well.

This changed with Adam Smith, John Stuart Mill, and Milton Friedman who were interested in rationally deducing the laws which govern our economic lives; too bad none of them really cared about (or even knew) the laws which govern our human nature.

And this left a void where there was none: suddenly, nobody knew what was the goal of economics, even though originally the field was founded mainly with its objective in mind.

The result?

A somewhat invented goal: GDP growth.

The problem?

Well to quote Simon Kuznets, "the hallowed creator of national income itself,": "Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term... Objectives should be explicit: goals for 'more' growth should specify more growth of what and for what."

Well, that's where Doughnut Economics comes in.

Its name comes from Kate Raworth's visual representation of its objective:

As you can see from the graph, doughnut economics has a pretty discernible goal: to reach the sweet (and safe and just) spot between the social foundation of human well-being and the ecological ceiling of planetary pressure.

For all of humanity.

2. See the Big Picture: from Self-Contained Market to Embedded Economy

If you are an economist - or have seen an economics textbook published in the 20 th century - you have probably already seen the image below:

Supposedly, this Circular Flow diagram should explain away macroeconomy; and for many economists out there, it does.

The problem?

It is utterly and completely wrong.

And there are two reasons why it is wrong.

The first one: the market isn't self-contained, and it isn't the only economic sector which creates value. Too neoliberal or libertarian to believe that?

Well, allow Kate Raworth to ask you a question: who cooked Adam Smith's dinner?

Her answer:

When Adam Smith, extolling the power of the market, noted that, 'it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner,' he forgot to mention the benevolence of his mother, Margaret Douglas, who had raised her boy alone from birth. Smith never married so had no wife to rely upon (nor children of his own to raise). At the age of 43, as he began to write his opus, The Wealth of Nations, he moved back in with his cherished old mum, from whom he could expect his dinner every day. But her role in it all never got a mention in his economic theory, and it subsequently remained invisible for centuries.

In other words, unpaid household labor creates a lot of value; otherwise, you won't have Wikipedia.

The second problem is even bigger: the economy isn't a closed system. It is - as Herman Daly first suggested - "an open subsystem of the closed Earth system."

And it looks something like this:

In other words, an economy which constantly grows will one day be brought to a halt when it inevitably overshoots Earth's regenerative capacities.

And that day is, well, today.

3. Nurture Human Nature: From Rational Economic Man to Social Adaptable Humans

According to Kate Raworth, the most influential portrait in the history of civilization isn't Leonardo da Vinci's Mona Lisa, but the "equally enigmatic yet utterly different character... the rational economic man."

Despite being"the smallest unit of analysis in economic theory," this Homo economicus is such an exaggerated and distorted version of Homo sapiens that it's basically a caricature, if not a cartoon.

You know him well: he/she is the "solitary, calculating, competing and insatiable" creature, a Swiftian Yahoo who (to paraphrase John Stuart Mill) desires to possess wealth and luxuries, but deeply disdains work.

Now, even Mill was aware that his caricature was a caricature, describing his profile of the Homo economicus as "an arbitrary definition of man," based on "premises which might be totally without foundation."

Foundations-shmoundations, said just about every economist after him and proceeded to develop a concept of the economy in general with this being as the atomic foundation.

Of course, everything economics says it's wrong, because, as we now know full well, humans are predictably irrational, social creatures who often make decisions based on a complex network of premises.

For example, as both the public goods and the ultimatum game prove, most humans value fairness far above selfishness and are willing to lose things if they see injustice in winning them.

The only exception of this group - economists, influenced by the vision of the rational man from their textbooks.

So, let's influence humanity in a different manner altogether.

What should replace homo economicus?

"Many new names have been proposed," writes Raworth, "from Homo heuristicus and Homo reciprocans to Homo altruisticus and Homo socialis. But it makes no sense to pin ourselves down to just one of these identities: we inhabit them all simultaneously."

And that's a fact.

4. Get Savvy with Systems: From Mechanical Equilibrium to Dynamic Complexity

But if humans are so complex, then how do market balance themselves?

Well, the truth is: they don't. If they did, things such as Tulipomania or the financial crisis of 2008 shouldn't have happened in the first place.

Of course, hardcore market-believers would say, well, even though they did, after a while, they balanced themselves out.

However, this is wrong on so many levels that we don't even feel the need to refute it (for one, some people earn a lot of money in the process, and others die - and, really, is this what economics should be all about?)

Anyway, if you think that the market is all about "supply and demand" and believe in the "equilibrium point," then you're thinking too simplistic, and you'll always have to deal with bubble-boom-bust cycles.

The image you know from your textbooks -

- should be immediately replaced by a more complicated one which really shows the inner workings of a complex system (because that's what the economic system is):

Confused about those chickens and eggs in the graph?

Well, the image shows how feedback loops work and uses an analogy to describe it.

Imagine chickens living by the road and laying eggs. More eggs mean more chickens and more chickens mean more eggs. This is the left side of the graph which demonstrates how a reinforcing loop works (R), amplifying what is happening.

However, there's also a balancing loop (B) on the right side. It works like this: more chickens → more road crossings → more deaths → fewer chickens. The balancing loop counters the reinforcing one.

"It is out of these interactions of stocks, flows, feedbacks and delays," writes Raworth, "that complex adaptive systems arise: complex due to their unpredictable emergent behavior, and adaptive because they keep evolving over time."

5. Design to Distribute: From 'Growth Will Even It Up Again' To Distributive by Design

We quoted him above, we'll quote him again: Simon Kuznets, a guy who won a Nobel Prize in Economic Sciences for his contribution to the transformation of economics into empirical science.

Also: the guy who gave us this:

Above you can see the Kuznets curve which suggests - if it is not obvious enough already - that as countries get richer, inequality must rise before it will eventually fall.

In other words, if you want economic success then you'd better deal with economic inequality because that's an inevitable stage of it; as for equality - that should come a bit later.

In other words, "development must be inegalitarian" (W. Arthur Lewis, also a Nobel Prize winner), so "poor countries should concentrate income in the hands of the wealthy since only they would save and invest enough of it to kick-start GDP growth."

Good news - for the rich.

Bad news for just about everyone else.

Because, you see, even though you can apparently get a Nobel Prize for it and the Kuznets curve is still considered an economic law (so much so that Steven Pinker uses it as an argument), this theory is merely clever, but utterly and dreadfully wrong.

And you know how we know this?

Well, first of all, because Kuznets himself said that. Both in private correspondence - "no evidence whatsoever" - and (well, this is tragic) in the very texts where he introduced the idea, which, in his words, was based on "5 percent empirical information and 95 percent speculation, some of it possibly tainted by wishful thinking."

And secondly, because when Thomas Piketty tested Kuznets theory empirically, he found out that it bears no relation to reality.

The solution?

To start thinking about creating a society where development is egalitarian.

Because it is possible.

6. Create to Regenerate: From 'Growth Will Clean It Up Again' To Regenerative by Design

Another thing mainstream economists are pretty sure will sort out itself with growth?

The Earth.

And once again, the problems are created by the very people who believe they've discovered a law which demonstrates that they'll be sorted out.

In this case, American economists Gene Grossman and Alan Krueger did a study in the 1990s and supposedly discovered that pollution decreases with growth - after increasing for a while.

You can notice the pattern here, can you?

It's basically the same idea that Kuznets had as far as inequality is concerned.

In fact, the graphs are so similar that this one we don't even need to copy/paste here; you'll just figure it out via its giveaway name: Environmental Kuznets Curve.

The problem with this curve?

Well, apparently - and once again - that even its authors didn't believe it. Unfortunately, everybody else did - and by everybody, we do mean rich people in power - and soon it was difficult to debate with people that growth might mean serious environmental problems.

"Of course it does," they'd say. "But they'll sort out themselves in the end."

The logic may be sound on paper - technological advancements create environmental problems, but if not regulated they also come up with solutions for these very same problems - but the data doesn't support it.

On the contrary: it seems we may already be near the last return point. (If we're past it then thanks, laisses-faire economists and God help us!)

And maybe we should try to do something before it's too late.

And that something is quite obvious: transform our linear, caterpillar economy into a circular, butterfly one, shifting from a present filled with disposable products to a future of reusable goods.

True, we've already started doing this.

But we need to do even more.

7. Be Agnostic about Growth: From Growth Addicted to Growth Agnostic

It all pointed to this, didn't it?

As strange as it may seem at first glance, it's even stranger how it hasn't become part of the mainstream science of today.

Bear with Raworth for a second.

Studies and empirical data have demonstrated - beyond reasonable doubt - that, at least so far, "no country has ever ended human deprivation without a growing economy. And no country has ever ended ecological degradation with one."

In other words, if we want a better quality of life for more people, then it's only smart to devise ways for our economy to grow; however, if we don't want to destroy the resources which allow it to grow, then we must hinder its growth.

The solution?

Well, that doughnut from the start: finding the right balance.

But that all starts with an almost counterintuitive notion: after a certain limit, economic growth is probably not good anymore.

In layman's terms: there should be such thing as enough money.

The Bushmen know this quite well for about one-hundred thousand years, but we seem to have forgotten it.

So, Raworth proposes rebuilding our system so that we are constantly reminded that hoarding (especially money) is not only selfish but, in the long run, detrimental to everybody including you.

An Argentinian-German businessman by the name of Silvio Gessel - who lived between the 19 th and the 20 th century - proposed a solution for this: "we must make money worse as a commodity if we wish to make it better as a medium of exchange.'"

Money, in other words, ages well: unlike most commodities (be they potatoes or smartphones), it appreciates with time.

A good way to inspire people not to hoard money?

Introduce money which loses value the longer it is held.

It's called demurrage, and you should really read all about it.

Key Lessons from "Doughnut Economics"

1. Economics Has Failed Us Big Time
2. Seven Ways in Which Economics Is Wrong About the World - and Seven Ways to Fix This
3. Doughnut Economics Is All About Thriving While Preserving the Planet

Economics Has Failed Us Big Time

"Economics," to quote Kate Raworth, "is broken."

Not only it has failed to predict financial crises which have shaken our society to its very foundations, but it has also shown no interest even to devise ways to prevent these in the future.

Economics' "outdated theories have permitted a world in which extreme poverty persists while the wealth of the super-rich grows year on year. And its blind spots have led to policies that are degrading the living world on a scale that threatens all of our futures."

Seven Ways in Which Economics Is Wrong About the World - and Seven Ways to Fix This

There are seven ways in which mainstream economics is fundamentally wrong about the world - and seven things to do if we want to get back on track:

#1. Mainstream economists believe that the rise of GDP should be the goal; in fact, it should be the doughnut (wait... what? See lesson number 3 for more).
#2. Self-contained markets don't exist; embedded economy is the real deal.
#3. The idea of the rational and selfish economic man is utterly wrong; homo sapiens is both the most irrational and "the most cooperative of all species when it comes to living alongside those who are beyond next of kin;"
#4. Mechanical equilibrium is possible only in closed and predictable systems; reorient to understand dynamic complexity if you want to understand the market;
#5. Growth doesn't bring equality; distribution should be part of the economic systems by design;
#6. Growth doesn't solve environmental problems as well; economic systems should be regenerative by design; and, finally,
#7. Economic systems should not be about never-ending growth - that is not possible - but about thriving within limits.

Doughnut Economics Is All About Thriving While Preserving the Planet

The essence of Doughnut Economics is this: to create "a social foundation of well-being that no one should fall below, and an ecological ceiling of planetary pressure that we should not go beyond. Between the two lies a safe and just space for all."

In other words, we are all humans, and we all live on this planet; let's all live our lives as humans and not destroy our planet.

How's that for an objective, economics, ha?

Like this summary? We'd like to invite you to download our free 12 min app for more amazing summaries and audiobooks.

Doughnut Economics Quotes
Instead of pursuing ever-increasing GDP, it is time to discover how to thrive in balance. It is time to draw the economy anew, embedding it within society and within nature, and powered by the sun. Human nature is far richer than... early sketches of... the rational economic man: we are social, interdependent, approximating, fluid in values, and dependent upon the living world. It's time to stop searching for the economy's elusive control levers and start stewarding it as an ever-evolving complex system. The radical flip in perspective invites us to become agnostic about growth and to explore how economies that are currently financially, politically and socially addicted to growth could learn to live with or without it. Click To Tweet Click To Tweet Click To Tweet Click To Tweet Click To Tweet

Final Notes

In our humble opinion, Doughnut Economics is practically everything an economics book for the 21 st century should be: comprehensible, environmentally-friendly, aware of the challenges that lie ahead, interested in solutions which favor humanity as a whole (and not merely a certain group of people).

And unlike most economic books, it is also honest, out-of-the-box enlightening, and prefers images to equations.

Kate Raworth - thank you.

The rest of you - please read the book.

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Doughnut Economics Summary - Kate Raworth | 12min Blog

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13 min read ⌚ Quick Summary: Doughnut Economics by Oxford academic Kate Raworth deconstructs the character of the rational economic man and challenges the necessity for never-ending economic growth by identifying seven critical ways in which mainstream economics has misled us, while sketching out an alternative plan on how we can satisfy humanity's needs without overshooting Earth's ecological ceiling.

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The basic for that way is the Kuznet curve, which says that when an economy
develops, market forces first increase and later decrease economic inequalities. It
means that the income per capital first rises to a maximum and causes inequality,
until it can decrease it. Raworth criticizes that the economic inequality is not an
economical need, it is more a design error. 21st century economists have to recognize
that a lot of possibilities exist to design economies with the result of more equality
when distributing their created values. It means that it is much more, than just
distributing incomes, but wealth. Especially when that wealth comes from possessing
land, companies, and technologies or from the creation of money.

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5. Design to Distribute - 5/7 Doughnut Economics

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In 2009 I went to Queens in Belfast to hear Professor Henry Chesbrough give an all Ireland lecture on Open Innovation.