Interminable conversations

Birds do it. Bees do it
Even educated fleas do it
Let’s do it, Let’s fall in love
Cole Porter 1928

There is no doubting the power of conversation as a communication tool. The best preachers and the biggest stadium rock bands mimic traditional call and response to engage the audience and drive home the memory if not the message.

Climate for change is the latest grass roots movement to adopt the pattern to drive for specific outcomes.

  1. “What do we do as individuals [to prevent climate change]?’
  2. “How effective is that?”
  3. “Would it be more effective to lobby government to change the regulations than to change our light globes?”
  4. Let’s agree that we should use our collective energy to lobby government.

Get Up eplored a conversational approach in the 2016 election campaign, refined and rolled it out as a significant component of its 2019 platform.

The ALP says that it is using it, but it stops short of allowing a second voice in the conversation, so can not be genuinely included as a data point in this analysis.

The Greens have been using it in one form or another since 2013. Adam Bandt employed what his campaigners called the Barack Obama strategy in his first successful election campaign. Obama had taken his inspiration from Chicago community activist Saul Alinsky and his book Rules for Activists via

Keep this manual safe and confidential.
DO NOT SHARE

Bandt’s campaign manual was taboo in the Australian Greens, for a variety of reasons, some practical, some factional, some relating to inertia. It had the words, “Keep this manual safe and confidential. Do Not Share” emblazoned across the inside cover. As a result, the South Brisbane Greens fought the 2013 campaign against Kevin Rudd in Griffith directly following Saul Alinsky’s principles and simply told everyone we were using the “Bandt model”. When Rudd resigned in 2014 we campaigned against Terri Butler in the by-election using the official playbook and paid Get Up’s Simon Sheikh to send some staff to come and train us in the fine print of the technique.

Following that, the model has become de-rigueur in The Greens and has spread through other environmental and activist groups as outlined above.

The most recent incarnation of the two-decade old training by Al Gore’s Climate Action has now added conversational techniques to its armoury.

The failure of all this conversing to make a “Climate Election” out of the 2019 contest for control of the Australian Federal Parliament simply brings The Greens, Climate Action, Climate for Change and Get Up to the same point.

The populace is not sufficiently moved by the evidence of the damage they inflict on future generations or the world’s poor to give up their four-wheel drives, steak dinners, international holidays and other benefits of continuous economic growth.

We need not argue about why this is the case, that is fairly straight forward, we do need, however, to discuss what we can do to engage the natural morals and humanity of the silent majority.

The reasons that people do not want to engage are spelled out in the uncompromising and terrifyingly honest video snip, “Deep Adapatation” by Jem Blendell. https://www.youtube.com/watch?v=DAZJtFZZYmM&t=2s

The contract is broken – We are not in control any more,”he points out.

To paraphrase: the very real and well understood danger that we may become extinct in the lifetime of people living today, leads directly to the breakdown of the fundamental promise that has underpinned liberal democracy. That promise has been that life will continue to get better, as long as we stick to the rules. As a consequence, people are no longer sticking to the rules.”

The impact is that veteran campaigners are giving up, declaring the end of social democracy and the failure of the climate movement. In April this year John James wrote his final weekly newsletter, opening with the words:

“For more than three decades I have been spreading news of the climate crisis during the years when we could have made a difference, and at no moment in all that time has the good news outshone the bad.

“I am 88. I gave my first public talk on ecology and the warming planet in 1982. I am weary of reiterating increasingly miserable news. We all know where we are heading. We won’t be bored in the years that remain to us.”

These campaigners express disappointment that we did not make the change that had to be made to avoid the position we are in now but in a very real way they have simply switched gear accepting the inevitable. They have not given up campaigning, they have simply given up trying to bring the mainstream with them.

I interviewed Richard Heinberg in 2008 about his scenario analysis PowerDown. I pointed out to him that based on the political landscape at the time his Lifeboat scenario seemed more likely than any of the others. He was shocked. “I had to include that for completeness in the spirit of scenario analysis, but it is the worst case scenario. That is what we need to do if none of the other scenarios eventuate.” https://thegenerator.news/thegenerator/soundfiles/Heinberg_Lifeboats.mp3

On the other hand, the youth is newly energised to pick up where their elders have left off.

The Extinction Rebellion, the Climate Emergency are declarations that reflect the urgency so cogently declared by Greta Thornburg. That does not resolve some of these inherent tensions, though. When Greta declared that Sustainability is dead, Climate Change is everything, the fractious nature of the discussion that emerged must have made fossil fuel magnates extremely warm and comfortable.

Recently, a number of young women who have expressed serious concern about their decision to bear children in the face of a possible extinction event. I grew up in the shadow of the Atomic era, I was born at the height of the Cold War. I missed being conscripted to Vietnam by five years. As youngsters we expressed intellectual concern about the morals of bringing children into this world, but all the women my age who discussed with me their reasons not to breed were driven by rather more selfish reasons. Children are an expensive luxury in a neo-liberal society.

These deep, life changing decisions by thoughtful people whom I respect are symptoms of the alarm generated by the possibility of extinction and the certainty that we are at the end of growth.

The reality is that we have to go far beyond conversations that bring the mainstream voter into the conversation, we absolutely have to take action to begin to build a post-growth, post-carbon world. That requires more than conversations or lobbying politicians, that requires radical action, leading to radical change.

Simon Sheikh of Future Super in January 2014
Simon Sheikh of Future Super ex-Get Up acted on establishing an income stream before setting up a business training people in the conversational approach.

It may well be that the organisations that have engaged directly in the financial system, Future Super, Planet Ark two name just two, despite their flaws, offer a significant clue.

Circular economy funding needs oversight, suggests Responsible Wood

With governments funding startups in the social enterprise and circular economy space there is a need to keep an eye on the outcomes being delivered, according to representatives of Responsible Wood.

Mark Thomson and Jason Ross have worked with the timber and paper industry to developed agreed frameworks for marking wood-based products as sustainable. As a result, they understand the need for agreement as well as the challenges. Great Notion’s Geoff Ebbs met with them in Brisbane today (Thursday, June 20) to discuss the lessons they have learned and how they might be applied in the circular economy and social enterprise space.

Mark Thomson is the director of Responsible Wood and is concerned that a lack of oversight might damage the reputation of the movement and lead to its dismissal by mainstream business.

“The implicit assumption that a startup is good just because it is a social enterprise or identifies with the circular economy, may need to be challenged,” he told Great Notion.

Marketing manager, Jason Ross pointed out that if the overarching aim is to spread the concepts of the circular economy as broadly as possible into the business community, then it is critical that the concepts are clearly understood and communicated.

“Business and government really need to address social and environmental viability as well as economic considerations,” added Mark. “Poor implementation could undermine that.”

“We saw in early sustainability standards that hasty implementation of environmental standards discredited the idea of sustainability,” he said. His experience is primarily in timber and paper, but our discussion ranged across similar experience in technology standards, water and sewage recycling and the interactions between rich and poor nations through international programs designed to help that fall into disrepute.

Great Notion and Responsible Wood
Geoff Ebbs, Jason Ross and Mark Thomson discuss certification and standards

Mark observes that there is a natural tension between encouraging innovation and diversity on one hand, and managing processes to ensure a common purpose on the other.

“My experience indicates that certification and standards provide an enabling platform that encourages innovation in an orderly manner and avoids catastrophic failure that is damaging to reputation as well as slowing progress.”

He points out that in the timber industry separate standards developed by environmental groups and industry groups developed from divergent starting points but have evolved to accommodate each other and create a working, global set of standards.

Jason Ross adds that any working agreement between different groups involves compromise, but it is important to ensure that those compromises do not undermine the fundamental intent of the agreement by embedding poor practice as standard.

Great Notion is engaged in ongoing discussions with Responsible Wood about presenting the advantages of the Circular Economy and a Zero Growth Economy to business.

The best and worst of recycling

Agricultural use of single-use-plastics dwarves domestic use, Jenny Brown of Envorinex told a crowd of forty at The Precinct in Brisbane last night. The good news is that the company which she founded and heads as managing director, is doing something about it.

A manufacturer of plastic goods for industrial and infrastructure applications since 2003, Ms Brown has been waging war on waste by recycling as much plastic as possible and delivering goods made from 100% reclaimed waste in the bulk of her products.

Jenny Brown of Envorinex at the Circular Economy Meetup - June 2019
Anshu Sisodia and Jenny Brown of Envorinex with friend at Brisbane’s Circular Economy meetup for World Environment Day in June

“Plastic can be re-used hundreds of times and last for centuries if it is properly processed,” she said, “the important thing is to get it right the first time.”

Some of Envorinex greatest successes include the processing of tonnes of bags and tubes used to deliver saline solution in hospital and converting that into clips, mats and other products.

“All of the goods that leave our factory can be recycled again, and again and again,” she said.

Envorinex is based in northern Tasmania and employs around twenty full time staff on two different production lines, reclaiming and processing waste and producing a range of products from railings for roads, non slip mats for oil rigs, through to simple clips and accessories for a range of applications.

Ms Brown is in Queensland to explore the establishment of a processing plant to recycle a significant portion of the agricultural waste from the southern half of the state.

Her presentation included images of tonnes of single use plastic discarded by strawberry and livestock farmers. Envorinex also processes hard plastics recovered from mines and Tasmania’s very active salmon and oyster farming industry. The stanchions and frames used to contain the fish or on which the oysters grow, are replaced every three to five years and include many tonnes of plastic.

She said that the enemy of recycling is contamination. This is not so much the organic material that attaches to the plastic as the ropes, clips and other attachments that have to be removed manually, vastly increasing the cost of handling and recycling.

He also noted that most manufacturers reduce costs by mixing substances such as sawdust with virgin plastics to reduce costs and by skimping on other additives that ensure longevity and recyclability.

Answering a question from the audience about domestic use of single-use-plastics she said that Envorinex deals exclusively with industrial and agricultural waste because domestic waste is so contaminated that it is almost impossible to recycle.

“This is why the waste from Australia and other rich countries has been rejected by China, India and Malaysia. They simply cannot process it,” she said. The problem is partly that packaging is often made from a mixture of products that cannot be effectively separated as well as the poor handling and sorting on the part of domestic users.

She also noted that there are some applications, such as hospital equipment, where single use plastics are necessary but, that generally speaking, single use items are the major problem.

More information is available from the Envorinex website

Growth, or not, and a little Wisdom

A public discussion on the Post-Growth Future for Business held at University of Queensland generated far-reaching discussion last Friday, 7th June.

Dr Cle-Anne Gabriel
Dr Cle-Anne Gabriel at UQ Business School

Hosted by Dr Cle-Ann Gabriel, who is researching business models for sustainability, the event outlined the reasons for considering an end to growth, the challenges that poses for business and some approaches that can help business flourish in a post-growth environment.

Key among the ideas was that individual businesses can grow in a zero growth economy, the challenge is where the degrowth comes from to balance that out.

Dr Gabriel provided an overview of the philosophical underpinnings of zero-growth, the difference between degrowth (it is a process that can be applied to specific areas, such as developed countries, to move toward a post-Growth economy) and post-Growth, and a list of the challenges facing economists.

Dr Michelle Maloney

Dr Michelle Maloney, codirector of the New Economy Network, walked through the recent history of growth and the increasing influence of finance as a result of neo-liberalism and some of the tools being used to replace economic growth in specific communities.

Associate-Professor Bernard McKenna

Associate Professor Bernard McKenna focused on the nature and application of wisdom. He pointed out that the application of theory and dogma to economic management and in governance generally can lead to harsh and unintentional harm, if is applied without the ameliorating impact of wisdom.

The complimentary and thorough talks generated vigorous and wide ranging discussion in the workshops raising a number of interesting questions and observations.

One very challenging observation was that the exponential curves of the “Great Acceleration” all follow similar trajectories to that of population. If deforestation, plastic pollution, ocean acidification, falling water tables, disappearing ice etc are all functions of overpopulation, then this leads to the challenging idea that reducing population would solve all the other problems on its own. That in turn leads to the uncomfortably cynical observation that the inaction of the world’s richest nations on climate change and their increasing hostility to immigration could well engineer such an outcome by simply letting three quarters of the world disappear in an ecological catastrophe.

Professor McKenna’s work on Wisdom would obviously not accommodate such a conclusion.

Dick Smith and Geoff Ebbs discuss degrowth

Entrepreneur and adventurer Dick Smith is no stranger to controversy.

Dick Smith on the ABC discussing food sovereignty
Dick Smith appeared on the ABC discussing Australian food production

Over the years he has threatened to run against Tony Abbott, as well as starting a range of ventures that can only be described as profit for a purpose. Dick Smith foods for example was set up with the sole purpose of keeping Australian food processors in Australian hands.

In this interview with Geoff Ebbs, Dick Smith discusses the end of growth and the challenges inherent for capitalism in that concept.

Dick and Geoff discuss growth and capitalism in this two minute snip from a 15 minute interview.

The interview was first aired on The Generator, a weekly radio show on Byron Bay’s Bay FM that ran from 2005 until 2009.

Schoolkids stump speakers at Climate Week Event

Questions from students and millennials went unanswered last night at the first of the Climate Week Speakers Series held by CitySmart at the State Library in South Brisbane last night (Tuesday).

Questions from students and millennials went unanswered last night at the first of the Climate Week Speakers Series held by CitySmart at the State Library in South Brisbane last night (Tuesday).

“How can you maintain hope in the face of the Climate Emergency when it is clear that the general public really does not care?” came the earnest plea from a young woman after articulately the outlining the causes for despair.

“What is the intersection between recycling and climate change?” asked one twelve year-old, whose primary education obviously extends includes an understanding of the issues beyond the majority of panellists on the stage. Certainly they failed to come close to interpreting the question, let alone answering it. “Embedded energy,” would have been a good start, as long as it was followed by a sensible and straightforward explanation.

It was a far cry from what we got, however. Angela Heck of CitySmart did a good job of introducing the guests and managing the panel but she had her work cut out.

The panel at Climate Week Speaker Series
Farmer Greggie, Angela Heck, Roy Tasker, Sabrina Chakori at CitySmart’s Climate WeekSpeakers event



Farmer Gregie from 4 Real Milk has made a name for himself on breakfast television with his colloquial language, his upside down milk bottle trick (in which the cream on the unhomogenised milk keeps the milk in the bottle) and his heartfelt pleas for consumers to consider the plight of farmers. His rhetoric is not up to the job of considering the difficult issues at hand, though, and he manages to terribly mangle the facts on regenerative farming and carbon sequestration, which is a pity as he is making a valid point. The underlying current of climate denial does not help, though it probably explains his popularity on free-to-air TV.

Professor Roy Tasker from Planet Ark presented an overview of DrawDown, Paul Hawken’s roadmap for energy descent aimed at governments and community leaders. He crossed horns with farmer Gregie by pointing to the facts on global meat production and climate change, while conceding that industrial harming produces most pollution as well as harming animals and the local environment. That he did not acknowledge the important role of animals in regenerative farming is partly due to the complexity of the issue and partly due to the mess that Farmer Gregie had already made of the topic.

Tasker also forgot to stress the importance of getting the plans in DrawDown into the hands of our rulers, simply asserting that it is time to act and telling the assembled and experienced activists to write letters and use social media to enhance their activism. That promotion of clicktivism grated on the many climate activists in the room who have been on the barricades for decades and are looking for real messages of hope in what is a frightening and truly dire situation. When two women in their twenties seriously question the value of procreation due to failure to act on this major challenge we need stronger action than facebook is able to provide.

Professor Roy Tasker knows the place is burning
Professor Roy Tasker of Planet Ark knows the world is burning

Unfortunately, he presented an over-simplistic view of smart electricity meters and completely failed to explain their role in building a more flexible electricity network. He also struggled to answer the most basic questions about the energy balance in a domestic home, the role of biogas, and the embedded energy in a solar panel.

Sabrina Chakori more than made up for the lack of brain power in her male companions and presented a lightning walk through the research she has done toward her PhD. She is studying and running a volunteer not for profit Tool Library at the Queensland State Library because she has drawn the conclusion that we need to reconsider the role of growth if we are going to solve the problem of living on a planet with finite resources and a growing population.

She reminded the panel more than once that recycling consumes resources and corrupts materials (see our piece Recycling is just rubbish) and that we cannot consume our way out of the climate crisis and social injustice. Unfortunately, her questioning of the role of economic growth is not going to get her a seat opposite David Koch and so breakfast viewers will continue to see the likes of farmer Gregie assert that volcanoes produce more greenhouse gas than humans instead of an anything approaching reasonable analysis.

Despite my bitching and moaning, CitySmart has done a great job of crafting a panel and thus an event that has both public appeal and generates real discussion. It is just that, like the un-named millennial with whom I opened the article, I cannot help but despair at what appeals to the public.

Relevant articles

https://www.climate.gov/news-features/climate-qa/which-emits-more-carbon-dioxide-volcanoes-or-human-activities

https://thegenerator.news/thegenerator/soundfiles/Heinberg_Lifeboats.mp3

Discussion thrives at Griffith Circular Economy event

Over fifty delegates kicked off a lively discussion about the role of the Circular Economy for small business at Griffith University, Southbank, yesterday, Thursday, 30th May.

The Queensland Small Business Week Event #QSBW had businesses grilling government, academics and practitioners about tools to implement the strategies discussed, government support for innovation and long term impacts on the economy.

Liesl Hull from Suez presented examples of practitioner success
Liesl Hull from Suez presented examples of practitioner success

Geoff Ebbs of Great Notion hosted a panel with Dr Robert Hales, Director of Griffith’s Centre for Sustainable Enterprise and Marjon Wind, of CE Labs and BMI. Speakers inlcuded Syliva Garner from Queensland Department of Environment and Science, Petra Perolini of the Queensland College of Art and Liesl Hull from waste conglomerate Suez.

Griffith University will launch a course for business leaders in July, in the same timeline CE Labs will announce the outcome of the 3 month process they launched in February and Great Notion will begin a roadshow through business networks and chambers of commerce.

Thriving in a low growth economy: Say what?

Wages growth, inflation, interest rates and unemployment are at all-time lows. Traditional economic models are not working. How can small business thrive in a low-growth economy?

Many small business owners find it unhelpful to engage with macro-economic policy. It seems largely irrelevant to our frame of operation. Throughout the rise and fall of empire, fashions in economic theory and the fickle passions of rulers, taverns and cafes, bakers and tailors, butchers and milliners have flourished. Small businesses dominated the main thoroughfares and side streets of the capitals of every civilisation.

People need to eat, to dress, to trade regardless of the forces shaping the geopolitics of the day. Every army has its camp followers; providing the services soldiers demand, at a price.

Of course, retail markets flourish in wealthy, successful empires and struggle when an empire is on its knees. The recent economic crisis in Greece was marked by the absence of advertising in the streets and the threadbare nature of famous retail strips. Similarly, the depression years in Australia and the US showed a dramatic shrinkage in retail activity. Nevertheless, some businesses survived the tough times, building their brands and brand loyalty or simply eking out an existence in their community.

We face an era where globalisation and online trading have undermined many of the roles filled traditionally by small business. Trade is booming, but many small businesses are not. On top of that, we now face challenges to the geopolitical framework, the availability and price of resources and the natural environment that supports and nourishes us.

How best to prepare for this apparently perfect storm?

Fouinder, Geoff Ebbs, digs in the leaf litter
Digging in the leaf litter to gather nutrients might turn up truffles

Is zero-waste enough?

The notion of the Circular Economy is that we can no longer continue the extractive practices of the linear economy; harvesting resources, extracting the most profitable elements and throwing the remainder away. We need to emulate ecosystems, ensuring that what we don’t use ourselves is taken advantage of by another member of the eco-system. A rainforest throws nothing away, clean water flows down its rivers, to be returned by the water cycle. It is a net producer of oxygen and consumes only sunshine. Everything else cycles around within the closed ecosystem.

Implicit in our adoption of this model is the twin notions that the planetary systems that support us can only provide a finite amount of resources and survive a certain level of contamination. To preserve the supportive capacity of those systems, we must limit the extraction of raw materials and the production of waste.

Therefore, the primary focus of the current wave of Circular Economy practitioners is, justifiably, the elimination of waste through re-use, reduction and recycling.

There is an underlying problem, though, that this focus does not capture. That problem is our addiction to growth.

The challenge of growth

Put simply, the challenge of continuous growth is that we live on a finite planet and, at some point, we reach the limit of the planet to support us and so must stop population and consumption growth. This was succinctly framed by Malthus in the eighteenth century when he compared human populations to rabbits on a desert island, and the cycles of population boom and bust that characterise them. His concluding observation was that only some moral imperative could prevent humans from facing the same fate.

David Suzuki recently reframed the problem using a test-tube of nutrients and a population of bacteria that is analysed further under the mathematics of growth. “Eventually, the bacteria will consume 100% of the resources in the test-tube” he notes.

The ability of technology to solve any shortages that arose over the intervening centuries discredited Malthus so completely, that scientists (such as the Club of Rome, writing in the sixties that humanity faced major challenges by the mid-twenty first century) have been largely ignored as alarmist. Indeed, it is a defining characteristic of many contemporary, populist movements around the world that they accuse globalist governments of threatening the rights of ordinary people to consume whatever they want in the name of fictional crises that have been produced simply to scare us into submission. The rhetoric pits personal freedoms against a mythical global good.

At the heart of this hubris is our conviction that we have conquered nature; we confront global collapse as interplanetary gods waving our magical trident to perform geo-engineering on Earth or providing an escape to Mars. This is the type of desperation that led the Easter Islanders to construct huge stone statues in a vain attempt to survive without fresh water.

As a civilisation we can only survive if those of us who can see the big picture, can provide a clear portrait of a radically changed economic system with a complete understanding of what this change means for ordinary people.

The development of tools for small business to thrive in a circular economy is one step in that larger process.

Our dependence on growth

In 2008 I interviewed Dick Smith about his attempts to run Australian Geographic as a non-growth company and Dick Smith Foods as a bulwark against the damage globalisation might be doing to Australia’s food sovereignty.

Among the difficulties he faced at Australian Geographic were rising costs of both overheads and supplies, staff expectations for advancement and the ongoing need for capital investment. Ultimately he sold Australian Geographic as a going concern and the business model reverted to a traditional membership publishing one.

He also conceded defeat of the mission for Dick Smith Foods when the Green family sold their quite sizable food processing business to American interests.

“I remain a capitalist,” he told me, “No other system has provided so much advantage for so many people, but I am not sure how we can avoid its cycles of boom and bust.”

Given such a long period of economic growth, the scale of an imminent downturn is somewhat frightening.

To date, we have assumed an underlying growth in the economy to meet many of our expectations that life will improve over time. It is important to analyse those expectations so that we can better prepare to deal with the changes we face.

The mathematics of growth

Earlier I asserted that the traditional 25 year mortgage is based on a three percent inflation rate. That is because an annual three percent increase results in a doubling of the value of your asset every 25 years. A ten percent increase doubles the value every seven years. This is the basis of exponential growth. A small increase in the rate of growth, reduces the time it takes to double the value of the asset.

The time it takes to double the value of an asset, or the size of a population decreases quickly as you increase the interest rate.
It takes 25 years to double something that increases at 3% a year, only 10 years to double something increasing at 7%

David Suzuki uses this to demonstrate the impact of exponential growth in his famous test tube example. You take a test tube full of a nutrient solution and you add a bacteria that reproduces every second, consuming some nutrients to do so. The population of bacteria doubles each second. At the beginning the test tube is full of nutrients and has one bacterium. At some point, the end of growth (E), the test tube is empty of nutrients and so the population of bacteria cannot grow and will collapse. One second before that (E-1), the test tube will be half full of nutrients and will have half the possible maximum number of bacteria (E-1=50%). Five seconds before the end of growth (E-5) the number of bacteria will be 3% of the theoretical maximum. Do the maths: 50, 25, 12.5, 6.25, 3.125. (E-5=3%)

He puts it this way, “At 3% of the theoretical maximum, most of the bacteria will be blissfully unaware that they are about to go extinct. There is 97% of room for growth and plenty of nutrients. Nothing’s wrong, they will say.”

He makes the point that with the human population doubling every 25 years and many resources already in short supply, most scientists concur that we are in the final moments of a major collapse. “We are currently much closer than the five second point of the test tube example.”

He extends the analogy. “Let us say that a few brilliant bacteria in the test tube have explored the world around them and found three more nutrient laden test tubes nearby. Imagine that they decide to use some of the diminishing resources to go to Mars. Those three test tubes could expand the life of the colony by two seconds! This is not a new beginning, it is just a slight delay of the end.”

The point is that despite our individual and systemic dependence on continous growth, it is not sustainable. We cannot afford it because it leads directly to a collapse of the systems on which we depend.

As a result, we cannot assume a background of growth as the basis of our future planning.

The instinctive mantra of political parties that their role is to nurture and manage economic growth is a convenient fiction in the face of a radical and unpalatable truth. It is one of the reasons we no longer trust them. We know the premise rings hollow.

The role of debt

There is a very simple reason that governments and opposition parties continually talk about economic growth as the central plank in a capitalist democracy. That is, the financial system depends on it.

It is impossible to make a profit by lending money to someone unless they pay you interest. For the borrower to justify those interest payments they must be making more money from their commercial activity than the money costs them.

If you borrow a million dollars to buy a home in Sydney you will pay, over 25 years, another million in interest. If the house has not doubled in value by the time you have paid it off, you have lost money on the deal.

This simple arithmetic is the basis of our housing market, the 25 year loan and the preferred CPI increase of 3%. If inflation sits at 3% then home owners can afford to buy houses, rents are about half the cost of having a mortgage but someone paying off a mortgage pulls in front after 25 years, because they can now live in their property rent free.

That model has been seriously disrupted over the last two decades.

The same logic applies to commercial lending, the share market and international currency exchanges. Without continuous growth, the debt model collapses and so does our current financial system.

In the light of this it is interesting to consider that charging interest on loans was once illegal in Christian Europe (it was known as the crime of Ursury) and remains banned in Islam. The rise of commerce and the collapse of the Church in the face of the industrial revolution has radically changed our thinking about the role of debt.

Is degrowth possible?

There are plenty of organisations promoting the virtues of reducing our footprint: Fly less, buy less, use less, apply thrift, declutter, destress, spend nothing …. All of this is a retailer’s nightmare.

The driving logic of these campaigns is compelling. Consumption is not happiness, the ecosystem that nurtures us is overloaded, we have to reduce our footprint to survive. It is not a question of whether we can implement degrowth, it is a matter of how we survive in the face of a collapse in growth. Degrowth now, is simply an insurance policy against future systemic failure.

How on earth is this view compatible with Thriving in a Circular Economy?

The simple answer is to look at a natural ecosystem like a rainforest.

Overall the forest only consumes sunlight, it captures rainwater and releases clean fresh water into the streams that run out of it. It produces oxygen and consumes carbon from the atmosphere. Other than that, it is a closed system.

But it grows.

It thrives.

It teems with life.

See the article Unpacking the Circular Economy for a detailed analysis about how linear systems within an ecosystem contribute to a circular economy. Ultimately, each of us can grow as we need to, but somehow we have to particpate in the overall ecosystem.

We cannot grow exponentially. We cannot grow at the expense of future generations. But we can grow vigorously, as long as we are part of an ecosystem and ensure that our waste is someone else’s food.

The limits of growth are simply that we cannot grow by exploiting the major resources and throwing the rest away – unless we have an army of parasites, camp followers and dung beetles. Most importantly, those dung beetles, camp followers and parasites must thrive as well. There cannot be a pile of poison at the end of the line which no-one can touch, be accountable for or live with.

That is the condition of entry into the circular economy.

So, the tools of survival?

Small business has a head start.

It is a member of its community. Its stakeholders are generally its staff and customers. If remote financial markets are stakeholders then it is not, for the purposes of this treatise, a small business. Using those stakeholders to build a community network allows the business owner to go beyond profit. Instead of measuring success by how much money you can siphon from the business, start measuring how much good will you have built in your community. It is that good will that will see you through the next depression.

The Koch brothers built a fossil fuel empire that has funded the conservative political movement in the US on the basis that Good Profit is generated by harnessing the goodwill of stakeholders, not by extracting money from them. While I have differences of opinion with them on what constitutes the moral good, I have no disagreement on the application of a moral framework to business. It is essential.

Building a community network is the way to amplify the influence and reach of your business and the perceived value of your brand. Build your community and they will help you build the business, regardless what happens in the macro-economic and geo-political climate.

Secondly, there are a range of very simple management tools that allow you to differentiate between building a sustainable business and participating in the illusion of continuous economic growth.

Some of them are simple, ancient adages. Cash is king, neither a lender nor a borrower be, a stitch in time saves nine.

Behind each of these straightforward observations are centuries of wisdom. By applying the management tools that flow from these simple pearls, you can avoid the crippling bondage of debt, disposable income, built in obsolescence and churn.

You can build a sustainable business that embeds your contribution to the community in the value that you provide to the community. This is the ultimate contribution to the world you live in, and unlike your bank balance, you can take it with you.

Think about it.

It is a truly great notion.

The Small Business advantage

Globalisation, online competition, energy prices, low economic growth: we are all aware of the challenges.

Small business has a natural advantage, however. We are embedded in our community and have the opportunity to build and reinforce our networks of stake holders.

Great Notion, Griffith University and the Circular Economy Labs have put together a networking opportunity and lunch at Soutbank during Small Business Week to discuss the role of small business in the circular economy.

Come to the Executive Boardroom on the 7th floor of QCA at 226 Grey St for a two hour session starting at 10am on Thursday 30th May. Thrive in the circular economy will give small business the chance to discuss the opportunities with the Queensland Government, the Circular Economy Labs and local practitioners. 

Hosted by Great Notion and Griffith University, this is a unique opportunity to talk to the practitioners and the people who are testing the business models and training the practitioners.

Register now

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