Frans van Houten — The Circular Revolution

Just as ecosystems reuse everything in an efficient and purposeful cycle, a “circular” economic system would ensure that products were designed to be part of a value network, within which the reuse and refurbishment of products, components, and materials would ensure the continual re-exploitation of resources.

Project Syndicate
The Circular Revolution
Frans van Houten | Chief Executive Officer of Royal Philips

Like all major transitions in human history, the shift from a linear to a circular economy will be a tumultuous one. It will feature pioneers and naysayers, victories and setbacks. But, if businesses, governments, and consumers each do their part, the Circular Revolution will put the global economy on a path of sustainable long-term growth – and, 500 years from now, people will look back at it as a revolution of Copernican proportions.

Paying attention to land (natural resources, ecology) as a crucial economic factor that is finite and fragile. Is private property a sufficient incentive for appropriate stewardship? Not under the current institutional arrangements that promote unlimited growth and profit based on freely exploiting resources. 

The real tragedy of the commons is turning out to be overuse, depletion and degradation due to privatization under contemporary economic liberalism (neoliberalism) as a socio-economic and political theory. The problem is traceable to power structures, institutional arrangements, negative externality, adverse selection and perverse incentives that market-based theories do not take into account in pursuing innovation and efficiency based on the assumption of (near) perfect competition.

Clean Technica — Amount Of Raw Materials Needed To Sustain Economies Of Developed World Is Significantly Underestimated, Research Finds

Amount Of Raw Materials Needed To Sustain Economies Of Developed World Is Significantly Underestimated, Research Finds (via Clean Technica)

The true raw material footprint of the world’s leading economies has been revealed thanks to new research — and the findings don’t bode well, the amount of raw materials necessary to sustain the economies of the developed world is considerably…

---

Leo Hickman — GRANTHAM: Capitalism Is Great, But It Assigns No Value To Your Grandchildren

Jeremy Grantham: "Capitalism does millions of things better than the alternatives. It balances supply and demand in an elegant way that central planning has never come close to. However, it is totally ill-equipped to deal with a small handful of issues.

"Unfortunately, today, they are the issues that are absolutely central to our long-term wellbeing and even survival. It doesn't think long-term very well because of high discount rate structure."

Business Insider
GRANTHAM: Capitalism Is Great, But It Assigns No Value To Your Grandchildren
Leo Hickman, The Telegraph

Jeremy Grantham gives a shout out to Kenneth Boulding, author of Evolutionary Economics, Ecodynamics, The World as a Total System, The Economics of Human Betterment, and many other works. Boulding was also aware of monetary economics, sectoral balances and functional finance. See, for instance, Economic Analysis, rev. ed., 1948, p. 399-402. See also L. Randall Wray, "Kenneth Boulding's Reconstruction of Macroeconomics," Review of Social Economy; December 1997.

Grantham: One of my new heroes is an economist called Kenneth Boulding who, at 22, got a paper into Keynes's journal. At the age of about 50 he realised that economics was not taking its job seriously, that it was not interested in utility, in real serious improvement in the world, but that it was increasingly interested in new, elegant mathematical theories designed to get career advancement, over usefulness.

He said the only people who believe you can have compound growth in a finite world are either mad men or economists. He also said: "Mathematics has brought rigor to economics. Unfortunately, it also brought mortis."

This is a fairly long interview, but it is worth reading for several reasons. One is, of course, that Jeremy Grantham has been around for a long time and speaks from deep experience. In addition, he is essentially saying that what matters is real resources rather than money.

We don't build things on paper and yet we've begun to talk as if we do. People say that the Chinese have built all their railroads on debt, to which I say, "no, they haven't". They've built them with real Chinese people and real cement and real steel that are part of the real world.