The Economics of Happiness

Yesterday I turned on the radio and listened to a song. One of the lines was "when you don't know when enough is enough you'll lose everything". I was surprised. It was a deja vu. I have been thinking about this intensively over the last week and had some discussions with friends on this very topic. This is ancient wisdom. Have a look at these quotes:

• "The secret to happiness is being satisfied with enough" Thomas Aquinas
• "When there is no desire, all things are at peace" Lao Tse
• "The secret of happiness is not found in seeking more, but in the capacity to enjoy less." Socrates
• "Happiness is knowing when 'enough is enough.'" Thich Nhat Hanh, Vietnamese Buddhist monk
• "Rather than make money to live the way you want, figure out how to live the way you want without money." One of my friends

A handful of economists started studying "the economy of happiness". The first book under this title was published in 1906. That's more than a century ago. Very recently a documentary was released under the same title. Wikipedia has an article on "Happiness Economics". Bhutan was probably the first country in the 20th century to introduce a Gross National Happiness index to contrast the standard GNP. Apparently since 1999 they are measure this quantitatively. Having it on a public agenda might have helped bring Bhutan to be considered the 8th most happy nation on our planet. Now other countries have picked up on this (e.g. Thailand) and others are currently discussing its introduction (UK, France).

Mark Anielski has written a more recent book with the title "The Economics of Happiness: Building Genuine Wealth". He uses a stylized 5-petal flower to visualize 5 factors of happiness or genuine wealth. For more details on what he means by that listen to his 80-min talk.

But back to the core: we need to know when enough is enough. A financial person would put it: we need to know when it is better to reduce spending instead of increasing income (in order to become happier). My friend calls it the dual problem. From a mathematical economics standpoint either approach from the dual sides should lead to a solution. From an isolated viewpoint one can balance a budget by either earning more or spending less. From a more holistic approach taking resource depletion and natural balances into account, it seems obvious that if spending or using less can lead to the same goal (of a balanced budget and a happy life) then this seems not only the preferred but the only true solution to the problem.

Socially we are far behind or far away from accepting this truth. The materially rich are admired, the ones who earn a lot of money are called successful, but the materialistically or monetary humble ones are disrespectfully called cheapskates. It is time to shift our attitude. Why not call the materially rich ones "spendthrifts" and the frugal ones "resource efficient"?

My friend also views the quote "A penny saved is a penny earned" by Ben Franklin equivalent to the above ones. I guess a penny saved can lead to happiness. This brings us (once again) to Voluntary Simplicity and Simple Living. Voluntary simplicity can work beyond the individual. The one fact that all happiness researchers agree is that happiness is relative. In other words, a poor amongst poor is as happy as a rich amongst the rich. Furthermore, a poor amongst poor is happier than a rich amongst the even more rich. If a whole nation or the whole of mankind were to make a step towards a simpler life we would all stay at least equally happy, if not become more happy due to the same factors that individuals attain happiness via simplicity (more spare time, less stress, less worries, less dependencies, more social time, more social ties, etc.).

The reverse is not an option. Voluntary wastefulness as many practice it today will lead us all into ruin, either socially or ecologically. We desperately need an attitude shift, we need to first recognize and accept, then embrace and cheer that less can be more satisfying.

Agroinnovations

Yesterday I stumbled across the www.agroinnovations.com site. Frank Aragona runs both a blog and a podcast. Podcasts are mostly 30-minutes episodes and the corresponding blog entries provide additional textual information as well as videos related to the individual podcast episodes. The podcasts are of extremely high quality. The Agroinnovations podcast is now in its 5th year with more than a 115 episodes published. His interviews include the who-is-who of thinkers in the permaculture, transition, and eco-agriculture movements and related fields. I urge you to browse through his podcast list. You will find interviews with Bill Mollison, Larry Korn, P.A. Yeomans, Rob Hopkins, Paul Stamets, and many more.

Money

Money is such a crucial resource in our lives, yet nobody teaches us about money. There are no classes in high school. Most people have no true understanding where money is coming from. An expert on teaching about money is Bill Still. In 1995 he produced the classic documentary on money entitled "The Money Masters". This video is available here and here. He just released for free his updated version published in 2009 entitled "The Secrets of Oz". A must-watch video for anyone. Have a look at Bill's channel.

The One Straw Revolution

Mr. Masanobu Fukuoka is one of the key names in the creation of the permaculture movement. He himself would not see it that way. Several countries had a figure stand out in this field. They were visionaries that were decades ahead of their time. In Australia there is Bill Mollisson, in Austria Sepp Holzer and in Japan it was Masanobu Fukuoka. They are legends, rightfully so.

Already in 1975 he wrote the classic book "The One Straw Revolution" sometimes nicknamed "Zen and the Art of Farming". This book is an easy read, just some 100 pages. I had heard and read a lot about him and his techniques. I had some preconceived notion what the book would be about. But it harbored a few surprises for me. His point of view is that we cannot and will not know or understand nature. "When [we] think [we] are beginning to understand nature, [we] can be sure that [we] are on the wrong track." Basically his beliefs are that we cannot truly understand anything. Another key opinion is that he sees nature as something highly connected. Nothing can be seen in isolation. However, our world and society are too complex. He experienced that many scientists came to study his fields but each looked at it only from one very specific angle according to his research speciality. He knew that such a narrow-sighted approach would not lead to insights or results. According to his thoughts it would require scientists, researchers, politicians, artists, poets, philosophers, men of religion, and farmers to gather jointly to talk things over together.

He was on a search of effective farming that is simple. He always asked himself what can I remove from typical agriculture while still keeping it effective. Slowly and with many tries and failures he reduced agriculture to the bare minimum input while not losing and even increasing health and output. In his way of farming external energetic input is at a minimum. He says that putting "doing nothing" into practice is the one thing the farmer should strive to accomplish. The farmer is freed from useless or even countrproductive chores and free to take a midday nap or write poetry.

His method, he calls it no-method, is based on four principles.

• no cultivation: no plowing or turning of the soil
• no chemical fertilizers or prepared compost: For fertilizer Mr. Fukuoka grows a leguminous cover of white clover, returns the threshed straw to the fields, and adds a little poultry manure
• no weeding, no herbicides: Straw mulch, a ground cover of white clover interplanted with the crops, and temporary flooding provide effective weed control in his fields.
• no pesticides, no chemicals: The sensible approach to disease and insect control is to grow sturdy crops in a healthy environment (rather than weak - often laboratory made - crops optimized for size or color).

I liked this phrase a lot: "Before researchers become researchers, they should become philosophers. They should consider what the human goal is." He certainly views farmers as philosophers. "The ultimate goal of farming is not the growing of crops, but the cultivation and perfection of human beings." As you can see "The One Straw Revolution" is not only a book on agriculture or permaculture, it is a book on life. "In nature, there is life and death, and nature is joyful. In human society, there is life and death, and people live in sorrow." Isn't it time we change our objectives?

PS: Just found this video "The One Straw Revolution" that brings the book in context with Larry Korn , translator of the book, who worked for the old master for a total of 2.5 years. Here I also found the reference to the web site www.onestrawrevolution.net. More videos and links are to be found there.

Awareness Test

Do this awareness test without any cheating. What does tell you about our perception and about what we think we know? Let's walk through life with our eyes wide open.

Monsanto and the US State Department

WikiLeaks reported that the US Ambassador to France planned pain-causing "retaliation" against France over the ban on Monsanto's GMO corn. Need I say more? Who are your friends? Big business? Governments? Nah, there is no difference between these two anymore.

Vive la France.

New Start

Today, 1-1-11, is another opportunity for a new start. A TV-like internet channel was opened today that promises to cover these topics with a daily link to a short video:

• local food production
• permaculture
• energy
• transportation
• community response
• co-housing
• enlightened simplicity
• and positive transition initiatives of all kinds

Sounds interesting, today in its first "episode" the link was to a 5-min video with Geoff Lawton on a permaculture food forest in Vietnam. The TV-like channel is called "Next World TV". If you subscribe you get one email daily with a link to a relevant video or video segment.

Zone of Influence

2011 is approaching. It is natural to think about the upcoming year. The way I see our mid and long term future is as follows. Next on the horizon in time is another big financial crisis that will hit the US, and again it will be mortgage-based. As the US is so big and the dollar so influential this crisis will indirectly and slowly affect other nations, i.e. the EU and the rest of the world. Both the US and the EU will go through a period of recession of 1 to 3 decades. It will not happen instantaneously or especially in the EU, all changes will be slow and gradual. Example changes will be: salary 5% down, unemployment 5% up, food quality 5% down, etc. There won't be this cataclysmic big event, this big crisis is not about suddenly there will be no food or no petrol, instead the typical living standard will be gradually but consistently going qualitatively downhill in most nations. Civil rights will be reduced step by step. Governmental and corporate scams will become wilder and weirder. Our personal sanity and well being must come from the immediate environment around us: our family, friends and neighbors. Despite Tea Parties, Transition Movements and many more activist groups I see hardly any change around me as I walk through the city. Above all I see no change in how-we-do-business and in politics, no corporate ethical change, no politics for the masses. Since it is hard to find positive political change, there is a high level of doubt that in 10 years we have advanced politically into a more ethical, just and sustainable society. I sound pessimistic. Unfortunately. But it just means as a way of safety and a way of moving forward we must focus on our small and immediate surrounding where we do can make change: our homes, our gardens, our neighbors, a small community group in our village or city, etc.

At the national level, we are very reactive: only when the oil prices really hurt and the cars stand idle in the parking lots will be seriously think about other modes and technologies of transportation. We could be so pro-active as a society, but instead we are forced to behave in certain ways through laws and regulations which includes building codes, tax laws, governmental incentive schemes, and so on. Pro-active behavior currently only has room at a personal level, where an individual takes the burden upon himself. We must take this challenge and shoulder this burden for the sake of our morality, our kids and our long-term hope.

Religion and Sustainability

Just by chance I stumbled across this book today on Christmas Eve. After reading a few pages it dawned on me that this book is very appropriate for this religious day. The title is "Religion and agriculture: sustainability in Christianity and Buddhism" by Lindsay Falvey. It is available freely. In the introduction it states that it uses "sustainability as the meeting point of science and religion". It raises questions like "Why chose agriculture as the entry point to sustainability?" "Why even relate religion to the search for sustainability?" "What is sustainability anyway?" For 300 pages it then goes into details on western and eastern religions and how they lead and relate to sustainability. I haven't read all the way through it but if you are interested in any two of the three topics of agriculture, sustainability and religion/spirituality, then this book might be of interest to you. It certainly is spiritually motivating, a good book to start reading on December 24th.

Collaborative Consumption

The term "Collaborative Consumption" was coind in 2007 and in 2010 pushed by Rachel Botsman and Roo Rogers. It is about shared owning, owning access but not the product, and community ownership. This leads to community consumption. Rachel and Roo have written a book "What's Mine Is Yours: The Rise of Collaborative Consumption" and created the matching website www.collaborativeconsumption.com. It gives some good ideas on how collaborative technology (internet and its services) enabled new concepts of sharing (car sharing, ride sharing, real-estate sharing, etc.) and reuse (swapping and donating products). If you are more into audio and moving pictures, have a look here at collaborative consumption videos.

Freecycle

Recycle. Free + recycle = Freecycle. Hence, www.freecycle.org. The idea of Freecycle is so simple. We all have things we throw out, and our trash can be somebody else's treasure. Whenever we throw away an old door, a used book, a child's toy, we fill up the landfills and these items might be reused by somebody else. Freecycle is an online network bringing people together to form a local community. You announce an item that you want to give away for free, and somebody from the community can come by and pick it up. Freecycle.org's mission is: "to build a worldwide gifting movement that reduces waste, saves precious resources and eases the burden on our landfills while enabling our members to benefit from the strength of a larger community." Go ahead, join or start your local Freecycle community.

Home Improvement

If you are planning or working on some home improvement project or even a new home, have a look at these two recent presentations from TED. Both these videos give inspirational ideas on sustainable construction and building. Dan Phillips builds unique and personal houses from reclaimed materials. One can pick up many creative thoughts from him.

John Hardy has created a green school and this video presents his green school dream in Bali. It was interesting to see the first proposal for his school as made by an apparently traditional architect: all building as square boxes and the largest box in the center was labeled "the Administration Complex". It seemed so wrong that the administration should be the largest structure on the school campus. A nagging inner voice hinted that any school should be about teaching and eduction and accordingly the largest building should be dedicated to that objective. It was also speaking of itself to call it a "Complex" implying - even if only at a Freudian level - that it was a complex thing or complex solutions. We should strive for simplicity not complexity. Anyway, this "typical" architectural proposal was rejected and a set of building was realized following ideas from permaculture. The central building was designed as an intertwined double spiral which looked like a permaculture pattern to me. The building was named "Heart of School" (instead of Administration Complex), and yes part of it houses the administration facilities. As material they used bamboo and local natural materials. I found it creative and an idea worth copying to use thrown away glass panel from old cars with white paper placed behind it as white board for kids. Now that is cheap and functional design.

Refuse - reduce - reuse - recycle. These builders give us some examples of how it can be done and how beautiful the result can be. Maybe it will influence our next personal home improvement project.

Gold

Just like silver, gold is also up and climbing. And there are lots of news around gold.

First, there is World Bank chief Bob Zoellick who said "Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." He made further comments that hinted at a gold standard. Amazing, the chief of the World Bank hinting about a gold standard. That is massive news. It was reported instantly. The next day came all the expected retractions and he said he was misinterpreted and that in fact he did not call for a gold standard.

One may think about this as a slip of the tongue or true misinterpretation. Independent of that, he was certainly right when he said "Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." Why? Gold has been made an official currency for collaterals of large financial transactions. A press announcement from ICE states: "IntercontinentalExchange (ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, today announced that ICE Clear Europe will accept gold bullion as collateral for all energy and credit default swaps (CDS) transactions beginning 22 November 2010." With ICE putting this policy in place other operators and clearing houses will have a competitive incentive to follow.

Gold is gaining in importance in the financial world it seems.

Silver

Silver is acting unusually in the markets. In 2010, silver has doubled. The 2010 low-price was $14.82. The 2010 high mark so far was $28.638. What could justify such insane increase in the silver price. Speculation is the only possible answer. When can we get to a real economy based on real productivity, producing real and useful goods? We must move away from a speculative, financial economy where gains and losses are all in numbers if we want to avoid bursting bubbles and a unfair and unjust society.

A friend sent me these links: JP Morgan and HSBC are manipulating the silver market since 2008. This is not the first time in history that banks or rich individuals are manipulating the silver market. The interesting part about this current manipulation is that it was picked up by the independent news and activist groups. People like Max Keiser and Alex Jones rallied and promoted people to buy silver in order to financially hurt JP Morgan and cohorts. It is a risky business to put yourself as a single small investor against the bullies like JP Morgan. Nonetheless, it is fascinating strategy - although uncertain in success - to band together many small investors to bring down a giant bank by betting against it on a market gamble, in this case the silver market. According to Max Keiser as long as the silver price remains higher than $25/oz. JP Morgan is punished. As a last note: let's not forget that this war cry to buy silver to crash JP Morgan is also a form of silver market manipulation. But at least this is a public one talked about on the internet, while JP Morgan's shorting is a stealth maneuver hidden from the public.

PS: About 2 weeks later this was posted: Is J.P. Morgan Getting Squeezed in Silver Market? According to this JP Morgan is now manipulating the copper market to offset losses in the silver market.

European State of Affairs

European state of affair is very gloomy. First Iceland. Then Greece. Now Ireland. Next is Portugal. And the prediction is that Spain will follow. Thereafter maybe Italy. Many people have predicted it. It did happen just as predicted. Only the governments said it would never happen. Take Ireland, up to the very last day, the government of Ireland was denying any problems and talks to the IMF and the EU about a rescue plan. The next day it was all official. How can anyone lie so blatantly?

About Spain? Some say the the European Financial Stability Facility will be out of funds to rescue Spain. Will they increment the fund? Where would the money come from? EU printing presses? US printing presses? Currently the Euro/US$ exchange rate is approaching 1.50. The Euro is very strong and the EU economy is suffering under it. This seems a good opportunity to print Euros, rather taking a $-based credit from the US (IMF or similar). Printing Euros would weaken the Euro currency and remove pressure from EU companies, but it would be against US wishes as the only interest of the US is to flood the whole world with printed US dollars. The gain for the US of sending $-based credits to the EU would be 3-fold: more dependency of the whole world on the US currency, weakening the US dollar even more thereby strengthening US companies, and profiting from future interest payments. So, will the political strength of the US be powerful enough to force the EU to take a US credit rather than print its own Euro money?

Will Spain be rescued? I am sure about it, the question is only how, i.e. by whom.

A Lesson in History

This TED video presentation shows a small part of history, as "seen from the other side". It outlines the history of the Native American Lakotah tribe since 1824. History is always written by the victor. 15 griping and sad minutes of video by Aaron Huey. Minority groups and natives around the world have and are still suffering the same treatment.

Germany upholds Restrictions on GMO

This week a German court voted in favor on keeping current restrictions on planting and growing GMO (Genetically Modified Organisms) plants. Overall there is good news and there is worrisome news. The good news:

• Existing restrictions on distance and liability of genetically polluting neighboring fields are kept in place. [Proving pollution and the source of pollution however seems dauntingly difficult.] 
• In April 2009, Germany's government banned commercial production of GMO maize type MON 810 GMO from U.S. biotech giant Monsanto on health concerns despite European Union safety approval.
  

The worrisome news:

• In 2010 Germany accepted an EU decision to approve commercial cultivation of the GMO potato Amflora developed by German group BASF for industrial starches, not human food.
• The EU is responsible for GMO approvals in the bloc, but is considering new rules to permit individual member states to decide whether biotech crops are cultivated in their countries.

Slowly the rules and laws safeguarding us from GM pollution in the EU are eroding. It seems that the industry (Monsanto, BASF, Bayer, etc.) is partially successfully working on a divide and conquer strategy.

The Story of Electronics

It started with The Story of Stuff. Annie Leonard presents her thoughts on the sad story of the production process in a concise, yet cheerful manner. Her upbeat attitude to solve these critical issues make her educational videos nearly fun to watch. Annie Leonard made the Story of Stuff a great story. Over the last four years she has added to it, and made a number of sequels: The Story of Cosmetics, The Story of Bottled Water, etc. And now: The Story of Electronics, 7 minutes worth watching. Here is her site: The Story of Stuff, and here is her YouTube channel. Perfect for us as adults, perfect also to teach teenagers the role of corporations and the outsourcing of cost to other nations. Well done Annie.

Economy

This phrase taken from Tim Jackson's talk "An Economic Reality Check" at TED (time 7:00) sums it up pretty well. No additional comment needs to be added: The world we live in is an economy in which we the people are "being persuaded to spend money we don't have on things we don't need, to create impressions that don't last, on people we don't care about."

Cash

I like Cash. No, not the green bills, I am talking about Johnny Cash. I admire his songs and lyrics. However, listening to his songs we too often get reminded that things aren't changing. The 1960s and 2010. It is all the same. One of the biggest problems - especially for the poor people and the poor nations - remains debt.

You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter, don't you call me, 'cause I can't go;
I owe my soul to the company store.

This song under the title "Sixteen Tons" was first recorded in 1946 and later in 1987 by Johnny Cash. How far have we come? It is deja vu all over again. Debt is dictating our lives and enchaining us as individuals as well as at the national level. Today we owe our souls to the bank (or the World Bank and IMF in the case of nations).

And environmental pollution is also not something new. He sung about it in "Don't go near the water" in 1974. Here is a video version that will correlate words from 1974 with photos from 2010. Another one of my favorites is "The Man in Black". Listen to it if you have time.