Third Paradigm is an out-of-the-box thinktank on community sovereignty and regenerative economics.
We look at how to take back our cities, farmland and water; our money, production and trade; our media, education and culture, our religion and even our God.
We present a people's history of the Bible and a parent's view on how to raise giving kids in a taking world.
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On my recent trip to DC I attended the Green Festival. Two of the speakers I was especially interested in were Pablo Salon, Bolivia's ambassador to the UN, and Claudia Solerno, Venezuela's Presidential Envoy on Climate Justice. You might remember her - she became famous for pounding her fist on the table in Copenhagen and declaring that the US had hijacked the proceedings with the equivalent of a coup. At the Green Festival she gave an equally passionate, if less percussive, talk. After it, I waited to speak with her while she was thronged by interviewers from Pacifica Radio and Latin American TV. Finally I pressed my way to within a foot of her and she turned.
I told her my hope that Venezuela and the ALBA nations come to the rescue of Honduras. She nodded sympathetically. I then said that US hegemony was a problem that was solving itself. As the petrodollar stops being the exclusive currency of the oil bourse - in other words, the only type of money in which oil can be bought - nations will start flushing dollars out of their central banks, creating a market awash in dollars. The value of what the dollar buys abroad will plummet, leading to hyperinflation. Agribusiness, which sells to the highest bidder, will ship our own crops - probably still subsidized by our tax dollars - into emerging markets. The ensuing food crisis will be far worse for us than it was for Cuba during the hunger years.
"As one mother to another," I said, "I want to ask a favor. When the tables are turned, I hope that Venezuela will remember that the United States people and the United States government are not the same. We have no control over our government. We thought we did when we elected Obama, but you see how that's turned out. By the time we're willing to consider the kinds of things that could turn it around it will be too late."
Claudia looked at me, opened her arms, and hugged me. Not a wimpy American hug but un abrazo, a hard hug that means it, and goes on longer than is polite. In Quechua they sign their letters, to the best of my pronunciation, Marqakuyki, wauqicha: a strong hug for you sister and brother. It was this kind of hug of solidarity, mother to mother. I walked away floating on air.
Claudia knew that I wasn't exaggerating. From Venezuela they can see the writing on the wall, even if we can't. In this episode we're going to decipher some of that writing and see if we can understand what's happening before it's too late.
First we'll start by reviewing what money is. With this in mind, we'll list the features that a successful economic turnaround would need to have. For this exercise, my economics group imagined that we had the freedom to set up any system we wanted for Santa Cruz County. What would be the criterion by which we'd determine whether it was working? We'll explain how the strategies would be opposite for a situation of so-called "normal" inflation and a circumstance of hyperinflation.
But first, let's hear some poems. These are Each of Us Has a Name by Zelda, For the Sleepwalkers by Edward Hirsch, and Everything is Going to be All Right by Derek Mahon. The music is Welcome Ghosts from Explosions in the Sky. This first poem is dedicated to the people of Haiti.
We're talking about economics and the features that a successful system would need to have. Most people see a fair economic system as one that leads to a more equitable distribution of money, or of goods and services. But we'll begin by asking what money is, as we did in the second show of Third Paradigm, called Doubting the Existence of Money. Wikipedia defines money as an object used as a medium of exchange. But it then clarifies that the vast majority of money isn't an object at all - it's an idea, an intangible concept. One might say, a figment of the imagination, or the construct of a dream. Exactly, my gift economy friends say, that's why we should freely distribute the goods and services without the use of money. I agree with them when it comes to services because our time is ours to give. It's the one thing we own completely. But do we own the goods our money "buys?" Each product is the sum of labor and resources. If the earth's resources can't be monopolized, but only borrowed by the person who uses them, who really owns the product? Of course it's the person whose labor made it.
If money symbolizes an exchange of labor, what does our labor do for the person who made the goods we "buy?" Our labor serves the people who pay us - people who have more money than we do. Our labor, in other words, enriches the rich. If you're a teacher, you're working for the government to justify taxes. If you're a doctor, you're working for the insurance companies to justify premiums. Even if we look at the students and the patients we help, they're not the ones making the shoes or shirts our money buys. We're a services labor force but man cannot live by services alone... nor woman.
And so even though our money's created by debt, it's actually backed by theft. If our money didn't buy cheap products made under a standard of living we'd never tolerate, we couldn't live. We're getting these products at a steal because they are stolen, through theft of the resources, sovereignty, and human rights of foreigners and immigrants. This theft-backed currency is what sells us on the debt and the taxes. If we were growing food and making the things that we traded with our neighbor, would we tolerate 90% of the value of the trade going to a distant and unresponsive government? Would we give one-third of our hard-earned cash to the banks in mortgage payments? I don't think so.
On the other hand, we pay an arm and a leg for things that should be free or almost free - housing, daycare, healthcare, education, and retirement. These are all things that families and communities used to do for each other, things that were a point of honor to provide. But these stretch us so thin, there's very little left for the people who provide our food and goods. According to the Department of Labor, the average family spends only 7% of their budget on food at home, although they spend almost that much on food out. Since the actual laborer gets little of the money paid at the store, the value of their time is minimal.
I looked at a book called Fast Food/Slow Food: the Cultural Economy of the Global Food System by Richard R. Wilk. One of the studies looked at the Yapese people, who are subsistence farmers and fishermen. The family averaged about 20 hours a week spent producing food. That would equal half of a US family's budget, if the farmer's time was valued the same as ours. Of course the food we eat is much more labor-intensive than the Yapese diet of taro root and fish. If we were producing all of our own food or trading for it, it would take the majority of our time, not 7%. With none of our labor benefiting the farm worker, and less than 7% of our income, we're like birds stealing the bread out from under the little red hen's nose. Remember that children's story? We're the ones saying "Not I" to planting, picking, threshing, and grinding the wheat, but still we think our money entitles us to take it away from the worker when it's time to eat it. Before we look at the features that an economic plan would need to have in order to change this, let's listen to a John Hiatt song for the journey called Before I Go.
That was John Hiatt with "Before I Go" from his Crossing Muddy Waters CD. You're listening to Third Paradigm and we're talking about what the criterion would be by which you'd measure a plan to turn around the economy. Our society gauges success from a consumer perspective - the ability of people to buy products and services. But we've questioned whether that was enough, or even a step in the right direction. My Glocal Economics class saw any society that was 98% dependent on other people for their food as unsustainable, especially when there was nothing we produced in return. Without reciprocity or self-sufficiency, our lifestyles teeter on the edge of a crumbling dollar. And so these are the features we listed as important to a functional plan:
Once we wrote the features an economic plan should have, it was time to develop the plan to develop the plan. Someone once told me that in order to cope with all the depressing details of how economics works, people first need a vision. They have to be able to picture a way that it could be. Well, if hope is the things with wings, a vision is the thing with feet. It needs to be solidly grounded in reality and be able to get from here to there, step by step. But while we held to laws of physics, i.e. everyone can't consume without anyone producing, we didn't get bogged down with the nonstarter that "they'll never let us do this." Our assumption was that, when things get bad enough, people will start to consider things they wouldn't now. Our shared certainty was that they will get bad enough.
What's next, after the stock bubble, the housing bubble, double-digit unemployment, and 40% tuition hikes? The mother of all sharks in the water is hyperinflation. This is where the value of the dollar plummets. Besides the US-backed petrodollar no longer being the reserve currency required to buy oil, we've just diluted our money by $600 billion that we handed to the bankers, and the US strongarm tactics to get China to devalue the renminbi are backfiring. David Bayer in Peru just sent me the most concise and clear-thinking article I've read on this topic. It's by Michael Hudson, and is called Krugman, China and the Role of Finance. You can link to it from our website at thirdparadigm.org. This is an extremely important article for understanding our economic situation and we'll discuss it more in a future episode.
In a situation of hyperinflation, the cost of debt and services would deflate, along with our incomes and bank accounts, but the cost of food and goods would skyrocket. One of the key features of our economic plan is to cause this to happen gradually, rather than the jolt we're facing now. How do you protect yourself in a situation of hyperinflation? The strategy is, not only different from a situation of inflation, but is its opposite in every way. For inflation, you need to put money at risk in the stock market or in real estate speculation, so it keeps the same value relative to what it buys. But for hyperinflation, you need to invest where you'll get a return in real goods, not money - things like local food production. For inflation, you're in competition to make more than your neighbors, because the rising tide of inflation will sink your boat if it's anchored to a fixed marker. But for hyperinflation, investing in community will be more important than money in keeping you afloat. Do you really want to be the only one with a lifeboat when the Titanic sinks?
In closing, Black Friday has just ushered in the season of mourning for those of us who care about the people who work in the Chinese, Indonesian, and Mexican forced labor camps known as sweatshops. Perhaps, with the dropping dollar, the era of cheap junk is ending, through no fault of our own. But in the meantime, you can support ethical buying for the holidays. Fair Trade USA has twelve days of The Ultimate Fair Trade Holiday Gift Guide, featuring our friends at Fair Trade Sports. But Fair Trade Sports has gone one better, linking to the holiday guide at Shop to Stop Slavery. A website called Free2Work has an I-phone app you can download to check out the labor practices of brand names while you're shopping. And local surfer-activist Kyle Thiermann has come out with a video called Buy Local, Surf Global, which features Annie Leonard and the Sri Lankan factories that make a lot of our apparel. However, it also features Pacific Wave, the local store that sponsors Kyle.
For Third Paradigm this has been Tereza Coraggio. Thanks to Mike Scirocco for web editing, and to Robin Upton and Ken Dowst for help with sound production. We go out with a song by Iron & Wine, which is the stage name for Samuel Beam. Sam has five daughters, so he's two up on me. However, I now have three teenage girls in the house all at the same time. As one house of girls to another, I wish him luck. This is Freedom Hangs Like Heaven from his Woman King CD.
Thank you for listening.