The Green Gap

In the Cold War, we feared a Missile Gap was a strategic weakness. Nowadays, we must awaken to the fact that the Green Gap is true strategic weakness: the nations whose economies will thrive in the coming years will not be those with the biggest factories, but those with the most sustainable, efficient, and ecological markets. What we require is a Strategic "Green Reserve" of ecological design to weather the coming changes that both climate and resource scarcity will force on the international economy.

Monday, 14 March 2011

"Burning down your house to generate heat"

An excellent post by blogger Ian Welsh.

"An actual capitalist society (which we do not live in) makes cashing out very difficult.  You don’t want people creating money by destroying value, and you don’t want viable ongoing concerns arbitrarily destroyed or weakened.  Whenever a company is bought out by borrowing the money, then making that company take on a loan to pay back the original loan and then another loan to pay the buyers even more money, money has been extracted while value has been destroyed (layoffs and other cost cutting inevitably follow)."

Great analysis of a problem central to our current economic system - that we sacrifice capital for currency. Just like in an ecosystem, the greater the amount of capital, the more of a buffer we have against shocks, and the more carrying capacity the system has. The more capital exists, and by that I mean ALL capital - natural and man-made, the richer the economy and the greater its ability to support life. The company that sacrifices capital to make a profit is, in effect, eating itself.

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