Economic Reconstruction

The following is an essay I wrote for the 2016 essay competition by the Next System Project.

The Turquoise Society: From self-destruction to self-regeneration

It is possible to build a better world. We have the technology, but we are missing the framework of ideas that we need to create global civilization 2.0. This essay will present a political/economic/environmental framework, or paradigm, that I hope will contribute to the project of turning our state of affairs around.

The progressive movement needs a new way to understand both the economy and the state. Mainstream economics, as I will argue, lays at the center of the conservative assault on the state, but mainstream economics also ignores the environment. We need a new economics which is centered around production, not exchange as in mainstream economics. Production means not only the ability to generate goods and services and thereby create the conditions for widespread prosperity, but also the production of life in ecosystems. In other words, production means producing life, both for people and for all other living things on the planet.

I am calling a society that produces prosperity for both humans and all life a ‘turquoise society’ because turquoise is a combination of the green of environmentalism, as well as the blue of the blue-collar worker in manufacturing. I will argue that manufacturing is the central process in a human economy, and manufacturing must and can be done in such a way that manufacturing supports the environment, instead of destroying it.

In addition, the image of turquoise should suggest the influence of Native American culture. The indigenous peoples of the world usually have an outlook which will be critical to the continued existence of global civilization: to interact with the natural world in such a way that ecosystems are not destroyed, or put another way, to interact with the environment in such a way that the life and wealth-generating capacity of ecosystems are regenerated, in a natural way. For instance, the
Menominee tribe of Wisconsin has been sustainably harvesting their forests for hundreds of years, and the forest is thriving in all respects, while the surrounding areas have either been denuded or are sterile tree plantations. The concept of sustainability in this essay will mean to be sustainable indefinitely; the concept does not mean ‘to reduce the rate of destruction’, or ‘to keep things going until some imaginary technology bails us out’. Sustainability means that the economy could keep going for at least thousands of years.
I am also invoking an indigenous peoples’ framework, perhaps somewhat liberally, to imply a widespread democratization of not just the political system, but the economic system as well. The concept of economic democracy will be explored later in this essay.

The key to understanding both the human economy and ecosystems is to understand the idea of physical capital. Regrettably, mainstream economics does not understand this concept, which brings the usefulness of the whole enterprise of mainstream economics into question. The ‘magic’ of physical capital, both human and ecological, is this: physical capital regenerates itself and also provides the wealth and life that sustains both human society and ecosystems. In ecosystems this is easy to understand — organisms reproduce to create more of themselves, and therefore they provide more physical (natural) capital (Hawken et al 1999). They also provide the food or inputs for other organisms. Outputs become inputs, outputs don’t become pollution. In conjunction with the inanimate geography and resources of an area, all of this physical capital forms a self-regenerating ecosystem.

Human economies use a similar process, although it is generally not understood this way. The breakthrough technological innovation of the Homo genus, predating Homo Sapiens, was to use a piece of technology — originally a hammer stone — to create another tool, for example other cutting tools such as spear heads. No other species can use a tool to make a tool. Skip forward tens of thousands of years, and we have sophisticated machinery called machine tools which, in conjunction with the modern-day equivalent of hammer stone makers, machinists, can be used to create pieces for more machine tools, and for all other kinds of machinery as well. There are a whole suite of technologies which I will go into later that collectively I call ‘reproduction machinery’ that sit at the center of human economies, and which collectively make possible the production of all goods and services that we use.

So all life, including human societies, depend on self-regenerating physical capital to survive and thrive. Humans use not only their own physical capital but the physical capital of ecosystems. A turquoise economy would include ecosystems within its frame of reference; the successful reproduction of physical capital in ecosystems would be as important as the physical capital in human economies. But here is the problem: in some countries, such as the United States, both the physical capital of the economy and the physical capital of ecosystems is being destroyed, and this economic and environmental crisis is leading to a political crisis: the rise of right-wing nationalism, exhibit A being Donald Trump.

Trump was able to capitalize on what essentially has been the destruction of physical capital, the wholesale shutdown of much of the manufacturing economy in the United States. The first wave of outsourcing of factories, in the 1960s, led to the decline of African-American communities in the inner cities (Wilson 2011). Instead of leading to a campaign of reindustrialization of Black communities, this decline led to hand-wringing about the African-American family and inadequate policies like the war on poverty. When deindustrialization hit the white working class, starting in the 1980s, the ideology of a ‘post-industrial society’ was well-advanced and the white unemployed were also consigned to the alleged ‘dustbin of history’. This resentment and anger has now boomeranged and is helping to lead to American right-wing nationalism. Similar movements have popped up all over the planet, as in Brexit in the UK.

It is imperative that progressives formulate a more attractive story about politics, economics, and the environment or we will be hit with three simultaneous crises: climate change and the general destruction of ecosystems, growing economic inequality and suffering, and as a consequence, the spread of right-wing nationalism as an illusory alternative. But in order to formulate this alternative, not only must progressives understand the dynamics of a turquoise economy, they must understand the role of the state as the way to get from here to there.

The rise and decline of the American state

When Martin Luther King and the civil rights movement tried to right the wrongs of American society, they looked to the Federal government to enforce human and civil rights. When environmentalists wanted to clean up pollution and conserve natural areas, they looked to the Federal government for enforcement. The goal of equal rights for women, and the enforcement of a woman’s right to choose, still depends on the Federal government, and it was the Federal government that oversaw the enforcement of marriage equality. Yet when it comes to the economy, the conventional wisdom has become that the government is the problem, not the solution. This will turn out to be a catastrophic conclusion if it is allowed to persist.

We got to this point through a series of unfortunate processes. Coming out of World War II, it was assumed that the Federal government could indeed intervene in the economy successfully. The New Deal had spawned, not only the creation of Social Security and other parts of the safety net, but the direct employment of millions of people through programs like the WPA, CCC, TVA and PWA (McElvaine 1993, Kaye 2014). World War II had also been a very successful way to increase employment, so much so that women for the first time were a significant part of the work force, and the evil of segregation began to fray at the edges.

But the success of World War II economically sowed the seeds of the decline of support for the state’s economic capacity, because liberals transformed into what were referred to as ‘Cold War liberals’, that is, while they accepted the Federal government’s large role in the economy. They also pushed for a large military and supported a growing military-industrial complex. The full denouement of this contradiction occurred when Lyndon Johnson moved his focus from his war on poverty to the war in Vietnam. Martin Luther King and his fellow activists were very bitter about the reduced level of spending for civilian purposes in order to fund the war (Garrow 2015). Eventually, a large anti-war left emerged, and this part of the left was more concerned about the damage that the state could do as an empire than about the good it could do as a central actor in the economy. Eventually, the New Deal was dragged down, chained to the weight of the Cold War and the military state (Stein 2010) .

Enter Ronald Reagan, and the idea that ‘the government is not the solution, the government is the problem’. In reality, I will argue, in many cases the government is the solution and the market is the problem. But as the triumphalism about the collapse of the Soviet Union created a smugness about the perfection of the ‘free market’, the decline of the manufacturing core of the economy continued apace, and with the decline of manufacturing the one institution that could lead the white working class in a progressive direction, the unions, declined with the closing of factories. With the decline of unions, the Democrats moved closer to corporations as a source of funding, and the urban professional classes became more attractive than the working classes as a source of votes, leading to the debacle of the Hillary Clinton loss.

This movement toward corporate power had the unfortunate effect of moving the Democratic party, and many progressives, toward what is called neoliberalism, that is, an all-encompassing faith in the market, and a concomitant lack of faith in the capacity of government. Bill Clinton declared that ‘the era of big government is over’, that is, government can only tweak the economy by sending ‘signals’ to the all-knowing market, preferably with tax cuts, with as many trade deals as possible and some privatization thrown in for good measure. If there is one lesson we should learn from the past several decades, it is that anytime someone proposes to solve an economic problem solely with a tax or a tax cut, run in the other direction.

However, the Republicans were already far along on the trajectory that Nixon’s ‘southern strategy’ had sent them on decades ago, that is, they based much of their electoral strategy on attracting white voters with bigotry. This bigotry then led African-Americans, and increasingly, most Latino voters, to run to the shelter of the Democratic party, which then did not need to figure out how to appeal to the white working class, because, well, ‘demographics’. The fight against bigotry is necessary, but it is not enough; the state has to be brought back into the economy or, out of frustration and anger, the political system will split apart and right-wing nationalists will take control.

Progressives should understand that the role of the state is three-fold: it must create infrastructure, it must encourage and support production, that is, manufacturing and agriculture, and it must do all of this without destroying the foundation of society, the environment. States that have pulled this off have prospered; states that have not have eventually collapsed. At this point, globally, we are headed for collapse.

Fortunately, it is possible to reach all three of these goals at once by implementing a state-driven program to create a green infrastructure. I will go into the details of this Green New Deal later, but first let’s look at why infrastructure, production, and the environment are responsibilities of the state.

The role of infrastructure

Infrastructure-building was the reason for the creation of civilization in the first place. Civilization most of all is based on the means of building infrastructure. The first civilizations, in Sumer and Egypt, were made possible by constructing water infrastructure, irrigation in the case of Sumer and flood control in the case of Egypt (Solomon 2010). It was only because these infrastructure projects led to larger populations and an agricultural surplus that supported an army and skilled workers that these civilizations where then able to create a military that is generally considered the hallmark of a state. What political scientists and historians generally miss is that production precedes military strength. When the infrastructure destroys the environment, the civilization collapses (Montgomery 2012, Diamond 2011). Sometimes a group that has less sophisticated production, like the Mongols, conquer those with better infrastructure (although the Mongols were no slouches either), but the ‘prize’ is not the possession of someone else’s military, the prize is the production system of another people. The infrastructure enables a production system to prosper.

In the United States, infrastructure building has always been a central issue in struggles among elites. Before the Civil War, the slaveocracy frowned on national infrastructure, because Federal success would have shown that Federal government also had the power to eliminate slavery (Larson 2001). The original Republicans formed to a large extent out of the needs of the northern and particularly Great Lakes elites to create infrastructure in order to take advantage of the emerging Industrial Revolution (Egnal 2010). The Transcontinental Railroad was an example, but also the network of land grant colleges were infrastructure investments that the Congress created only when the slave states were not in the Union. After the Civil War the railroad building boom created the demand needed for the steel and other manufacturing industries that powered the rise of the US as a Great Power. Even in the Republican administrations of allegedly free market Presidents such as Calvin Coolidge and Herbert Hoover, the Federal government was remaking the West through projects like the Hoover Dam. FDR created the Tennessee Valley Authority, a regional infrastructure project that he wanted to repeat all over the country, and his vision of a national rail network came to fruition under another Republican, Dwight Eisenhower, in the form of the Interstate Highway System. There was so much infrastructure spending during the New Deal that we are still using most of it today; in fact, since Eisenhower the rate of infrastructure spending has declined to the point were New Deal infrastructure is in danger of literally falling apart because the ideology of the slaveocracy is back, that is, the conservatives don’t want successful infrastructure building because it would show that the Federal government is capable of successfully intervening in the economy.

The role of manufacturing

In order to build infrastructure, you have to manufacture the parts of the infrastructure. The ancient Romans had to manufacture the stone and concrete they used for their still-standing infrastructure of roads and aqueducts. But of course manufacturing is not useful just for infrastructure, it is the means to produce all goods. At this point in our civilization, most economic activity takes place in the service sector, but the overwhelming majority of services are the act of using manufactured goods. For instance, retail and wholesale is the act of selling and storing manufactured goods. Health services rely on health care equipment, drugs, and hospitals. Restaurants are, in a way, manufacturing locations themselves, and they use equipment and processed foods that were manufactured. All buildings, and the materials such as furniture within them, are made out of manufactured parts, including the construction equipment used to build them. All computer-related serves use manufactured digital equipment, and airlines use manufactured jets. The list goes on (Rynn 2010 Chapter 2).

The service industries rely for their technological innovation on the innovation that occurs in the manufacturing industries. The obvious example is the revolution in digital technology. But not only do the computers become more powerful, manufactured goods are constantly being made more efficiently. In other words, you can make more of something with either less labor - increased labor productivity - or less material or energy inputs - increased productivity of materials — or both. There is much discussion now of the coming of robots and automation, and how this will kill off all manufacturing jobs, but these processes have been going on for 200 years — namely, the increasing productivity of manufacturing. For the last 100 years, a period in which we have decent data, manufacturing productivity has been going up at a fairly steady clip of about 3% per year — and robots fit into that trend, they are not a revolutionary break.

Automation is not fatal

Then why did manufacturing employment hold up for so long, if manufacturing keeps getting more productive, meaning you need less labor? The reason is that the increasing productivity of manufacturing means that the goods cost less, and so the demand for them increases, and with the increase in demand, even though you can make the same amount of goods with less labor, you need even more labor because you have to make many more goods. This process is similar to one first noticed by a mid-nineteenth century economist, Stanley Jevons, and was called the ‘Jevons Paradox’. He noticed that the demand for coal went up even though coal was used more efficiently, that is, the productivity of coal increased. This paradox has been noted by many environmental writers because of the worry that, say, more fuel efficient cars would lead to greater use of gasoline because each mile traveled would be cheaper. The same process happens to manufactured goods because of the use of less labor: as the price of goods go down per unit of labor, the demand goes up, and therefore the demand for labor goes up as well. Therefore increased productivity can actually lead to greater demand for labor, and automation need not mean less manufacturing jobs.

However, in order for this golden process of productivity increase to work to the benefit of labor, a few conditions must exist. First, demand for the product must be expandable. If everyone has a refrigerator, then making refrigerators more efficiently will eventually lead to a loss of employment. Currently a few billion people worldwide don’t even have electricity, much less refrigerators, so theoretically a global Marshall Plan and sustainable industrialization of the planet (about which more later) would lead to expansion of demand for labor in manufacturing for quite a long time. In rich countries this market saturation can also be countered by increasing the quality of the refrigerators, so that more and better paid people are required to put sophisticated goods together. If the society moves to emphasize quality instead of quantity, then the need to exploit the environment for new materials decreases.

So the second condition for rising employment with rising productivity, after an expanding market, is that quality becomes a more important consideration than quantity. Third, unless quality becomes a focus, the material and energy inputs to manufacturing become scarcer and the prices for the inputs will go up, thereby increasing prices and decreasing, indirectly, demand for labor. In any case, currently we are depleting critical raw materials at such a rate that eventually global civilization will not be possible (Bardi and Randers 2014), so productivity of material use will have to increase dramatically.

But it might be argued that eventually technology will become so productive that the percentage of workers in manufacturing has to decline. We don’t really know if that will happen. First, most of the world could use not only refrigerators, but a whole assortment of other goods. So there is much of the world to industrialize, effectively. However, this would clearly lead to scarcity of materials, so all of this must be done with a concentration on quality and a focus on raising the productivity of materials use, not just productivity of labor. When productivity of materials use becomes more important than the productivity of labor, there is likely to be a tradeoff with productivity of labor, and therefore more labor would be needed than in the wasteful throwaway society we have. But this productivity of material use would not just mean more workers in a factory; it would also require society-wide (or system-wide) workers who would be part of a system-wide recycling and reuse system. Such a system, which I will expand on later, can only be done by the state.

Another way to increase productivity of labor and materials, and at the same time increase job satisfaction, is to have democracy on the shop floor, that is, workplace democracy. As Seymour Melman showed, the ‘administrative overhead’ of firms that are structured like dictatorships can siphon off much of the productivity gain of the factory floor; in addition, happy workers who can apply their skills and intelligence to the production process also make for a more productive workplace (Melman 2001)

So while there probably won’t be millions of monotonous, dehumanizing manufacturing jobs on assembly lines like there used to be, these will be replaced by more highly skilled, highly paid workers who concentrate more on quality, and also by workers employed by the state to create a manufacturing system that is more like a natural ecosystem — the output becomes part of the input, the output does not become garbage and pollution. In nature, microbes, fungus and detrivores turn dead matter into the raw material for new life. In a turquoise economy, an army of state employees will fulfill the same function.

The ecosystem of machinery

Reproduction machinery (such as machine tools) are used to create more reproduction machinery, creating what is called a positive feedback loop, that is, there is something that creates more of itself or increases more of itself. For instance, a group of rabbits create more rabbits, until a few pairs of rabbits can quickly lead to a population explosion. In the same way, a few machine tools, with the required workers, can be used to quickly create an enormous number of new machine tools, which can then be used to create other kinds of production machinery, which in turn are used to create more goods and services, a process we call economic growth.

Technological innovation in these classes of machinery lead to a kind of reverberation of technology in the economy as a whole, because more productive reproduction machinery leads to more reproduction machinery and production machinery, and more productive production machinery leads to more final goods and services. So technological innovation in the machinery industries is the foundation of innovation in the services and final goods sector. Since technological innovation is the most important source of growth, the machinery industries are the most important source of economic growth. (Rynn 2010, Chapter 4)

We can see this process by looking at great jumps in technological innovation in the reproduction machinery industries that drove great social changes. The Industrial Revolution took place because certain reproduction machinery technologies were invented, such as metal-based machine tools, steam engines, and large-scale iron production. Largely because of these changes, whole new categories of production machinery arose, such as textile machinery. What is often called the second Industrial Revolution in the later half of the 19th century was also essentially a leap forward for reproduction machinery: steel production replaced iron, electricity replaced steam power, and machine tools and other factory machinery was made out of steel and were powered by electricity. These developments then enabled the birth of the era of mass production as epitomized by Ford. In other words, there were powerful positive feedback loops among all the different kinds of reproduction machinery which led to even greater innovations and growth.

Our current technological revolution is powered by an obscure group of machines called semiconductor-making equipment. Because of better and better semiconductor-making equipment (made possible by better and better machine tools, among other technologies), computers are so small we can put them in a phone and into our pockets. An environmentally benign civilization would have to change its energy-generating reproduction machinery, from coal and nuclear power plants and internal combustion engines to wind, sun, and other renewable energy technologies.

Essentially, the human production system just described is an ecosystem (Rynn 2010, Chapter 3). It is composed of certain functional parts, particularly a self-regenerating, reproductive core, and the cycle of outputs leading to inputs leads to the system being self-regenerative as a whole. In addition, as parts of the system change, in natural ecosystems through evolution and in human economic ecosystems through innovation, the ecosystem system as a whole evolves. However, as I will note later, mainstream economic theory acknowledges none of this — except for the vague, unspecified concept of ‘technological innovation’ — and since progressives are generally not aware of how manufacturing works, progressives have had no answer to the nostrums of conservatives about how to achieve economic growth.

Good economic growth

But on a planet which is already being overmined, overexploited and overpolluted, do we really need economic growth? I think instead of making a blanket statement that we do or do not need economic growth, we have to look both at what kind of economic growth we are talking about, and ask, how is our global production system constructed?

Let’s envision a society in which there is no mining or extraction, no pollution, and no waste. Such a society is within reach technologically; the problem is to create a society that can handle these requirements. For fans of Annie Leonard’s ‘The Story of Stuff’ , this is how we avoid drowning in garbage. The key is to look at the problem holistically. The ‘market’ can’t handle this, only the state can direct this kind of transformation.

The most obvious change to make is to move from fossil fuels to renewables in the production of energy. There are two parts of this problem, because in reality there are two (or really two-and-a-half) energy systems. The first is the electricity energy system. This is now generated mostly by coal, oil, nuclear and gas, with renewables growing at a fast rate. It is fairly ‘easy’ to see how to change this: ‘just’ build huge networks of wind farms, linked together with efficient electric grids, use more and more solar power, even use geothermal heat pumps and research large-scale geothermal, and research other renewable technologies like tidal and wave energy. I will go into more detail later on my own plan to accomplish this. The point is, it would be relatively easy politically to transform the electricity system, because people don’t care where the electricity comes from when they turn on the switch (Rynn 2010, Chapter 9).

The second part of the energy system is much more difficult to tackle, and generally environmentalists have to some extent ignored this: there is also an oil energy system, the problematic part of which is used to drive almost all transportation (about 20% of oil use goes into petrochemicals, which would have to be cleaned up in a pollution-free world, but that problem is not insurmountable). The problem is not just that the transportation system, and particularly the use of long-distance cars and trucks, would be very difficult to transform, the problem is that this civilization has spaced its buildings in a scattered way that makes them dependent on long-distance cars and trucks. In other words, the problem is sprawl.

There seems to be an assumption among environmentalists that somehow cars and trucks can be electrified. Johnny and Susie Suburban will only have to know how to plug an electric charger into their car instead of filling up; otherwise they will basically not be inconvenienced. The problem is that this alleged technological shift has not been thought through. For 100 years there have been many attempts to create electric cars, and the problem is not the evil machinations of GM and the oil companies (although they have not been angels). The problem is that petroleum is a miracle fuel that is very difficult to replace. The Earth, over tens of millions of years. did trillions of dollars of work cooking organic material so that it is perfect for pulling out of the ground, transporting, and storing at normal temperatures in a vehicle, and then being vaporized and burned in order to release an incredible amount of energy. And even then, the very old technology of the internal combustion engine loses about 80% of this miracle fuel’s energy, and then most of the rest of the energy is wasted carrying around a 100 to 200 pound person in a two ton vehicle. And then the vehicle isn’t used over 90% of the time, which is incredibly wasteful of the physical capital we discussed earlier (Rynn 2010, Chapter 10).

While I do not doubt the ingenuity of Elon Musk, I don’t think that hundreds of millions of cars will be run like the current long-range, large, fast gasoline-powered cars that we have now. It would be possible to power hundreds of millions of small, slow, short-range electric cars, because that is the technology that we have now. But it would be very risky to assume that somehow Mr. and Mrs. Suburban will not have to change their lifestyle in any way. Which of course makes dealing with climate change much more of a hard sell.

However, I think it may be possible to convince a considerable part of the population to live a lifestyle that, at most, required actually-existing electric cars: to initiate a huge, state-driven program of constructing walkable neighborhoods that are tied together with electric transit, and which use electric trains for intercity travel. Walkable neighborhoods would also mean that you could transform the freight system to use electrified freight trains, which are at least 12 times more efficient than using trucks, and then use small electric trucks for the last few miles. Finally, you could replace most air travel with a network of high-speed trains (I will go into more detail on all of this later). Creating walkable neighborhoods means constructing a lot of large residential and commercial buildings that are close together, as in an urban environment, and as all towns used to be, with their functioning main streets.(Rynn 2010, Chapter 11)

So having economic growth without fossil fuels would be quite a lift, but it is possible (the one-half energy system I referred to above is the heat provided by natural gas, but that can be pretty easily replaced by renewably generated electricity). Depending on how much energy you can get from the sun, wind, and water, you could be growing economically for a very long time in terms of energy, and you could provide electricity to the entire human population, most of whom do not have any or not much electricity. But then the problem is to have economic growth without running out of other materials.

Most raw materials are not renewable. There are a couple of raw materials, iron and silicon, which are plentiful, but many others are being depleted at a rapid rate, particularly phosphorus, which is essential for agriculture. This means that recycling and reuse would be essential for a sustainable economy. That is, almost all inputs into the manufacturing process, besides energy, would have to be an object that had been previously used, or the material would have to be recycled (McDonough and Braungart 2010). The product of iron, steel, is very recyclable, so in addition to the large of quantities available in the earth’s crust, iron and steel would be fairly easy to use and even expand. So would silicon, which is basically made from sand. However, it would take quite a bit of human labor to help with this recycling and reuse, and in addition manufacturing would have to reoriented to make things in such a way that the goods would be easy to reuse or recycle, so that the manufacturing process would use recycled or used goods. This sort of conversion of industry would require a huge amount of subsidies from the state, and a large, newly trained work force of engineers.

An advantage of apartment buildings and density in walkable neighborhoods is that much less in the way of materials and energy is used. It’s very expensive to heat and cool single family homes that have four walls, a roof, and many more square feet than even a comfortable apartment. In addition, apartment buildings have a small roof and apartments share walls. Also, train-based transportation requires a much smaller amount of material than a national fleet of cars and trucks. But the question is whether a large percentage of the population would accept having less space, less use of cars and less energy use in exchange for walkable neighborhoods. Some studies have shown that up to about one-third of the population would like to live in walkable neighborhoods, while only about 5% now do so.

The other main part of production, agriculture, is currently unsustainable for a number of reasons. Besides generating about 10% of greenhouse gases (much of it from livestock), modern agriculture is using phosphorus at an unsustainable rate, requires an enormous amount of fossil fuel for transport and creation of pesticides and fertilizer, pollutes much of the environment on which it depends, and is using up nonrenewable water (such as from aquifers) in many parts of the world. So like manufacturing, agriculture would have to become indefinitely sustainable. To do this, there would ideally be farm belts around cities and towns and gardens within them to keep the transport distances down. There would be much more labor involved because intensive agricultural techniques would need to be used in order to take advantage of organic farming and to provide high-nutrient fruits and vegetables. Ideally the entire livestock industry would have to be transformed, but it is unclear if Americans (and people around the world) would reduce their meat consumption in order to save the planet. At least if livestock were free-range, and not in factory farms, and were not fed grains, then the amount of grain that would have to be produced would drop drastically and therefore the demands on the environment would drop as well.

So it is possible to produce goods and services that maintain a comfortable standard of living, and even incorporate economic growth, but the processes of manufacturing and agriculture would have to change systemically, for both inputs and outputs. I don’t think this can be done reliably by the market. It would take an enormous amount of free help and loans to make this kind of conversion to green production a reality. A tax that penalized producers who didn’t get with the program, besides being political suicide, would not even work because for the most part even large corporations don’t have the resources for this kind of conversion of production to sustainability. There would also be great economies of scale if the Federal government trained and deployed, say, a Civilian Conversion Corps to help manufacturers and agricultural enterprises. Even after conversion, there would be inevitable headaches and roadblocks that would need government assistance to overcome.

So indefinite economic growth is possible, but only if the state can provide enough guidance and if resources are made available to convert production into a self-regenerating system, not a self-destroying one. The government is also necessary to keep the core of economic growth, the manufacturing sector, from being destroyed by the market system and by the military side of the state. The financial sector and the military are the two forces in a political economy that are most responsible for tearing down the manufacturing sector; unfortunately, they both hold an inordinate amount of political power.

How the military and market destroy production

Despite the story told by mainstream economists, firms do not generally compete mostly by undercutting their competitors in price. More important for most capitalists — by which I mean top management and/or owners of stock in non-employee-owned and operated companies — is the ability to take as much market share as possible and to accumulate as much economic power as possible. This is a positive feedback process, similar to the process we found for economic growth but different enough to lead to unfortunate results. When positive feedback operates in a system of power, then the organization that grabs the most power before everyone else grabs power can wind up becoming dominant in the power system, or can even take the whole thing over. This is the same process whereby a country conquers another, thus making it more powerful than its neighbors, giving it the power to conquer another country, until it gobbles up most of its neighbors. In the same way, a company that takes over another company thereby gains the ability to take over yet another, until you have oligopoly and three main car companies and ‘seven sisters’ in the oil industry, and so on. But this whole process also affects the structure of the economy as a whole, because financial firms have the biggest advantage: they can make money in seconds by shifting around money. All the other firms have to actually create a good or service, and it can take months or years to open up a factory or even a service firm, so the financial firms can jump way out in front of the rest of the economy, effectively, and through the power of compound interest, they can loan out this money and thereby weave their tentacles throughout the productive part of the economy. The economy begins to resemble a whirlpool, where everything is getting sucked into the financial maelstrom. This doesn’t just lead to income inequality which is now leading to right-wing nationalism, it leads to manufacturing being sucked dry and left for dead, and therefore the general economy loses the goose that lays the golden eggs.

The other force in a society that depletes the manufacturing sector (and everything else) is the military. Over several decades, the late Professor Seymour Melman explained, through many books, articles and lectures, that military production depletes the manufacturing economy, until eventually the manufacturing economy loses its competence to produce for the civilian sector (Melman 2001, 1987, SeymourMelman.com). The military does this in a few ways. First, it lures away many of the best and brightest engineers because it can arbitrarily pay better than the civilian sector. Second, these best and brightest engineers learn to manufacture without regard to cost or reliability, leading to chronic scandals like $300 toilet seats (I remember visiting a military factory with Melman and when Melman asked the factory manager whether they knew the cost of the various stages of production, the manager happily volunteered that they don’t worry about cost because they need to meet the military’s requirements, no matter what the cost). Third, this exploding cost of military equipment and services leads to less money for civilian needs. Melman published several op-eds in the NY Times (PDF) over the years showing the tradeoff between the cost of a military program or piece of equipment versus badly needed infrastructure in the United States. Even in the 1960s, Martin Luther King and others bitterly complained about the declining funds going into civilian programs as the Vietnam war heated up.

Eventually, as happened in the United Kingdom and most spectacularly in the case of the Soviet Union, the cost of empire and its attendant military leads to the neglect and depletion of the manufacturing base (and a lot else besides) that then leads to the decline of the economy and the international power that the military was created for in the first place. In other words, the military is a classic case of self-destruction: the more that is spent on the military, the more the long-term power of the country will decline (Rynn 2006). In the same way, the creation of the richest people and organizations of an economy in the financial sector leads to the immiseration of everybody else and the decline of the production sector that gave rise to the financial sector in the first place, thus leading eventually to the fall of finance.

So we have a cosmic conundrum here: we need the state to pour resources into a transformation of the infrastructure and production sectors in order to avoid environmental collapse, and we need this conversion and reconstruction plan to revive the manufacturing sector that underlays the prosperity of the population, without which the politics of the country is vulnerable to right-wing nationalism; yet an incredible amount of resources are going into the financial sector and the military, not to mention myriad other industries in the United States such as the health insurance sector, the fossil fuel industries and the pharmaceutical industries. Seymour Melman’s former student Lloyd Dumas entitled his book “The overburdened economy” to describe these processes (Dumas 1986). But there are ways in which we can overcome.

Public banking

The problem of the financial system requires the construction of a public banking and financing system, and the problem of the military requires a plan to convert the military to infrastructure production and also requires the creation of a different global political architecture. Let’s look at public banking first.

The finance problem is two fold. Not only is the financial system taking too much of the national income and impoverishing the nonrich and manufacturing, but the way that the Federal government pays for its services has become part of the problem. As Ellen Brown has pointed out in her books “Web of Debt’ and the ‘The Public Bank Solution’, for hundreds of years most — thought not all — governments have been paying for many of their activities by either borrowing from the rich and paying back with interest, or by taxing the middle class and the rich (Brown 2011, 2013). On the other hand, throughout history governments have often simply printed money to pay for most of their activities, which means no or little taxes on the middle class and no interest payments being shoveled to the already rich. Of course this situation can become inflationary if it gets out of hand, but if the printed money used for government spending is basically investment, such as infrastructure and education, then the new money will not be inflationary. This is because the amount of money of a nation should reflect the wealth of a nation; if the wealth goes up, so too should the amount of money. Currently the money supply is controlled by the private banks, which create money and then make excessive profits. They do this through the magic of ‘fraction reserve banking’, that is, they loan out money, most of which they don’t have, on the theory that only a small percentage of depositors want their money back at any one time. If the government creates money for critical infrastructure spending and investment, then the government would be doing what banks do, except that they wouldn’t be throwing away money on speculation leading to financial crises, as the private banks do.

In order to solve both the problems of depleting the economy and funding the government at the same time , a turquoise economy would be based on public banks, not private ones. Like the private banks, the public banks could loan out money, but unlike private banks they could not require the loan to be paid back and not charge interest — basically, creating money. This technique could be used to pay for a huge green infrastructure rebuilding program, even one that cost one trillion dollars per year or more. Public banks could also make ‘real’ loans, at low interest, to individuals and businesses, and the revenue from the interest charges could go back into the treasury, thus providing a revenue stream for ‘services rendered’ in addition to taxes on the rich. States and towns could also have their own banks, as the state of North Dakota currently does, to great economic benefit.

The income tax was originally supposed to apply only to the top 10%, but particularly as a result of wars, the middle class had to pay more and more of the burden. Printing money to pay for the military is inflationary, but if the military is mostly converted into an infrastructure-building entity, then most of this problem goes away. Politically, the middle class income tax has made it very easy for Republicans to play the politics of division — ‘you are paying for someone else’s (wink wink, they are dark) income, housing, education, etc’. If the taxes on the rich and large corporations and revenue from services rendered by the Federal government are paying for the safety net and income redistribution, the argument that ‘you are paying for someone else’ loses its hold — not to mention the political attractiveness for a progressive agenda by proposing a way to eliminate most middle class income taxes.

Services rendered could also include the revenue gained from the infrastructure built by the public bank loans/grants, say from electricity generated by a Federally funded Interstate Wind System, or from Federally constructed town and city centers, as I will explain later.

Another way to decrease the Federal expenditure on noninvestment is to pay off the national debt with printed dollars. That is, the $17 trillion or so of Federal debt, most held by other countries’ central banks, could be bought back with printed dollars (the government has a right to do this at any time). Treasury bonds are considered part of the money supply anyway, so switching printed dollars for treasury bonds would do little to spur inflation, while saving the Federal government about $300 billion per year, to be used, say, to expand Social Security, or to fund other government services.

Thus a transformation of the finance system, from one based on private banks and privately owned Federal debt, to a finance system centered on public banks and printed money, could help avoid financial crises, free up much more money for important civilian work, and provide the money for a program of green infrastructure construction.

Reducing the military

A large cut in the military budget would also free up money for useful civilian expenses, but obviously this is very difficult politically. The US military is the mightiest political machine to ever exist; they put Tammany Hall to shame. With bases and factories strategically spread out all over the country, Congress would be in no mood to end the gravy train. In addition, there are millions of engineers and workers who depend on the military; even the unions depend for much of their remaining membership on military factories. And of course, there is always some entity around the world that can scare enough Americans into believing that the huge military budget is necessary.

However, I think it might be possible to start to crack apart this ‘iron triangle’ of the military, the Congress, and big corporations by, effectively, replacing the Military Industrial Congressional Complex — Eisenhower’s original name for what he called the military industrial complex — with an infrastructure industrial congressional complex. That is, instead of factories for tanks, planes, and guns, we could convert these factories into making wind turbines, solar panels, and high speed trains. However, as Seymour Melman pointed out, this process would require a retraining of the engineering workforce to compete in civilian markets, emphasizing cost and reliability . By strategically placing infrastructure-producing factories in congressional districts, a new ‘green triangle’ could be created.

To make a reduction in military spending a permanent phenomenon, however, requires a different global architecture. Here we have to confront, not just military problems, but the entire concept of globalization. Globalization and environmental destruction are driving the right-wing direction of societies all around the world, including the Middle East. Instead of a global economy, we need a set of world regions that conduct most of their economic activity internally. This will create a balance of power internationally that will prevent war.

A general rule of thumb in international relations is that when there is a large disparity in power among nations, the more powerful ones will take advantage of the less powerful, as the ancient Greek historian Thucydides explained over 2000 years ago. There are two main reasons that Great Powers, like the United States, control the international system: first, they have strong industrial systems which gives them the power to both build large military establishments and control the economic destiny of weaker countries; and second, they are large enough geographically to contain a well-integrated industrial system with a large population (Rynn 2010, Part 2). The United States fills both these requirements, although it is losing its industrial base; China is clearly rising, with perhaps the biggest single industrial base; Europe, with the industrial powerhouse of Germany at its center, forms another formidable core; and Japan and India have much of the necessary requirements. The USSR used to be a large, industrial center, but it has been broken up, and the strongest part of the post-USSR, Russia, has come to depend more on oil than factories.

There are many parts of the world that are weak because they are both divided, and at best, have emerging industrial bases, and these are the areas that Great Powers play with, particularly the Middle East, but also Africa, other parts of Asia, and to a lesser extent, Latin America. In order to construct a global architecture that would preclude war, these poorer, divided areas must become more integrated regionally — but not globally. That is, instead of globalization, we need world-regionalism, because an economy at the level of a world region can bind itself together enough through intelligent infrastructure-spending, protection of ecosystems, and construction of a manufacturing base to create a thriving, complete production ecosystem. The more democratic these regions are, the faster a well-integrated world region will gain world power because the elites won’t be able to siphon off the wealth needed to build a turquoise economy. Since democracies don’t seem to go to war with each other, global democracy could conceivably lead to a global sustainable peace.

One way to achieve the triple goal of regional integration, sustainable industrialization, and protection of the environment is to initiate a global Marshall plan - while requiring democratization. Just as the US realized that by building up Europe after WWII a revitalized Europe would benefit the US, so too should the developed countries realize that building a green industrial base will be a win-win situation (NSP 2016). For many years, a global Marshall plan would actually help the developed countries because for a while, at least, the poorer regions would need the machinery and services of the developed countries, until the poorer nations are able to regenerate their own industrial economies because they will hit a tipping point of physical and human capital. There could effectively by many Green New Deals, so that at the end of this process, the climate change problem will effectively have been solved because there will be minimal emissions of greenhouse gases globally.

Human capital can reproduce itself because teachers can teach the next generation of teachers. This was basically the way the Soviet Union originally became an industrial power; it imported engineering talent, particularly from Germany and the US, to train its own engineers, who eventually were able to train the following generations of engineers. It was the obsession with a military buildup that brought this virtuous circle to an end, and it was the lack of democracy in the Soviet Union that enabled the Soviet elite to destroy their own country. It is an open question whether the tyrannical Chinese Communist party can clean up the environment and air before they too destroy their society because of a lack of democratic accountability.

So instead of encouraging global trade, we should be encouraging intraregional trade, and this understanding arises out of the insight that economies are production ecosystems that operate best at a world regional level. This would not only lead to great prosperity, and turn back the tide of right-wing nationalism, it would make the differences in international political power small enough that no country or region would reasonably think they could get away with conquest and empire.

The poverty of mainstream economics

At this point, an economist who was true to his or her profession would undoubtedly trot out the various economic theories that are meant to obfuscate any objections to globalization and the market as the only solution. ‘Surely you must not understand the theory of comparative advantage, the most beautiful concept in economics, as Paul Samuelson called it’, which justifies trade-and-yet-more-trade, and can be used to argue for the dismantling of whole industries in which a country does not enjoy ‘comparative advantage’. The theory of comparative advantage is a good example of an interesting thought experiment gone completely awry. It’s alleged advantages take place in a mental fantasy world in which there is no technological change and economies only exist in the short-term. The global economy is made up of isolated global industries, in this telling. Most importantly, there is no understanding that production requires an entire suite of industries in one region, and within this system of industries there exists positive feedback loops and self-regenerating networks that make human economies possible. But I think the most telling argument against comparative advantage is the one advanced by the originator of the concept, David Ricardo, when he predicted that because of comparative advantage, the US and Poland should continue to do what they were doing best as of 1820, that is, grow grain, and Britain should continue to monopolize industrial manufacturing — how convenient! (Rynn 2010, Chapter 7)

But comparative advantage is just one of many mainstream economic theories that conservatives have been using for decades to push aside consideration of broad progressive goals. Recently we have the ersatz theory of titans of industry and the superrich as ‘job creators’, when in fact the economy would be doing much better and would create many more jobs if they simply weren’t there (or ideally, all firms were democratic coops not in need of a tyrant). ‘Governments must get out of the way so that entrepreneurs can do their magic’, when in fact, as we have seen, it is the technological develop of industrial machinery that is the driving force behind economic growth. Deregulation and lower taxes is supposed to have the same impact of ‘unleashing’ the energy of capitalists. I’d like to say that none of this even has support within the mainstream economics theory of growth, but I can’t, because there really isn’t a mainstream theory of growth.

While I won’t go into the details here, the topic of economic growth has long been a backwater in the field of economics (PDF). This may surprise people who think that economic growth is the be-all and end-all of conservative dogma, but the problem for economists is our friend from the beginning of this essay, physical capital. While physical capital is clearly at the beginning of the chain of production, there is no place for capital within economic theory because most of all, economic theory is a framework for understanding exchange, not production, and exchange only in the short-term in one particular competitive industry. My framework for understanding the economy is based on production for the economy as a whole in the long-term. To make this change in economics would be the equivalent of the Copernican revolution that changed the conception of the solar system from the sun and planets revolving around Earth to everything revolving around the sun. I am claiming that the economy revolves around production, while mainstream economics claims that the economy revolves around exchange — and somehow production is a byproduct of this all-important system of exchange. I would call my alternative conception a ‘production-centered’ economic framework.

Notwithstanding questions about being burned at the stake for being a heretic, there are many advantages for progressives and environmentalists by putting production at the center of the economy. First, it makes it easier to integrate the natural world into our understanding of the economy, since the natural world also produces. The question then becomes, ‘how can we produce in such a way that the production of the natural world is not destroyed’? Second, the state can very easily be seen as a solution. In the mainstream paradigm, the state can only make things worse, as in the microeconomic explanation that taxes raise prices and decrease supply. If production is at the center of the economy, then the market exists to serve production, not the other way around. Production must be encouraged, by any means necessary, including government intervention in the economy. Third, the market stops being the solution to every problem, because the process of exchange, while important, will not solve all problems. When the market is everything, the state can be nothing (as in the libertarian imagination), and progressives have nowhere to go to make big changes in the society.

The market is incapable of designing society so that the environmental foundation of society is not destroyed. The market can only respond to short-term signals of profit in a specific location within the larger system of systems that make up an economy. But the environment is made up of ecosystems, and ecosystems rely on the positive feedback loops and linkages of regeneration that come from a holistic evolution of a set of functional relationships. The market cannot ‘understand’ that by tearing up one particular part of that system, say a forest or the machine tool industry, it is unraveling the entire web of relationships. Only a conscious entity that explicitly works toward the goal of maintaining and improving a system as a whole, in the long-term, can create a civilization that doesn’t unravel. That conscious entity is the human mind, which can plan and design a system for the future, unlike a market, which is supposed to blindly adjust according to signals about what is profitable or not. As Locke, Rousseau, and others explained at the beginning of the Enlightenment, the state is the entity which is supposed to represent and carry forth the collective planning and design of its constituent human minds. Obviously the state is having a hard time, in the beginning of the 21st century, implementing intelligent designs as opposed to being pushed around by the blind forces of greed that bubble up from the market. But it is up to the progressive movement to turn this situation around, because nobody else is going to do it, and the alternatives are neoliberalism and right-wing nationalism.

Economic democracy

On a deeper level, we should be able to widen the orbit of democracy from the political sphere to the economic one. Clearly, we see that concentrated economic power distorts and warps political democracy, as the rich and powerful get the policies they want and the bottom 90% get virtually nothing. In the long run, a democratic government should not only build public banks and better infrastructure, but also work toward the long-term goal of making firms democratic. If most companies were democratic, many of the ills of the current society would be dramatically lessened; the will to power that is destroying the society would be decreased because the CEOs would be democratically elected, as in the Mondragon system of cooperatives in Spain. Most money would get out of politics because money from business would be money from all the employees of a firm, so that collectively business power would reflect most of the population, instead of a handful of CEOs. For instance, it would be easier to pass environmental legislation because employees live in their neighborhoods and would be concerned with the health of their families, whereas now CEOs can dismiss anything that hits the bottom line as being inimical to the interests of their shareholders. In a system of workplace democracy, the employees are the shareholders and profit is not paramount.

A program for economic reconstruction

Let’s look at what I will call a program of economic reconstruction, and then a wider Green New Deal, and see how this program might fulfill the requirements of the framework I have laid out. In addition, I will point out how this framework can be used to cause a political realignment toward a progressive politics, mainly in the US but also ideally in the rest of the world. I offer this plan not as a final product, but as a starting point for discussion.

At the center of the program is a set of programs to create a green infrastructure in the United States, that is, to create an infrastructure that will emit almost no greenhouse gases and will have a benign impact on all ecosystems and the environment in general. According to my calculations, which you can see at GreenNewDealPlan.com, these programs would cost about $1.7 trillion per year, and would yield a completely different infrastructure in about 20 years. There are several main parts of this program (PDF).

The Renewable Energy System would cost about $500 billion per year. The centerpiece is an Interstate Wind System, which alone would provide all the electricity needs of the United States as of today. Wind power is an excellent example of the advantages of Federal planning. Because the wind is always blowing somewhere in the US, but the wind is intermittent, that is, sometimes it is not blowing in certain places where it usually is, then if the wind system is designed to be continental in scope, then the wind farms can be placed so that there is always enough wind blowing in enough places in the US to provide most of the electricity the country needs. In addition to the actual wind farms, such a system would also require an Interstate Smart Electric Grid. Currently the national electrical grid is cobbled together from a few separate systems, which were not built with optimal efficiency in mind. The idea would be to have a state-of-the-art system that would cover the entire country and would be able to take advantage, not only of wind, but of other renewable technologies as well. The Green New Deal Plan also allocates money for building millions of solar panels, funding millions of geothermal heat exchange systems (which cut down on the electricity needed for heating and cooling by about two-thirds), and for a large program of building efficiency. In addition, there should be research and development of large-scale geothermal, wave, and tidal energy.

The second major part of the plan is an Electric Transportation System, at about $500 billion per year, and would create demand for manufacturing. The two main parts of this system would be an Interstate High-Speed Rail System (along with an Interstate High-Speed Freight Rail System), and a Distributed Transit System. The high-speed rail system would take advantage of the technologies being implemented all over the world, particularly China, and could be used to replace most of air traffic, while the freight system could replace most long-distance trucking. The transit system would put New York City-style transit systems in 30 metropolitan areas in the country. Between the transit and rail systems, people could simply use actually-existing electric cars, and business could use small electric trucks, although I don’t allocate any money for these, since individuals could purchase them, but there could certainly be a subsidy system installed. However, this whole change of transportation technologies depends on the next system.

The third major part of the plan is for a City Regional Network, abut $600 billion per year, the centerpiece of which is a program to build walkable neighborhoods by building tens of thousands of large, comfortable, affordable residential complexes that would provide the density needed to create a walkable neighborhood. These could be built within central cities, many of which do not have enough residential building, and within towns and suburbs, many of which have virtually no centers, or centers which were destroyed during the process of suburbanization. This part of the plan would obviously create millions of construction jobs, in addition to the manufacturing jobs for buildings materials. Also note that these would be built without financing, so the revenue would replace hundreds of billions in middle class taxes.

These plans also include an upgrade to the current infrastructure, following the advice of the American Society of Civil Engineers, who currently give the infrastructure a grade of about D, in their Infrastructure Report Card. The other major component of the plan is to create a zero pollution, recycling-based production system, which hasn’t been totally calculated, but includes a robust national recycling system, and conversion to local, organic agriculture. There are no studies I am aware of to estimate the cost of converting manufacturing to zero-pollution and to the reuse and recycling of materials.

This program would create about 27 million total jobs, about 6 million of which would be manufacturing jobs. The multiplier effect, that is, the jobs that would result from the creation of these jobs, would also be immense. The Economic Policy Institute estimates that for every manufacturing job created, three more are created. However, after twenty years, if this plan was fully implemented, several million jobs in the fossil fuel and transportation industries might be lost, so the total jobs gained after accounting for those losses would probably be closer to 22 million total and 5 million manufacturing.

Also note that at the end of twenty years, ‘only’ one quarter more of families would live in walkable neighborhoods, so that it might take 40 or so years, depending on how many households would finally end up in walkable neighborhoods, to completely move the US away from automobile-centric transportation. Assuming that only 5% of households now live in walkable neighborhoods, even with about one-third of households being able to take advantage of transit, many of the remaining households might be able to use only low-distance electric cars.

In order for this program to have the results in employment and the revival of manufacturing desired, the Federal government would have to require that the goods needed for infrastructure building be produced in the United States, a policy called ‘domestic content’. It would also be critical to require that after a few years, most of the machinery used to produce these goods also be produced in the United States. Probably almost all economists would be against this policy, so stricken are they by the siren song of ‘comparative advantage’ and the ‘perfect market’, although note this plan would not require large domestic tariffs. Perhaps domestic content policy would not be necessary if every other region of the world were simultaneously embarking on a program of economic reconstruction, because all nations would be so busy with their own economies they probably wouldn’t have the capacity or desire to sell to the US. But the effect would be the same — creating a green infrastructure would pull the rest of the economy up. Currently, the conservative chant is that preventing climate change would damage the economy, but allowing climate change to happen would be fatal to the economy, and as we can see, preventing climate change would revive the economy.

Even with the immensity of this program, a Green New Deal might encompass yet other reforms that would help to insure that we lived in a turquoise society. The infrastructure plan includes billions to rebuild schools, but we might want even more funds to achieve a national goal of implementing a maximum of, say, 15 students per classroom. This would also require many more teachers, and the Federal government could help subsidize this. In addition, there could be a national childcare and preschool program, Federal help with after-school programs, an expansion of technical schools (which would be necessary considering the expansion of manufacturing and construction) and free public college.

This expansion of education would very useful for a program of economic reconstruction, which would require skills, such as engineering, that are currently in short supply. But a Green New Deal could also include a revival of a Civilian Conservation Corps, that would be tasked with maintaining natural places, including parks, as it was during the original New Deal.

In addition, this Green New Deal could eliminate poverty, Martin Luther King’s long-term goal. Like the New Deal, Social Security could be expanded so that no one without a job lived in poverty. In addition, considering all the new work to be done, the Federal government could guarantee a good job to anyone who wanted one. Obviously this would be a radical departure from a market-based employment system, and would confirm the worst fears of private business about the meddling of the government. The business class is generally more concerned about rising wages, which a guaranteed job program would definitely create, than they are about rising demand, which would also clearly be the consequence of real full employment. But in the long-run the larger demand for their products and services would be better news for business than the rising wages would be bad news for their bottom line, and ironically a guaranteed job for everyone would be better for business than the current system.

Of course, while we are creating this wish list, we should include a Medicare for all system. Because the agricultural system would be converted to a mostly organic, local system, if the government subsidized fruits and vegetables then the health of the population would be improved significantly and the national health bill would decline. A population living in walkable neighborhoods would also be healthier because of more exercise, and particularly if exercise was encouraged in some way, the health bill would decline even more. And of course without the toxins belched forth by coal plants and internal combustion engines, many chronic diseases would become much less frequent.

How do we pay for all of this?

As explained above, a public banking system could have the double effect of making it possible to print money for the construction of infrastructure, and to create revenue streams for government. When the wealth-generation capacity of a country is increased, the money supply should increase, because as Adam Smith pointed out long ago, the wealth of nations is reflected in the goods and services it creates, not in the money supply. The money supply should be a reflection of the goods and services, and if government builds infrastructure, the money supply should increase. The government should be the institution increasing the money supply.

However, particularly before the infrastructure becomes fully functional, there would need to be other revenue streams, or other ways of cutting the Federal budget to make room for more important projects. The conversion of the military to infrastructure building would provide several hundred billion dollars, as would replacing treasury bonds with dollars, as discussed above.

There is also plenty of wealth that should be tapped in the top 1 or 5 per cent of the population, and in large corporations. This could be done in one of two ways. The top 1% or so of households receives about 25% of national income. If total GDP is $16 trillion, then this comes out to about $4 trillion, and to tax this group 25% more than the 38% as present would yield a cool trillion dollars, enough for most of the Green New Deal. Large corporations used to contribute at least one quarter of the Federal budget but now only put in about 7%; raising their rates could bring in more hundreds of billions, as could simply taxing capital gains as income. Or, the government could offer the rich and corporations an alternative — investment in reconstruction bonds at a very low or no interest, and you don’t have to pay these new taxes. Either way, there is plenty of revenue available for the critical task of moving toward a turquoise society.

A new political alignment

Clearly, a program to create tens of millions of good jobs would appeal to the entire working class, black, white, latino, of whatever creed or color. This alone would pull the rug out from under the Republican party. Trump’s measly $1 trillion over 10 years for the infrastructure would do very little, and will do even less if it turns into a boondogle, as it seems to be. But even Bernie Sanders (much less Hillary Clinton) did not call for significantly more infrastructure spending. They both had no core argument for fixing the economy, but this Green New Deal would provide a very attractive one.

One might object that the scale of expenditures, and the new ideas for funding like public banks, would scare off some of the middle class. Certainly many if not most ‘serious people’ in the punditry class would paint a picture of inflationary doom. Obviously the very rich and corporations would object to higher taxes, the military would likewise predict national security catastrophe, and the financial industry would do everything in its power to quash public banking. But I think it is better from a progressive prospective to have 90% of the population on your side than the power elite.

The professional middle class, which seems to have become the base of the Democratic party in addition to the Black and Latino working classes, would be materially improved from the implementation of a Green New Deal. First, most professionals live in or near large cities, and this program would rebuild much of the urban environment for the better. Indeed, a large scale program of residential building would bring urban rents down, which would attack the biggest single expense urban residents face. In addition, the demand for engineers and other technological workers would greatly expand, and salaries would thereby rise. A good childcare and pre-k system would appeal to single moms and all families, as would the larger supply of jobs. The possibility of free college, as Bernie Sanders has shown, would draw in young voters, not to mention the prospect of a good job after college.

I also think that in an atmosphere of expanding horizons and the comfort in knowing that there are plenty of good jobs, good medical care, a comfortable retirement and good educational opportunities, would lead to a lower general level of bigotry, toward Blacks, Latinos, Muslims, women, and LGBT individuals. Bigotry would not be eliminated in a turquoise society, but the urge to blame ‘the other’ when things are going badly would be greatly diminished. The Obama voters who elected Trump were voting mostly out of anxiety; if there is one thing a Green New Deal should accomplish, it should be to increase the economic security of the electorate. No more looking for ways to appeal to the ‘white working class’ — the advantages to the whole working class would lead to a truly multi-racial coalition.

Clearly this program would be a boon to unions, which would see their membership expand greatly, and for environmentalists, who would see their issues become front and center as part of a wider economic program. For too long, environmental and labor issues have been isolated, single issue causes. Since the decline in union membership has followed the decline in manufacturing, a rise in manufacturing would lead to a rise in union membership. Climate change has not broken out as a major issue, for two main reasons in my opinion: it has not been shown how combatting climate change would benefit everyone, and the solutions offered, such as a carbon tax, have either been too small to solve what is supposed to be a catastrophic problem, or too uncertain to do the job.

By employing millions of people to create a green society via a green infrastructure, and by therefore also creating a manufacturing boom, the Green New Deal accomplishes many goals at the same time. In addition to the effect on climate change, there are the benefits generally for ecosystems by recycling and reusing. Poverty could be eliminated. African-American communities would gain economic power because of full employment and the return of good manufacturing jobs, which would also help these communities take control of their policing and governance. Jobs for all would decrease the fear of immigrants and lessen xenophobia. The conservatives reliance for their hold on power on evangelical strictures against women’s rights and LGBT rights would disappear because their loss of the white working class base would require a complete transformation of the Republican party. The health of the society would dramatically improve as would the educational level. The standard of living would increase because of lower taxes, lower rents, and better jobs. And all of these changes reverberate around the society because of the virtuous cycles, or positive feedback loops, that would form.

A realistic utopianism

We have seen that a new conception of the economy and the state is needed in order create a society that is environmentally and economically sustainable and just. The old story about the economy, as a self-organizing group of bold entrepreneurs that just need to be left alone, never worked and will be catastrophic going forward. In reality, the economy is an ecosystem, and it is part of the larger natural ecosystem. Ecosystems must be managed so that all of their parts thrive, in self-regenerating balance. The same is true for a human economy. The manufacturing and machinery sectors, along with the infrastructure, are at the center of production.

The government, or the state, has a much larger role in the economy than has been generally acknowledged. The state is the only entity that can plan and design for the nation, or the region, as a whole, and plan far into the future. The market can only work when the larger structure of the economy is maintained by the state. That structure includes the infrastructure, and all of this must be built with an understanding of how the various human systems fit in with the larger ecosystems of the Earth.

Sometimes, the market is the problem and the government is the solution. The level of governmental intervention into the economy would not only signal a return to the ‘era of big government’, it would begin a new era of even larger government spending— but with a twist. ‘Big government’ often means that the government will intrude into your daily affairs, it will try to tell you what to do. The conception of government I am putting forth in this essay is completely different. It is a government that builds. Government is best at building, and government started by building infrastructure. If the main task of government is to build, and if it also helps to build an economic democracy of employee-owned-and-controlled firms, than it can actually become less intrusive and regulatory. Government can help business by helping them to convert to civilian work, to convert to green manufacturing, to convert to employee-owned-and-operated governance. Government can help business by providing business with well-educated and healthy employees who will be paid more and who will have more money to spend. Government can help business by providing more finance capital at lower rates with public banks, and by providing a world-class infrastructure to use for transporting goods and providing services. Government and the market can both be part of a self-regenerating system if the role of government as builder takes front and center in the public imagination.

A turquoise society and a Green New Deal will only happen if progressives can take over the levers of power in government. I foresee an electoral strategy as the main path for progressive activity going forward. I think a Green New Deal, or some version of it, could be a powerful way to rally, not only the various parts of the left, but also much of the alienated working classes, of all ethnicities, to work toward a better society.

A Green New Deal may seem utopian. But it is more realistic than most agendas currently being discussed, because it seeks to actually solve the problems we face. Income inequality has become so serious that government needs to directly create millions of jobs and revive manufacturing. Climate change is such an existential threat that we need government to create the equivalent of ten Interstate Highway Systems. The global threat of right-wing nationalism is so great that we need to offer a concrete, clear, progressive alternative to the world’s people. As Thomas Paine said, ‘we have it in our power to begin the world over again’.

Biography

Jon Rynn is the author of the book “Manufacturing Green Prosperity: The power to rebuild the American middle class”, from Praeger Press. He has a Ph.D. in political science from the City University of New York Graduate Center. He is the author of numerous articles and posts on sites such as grist.org, the Roosevelt Institute blog, and alternet.org and others, which can be seen at JonRynn.com. He worked closely with the late Professor Seymour Melman of Columbia University for 20 years as an informal research associate. Currently he works for the City of New York and lives in the New York City area with his family.

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