Transcript of EP 169 – Roar Bjonnes on Growing a New Economy

The following is a rough transcript which has not been revised by The Jim Rutt Show or Roar Bjonnes. Please check with us before using any quotations from this transcript. Thank you.

Jim: Today’s guest is Roar Bjonnes. Roar is the co-founder of Systems Change Alliance and a long time environmental activist and writer on ecology in alternative economics. Today we’re going to talk mostly about his book, Growing a New Economy: Beyond Crisis Capitalism and Environmental Destruction. These are topics we’ve talked a lot about on the Jim Rutt Show. So welcome, Roar.

Roar: Thank you. I’m glad to be here.

Jim: Yeah, I look forward to this conversation. It’s quite an interesting book. You’ve obviously been thinking about this for a long time, you know a lot of the sources, et cetera. It’ll be fun to jump into this. Let’s start off with the way you start the book, with a quote from Naomi Klein, where she says, “We live in a time of overlapping crisis. We need to connect the dots because we don’t have time to solve each crisis sequentially. We need a movement that addresses all of them.”

Roar: Yeah, I started the book with that quote because I think it’s so important to connect the dots. The main topics in the book are the financial crisis, the environmental crisis, resource crisis, and the inequality crisis. And all of these crises have a common cause that is partly the economic system. But even before we think about the economic system, we need to look at the worldview that created this economic system. E.F. Schumacher, maybe the father of green economics in the 1970s, said that, “Every economic system has an underlying philosophy and underlying worldview.” And I think that’s that’s very important.

For example, today we are now at COP27 in Egypt. We have all of the different politicians from the rich countries and the poor countries. We have many activists there as well. But most of the discussions are related to how we can find solutions that are, I would describe as green washing, not real, deep solutions, not fundamental solutions. And that’s what I think Naomi Klein means and what we mean in the book, that we need to really dig deep into what are the underlying sources or causes of these problems? The finance crisis, environmental crisis, resource crisis, inequality crisis, which has led to the problems of climate change, because it’s the economy, stupid. That I think is the main problem. And then of course we have to look at what is it in the economy that is the problem?

Jim: Yeah, well, I would add two more things to this. In my world, the Game B world and what people call the liminal web world, we often talk about the meta crisis, which includes the four you talked about and a couple others, one of which is the collective cognition problem. We’d argue in some sense that may be the most fundamental. It feels like the political world is losing its mind. What’s that all about? I think back in 1964, when I first got involved in politics, at age 11, this is an interesting statistic. Less than half of American adults 25 and over had high school degrees. It was about 45%. Only 9% had four year college degrees. And yet our politics was fairly sane. Today in the United States, 90% of adults 25 and over have high school degrees. And about 37%, varies a little bit by state, but 37% or so have four year college degrees. And our politics seems insane.

And our ability to make sense of the world together and come to some kind of consensus view on what’s right and what’s wrong, we seem to be losing that. And I recently said on a public talk I gave that if I had to guess which of the various parts of the meta crisis are going to kill us, it might be that one. It might get us before climate change does. Because if you can’t decide, you can’t think, you can’t make collective decisions, you’re in a deep world hurt. The other one. What you do allude to, and I do think you see this, is that culture is a substrate, particularly the culture of materialism, “More, more, more,” that drives and is driven by the other four parts that you talk about.

So anyway, let’s move on here, and then take another quote from the book. And this I think is very important for setting the grounding of the philosophy and of the rest of the work. “The financial crisis and the inequality crisis are both expressions of human made systems, namely our economic and political structures. Both of these crises are thus within the reach of politicians, activists, and economists to reform, restructure, or tweak.” I often call this the gateway insight. So many people think that what we have came down from Mount Sinai with Moses or some such, that the 11th commandment was fractional reserve banking. And of course, that’s baloney. This is all stuff humans have made up and humans can change.

Roar: Yeah. Again, what you said just earlier in your commentary, there, this about the meta crisis I think is very important. And that’s what I mean by the need for a proper worldview, because we need to have a common worldview. And the goodness is that I think that is happening on the ground. Paul Hawken wrote in one of his last books that, “There is a moment that the media doesn’t talk about.” And that moment is partly within the environmental moment and partly within what I would call the system sciences and the spiritual movement. For example, Jeremy Lent is talking about this, “The need for a new worldview.” I think this is very, very important. So we have lost touch with the real economy and instead we have replaced the real economy with the financial economy. But even the financial economy has become a speculative economy because fundamentally a financial economy should support the real economy, the making of things.

Economics comes from the Greeks [Greek 00:06:19], which connects ecology and economy, taking care of the household, which is the underlying philosophy behind economics. Since Adam Smith developed his ideas about the economics and classical economy, we have gradually gotten off course. Many of the idea that Adam Smith had in the beginning were pretty sound, but there was one particular problem. And that is his focus on profit and selfishness. And again, this comes back the idea of are human beings selfish? Aren’t we also altruistic? It comes back to the whole idea of evolution. Is evolution just survival of the fitness? And so on. So that to me is part of this meta crisis. These are some of the thoughts, ideas that we need to come to grips with in order to understand that economics is not a science in the sense of physics. It is really an expression of culture, and expression of meaning, and the way we share, and distribute, and use our resources.

Jim: And you made a very good point that until around 1800, humans would’ve thought it very strange, the way that we’ve put financialized markets at the center of everything. That is not certainly how our hunter gather forbearers did things, nor was it the way it was done through the Greeks, the Romans, in the Far East, et cetera. The economy or production, consumption, and savings, and investment were tools for the good life, not an end in their own self. That misreading of Adam Smith. You got to read Theory of Moral Sentiments with Wealth of Nations to really understand Adam Smith and people who focus only on Wealth of Nations come away with a distorted view. And unfortunately the world actually did go that way. What they went, that distorted view, that celebrating personal greed is the way to collective good was a gigantic mistake.

To your comment about Jeremy Lent, I actually had him on the podcast about a year ago, EP 150. We had a really good conversation about his recent book, which was titled The Web of Meaning, and about the nature of humans, whether altruistic or not, had a really good conversation with Sam Bowles, the economist who’s done a lot of work with herb dentist Gintis, field work all around the world on doing economic games and stuff. And he finds that people are both selfish and cooperative, and some very, very interesting results in that space in EP 100. So, “The economy and ecology,” you say, “are highly interdependent. It is about time we humans as stewards of this planet begin to conduct our political and economic activities accordingly.”

Roar: Yeah, this, I think is so important. In Systems Change Alliance, which I am co-founder of, and if any of your listeners go to, they’ll see that on that website we have four circles. The first one is about this web of meaning, the worldview. The second one is about nature, and the third one is society. And then the fourth one is economics. In modern economics, we’ve got it all backwards. We start with economics and then everything is subsidiary to the economic system. This is part of the problem and part of the disconnect. So this change started happening in the ’60s. I would say Rachel Carson’s Silent Spring woke people up to the fact that we had the environmental problems. And then as I mentioned earlier, E.F. Schumacher in the early ’70s with Small is Beautiful.

And I, myself, was part of that movement. I studied agronomy, agriculture at that time and was part of this small green revolution in Norway, where I grew up. We were able to turn one of the agricultural colleges into completely organic college. Today it’s probably the only one in Norway, and at one point, the only one in Europe that was wholly organic. So as I mentioned, economics is [Greek 00:10:43]. There is a connection because all our wealth comes from nature. So if we don’t understand how nature operates, which we have a much better understanding of today, and also we need to learn from Indigenous people. And that knowledge, that wisdom needs to be reflected in economics.

Sustainable economics or sustainable development is trying to do that. But the problem is sustainable development became a hot topic in 1987 with the Bruntland Commission in the United Nations. But as you mentioned earlier in our talk before the show, it’s gotten worse since then. The more we talk about sustainable development, the less sustainable development we are having. And that is because of this huge disconnect between economics and ecology. We are taking nature for granted. It’s been looked upon as a free lunch, but as we all know, there is no free lunch. We need to have an economic system that is guided by the loss of ecology.

Jim: Yet in fact, that’s the fundamental disconnect in some sense. Well, there’s two. One is disconnect from planetary safe limits and the other is focused on money on money return as an absolute good irrespective of human wellbeing. And the two together are essentially the fundamental problem. Now, of course it is interesting and I often point out that our modern world started to form around 1700 and reached its clearly visible form around 1800. And in 1700, one can understand how we got to the system we had. In 1700, humans were relatively few, it’s hard to believe. But as recently as 300 years ago, there were only 650 million humans on earth, less than a 10th as we have today. And the energy consumed per human on a worldwide basis was less than a 10th of what it is today. Most of it was animal power, surprisingly, with human power second, and wind power third.

And of course since then we’ve gone through what Nate Hagens, who we had on the show recently, calls the carbon pulse, where particularly after about 1800, we discovered how to not only find fossil fuels, but then to use them in things like steam engines, and then internal combustion engines, and later turbines, and reactors, and such, and ramp up the level of energy intensity. And at the same time, the miraculous, frankly, discoveries in biology in the late 19th century allowed us to turn the death rate down, and life expectancy up. Though actually, death rate down turns out to been more important than life expectancy up. And we’ve had this astounding population explosion where we’ve gone from 650 million people to what? A little bit less than eight billion people, probably heading for 10 and 11.

So anyway, what we take away from it, people in my world take away from it, is it’s perfectly understandable that the status quo formed the way it did between 1700 and 1800. Because at that time we were small and weak relative to nature, but we are no longer. And certainly by say, 1945, we had the numbers and the power to dominate the world and destroy it, potentially. And since 1975, that’s been fairly clear. It’s about when we passed three and half billion, which might be the carrying capacity of the earth without advanced fertilizers, and technologies, and such. Since then, we’ve clearly been overrunning the sustainable capacity of the earth to support the human race. And for me, the short form, I’d love to get your reaction to this. The short form, the fundamental problem, deeper that all these epiphenomenal problems, is that the current status quo has no breaks. It’s built for exponential growth above all else. And that the real transitions we have to make is from exponential to some form of meta stable social operating system that is congruent with staying within planetary limits. Does that make sense to you?

Roar: Oh, totally. I agree 1,000%. Very well summarized. Another thing that I just wanted to add to that, what shifted in the 1700s was also this idea that instead of us being part of nature, nature was seen as a machine. And that is one of the disconnects that Jeremy Lent points out in his book, The Web of Meaning, which also causes what you’re talking about, the exponential growth. Because then we looked upon nature as just another operating machine that we could utilize at our own interest, and growth, and so on. Yeah, this is the fundamental problem with capitalism, this idea that we can have endless growth without consequences. We have seen in our civilization that there are serious consequences to this endless growth. And that is the fundamental problem, I would say the problem in terms of economics. And so that is what we are seeing today. Since, as I mentioned the topic of sustainable development came on the scene in 1987, we have seen more and more exponential growth.

I come from Norway, and Norway is often hailed as the most sustainable country of the Scandinavian countries, the greenest on the planet, and so on. However, the reality is if everybody lived like Norwegians, we’d need four planets in order to sustain ourselves. And this is at the very heart of the problem. So now in the green movement, we have two world views. One is the no growth movement, which is addressing, we know this. We have the steady state. And then we have the green growth. And there’s a headbutting going on between those two worldviews. In one sense, I think we need a little bit of both. We need some green growth in the developing world because in the rich world we have extracted our resources from that part of the world. We created inequality.

Thomas Piketty, the French economist to wrote a 700 page book and which became a runaway best seller, focused on the growing inequality that is happening in the world today. So we have runaway growth on one side of the planet, and then we have exploitation, and degradation, and utilization of resources, and not allowing the people in the poor world to develop in the same way. So we have a huge problem at our hands. We need to lower our expectations about growth in our world. And at the same time, we need to have sustainable, resilient development in the poor part of the world. This is a complex issue.

Jim: And also I’d say that the no growth versus green growth, neither of them hit on quite exactly the right issue, at least in my mind when people say de-growth, I groan and say, “There’s a terrible way to present this to people.” Because at one level, we do need to literally de-growth. I mean, less inputs, but that doesn’t mean we can’t be richer because we can grow in the microcosm. Things like art, things like living well, things like having better food, even if we do it in a more plant based diet and grown locally rather than flying blueberries in from Chile in February, which is obviously totally insane, et cetera. So we can actually have a better human wellbeing while having less material inputs. And people have not put those two parts together. And that’s my objection to Davos Man’s approach to, say, climate change, which is, “Less, less, less.” Humans aren’t going to tolerate that unless you give them something in return.

So we need a cultural move to actually have more human wellbeing while we actually, for at least a while, reduce particularly energy, but other material inputs into our civilization. And green growth, yeah, sort of, maybe. But what does that mean? It seems to me you have to denominate that quite seriously in terms of, let’s say the nine planetary limits that people have identified. And then further, of course, new technologies come along all the time, which allow us to do more with less, in some sense. That’s a good thing that we managed to develop solar power just in time, it seems. Without that, we’d really be in a world of hurt. And in the future there may be other new energy sources, controllable fusion, maybe someday.

I used to be a skeptic on orbital solar, but I just talked to an entrepreneur last week about orbital solar. Maybe they can get that to work with the new lower launch costs that SpaceX provides. So a more nuanced view, I like to call it meta stability, where we understand our planetary limits and, as you say, we need to converge worldwide to a similar level of inputs. This idea that people in the West are going to consume 10 times as much per capita as people in sub-Sahara Africa. It’s immoral and it’s unsustainable, for sure. And we need to develop a convergence to similar levels of inputs that are well within our planetary limits. And I wish we could get a way to describe that with a name. I don’t have a name for it yet, but I think neither de-growth, or no growth, nor green growth quite gets at that dynamics that we have to undergo.

Roar: Yeah, I would agree to most of what you’re saying, although green growth, or at least de-growth is a misnomer, is like defund the police, which is, yeah, good intentions about having more social service to reduce crime and so on in society. But we don’t want to defund the police. We need the police. And similarly, the de-growth moment is using a term that is a little bit of a misnomer. But Jason Hickel, who is one of the main proponents of de-growth, an economist, he understands what you’re talking about because most of what he thinks that we need to de-grow is in terms of consumerism, things that we really don’t need. There are so many consumer items today that we don’t need. So many consumer items are created to be broken within a certain time so that we can make a new one. We don’t need an iPhone every year and so on. So that is part of what is meant by de-growth.

And then of course the green growth idea is that we need sustainable growth or resilient growth, which is what you’re talking about, to create that balance. So yeah, I basically agree with you, we need to find a balance between these two ideas and also, like you’re saying, come up with terms that really speaks to the issue at hand more properly and concretely.

Jim: Let’s move on a little bit to the book and let’s talk a little bit more specifically about one of your four crises, the financial crisis, and particularly how debt seems to be central to this problem.

Roar: We had a major change in economics in the ’70s, particular. Up until the 1970s, if we look at the United States, for example, there was very little debt in the economy. People had very little debt, but then there was a change with neoliberalism and the free market or the neoclassical economics, which started a little earlier, but it was building up until that time, when debt became part of the economy. And at the same time why? Because we had the growth of the financial economy, which I would call an artificial economy, a false economy. Because it basically says, “If you put your money here in this company and you have compounded interest, you will make money without doing anything.” And this is the kind of economy we have today. When we were writing the book, about 20% of the US economy was the finance economy, meaning an economy that doesn’t produce anything.

Now that economy is even higher GNP, I don’t know exactly what it is today, but it has grown. And that economy is very dangerous because it creates inequality. It creates inequality of wealth, and it creates inequality of income. So the wealth inequality is incredible. Today we have a handful of people owning more money than half of the planet. It’s an insane equation, that which is the inequality that Thomas Piketty is talking about as well. So that economy, again is a kind of free lunch economy. It is divorced from the real economy of producing goods that we need in the economy. And so this has created lesser income from the poor. And so in order to stay within the economy, then you need debt. If you want to buy a house, you need to take a bank loan and then a bank makes money on that loan. And with compounded interest, the banks make more and more money and you are gradually, the common person, the person in the street on Main Street is losing out.

So that is what we call a debtor economy, where most of the people in the economy are heavily in debt, whereas the few are earning more and more. And that is growing. And this is particularly the case in the United States, much less so in Scandinavia, where I grew up. In the United States today, the difference in income between the highest paid and the lowest is about 340 times. In Norway, it is probably less than 20 times, so a huge difference. So there’s less of that speculative debtor economy in Europe and particularly in Scandinavia, but it is the predominant part of the economy in the United States.

Jim: Yeah, I looked it up this morning when I was preparing my show notes and as late as 1965, the ratio of CEO pay to worker pay was 21 to one, and the most recent number in the US that I could find for 2021 was 399 to one.

Roar: Oh, so it’s even higher. Yeah.

Jim: So it’s moved 20x as a ratio. And again, this goes back to this fundamental introduction that you made, that these things are within our control. It is actually surprising that the masses of people have put up with this. In historical terms. When you get this much inequality, that’s when the guillotine starts to clank. We haven’t seen the guillotines out yet. I wonder what that’s about.

Roar: Yeah, that’s true. Well, again, if I compare the United States with Europe, Michael Moore had one of his films, it was called, Where Do We Invade Next? I think the title of the film was. He was in France, had a group of American expats around the table. And he asked the question, “What’s the difference between the United States and Europe in terms of politics?” And one American woman said, “The difference is that in the United States people are afraid of the government. And in Europe the government is afraid of the people.” There is some truth in that. What she meant is that in Europe, and this has, I think, shaped the European economy, and especially again in Scandinavia, where you had very strong union movement and an opposition to government policy since the 1930s and onwards. And this has very much shaped the Scandinavian economy because every year in Norway, for example, the labor union leaders sit down with governmental leaders to create policy, and sets income levels, and so on, and so forth. There’s constant negotiation back forth.

That we haven’t had in the United States. And that is one of the reason why there is such a discrepancy between the highest and the lowest pay. So in other words, you have more socialism, more Marxism in Europe than you have in the United States. And I think you will see that in politics today. We had election yesterday. And we see that there is actually, now, interestingly, a growing union movement in the United States, which I think is a good sign. But historically it’s not been a very strong movement. And that is part of the reason there are no mechanism for direct negotiations between the owners of business and the workers.

Jim: Yeah, of course, the US did have a relatively strong union movement up until the early ’60s. And of course it was an institutional problem. I’m not aware of how it works in Norway, but I am more aware of how it works in Sweden. I have some friends in Sweden, and one of whom was the president of the local union for firefighters in the town that he lived. And he told me how it worked. And even though he’s kind of a Trumpy right wing guy, he’s also a really strong union guy. And he explained that 90% of Swedes belong to a union and that that’s how they want it. And as you said, annually, they sit down, management and the union representatives, and they hash out a deal. If they can’t come to an agreement, there’s a strike, usually a symbolic strike for a day or two, and then they sit down again and have it.

And the results are a much more egalitarian structure. Of course, unfortunately in the US, the industrial unions in particular became very corrupt. Some of them were even literally captured by organized crime, famously the Teamsters, they also, let’s say the US auto industry in the ’60s and ’70s were very antagonistic to management and trying to get the company to run well. They were pretty good at getting very good wages, but they had very restrictive work rules and stuff which led the US car companies to be essentially overthrown in market share by the Japanese and to a lesser degree the German ones. You contrast that with German unions where again, they have very strong unions, but in Germany the unions actually have representatives on the supervisory board. And so they work with management to make the company more successful, but at the same time, demand a fair share of the economics.

The US unfortunately didn’t develop those institutions. And one of the things I like to always point out is institutional design is really, really important. And we just did not do a good job of modernizing the unions, which did remarkable things from the ’30s to the late ’50s, and then became rigid and corrupt in the early ’60s. And at that point, frankly it made good sense for businesses to try to get the unions the hell out of their business because they were rigid, and stupid, and often dominated by criminals. What we should have done is looked at people like Germany, and Sweden, and Norway, Denmark, I assume, and reinvent this kind of general union cooperation between workers and management for the benefit of both. But America didn’t do that, and UK didn’t do that either. It seems to not be a anglophone kind of thing to do, and institutions do matter.

Roar: Yes, I agree.

Jim: The other thing you talk about is national debt. Not only do we have private debt, but all around the world we have countries that have grossly exceeded reasonable debt levels and the chickens are going to come home to roost now with interest rates going up. The US could get away with, it’s crazy, $32 trillion debt next year, which is double from 10 years when the interest rates we were paying were one and a half percent. When they go back to the historical 5%, how the hell are we going to pay $1.5 trillion a year just of interest? And the US is in better shape because all of its debt’s denominated its own currency. But you look at countries like Greece, and Italy, and Spain, and Portugal, and we have a new and maybe much worse financial crisis that could well be coming.

Roar: I totally agree, that crisis is looming on the horizon. And one of the reasons why the US is still doing okay is because the US dollar is the main currency in the world. But if China, and Russia, and other countries start to demand doing business in their currency, then we would be in trouble. So that that’s part of the problem. But yeah, debt is not the solution. As Odum, the ecologist said, “In nature there’s no debt that is high enough, we have to pay it back.”

Jim: Yep. And of course the other, we’re talking about institutions, and you allude to this a bit in passing in the book, but my own analysis, it’s more central, which is that our monetary systems across the world today are actually based on debt. 90% of the money and circulation to the United States, 95% in the UK, is not issued by the government, but rather is issued by banks when they create debt. And this provides some very bad, I don’t know if it’s all bad, but it’s a curious set of dynamics, which is that money supply tends to grow overly fast during expansions, which causes the economy to be overheated. But as soon as things turn, banks pull in their lending, which at least implicitly reduces the money supply at exactly the wrong time. In fact, the knobs turn the wrong way both on the way up and the way down.

And I’ve long proposed a system whereby money is not issued by banks but rather is issued by the state. I call this program dividend money. And basically all the new money that comes in each year goes to the people per capita as essentially a bonus to the populace at about the rate of GDP growth, maybe plus a percent or two. And that kind of system does not have this double negative feedback system racing ahead on the upside and then retrenching too fast on the downside. And so again, this is a institutional structural issue that could make a big difference.

Roar: I totally agree. Yeah, that’s why we have these, the boom and bust cycles in the current economy, we, like you’re saying, accelerate way up. And then we have a crash like we had in 2008, ’10, and we might as well be in for another bust like that now. But yeah, that is a part of the problem. It’s an artificial economy. The finance sector is out of touch with the real economy, and so you have these boom and bust cycles.

Jim: Yeah, those are interested in my proposal, search dividend money, Jim Rutt, YouTube, and you can find an hour and a half of me ranting on this topic, and explaining how it works. Now, another structural thing that you did highlight, you did a very nice job. I learned some things on this, is talking about how the Eurozone had the surprising effect of actually making the rich richer. At first you might have thought they should have helped the poorest countries the most, but in the end it turned out not to. So why don’t you tell us that story?

Roar: Yeah, because of the centralization of the euro, you hand basically a situation where strong economies, like especially Germany and France, but especially Germany, again, the German banks are controlling the euro. And then in order for the countries like Portugal and especially Greece, Greece had probably the worst crisis around that time, 2008, ’10, because they were poorer countries and they needed to catch up. Then they were loaned money in euros, but of course they had to pay that money back. And then they loaned so much that they got into a crisis. And then they were not able to loan it back and so on. And so you had this economic crisis in especially Portugal and Greece, Italy to some extent.

But basically it created this huge division between the haves and the have nots in Europe. And I think that it would’ve been better to kept the national economies or the national currencies until the Eurozone had become a place where you had more equal economies. In other words, not such a difference between especially the countries in the southern states in Europe and the northern states. That was a big mistake, although I think they recognize some of that mistakes and it has balanced to some extent. But these same countries are in debt still and haven’t really recovered from that crisis, especially Greece.

Jim: Listeners who aren’t up on the details of macroeconomics, one of the key things about having your own currency is if you are less productive, let’s say you’re Greece versus Germany, you can change your exchange rate and it actually has some very interesting effects. It doesn’t impact the wellbeing of your citizens very much, a little bit, but it makes your exports much more competitive. And so that even if your productivity rate is less, your industry could be preserved. But as you point out very cleverly in your book, the Germans are more productive. If the Germans and the Greeks are linked in the same currency, there’s nothing the Greeks can do about it. And they essentially become deindustrialized by the fact that they don’t have the flexibility to adjust their currency to the reality economic situation.

I’m going to point out something else about Greece though, which points to a really big pattern, which I don’t think has been seen enough by people. Greece has had all kinds of historical problems, they had problems collecting their taxes, they’ve had a lot of corruption. But what people don’t know, generally speaking, is Greece spends one of the highest amounts per capita on military of any country on earth. I looked it up this morning, and Greece spent last year, 3.87% of its GDP on military, Germany, 1% Japan, 1%, even Taiwan’s sitting under the gun to the Chinese, like 1.3%, even the United States, about 3.5%.

So Greece is one of the biggest spenders on military and mostly it’s because of their feud with Turkey. And you go, “What the hell’s this about, two NATO members?” They’re not actually going to go to war with each other, but there’s this arms race. In fact, in our Game B world, we talk about this as the multipolar trap where, frankly, the stupidest thing human race can do is spend money on the military. Well, second stupidest. The stupidest is to fight wars. Wars are nothing but bad for the participants in them. But because one country can threaten the other, let’s look at Russia and Ukraine, it forces everybody else to increase their military spending. The Germans are going to double their military spending. And so we’re caught in this multipolar trap of defense spending.

And here’s the part that people haven’t seen yet, I don’t think, is that while we talked about that exponential economics is the problem that’s going to destroy the ecosystem if we can’t find our way to economic stability, since at least the American Civil War military power has been relatively strongly correlated with economic power. So if you back off of exponential economics before the other guys do, while you’re still caught in the multipolar military trap, you lose. So it’s actually a very deep and dangerous conundrum that we have to find a way to back away from the military multipolar trap at the same time we’re trying to back away from the economic exponentiation. Greece would be way better off if they were spending 1% of GDP on military like Germany does rather than 3.87. But they haven’t found a way to back away from that. And that applies on a worldwide basis, basically.

Roar: Yeah, I wasn’t aware of that, actually. That’s a very good point.

Jim: It’s quite interesting. The more broader thing is even more than the percentage of GDP, it’s the fact that the perceived correlation between economic power and military power. So if you’re caught in a military competition, you can’t back away from, you can’t back away from exponential economics. I don’t have an answer for this, but I think this is something people need to focus on more is that linkage going forward.

Let’s move on. Let’s talk a little bit about inequality. We’ve talked about it a little bit in passing. Give us your systematic thoughts on what’s going on with seemingly growing inequality everywhere, even including in Scandinavia now, but maybe not as rapidly as other places, but of course the leading growth in inequality is in India and China. So there’s something fundamental about the operating system today and that seems to be generating this inequality.

Roar: Yeah, and I think that the main problem with inequality lies at the heart of the imbalance or the contradiction within the capitalist system of looking at only profit as the main driver of the economy. That leads to winners and losers. It is no accident that The Selfish Gene Richard Dawkins’ book, The Selfish Gene became very popular on Wall Street. I think that idea, that we are inherently selfish beings and there’s no altruism or cooperation in evolution, nor in human society lies at the heart of this problem. So when we have economy such as India, that is a developing economy, in the last 10 years, we have seen the growth of middle class, 300 million people in the middle class, but at the same time, the poor have not gotten out of their poverty. So yes, we have seen a growing middle class, but at the same time we have also seen billionaires coming out of India. Many billionaires are now Indian.

So again, we see this top heavy economy which is centralized in the hands of bankers, in the hands of owners or businesses, and so on, and corporations. So that corporate capitalist economy is very imbalanced and that is the main cause of inequality in the world today. And this is what Thomas Piketty talks about. So how do we deal with that? We need to bail out the people rather than the banks whenever there’s a crisis. No bank is too big to fail, as it is in nature. We need to increase the wages as per the productivity of the economy. We need to have progressive taxation. In the United States. In the ’50s, taxation of the ultra rich was up to 80, 90%. That evened the playing field, we need to honor the real economy that the people that produce will get proper pay for what they produce. And we need to give incentives to co-ops and worker owned businesses as well.

And this is something we haven’t talked about yet, but what we advocate in the book is that the corporations are turned into worker owned businesses. Rather than Elon Musk owning the business. The workers themselves should be the main owners. And this, I think, is the major change that needs to happen. And I was very gratified to read in Forbes Magazine when the biographer of Margaret Thatcher, who was not the leftist, not the ecological activist by any means, he was saying that, “We need to turn the corporations into work around business.” So here you have a right wing person basically saying the same thing as I’m saying and what we advocate in the book. And I see this as a hopeful sign that many more people now are understanding that private corporate ownership is the main cost of inequality, and also one of the main causes of environmental destruction. And that needs to change, because it is the cost of this huge inequality that is still growing on the planet. Even though there’s more wealth, there’s also more inequality.

Jim: Yeah, you actually laid out, I thought, a very interesting three tier class of companies. That was something new. I thought that was an interesting contribution.

Roar: Yeah. This is something that I think is the solution. So if we look at Scandinavia, as I mentioned earlier, Scandinavia is probably the closest to that kind of an economy. So what we are advocating is a three tier economy that supports capitalism, but on a small scale. So private business is up to about 25 employees, privately owned so that there are no corporations. But capitalism is allowed, which is different from socialism or communism. And then that the corporate sector is turned into cooperatives and worker owned, worker decisions, sharing the wealth as we have in the Mondragon co-ops in the Basque Region of Spain, very, very successful. 70, 80,000 people employed in a few thousand businesses that are very successful even though they’re competing in a very hard, cutthroat, capitalist system.

And the third element would be government owned businesses. And you can see that in Norway, 75% of the oil industry in Norway is owned by the government. And that is one of the reasons why there is free medical care, free education through university, and so on, because the money earned from the oil and gas production is turned back into goods for the people. So that kind of an economy would then have a balance between the best of capitalism and the best of socialism in that sense.

However, it needs to be within the limits of the ecology of nature. So we could say that a doughnut economy or a doughnut economic vision needs to be part of this. So we have then a structural change at the heart of economics that then functions within the circle, the bigger circle, which is the natural environment. That’s the main vision we have for that new economy. And then of course there are many details that goes through that within that system.

Jim: Yeah, that’s quite interesting. Of course there’s some things that need to be thought about. The United States has cooperatives as well. In fact, I’m a member of two cooperatives, though they’re both buyer cooperatives rather than employee cooperatives. There’s really two class, there’s consumer cooperatives and employee owned cooperatives. And as a farmer, I belong to two that provides some of our materials for our farm. And you get a rebate at the end of the year, and it operates on a not-for-profit basis, which is good. And we have a few local employee owned cooperatives. But until very recently a structural problem was the law of cooperatives made it very difficult to get investments into them.

Roar: Yeah. So that has to change. In the farm sector in the ’50s and ’60s, especially in Scandinavia, the cooperative sector was very strong in the dairy sector and in the general farm economy, also in the United States. However, on the global scale, I believe it is about 10% of industries in the world are cooperatives. The Mondragon coops are probably the most well known because it’s so concentrated. But also in northern Italy, 30% of the business in northern Italy are co-ops as well. So we have certain areas of the world that has a high percentage of co-ops. In the Mondragon co-ops that employs thousands of people, nobody has been laid off since the 1950s when these co-ops were started. So that is one of the main benefits, tremendous security in the economy, and so that there’s no fear of being laid off, but rather people are reskilled, or there are changes in the economy, or in the business. Because the idea is that, “We are all part of this. This is our business. And so we work this out together.” Not like today when Musk took over Twitter and he basically fired half of the staff.

Jim: And of course, in the US there’s good sized co-ops too. The Land O Lakes company, which is the biggest butter producer in the United States is a producer co-op.

Roar: Yeah. And also some citrus growers in Florida. They’re also co-ops.

Jim: Yep. And though again, we talked about it earlier, especially for a more traditional company that’s a factory or something, gaining capital to build the factory is actually quite difficult. Though fortunately in the US they’re just recently been some changes in the law to produce so called hybrid co-ops, where you can bring external capital in at a fair rate of return. Maybe it gets a five or 6% rate of return, not a 16% rate of return. Venture capitalists are looking for, on average 16 to 20% rate of return. And that basically strips much of the profit out of the business. If you have hybrid co-ops, particularly the state of Colorado has been a leader in this. Fact, I did a podcast with Jason Wiener, who’s an attorney in Colorado and helped advise the state on these laws.

And so people who are interested in doing co-ops might well look at the Colorado law, because they’re trying to be the Delaware for cooperatives all over the country, who can register in Colorado even if they’re operating elsewhere and use some of these innovative structures. And I get to the point that institutions matter and our society needs to be smarter at adjusting our institutions to make changes in this direction. Now, government ownership is interesting, I can see the argument for it in things that are utility like, for sure, I mean water systems, sewer systems, even municipal power, internet, those all make sense.

Roar: That is where we are advocating that the government comes in.

Jim: There’s another class though, which I wonder about, and that is product oriented industries that require innovation. For instance, it would scare me to have the government own something like Tesla, which is very driven by innovation, or intel. Presumably there needs to be another structure for research intensive, innovation driven companies that nonetheless still have to be big. Any thoughts on that?

Roar: I agree. And I think that those could still be cooperative, some may be privately owned. So there has to be flexibility, here. Maybe a small private company producing very specialized item for a larger industry. So again, I think that innovation can happen as equally strong, I think, within the cooperative economy. Also, it is very important to remember that a lot of the innovations that happen in our society have been supported by government money. So the government can then supply and support the co-ops just like they’re now supporting many corporations. Bill Gates, without having the access to universities funded by the government, and so on, and many inventions, we never hear about that side of the story. We always hear about the successful individual, but we never hear that, “Well, they were partly successful because they got government grants, and so on, and so forth.” So I think that there is a role here for the government to play in funding and in capitalization. And at the same time there is growth from the bottom up in terms of creativity and change.

Jim: Yep. I think those are all very interesting ideas. Now, here’s a quote from you that I want to push back on just a little bit. “If the banking system collapses, the entire edifice of the market economy will come tumbling down. Although it does not produce anything itself, financial system enables all commercial transactions including imports and exports to function.” I like to point out to people that maybe less than we think, in reality finance is nothing but pointers to wealth. It is not wealth itself. If all the money and all the stock markets disappeared, the factories would still be there, the farms would still be there, the trucks would still be there, human capital would still be there. And in fact, we have a handful of interesting historical examples where banking and finance essentially disintegrated, and yet new systems were put in place, and the economies restarted remarkably rapidly.

Two I’ve done some research on are the hyperinflations in Germany, Hungary, and Austria, in early 1920s where literally, you’ve seen the things in the college textbooks of people pushing wheelbarrows full of currency to buy a loaf of bread, and essentially the value of money got wiped out, et cetera. Argentina 2000, 2001 had something similar occur, and yet, especially in Germany, when they introduced the new mark, the economy restarted in a week. It was quite remarkable.

So I say yes, we think we’re utterly dependent on banking and finance, but I also argue that as long as we had an architecture to replace it with, you could actually make a more radical change in that area than people think, because money is not wealth. Stocks are not wealth. They’re coordinating signaling devices and they’re probably more changeable than we tend to think, and certainly more changeable than the powers that be that dominate those institutions would like us to think. Which leads me to some radical ideas, things like instead, we’ll talk about that soon, you have an interesting idea about how to handle excess sovereign debt.

But I might go a step further and say, “Hey, let’s eliminate all debt. Let’s do a global jubilee. Let’s clear the decks. Let’s introduce a new monetary system of the sort I’ve talked about, where money is issued by the state as a per capita dividend to the citizenry. And as long as we thought that out in advance, yes, it might cause a little turmoil, it might be surprising how far a field we could go in terms of radical, new institutions, so long as we understand that money and finance are not wealth.

Roar: I agree with you, it is true. However, we cannot avoid some kind of crisis. The depression in 1930s was the stock market crash and it had devastating effect in the real economy as well because of this relationship that is there. But I agree with you in a fundamental sense, and I think that the planned forgiveness program of all debt, I think it’s actually a quite good idea, which sometimes happens. Sometimes poorer countries are forgiven, their IMF debt and so on, that does happen, because they’re realizing that they are never going to get back the money anyway.

But I don’t think that a huge international financial crash wouldn’t hurt the real economy. It would. But the other question is I think that it would probably be for the better. Yes, in the short term it will hurt many people. But in the long term, this is where we’re heading. We’re heading towards this crisis and this is why we put the four of them together. We are heading to this perfect storm of these four different crises. And I think that we are actually closer to that today than when we wrote the book.

Jim: I agree. You have a more moderate approach, but a clever one, which I’d never seen before, on how to eliminate public debt. It was a while ago you wrote this and I thought this was an interesting idea, which you pointed out that typically the private wealth in an economy, in an advanced economy, or even a semi advanced economy, is usually four to six times the public debt. It may have shrunk some with the gross run up of public debt recently, but let’s call it five times. You therefore pointed out that a one time wealth tax of 20% could be used to pay off the public debt. And you could either do it as a one time extraction on wealth or you could do it the Piketty way, which is to have a ongoing wealth tax that essentially pumps tax on private wealth that could be used for, amongst other things, paying off or at least reducing to a tolerable level, public debt. Do you still think those are reasonable approaches?

Roar: Yeah, I do. I think that progressive taxation is a way to go as a reform strategy, but in the long term, I think that the restructuring of the economy is necessary to avoid these booms and bust cycles in the economy. And that’s why we are focusing in the book, in the last part of the book, on the solutions on what we would call a restructured, decentralized economy, more economic democracy, not just political democracy, but economic democracy, meaning that the people involved in economics working day to day are also part of the decision making in the economy.

But yes, I think that to deal with that, progressive taxation is one of the steps to move. But when you restructure the economy, the debt burden will automatically go down because you are focusing on the real economy rather than continuously the finance economy, and always having the short end of the stick. So that’s why we are supporting that as a temporary measure and that’s why I think Piketty has some really good points, and I think his work is very important.

Jim: All right. Well, let’s move on here. There’s so much interesting stuff to talk about. We can talk for three hours easily, but being an old geezer, I can’t keep my energy up for quite that long. So let’s move on to resources, and particularly energy, and how these fit into the puzzle.

Roar: Yeah, as you mentioned in the beginning, the reason why we have had so much success in producing all this wealth in the rich part of the world particularly is because of cheap energy. The oil boom, the oil revolution created a situation in which we had ample resources in order to produce things. And without that oil, we would not have been where we are today. With that oil, we artificial fertilizer and so on, energy to heat our homes, energy to drive our cars, and transportation, and so on. So an explosion in economics. And at the same time as you mentioned also, an explosion in population. And at the same time an explosion in terms of utilizing non-renewable resources. And so today we are at the point where we are using up the resources of the planet, fish in the oceans, we have depleted so many of the fish stock, some of them up to 70%. Water resources, we have misutilized due to this explosion in growth of the economy in certain parts of the world.

So again, this growth has created the tremendous economic and environmental imbalance. So we are at the resource crisis, we are at the resource crisis in terms of water. We have maybe not, as Richard Heinberg said in his book, The Party’s Over, which came out, I think, in 2006. He wrote a recent article and saying, “Yes, I was a little early by saying that we are running out of oil, but we are right on course in terms of my analysis.” And I think that is right, we are moving into a situation where it’s becoming more and more expensive to utilize gas and oil as a resource. And so we are at this tipping point. We need to increase alternative energy, solar energy, wind energy, and so on.

At the same time, we need to do that in a responsible way. We can’t do it overnight. We can’t crash the whole economy. So we are at a very delicate situation. And will we avoid the crisis here in terms of balancing the utilization of non-renewable resources and other renewable resources like fish? That is the $60 million question. And I think it seems like we are moving towards a crisis of global proportions. However, and here is how thin the balance is, how thin the veil is between total exploitation, and crisis, and regeneration, and change. If we set aside one third of the oceans for 10 years, and no fishing, the whole fishing stock would renew in 10 years. So in other words, the whole ecosystem of the oceans would renew itself. These are the kinds of things that we need to do on a global scale, because now we don’t have environmental problems just in our backyard. It has become a global phenomenon. And what we’re not seeing is are these kinds of actions taken? These are the kinds of decisions that needs to be made at COP27, but they’re not happening.

Jim: They’re rearranging the deck chairs on the Titanic, basically.

Roar: That’s correct. That’s exactly right.

Jim: And then I recently was talking to some people involved in the ESG investing space, right? The environmental, sustainable, and governance type investing. And that’s turned into green washing as well. It’s letting the current group of elites make teeny little changes is not going to get us there. What it’s most likely to do is get us a fascist dictatorship because they’re not encouraging us to move in ways that improve in human wellbeing. It just makes no sense. It’s really crazy. So much interesting stuff to talk on, move on, something that’s going to get me to go back and do more research. You pointed to, what’s his name, Polanyi is that how you pronounce his name?

Roar: Karl Polanyi, yeah.

Jim: And I think you got it from him and some other related people. The idea that we have made a huge mistake when we think of land, labor, and money as the same as commodities. Could you talk about that a little bit? I think that’s a really interesting insight to got to make me do a little research and learn more about that.

Roar: Yeah, so Karl Polanyi was a Hungarian economist, and he wrote The Great Transformation in the 1940s, and he was prophetic. He basically pointed out what has happened, and that is he said, “We have created a market economy that is based on production, and the selling, supply and demand, but that system needs to be guided by society, by the culture, and it cannot be devoid from that. And in addition to that, we have turned everything into a commodity: land, money, labor, as something that can be sold and exchange.” And he basically said, “This is the heart of the problem in our economy.” And he is been absolutely right. So when we commodify everything, nothing is sacred anymore. Morality is out the window, ethics is out the window.

David Brower, the founder of the Sierra Club, he had a wonderful saying. He said, “Every new invention is guilty until proven innocent.” If we had followed Karl Polanyi’s message, we would have thought twice about letting new inventions onto the market if we had that kind of ethics. And this is what Karl Polanyi was talking about, but because everything becomes a commodity, it can be bought and sold on the free market, then everything is just a thing. There’s no sacredness, there’s no culture behind this. It doesn’t have any value apart from the monetary value. And that’s been the downfall of Western civilization. This is at the heart of the problems that we are facing today. And we need to resacrilize the planet, the work, human interactions, ethics, morality, values, spirituality needs to become central to the way we do economics.

Jim: That’s interesting that, when I was reading the book, I had just recently given a talk on issues like values, and I pointed out that it’s a moral obscenity and I think I used the F word to emphasize it in my talk, as I sometimes do, that the richest country in the world has tens of thousands of homeless people living on the streets. How could that possibly be? How could that be a moral decision, like what has happened in San Francisco and Los Angeles? And you think about it, I had that in my mind that I read your finished reading your book, and I came across this and I said, “Ah, to treat land and specifically housing as if it were just any other commodity ends up with that result.”

When I first was an adult, you could rent perfectly reasonable housing for a reasonable percentage of your salary. And this is a great example, the conundrum and why thinking about this wrong produces terrible results. But since 1975, the cost of housing has skyrocketed. What used to be a $300 a month apartment is now $3,500 a month. And here’s the key. It’s the same damn apartment. No new wealth has been created. And so essentially, literally, rentier, the rentier class has pulled a massive scam on humanity by moving a greater and greater percentage of our work labor, the blood of our lives into paying for rent, or the rent equivalent in purchasing a house. And it makes no sense. Why would we want that? Yet it’s happened despite the fact that it’s essentially crushing the wellbeing of anybody who’s not affluent, and at the margin results in tens of thousands of people living on the street in the richest city in America.

Roar: Yeah, it is so true. We are living in the rentier economy. It’s exactly right. And companies like Uber and Airbnb are capitalizing on that rentier system and destroying, for example, I was in Portugal, in Lisbon, a couple of years ago at the conference, and I heard that many of the local neighborhoods had basically been destroyed. People couldn’t afford to live there anymore because of Airbnb. Private investors were buying up whole blocks of apartments and then kicking out the older people living there. And now the rents are sky high, and many of them are rented out as Airbnb. So yeah, it is true. We have created the rentier economy. We are all in debt, and we are all become rentiers. We are the modern Serbs of this economy. And it’s not really improving. It’s not really changing.

Jim: And it’s not. But to your point, the very beginning, that these are all human constructions, and if we had the vision and the fortitude to assert our democratic power, we could change these things.

Roar: Exactly. That again, is the fundamental issue of economics. So much of it has to do with values, morality, and vision, and worldview, because that is what creates the economy that we want. So in other words, it is a construct and we need to construct an economy that is based on good values, creating a good society, basically. It’s that simple.

Jim: Indeed. And coming up here on our time, unfortunately, as I said, we want to talk endlessly on this stuff. I’m going to now switch, running through some of the tactical, financial and related reforms, which you suggested, just get your quick reactions to them, and you can tell us a little bit more. One you proposed is credit default swaps should be regulated just like the insurance industry. And here’s a controversy one. One should not be allowed to buy credit default swaps with assets that one does not own.

Roar: Yeah, because that just feeds into this artificial speculative economy. It just keeps that speculative economy growing rather than creating real wealth for real people.

Jim: As we know, it was also the spring, when it was pulled way back, when that was released. That’s what caused the financial crisis in 2008, that and some related chicanery, that very few people know about rehypothicating collateral. Just look that up. Rehypothicating collateral, people. Google that term. And when you read it, you’ll be horrified at what our financial system is doing behind the scenes that has nothing to do with productivity, and does nothing but adds risk to the system, make it short selling should be banned.

Roar: Yeah. Again, short selling, it’s just more the same, speculation on money and making a quick buck, literally in cyberspace. Not creating any real wealth.

Jim: Though, I’m going to push back on this one a little bit. Companies can be good or they can be bad, they can be misleading the public, et cetera. And short selling is a way to signal that you think a company is being duplicitous, and that it doesn’t actually have the potential that it’s claiming in the marketplace. And if we think of finance and money as signaling modalities that help us operate cooperatively in a decentralized fashion, I’m not entirely sure that getting rid of short selling’s a good idea. I like to be able to call bullshit on companies that I think are not what they say they are.

Roar: Right, yeah, it’s true. I see your point. Yeah. In some incidents like that, I think it could work.

Jim: Yeah, though, on the other hand, on smaller companies, you can crush a company by organizing a big short, but on bigger companies, that may be useful. So you might want to rethink that one a little bit. In a similar vein, option market should be used solely for mitigation of risk and not for speculation. I would say that the same objection to short selling may apply there, though maybe not as strongly, that investing in options is a signaling modality to express an opinion about what might happen. And that in itself can be useful.

Roar: Right. Jim, I was wondering if, because we have so little time left, if you could maybe do some features of the new economy?

Jim: Yeah, there’s various ones. Let’s go on to, we’ll skip over these details. I happen to love financial shit, so that’s why I went down that rabbit hole. A couple other ones, as we get to the more macro level, and I think this was very much accurate, you strongly reject the Washington consensus for how countries should manage their economy democratically. Why don’t you talk about that? What’s your advice to nation states for how they should manage their economies?

Roar: Yeah. This is one of the problems with the free trade system and what came out of the negotiations starting in the ’60s and so on, and which developed free trade agreements throughout the world, because it was basically free trade for the rich and control trade for the poor. So for example, we quote Erik Reinert, a Norwegian economist who wrote the book, Why the Poor Stay Poor and Why The Rich Stay Rich. Because free trade agreements were used for the benefit of the rich so that they could have easy access to raw material, this happened in Africa, in South America, in India, it goes all the way back to colonial time. And in effect, free trade is in, many ways, a continuation of colonial practices.

Meaning that, for example, in the United States, one of rebellion that created the United States was their rebellion against the British for not allowing United States to industrialize. The British wanted the United States to be an agrarian economy. And that is literally what has happened in so many parts of the world where the poorer countries was not allowed to industrialize. And so trade agreements need to be fair. In other words, the best strategy would be for small nation states to only export finished products rather than raw materials. Utilizing the raw materials in their own country, develop product, and thereby industrialize and of course, in a sustainable manner, and then sell the finished products, earning more money and raising the living standard of its own people. But this is not happening in the current free trade agreements. They’re not fair. And we need fair trade, not free trade.

Jim: Again, I learned something in this book, and this is an area I know a fair bit about. Comparative advantage is often said is one of the few things in economics that is both true and non-trivial. And for the audience that may not remember their econ, comparative advantage says, “Countries should concentrate on what it does best relative to other things, even if it does less well than other places do.” So for instance, if you’re better at making grapes and wine than you are at wheat, even if you’re not real great at either one, you should make more wine. Ricardo was the guy who came up with that idea. And it is really central to the way that neoclassical economists think about the world. And you gave me a neat example, I don’t know where you got it from, which is you acknowledge that in a static sense this is true, and it is. The math actually works. I remembered my economics classes, working through it. Comparative advantage does actually make sense.

However, you made the very nice distinction that if you only stick with what you’re currently good at, it’s very much like a six year old child choosing to go to work shining shoes rather than go to school, and that what the idea of comparative advantage misses entirely is the dynamics of the evolution of a society. You pointed out, the Brits wanted the US to be a raw materials, trees, tar, maritime supplies, and agriculture, tobacco, etc. But the Americans didn’t want that, particularly Alexander Hamilton realized that if we are going to have an industrialized America starting in competition with this global model at England, we would have to have high tariffs to do import substitution as a way to bootstrap our way up the stack, very much rather than going, sending your six year old out on the street, shining shoes, put them to school for 16 years so they could get a better job. And I think that was a very, very interesting perspective and is the first good refutation I’ve seen of Ricardo’s comparative advantage.

Roar: Yes. And what Ricardo’s system led to was protectionism for the rich and free trade for the poor, because the poor were not allowed to grow out of their own. Yes, as you said, if they’re good at producing tomatoes, they were not allowed to produce anything but tomatoes. They were not allowed to industrialize and so on. So that comparative advantage led to a disadvantage for the poor countries. And that’s one of the reasons for the inequality we have in the world.

Jim: Okay. Now let’s get on, we’ll probably exit here, because we’re getting up on our time, some strong recommendations, which, as you can tell from my conversation, I’m good with strong stuff. You recommended caps on wealth and income, so let’s talk about that.

Roar: Yeah, I think one of the ways to get rid of this finance crisis that is brewing and it is all always there, in these artificial economies to have a wealth tax cap on high income, we have caps on minimum wage. Why should we only punish the poor and not the rich? And because we had that in the ’60s, ’50s in the United States, for example, and also in Europe, progressive tax. But as I mentioned earlier, taxation is really a way towards systems change, structural change in the economy. So I don’t see that as so much necessary when we have a society that is restructured economically. Then, there will be less need for progressive taxation because naturally a few people will not earn as much.

But today I think it is very important. We need to get the money from somewhere. Like you said earlier, why should the richest country in the world have tens of thousands of people living on the street? It’s insane. It is unjust. And that money needs to come from somewhere to train people, to give them psychological care, if that’s what they need, to get them into programs, if they’re alcoholics, and drug addicts, and so on.

Jim: Yeah, and truthfully, I’ve thought about this quite a bit. I played the game of capitalism hard and made lots of money, but I didn’t really play it for the money. I played it to win. And the fact that I made ridiculous sums of money was frankly irrelevant to my motivation. A 10x difference in income would’ve been plenty to motivate me. It didn’t have to be a 500x, which it was at one point. And this is the case where, because we have not thought about our institutional structures and how they come back to human wellbeing and human motivation, we’ve gotten it wrong. Nobody needs to make $10 billion. What the fuck? How many cheeseburgers can you eat? In my case, it’s a fair number, but it’s still limited. I even ran the numbers on how much could you spend on whores and cocaine, and it came out to about $300,000 a year.

So even if you wanted to be a total degenerate, these kinds of things are just entirely broken. And there’s nothing wrong with us saying a 10x difference in incomes is good. We have that power as democratic people do it, but it’s not on the table at all. Even Bernie Sanders or Jeremy Corbyn never puts ideas like that on the table. They’re just thought to be too radical. I would encourage the audience to think outside the box, and I think that you’ve done a great job of laying out some interesting and controversial ideas here that actually do hang together pretty well.

Roar: Thank you, I appreciate that.

Jim: Any final thoughts before we wrap it up?

Roar: Well, I enjoyed this interview very much, and I am glad to see that you had such a good grasp on economics, and also contributed so many interesting ideas. Well, I think that we are moving towards this perfect storm, this crisis. We focus on four of them in the book. And unfortunately, I think that we will go through a crisis fairly soon. We are already starting with the climate crisis. We’re already experiencing the effects of the climate crisis. But at the same time, I think we are also going to have an economic crisis.

But what gives me hope is that so many of the ideas that we have for change are already here. And I think many of them are enough to ride us through the storm. What that storm would look like, nobody knows, when it will happen, nobody knows. But I’m very hopeful that we, as humanity, we will survive this crisis, and we will thrive, and we will find a way to live together on this finite planet, utilizing our finite resources, and expand in infinite ways through our spirit and our minds, through our creativity, culture, spirituality. Because as you mentioned in the beginning, that’s where we need to grow as humans and as spiritual beings. That’s where the real growth needs to happen.

Jim: Well, thank you, Roar Bjonnes for a wonderful conversation. This was very stimulating. I learned some new things. And it’s relatively unusual for me to learn new things in this space because I’ve read so much about it. I would highly recommend people who are interested in this actually read the book. We did hit many of the high points, but there are a lot of rich points that we didn’t have time to. And the book’s title is Growing a New Economy: Beyond Crisis Capitalism and Environmental Destruction.