Posted by: Gray | April 23, 2013

A Proposal to Cut US Citizen’s Consumption in Half

I was delighted to take part in an Earthday Conference organized at College of the Atlantic on the theme of  “Cooperation, Community and Complexity.” (For more on it and the very interesting presentations it included see: http://coa.edu/ecocon). As part of it I presented a short talk  focused on a proposal to cut U. S. citizens’ consumption dramatically and quickly. The bullet form of the talk is included here.  Comments growing out of the discussion it sparked will follow.

“Meeting the Future Halfway: Seeking An Economical Sound and Politically Effective Way to Cut US Consumers’ Ecological Footprint in Half Over Five Years”

4/21/13 Remarks  by Gray Cox (gray@coa.edu

Introduction:

My goal today is to foster a conversation about our patterns of consumption. But being caught up in the busyness of the world and consumption of ideas as well as things, I hope you will permit me to slow myself down a bit to enter this conversation with a prelude, a song. You can listen to it here:  Here are the words:

I’m gonna slow right down, so I can get there sooner.

I’m gonna slow right down, so I can get there today.

I’m gonna slow right down. Maybe even come to a full stop.

Maybe if I come to a full stop, I’m gonna get there right a way.

Some assumptions:

a. If everyone were to consume at the average level of the US consumer, we would need four planets or more to sustain ourselves. So the future is one in which the average person on the planet will consume, in material resources, ¼ or less of what the average U. S. citizen does today.

b. 3 of the 7 billion people on Earth live on $2.50 a day or less – which is way too little.

c. Dealing with the ecological problems and the poverty problems will require major changes in the ways our economic system invests and the ways  power is exercised in our political systems.

A basic proposal to address these concerns:

One simple action  people in the U. S. might consider taking is to adopt a plan to cut our consumption by 10% this year – and 10% the following year, and %10 more the year after that until, at the end of five years, we will have cut our consumption by %50. We can take the remainder of our income and spend it either on direct aid to those in need, on political efforts to change the world or on  investments in natural and community capital that will restore and enhance the earth currently being destroyed.

This action is simple in that sense that the basic step to be taken is relatively clear to understand and justify – though like any clear and reasonable action it requires appropriate application to the specific circumstances of peoples’ lives. The action is also simple in the sense that it is a step towards simplicity of living – though like any simplification of life, it can involve a subtlety and complexity of sensitive understanding. It arguably does not go far enough towards the future we need to reach. But perhaps we can think of it as a starting point which begins to address the problems of  ecological impact and poverty in an integrated way as socio-political economic actors – providing a way to meet the Future halfway. (And then see where we go from there.)

One further key point to note: Unlike some other proposals to cut consumption, this one does not reduce aggregate macroeconomic demand and would not present a threat of recession, depression and downwards spiral of the economy. In Herman Daly’s terms, it would provide a way to continue economic “development” while quickly and significantly reducing and reversing material “growth” and downsizing the ecological impact of  the U. S. economy.

What might motivate people to undertake this action?  And to what extent?

a. Ethical concerns for other people and/or the environment

            b. Religious motivations  (for a version of this paper presenting these ideas in a religious context see my paper from FRIENDS JOURNAL on “Meeting God Halfway” which is available at: http://www.quakerinstitute.org/?page_id=71

            c. Desires to become owners through investment

            d. Desires to become powerful, politically

e. Desires for security by reducing needs and increasing resources

f. Desires for “simplicity” of lifestyle and attendant peace, health or other effects

g. Incentives introduced by community,  state or national policies

h. Shifts in identity and culture brought about in any number of ways —  as with the example of energy consumers in Hancock County who have shifted from using oil or gas as “Modern Consumer Families” to being “Self-reliant Downeast Yankees” who use locally sourced wood. (For more on this case study, a paper is available by request.)

Some puzzles about the proposal that  need to be thought through further:

a. How should we measure and count personal income and  consumption as a percentage of family expenditures – vs.  government payments,  aid to others,  socially responsible investment and political action – and insurance, decisions to pay extra for “green” products, et cetera?

b. To what extent should we encourage reaching the 50% figure by increasing income instead of decreasing consumption?

c. To what extent and in what ways is a gross measure of consumption a useful and appropriate measure of ecological impact for the average citizen to  gauge his or her  footprint or, perhaps better labeled:  “bulldozer print”?

d. How should the proposal be adapted to people in different life circumstances – ages, family units, starting levels of consumption, et cetera?

e. How to make the transition at personal level?

f. How to best scale up the transition – and deal with possible dislocations in the political economy?

I hope conversation around this proposal will continue not only amongst ourselves now and  later in the day and beyond, but amongst others. I am hoping in particular it might continue through a blog at:  http://breathonthewater.com

To spark such discussion, I invite you to consider how you would choose between one of four possible career scenarios that you might adopt over the next 20 years. The scenarios assume, for simplicity’s sake, that you will make on average $50,000 a year, that in every case, if you save income to invest you will do so in a socially responsible form (e. g. investing in alternative energy or organic farms or local education bonds) that return a rate of 4% per year, and that in every case you will save at least 5% a year for a retirement fund of some kind. The choices are, then, to:

A. simply consume the rest of your income each year in the amount of $47,500 (a bit like the “Grasshopper” in the fable by La Fontaine)

B. live on $25,000 of consumption a year and spend 45% of your income on helping 25 people in absolute poverty living on $2.50 a day to double their income (the “Samaritan”, option B) by giving $22,500 a year.

C. live on $25,000 of consumption a year spend 45% of  your income in the amount of $22,500 a year on political action like electing funding a state legislator’s campaign or lobbying Congress (the “Political Activist”) – and it is assumed that you will be able to get at least 10,000 people through some group like Moveon.org to join you in this so there is a multiplier that results in the collective financial impact of your group on politics in the amount of 225 million dollars a year

D. live on $25,000 a year and invest an extra 45% (for a total of 50%)  on socially responsible things like organic farms, alternative energy, etc. (the “Socially Responsible Ant”) – while A, B and C save only 5% a year and end up at the  close of the 20 years with a little over $76,000 the “Ant”  will have savings equal a bit more than $764,000.  In that case, you will be able, at the end of the 20 years to retire with an annual income from your investments at 4% of  around $30,000 a year.

Below is a chart summarizing these four options. If those were the choices before you for your next 20 years, which would you choose and why?

A B C D
Grasshopper Samaritan Political Activist Socially Responsible Ant

1

income

50,000

50,000

50,000

50,000

50,000

2

investment rate of return

0

0.04

0.04

0.04

0.04

3

investment rate

0.05

0.05

0.05

0.50

4

annual investment

2,500

2,500

2,500

25,000

5

annual giving rate

0

6

annual political $ rate

0

7

years worked

20

20

20

20

8

annual spending on personal consumption  

47,500

25,000

25,000

25,000

9

personal wealth accumulation in socially responsible investment

76,411

76,411

76,411

764,114

10

annual retirement income after 20 years

3,056

3,056

3,056

30,565

11

total aid to others each year $

22,500

12

# aided by doubling income of $2.50 a day

25

13

annual political power individually $

22,500

14

Moveon.org multiplier

10,000

15

Total annual political action $

225,000,000


Responses

  1. Notes on a few of the comments from folks in the discussion period at the Conference:
    In trying the exercise at the end, one person chose to be a Grasshopper, 4-5 people choose to be Samaritans, 4-5 chose to be Political Activists, and 10 or 11 choose to be Socially Responsible Ants. (A few people were in each case tentative in their choice.)
    One suggested that a Government tax increase should be a fifth alternative.
    A number noted the importance of looking closely at the specific kinds of investments that should be allowed for D.
    People seemed to like starting the reflections with a song 😉


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