Paul Krugman, Nobel economist, acknowledges that the economy is in recession and says it will be a while until things turn around. Will it be 2010, 2011…2013? He has no idea. He’s also said that everything that’s been tried so far to get the economy rolling again hasn’t worked and that we’re doing the same thing Japan did during its last major economic turndown—and it didn’t work for them either.
Mr. Bernanke’s outlook wasn’t very upbeat either. “The likely duration of the financial turmoil is difficult to judge,” he said. “But even if the functioning of financial markets continues to improve, economic conditions will probably remain weak for a time.”Continuing, he said that “cumulating job losses, weak consumer confidence, and a lack of credit availability” would depress consumer spending, traditionally the engine of American economic growth, and noted that exports were “not likely to be as great a source of strength for U.S. economic activity in coming quarters as they had been earlier this year.”
So, what’s left to do but sit and wait it out? Or maybe this time we could try something else? As the world’s economists sit in turmoil trying to get the old system running again—they are running up against new parameters that have never before been factored into the current 3 sector (government, markets and illegal) economic model: major resource depletion, global warming, and a 70% consumer economy that can not be sustained. We all know it but our economists seem to be committed to long-term denial.
That’s understandable—they’re generally in their 50’s or older and have made their fortunes in the 3 sector economy. Not hard to understand why they think this is a good system and is the only option possible. But there are cracks in the system. Even Greenspan admitted that his 40 year commitment to the 3 sector economy isn’t working and he’s totally stunned. It’s clear that the imagination of the old guard is in a thinking block!
The old rules and the old system have run its course. This is a natural occurrence and shouldn’t be viewed as a bad thing but welcomed as the opportunity it is for a new model to be designed. Welcome to a 6 sector economy—A Full Spectrum economy. A Full Spectrum economy enables the introduction of 3 new sectors to the current 3 sector economy.
Doing this will take the pressure off the government and market sectors to carry the entire burden of the economy. This is important because when these two sectors are strained, it results in an increase of the illegal sector of drugs/crime/prostitution to fill the void. Anyone would agree that this isn’t the smartest way to go.
So a Full Spectrum economy makes sense! Adding these 3 new sectors—the household, unpaid volunteer and natural sectors as part of the measured/valued economy results in a more vibrant and active economy. These 3 new sectors have always been a part of the economy—in that massive quantities of ‘work’ have occurred in them and in fact the old 3 sectors could not have functioned without them. They’ve just never been monetized and valued and as a result, they’ve become invisible to the 3 sector economists.
Time to make the invisible visible! If we want a highly functional economy, designing the 6 sector Full Spectrum economy makes sense. Because the 3 new sectors foster a post-industrial service/knowledge economy into the areas that will be ever-more necessary now that consumption patterns are set to shift down.
For example, if we recognized the value of the ‘household’ sector—in that it produces a value of healthy, whole, strong children—we could pay those who do the high quality work in this sector. At the same time, thousands of other businesses would grow up around it. Not consumption businesses that lead to resource depletion—but new businesses in the service fields of education, health care, travel, art, creativity, music, environmental caring etc.
Household businesses are not ‘paying people to make babies. Instead, the household sector is “whole person/optimal human development enterprises’. To be the best business they can be, “Optimal human development enterprises”, like any business they would need to purchase services from other businesses. For example, as we know, today’s traditional businesses pay for bookkeeping, legal fees, advertising costs, promotion, productions costs etc. all as a ‘cost of doing business’ on their way to success. Whole Person/optimal human development enterprises would do the same.
They would be looking for services that would enable them to foster the broadest 7 “intelligences” that foster optimal human development for their children. They might purchase services such as private art lessons, music, or other interests of their children. They’d purchase lots of the latest technology, preventative health care, and lifestyle support services. They would buy services from travel businesses that would provide ‘real life’ experiences both as ‘adventure classes’ that have children/families traveling the world—or in-home experiences using technology that enables us to ‘be there’ while sitting in our living rooms. The imagination runs wild when you build the household enterprises which become part of the B2B economy!
While this is happening in the household sector, the ‘natural sector’ will also be a source for new economic development. While factoring in ‘true cost accounting’ of the earth’s resources will impact the ‘market/consumption’ costs/pricing to bring it into the balance that was missing in the 3 sector economy, working in this sector will provide much new and necessary work. Some will be in resource restoration but many new jobs will be created in work for caring for the planet in ways that benefit the household and market sectors too. It is a necessary new sector that, once monetized, has its value honored and respected within the 6 sector economy. It is another conscious step to again take pressure off the market/government sectors.
And the unpaid volunteer sector could be a method for ‘banking volunteer time’ (which is currently valued at $19.61 per hour!) that could be traded for future caring in one’s senior years or in time of need. For example, imagine if a volunteer ‘banked’ enough hours a month to cover their ‘health insurance’ payment and this was connected to a local health system? Imagine it costs $1000 a month. That’s 50 hours of volunteer time a month or about 11 hours a week. Doable? Certainly. There are all sorts of ways this could be ‘banked’ into the system within a community and result in a world that has everyone engaged and building a world that works.
We have a choice right now. We can sit on our butts and watch the chaos of the recession as we remain committed to the old 3 sector, imbalanced economy. We can understand why the current economists keep trying to fix a 3 sector economy but we can finally acknowledge that its time for a new model.
We have a choice to create a Full Spectrum, 6 sector economy that holds the future brightly in front of us. Let’s get off our butts and start designing this! It would put everyone to work and even the current economists would have something to do—writing books on why it is time to change to a 6 sector economy! I bet Paul Krugman could write that book!
As Buckminster Fuller said, You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete. Let’s try something new this time…..