The Blue Economy or the Economy of Happiness | ISPI
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New Ideas

The Blue Economy or the Economy of Happiness

Gunter Pauli
07 August 2020

The Blue Economy which was first proposed as a Report to the Club of Rome in 2009 points out that we have to replace efficiency with resilience. We have to convert the present economic model focused on competing globally with low prices. It is timely to design a framework that permits to generate more value while first of all responding to all the basic needs of a community. The low cost versus high value strategy can only be effective if and when society uses all readily available local resources available in its area of influence. This goes beyond the mere recycling. It includes the cascading of nutrients, matter and energy, discovering value in stranded assets and even putting to use weeds for productive purposes. This implies a fundamental shift in the “rules of the market”.

The key for business is not to grasp the latest strategy for cost reductions, the newest technology of the Internet of Things, nor the return on investment that pleases shareholders beyond expectations. Rather, business is in an urgent need to rethink its model of operations. The stop imposed due to the coronavirus demonstrates that we need business models that enhance and secure not just the "functioning of the market” which has forced many societies to a standstill. There is an urgent need to strengthen the very conditions on which life depends.  We need resilience and only when we have empowered communities with the practice and the tools to ensure this, then can we build a framework that permits us to pursue health and happiness. Would we ever give a license to operate to a company that destroys - perhaps unknowingly - the very environment on which life exists? The search for innovation and business development should be focused on how to design business that is capable of responding to the basic needs while ensuring thriving Commons while offering a respectable return. We do not have to pretend that the invisible hand will guide us, rather we should make a conscious decision to curtail the exploitation of The Commons along with the same logic that we deal with thieving. Stealing less is still stealing. Polluting less is still polluting. Destroying the Commons more slowly is destroying the Commons.

The present model for globalization is a framework that permits the pursuit of logic for competitiveness built around the power of “cheap”. The producer who is capable of outcompeting all others on the market based on price is the one that generally wins. In order to be the lowest in cost, all borders and tariffs need to be eliminated, and vigorous operators are permitted to cut corners. Labour is considered an obstacle and is therefore replaced by no labour thanks to the introduction of artificial intelligence and robotics. Raw materials are squeezed through a global supply chain management where suppliers are forced to eliminate intermediaries, press farmers and miners to embrace economies of scale and impose a never-ending pressure on prices, with a delivery system known as just-in-time where no stock is kept on the books, and all is in a perpetual movement on trucks with a back-up stored in faceless warehouses. The pursuit of ever-better economies and lower overheads leads to mergers and acquisitions, consolidation and concentration up to the point that in each market only a few players survive globally. These champions will focus on narrowly defined markets which are standardized to the extreme, with only cosmetic differences between two products or services. How can one ever expect that this business model that drives global production and consumption toward the lowest price and the highest economies of scale will lead to sustainability, health and (why not) even happiness?  It seems that this model is the antithesis of happiness.

When the priority shifts towards the generation of high value (instead of low cost) with local (instead of global) resources, then the economy increases the velocity of the circulation of money, increasing the purchasing power, tilting towards full employment. Whereas economic theory proposes unemployment to maintain flexibility on the labor market, full employment emerges as one of the visions in society most policy makers do not consider viable.  Yet full employment justifies immigration. When there is a vision for the development of a region or a territory, then this growth and job strategy beyond full employment is viable. However, this innovative approach can only succeed in the periphery, since there is always a resistance to change and a imposition of economic orthodoxy at the center of power and influence.

The concrete examples on four continents demonstrate that this competitive model is not only conceptually appealing, its effectiveness has been demonstrated in concrete cases from the Island of El Hierro in Spain to the Kingdom of Morocco opted for this approach. The core characteristic is that no one expects the Earth to produce more, everyone does much more with that what Nature already produces.

The citizens of El Hierro decided to converted fisheries (line fishing only while conserving all females), coordinate grapes farming and create their own winery, transform all goat and sheep’s milk into cheese with fresh herbs, and yoghurt with biologically farmed pineapples and bananas. The island reopened its abattoir and today has its self-sufficiency in fish, meat, wine and subsequently re-organized its water and power production and distribution. The economy moved towards full employment, money circulates locally and growth is combined with a considerable improvement of the quality of life. Morocco opted for a growth strategy driven by    

readily available and degraded land to farm crops as a source for a green chemistry. Old mining dumps are transformed into raw materials for a new (stone) paper industry, cutting imports while transforming a waste into a value generating tens of thousands of jobs. The internet in the Kingdom is complemented with a light-based high-speed innovative technology (LiFi) that permits the country to control its own data.

It is time to realize that we do not need to debate the good and bad of globalization, it is urgent we focus on what is better. And to face the future we need much better indeed.

Related Contents: 
Global Watch Coronavirus: Speciale Geoeconomia n.21

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Gunter Pauli
Zero Emissions Research and Initiatives (ZERI)

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