The Social License to Operate

A social license to operate is an intangible, fragile thing - an extension of Good Will in businesses. It depends on perception, communication, transparency and community values. I suspect though that it will be a pretty good indicator of the future viability of a company. I've done my rant about the ills of decoupling money from the goods and services it represents; now I'm thinking that a method of assessing and recording the social license might be as important as the current accounting of a company when due diligence is done.

A system of assessment would need to be agile and flexible to allow for lots of different situations and technologies, and would need to be able to cross national borders. It needs to be community based and not an arm of a multinational company. In other words it needs to be crowd sourced and used. And verified - no one wants a good company ruined by false information or misrepresentation.

Should an individual self assess? What is my long term philosophy?

I think in future rubbish will be more expensive than recycling

Recycled will be cheaper than virgin materials

Renewable should mean just that - consumption no greater that the earth's replacement capacity - with a bit built in for resilience and global repair.

Kiri and Jamie's Tea light holder

And where do I stand? A long way behind my own standards: this little item in cast glass doesn't just have glass manufacture and a kiln firing - there's a pile of waste mould material I have to answer for - how can that be re-used or recycled? I should get back to carving wood!

The grand unified theory of economics.....

The grand unified theory of economics..... well at least I've been thinking.....

Why is western economics so aggressive? Why in Tom Lehrer's words does everyone hate the Jews?

The history of the Western banking system goes something like:

the Law of Moses forbids usury - so Jews, Christians and Muslims didn't practice it amongst their own people. But where there is a law someone will find a loophole..... so lending money for interest was possible between people of different religions.... and became an option because Jews in Europe were forbidden to carry on other forms of business. So a banking system evolved that was independent of both the dominant Church and State. And borrowing for investment became the norm. And money became an object in itself rather than merely representing the goods and services that could be traded for it. So far as I can see a huge amount of social evil can arise from these things: boom/bust cycles and investment bubbles, dangerously deregulated markets and the need for endless growth.

Growth is a two edged sword – it's brought us really cool stuff – including hospitals and railways and clean water and mobile phones and the Internet.... and International travel and yummy foreign cuisine. But on a finite planet you can't maintain population growth and material-consumption-per-capita growth indefinitely. So is it growth we are after or evolution? Evolution allows for altruism, ethics, culture and non material trade and consumption.

How can we break the growth dependency? How do we stop Western economics being so predatory?

I think there's two things we can do that can trigger a paradigm shift towards social and economic evolution:

• borrowing and lending interest rates should be set at the inflation rate – so if you are saving for something then your money doesn't lose while you are accumulating – if you borrow you don't end up owing more than you own unless things go really pear shaped.
• The value of shares in enterprise should be set by a quarterly audit so that we don't have this testosterone fuelled auction mentality driving trading to ridiculous levels.

Can you imagine the pain if we actually implemented this? The end of the profitable banking system as we know it, the calming of the stock exchange to a mill pond of tranquillity.... and you couldn't pay tax on interest then – it's only keeping pace of the real value of goods and services. It needs a paradigm shift to make it work. Would we try it?? My mum said communism, like Christianity may be a pretty good system – we don't know because neither of them have been tried.

But if we want evolution rather than uncontrollable growth then it's worth thinking about how to achieve it and how we value it.

The bottom fell out?

So we live in a contracting economy? Not the first bubble to burst but this could be one of those crashes that they warn us about in the Limits to Growth... followed by oscillations until we reach some sort of stability. If it were not so obvious that humans only respond to crises then we could plan for an orderly contraction to a reasonable level of consumption and production so that we had a pleasant life without over stretching the environment.

You could start by saying that for mortgages the ratio of equity to the total price will remain fixed - except for repayments - so that as the value of the house drops the size of the mortgage drops - the bank absorbing the pain just as the home owner does.... not so silly really - just a spreading of the risk and it would mean that people on a mortgage won't be so pressed to use their stimulus package money for debt reduction. They'll know that their house will always be worth more than they owe on it.

And of course when (if) the economy picks up again the ratio will be preserved up to the point it was at in 2007. So for someone who just sits tight and spends their money they will be in the same position (and so will the bank) at the end as at the start. So you can spend the stimulus package money on a solar hot water service, or buying green power, or a bike....

If you know that things are going to contract why not do it sensibly and work out what we want to achieve - it is like moving to a smaller house - it is a blessed relief to throw out/sell/recycle/give away all those things that you don't really want and that are not contributing to your happiness. Much of our wealth is a burden - why are we so obliged to run the rat race? There has to be a better way.