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Hazel Henderson interview - on caring economics

27 September 1999


HAZEL HENDERSON was in Auckland during the Apec conference to speak to the inaugural conference of Businesses for Social Responsibility and also the Reclaiming Apec conference.

She is an original and leading thinker on the new information economy, and is a lecturer and advocate for sustainable human development and socially responsible business and investment. Henderson is also the author of five books including the most recent "Building a Win-Win World".

She serves on many influential boards, including the Worldwatch Institute, World Futures Studies Federation (Australia and Philippines), Calvert Social Investment Fund, Cousteau Society, Council on Economic Priorities, The New Economics Foundation (London, UK), and WeTV (Ottawa, Canada).

While in Auckland, Hazel Henderson spoke to The Jobs Letter editor Vivian Hutchinson on the continuing challenges of the global economy, and the future of work and livelihood.

The Jobs Letter: What are you seeing in the next ten or twenty years? Where are the jobs? Where are the livelihoods for people going to come from?

Hazel Henderson: Well I think that certainly you have posed this question right -- when you look at a really integrated model, it is a question of livelihoods as well as jobs.

I think a lot of us have come to the conclusion that we can't all sit around waiting for some multi-national corporation to offer us a job because it may not even be a job that will fulfill our life's purpose . and so the livelihood thing is a much more juicy question.

For example, I think of all the women I know in the USA who are members of the National Association of Women Business Owners. This is a very powerful group of women and, as you probably know, women are creating new companies at twice the rate that men are.

Surveys that have been done of women business owners show that their motivations for going into business are real interesting. The number one motivation is to "make a difference with my life and to do what I want to do". Another is a motivation to get around the glass ceiling: these women had suddenly realised that they were never going to be able to do what they wanted to do through one of these giant corporations. The interesting thing is that the motivation to make money was about number four. So a lot of the motivation was about becoming more able to express themselves creatively.

Most of these women started those businesses on their kitchen table and, together with the internet, figured out how to find markets for what they were doing. I remember a woman I met in the Seventies who had written a book about how to have worms eat your garbage. Back then everybody in the mainstream thought she was nuts. Now, she has a little company selling a worm kits . and children love them! So I think that, in the future, jobs are going to come from some very surprising places that we can't even think of.

The Jobs Letter: What are some of the trends that you are seeing at the moment? Writers like Jeremy Rifkin are saying that we are seeing the end of mass employment and the huge growth of an underclass who really don't have the skills to jump into the self employment market. What sort of future are we looking at for those people?

Hazel Henderson: Well I think that I agree with Jeremy Rifkin. In fact I have used the same model in my own writing.

We have to capitalise the care economy - I have also called it the love economy. We are all familiar with all these tasks around the community, the neighborhood and the household that are absolutely vital, whether its taking care of the young, the old, home based care - - that sort of thing. Somehow, this is one of the big places where jobs are going to come from.

There is a group that I am an advisor to in the US called the Alliance For A Caring Economy and their message, which I think is absolutely valid, is that the future is all about social inventions and social innovations. They point out: Why is it that we have this huge military economy and we don't have a huge caring economy? It's just ridiculous really.

I think its all about re-imagining the shape of an economy because any economist will tell you that you can create jobs by digging holes in the ground and filling them up. You can also create jobs with a bond issue to build a new school or create jobs doing anything that we can imagine. Its just that we seem to have fallen into a very narrow trap of valuing just a few categories of things, which for, the US, includes making weapon systems.

The US economy got stuck in that old industrial policy that we never admitted -- that our main industrial policy was based on the Pentagon. They have their tentacles in every congressional district and when you try to cut the defense budget -- the local communities in these districts respond with a call to "save our jobs".

Yet I think there is a better understanding now among the general public that we need to invest in the caring economy. People are asking: Hey, why don't we have jobs doing meals on wheels and why isn't that important? Why isn't there home delivered health care to keep people out of nursing homes?

The Jobs Letter: Do you think local economic development are going to give us enough jobs?

Hazel Henderson: I think its going to supply us with a piece of the puzzle. It's also going to have to rely initially on creating local currencies.

If you are living in a national economy where your money supply and your macro economy is run in such a way that you have got a constant deficit in the local community, then local communities in the short run just have to say: "Well, we are going to create some of our own chips to get into our own local markets".

We are, at the moment, in the situation where you have all these large international banks which have a branch in the local community. People go and put their paycheck in there at the end of the week and don't realise that all that money will be vacuumed right up out of their community and put on the electronic funds transfer system to start a hotel that nobody needs in Bangkok or something.

Because of the global level of average interest rates, the local community can never get its own money back to support its own small businesses. So that means that even if you are interested in community economic development, which I am, you have also got to spend some time getting politicians to plug these loopholes where the money leaves the community.

I was up in Ithaca, New York, where they have been using a local currency quite successfully for a long time. It was really fun to be taken to lunch at a restaurant and have my friend, Paul Glover, who invented the system, pay for it in Ithaca dollars. You can generate a mortgage using Ithaca dollars and you can go to the health club. People soon get the idea of what money is and how it impacts on the local economy.

Wherever you don't have good macro economic management, people are going to reinvent local currencies. What so many people that I talk to don't know is that that's how we got out of the Depression in the US in the 1930s. All of our banks closed. The American people tend to be can-do types of people, and so if the coin of the realm is not being circulated and the banks are closed, then everybody just got about issuing their own scrip. I love to take around photographs of all of this scrip (which I use at conferences) just to show people that we all actually know how to barter and trade with each other and we can re-learn how to do this, from the garage sale and the bring-and-buy sale all the way up the line.

I was in Australia last year in December, when I met with one of the officials of a barter card company. This is the most sophisticated sort of intermediate-level barter that is going on now. It's a plastic credit card system which last year turned over $2 billion Australian in barter. It's members are merchants in small communities who are bartering services between these outback small communities, and it's all done on the Internet.

This company has just acquired a big barter group in Canada and I had no idea that these barter companies are so huge now! Basically it's another Ebay (, the internet trading auction company -ed). Everybody has really learned that what you can do on the Web is trade. You can trade using money if you want to . but you can also use it to barter.

The Jobs Letter: So you see the future of Green Dollars and LETS basically going on to the internet?

Hazel Henderson: Oh yes. And going global at every level. I think we are going to end up with a whole multiplicity of currencies. We need a global currency. For things that have to be in global trade its good to have a global currency. But I think that also we need national currencies, unions of currencies and we need local currencies. I think that they all can co-exist. I think that the Euro, for example, is much too much of a straitjacket for those economies. It assumes the old economic frictionless model -- that a worker who grew up in Belgium and speaks French can instantly go to Spain and get a job as a computer operator in a Spanish company. It is totally unrealistic.

I think that we have to have the Euro as a "common currency, not a single currency". If you do want to use the Euro, you can have that in one pocket and then you can have the national currency also in your pocket and a local currency.

This is all to do with ecological principles. When we really learn to model our economic systems on nature we will find that that is they way that they work. In natural systems trade is done locally. When it comes to global free trade, we need to be careful about what should be done globally, and what makes more sense to be done locally. I say that when it comes to global trade, we shouldn't be shifting cakes around the world. At the global level we should be sharing recipes.

The Jobs Letter: The Multilateral Agreement on Investment (MAI) caused a great deal of alarm amongst community groups in this country. What was your position on that?

Hazel Henderson: I think it was absolutely terrible - awful. I wrote a lot of articles that this was kind of a Bill of Rights for investors . that was going to have influence over the rights of citizens and employees and nationals of a country. We have to watch that someone doesn't try to sneak the MAI in under the WTO or the IMF . we have to be very vigilant to make sure that this doesn't happen.

Another approach is to try and design our own MAI, which would be a Bill of Responsibilities for investors. Investors don't just have rights, they also have responsibilities. That's another way to engage in the debate. We all know that rights come with responsibilities so where, please, are the responsibilities in the MAI? If you can get that fleshed out then that is something that NZ Businesses for Social Responsibility can probably really help with.

The Jobs Letter: You've done quite a bit of work in recent years on national accounting and the way we account for things like GDP. How does this effect the employment agenda?

Hazel Henderson: Its difficult to generalise because this relates to national accounting and it seems very arcane . but this also tells you how important statistics are.

Here in New Zealand, a few years ago, you put a capital account into your GNP figures so that you carry on the books your public sector investments as if they were worth something . in the way you would in an ordinary business. In the USA we finally did that in January 1996. We began to have an asset account of our public investments and, of course, that's why we have a so-called surplus. The incredible effect of that was that we sucked all the flight capital in from the rest of the world because we have this so-called surplus.

I was in Japan in the middle of 1998 where everyone was beating on the Japanese about their terrible indebted economy and all the rest of it. So I'm saying - look! You've got wonderful public infrastructure, you've got 98% literacy, you've got an enormous savings rate, you've got a huge positive balance of payments and trade balance. There is absolutely nothing wrong with the Japanese economy.

Why is it that you let all these Westerners come and tell you that you're in debt? Because, I think if you look at what's happened here - you've got these debts for all these wonderful public assets but you just haven't put them on the asset side of the budget. Put them on the asset side of the budget and everything is great.

I was also, about the same time, talking to a group of European Union policy wonks, asking them the same question. There they are trying to meet the 3% deficit requirement to join the Euro and they are slashing the social safety net, slashing the public budgets, putting people out of work, causing strikes - all of this. I'm saying - guess what? - you could meet that 3% number just with an accountant's stroke of the pen. Carry your assets on the budget and your budget is already balanced.

So you say to yourself - why could anything so absurd exist and yet you know why it is don't you? It's a paradigm problem. How are all those economists who made money out of messing around with GDP accounts - how do they admit that they're wrong?

So the point to job creation is that its hard enough creating jobs and having good job creation projects . but if you are being sabotaged all the time on the national accounting front, which leads to your country unnecessarily slashing social safety nets, then you are always operating on an uphill basis.

The Jobs Letter: When you look at the Asian economic meltdown last year, do you get fearful about the consequences that must occur as millions of workers don't have access to work and income any longer?

Hazel Henderson: Yes. I think that it is explosive. What we saw with the Asian meltdown that that the whole Washington-led consensus on policies -- export led growth, tear down the forests, mine out the social system, have the lowest wages that you can -- was completely unsustainable.

I think we're seeing the explosion already in Indonesia. I think we are in for a lot of this kind of social unrest because people have been given these entirely unrealistic expectations.

You have a classic situation there where the whole Washington- led consensus model of economic, GNP measured, export-led growth is coming apart. Its completely counter-intuitive now. It used to be that a government would think "OK, I'm going to put up interest rates because that's going to protect my currency". Right now, if a country puts up its interest rates, then that's a "sell" signal for a currency trader. It's all backwards from what it was.

The Jobs Letter: In this morning's paper, the lead article on the Business Page was that job creation was down in the US . and the response from Wall St was to put stock prices up.

Hazel Henderson: Exactly! Wall St and Main St are completely de- coupled. The way it's set up is you can simply make more money shuffling paper assets . than you can from building a real factory to produce real goods and employ real people anywhere in the world. We have to heal that kind of split between the conceptual and all this theory and what actually happens in the real world.

The Jobs Letter: Do you agree that more could be done to reform the tax system in terms of making it more job-friendly?

Hazel Henderson : Well, you know I was very involved in the sixties in the whole idea of two approaches -- guaranteed income which is the bottom of the end of the line, and ESOPs -- employee/staff ownership programmes. Now these items are coming back onto the agenda. It's a scenario which Alvin Toffler (who is also a very old friend of mine) and Jeremy Rifkin and James Robertson have also been promoting. The fact is we set up technology to be about labour-saving. So that's where you are going to end up -- without jobs.

We always thought that when people moved away from agriculture, they would move into the factories -- no problem. Then, we closed the factories and automated them and said that people would move into the service sector. But, of course, what we're doing now is automating the service sector. So I think that we have to capitalise the care sector and what's now not on the agenda. And, in the meantime, we are just kind of chasing our tails because we're not pulling back and taking a wide view and looking at the whole economy.

A very key approach to the whole unemployment issue is the tax structure. I have been very much involved in the last ten years in promoting tax-shifting -- where you tax the things you don't want (like pollution, waste and inefficiency in the use of resources) and you take the taxes off incomes and jobs, which you do want.

At the UN Social Summit in Copenhagen there were a lot of companies that were involved, mostly European companies, who said well, look, as long as the tax that you are going to take from a corporation remains the same . they don't care whether you tax their use of virgin resources or their use of fossil fuels , and take away the taxes that they now have to pay on payroll. They don't care as long as it is revenue neutral. But, the signal that it would give to the whole system would be enormous in terms of job creation. So this idea is finally catching on, especially with a new government in Germany. There is a lot more debate about tax-shifting than there has been.

The Jobs Letter: What would be your advice to government leaders? What could they most effectively do about employment?

Hazel Henderson: Well I wouldn't presume to give any advice to the New Zealand government because I don't know enough about the local situation. But I do know that every other country that I go to -- and certainly my own country -- that the allocations they make in the Budget are to do with the values system of a country.

It is a values choice, in the US for example, for us to have a huge military. That Budget money would be much better off invested in education. We need to double teacher salaries. We need to double the number of teachers we have so that we can get the classrooms down to size. The job creation part of it can be to do with investing in the future and producing a better quality of life in our municipalities.

No country today gets any more security out of investing in military weapons -- that is the lesson of the post-cold war era. Out of the 85 conflicts going on in the world now, 83 of them are domestic conflicts. So we are finding that these huge weapon systems are obsolete job creation projects. We are still fighting that battle in the US, and so are they still fighting it in Britain and France and Germany. So the jobs challenge is about programming all of that tax money back into investing in the civilian sector.

We just have to invest in children. We are going into an information age and job one is going to be investing in education. And in prevention -- you know -- health care -- the prevention end. Its what our grandmothers always told us -- a stitch in time saves nine and we all know that its much cheaper in the longer-term.

The Jobs Letter: What sort of advice would you give to young people these days in terms of planning a career? What are the wisest things they can do?

Hazel Henderson: Well, I think that reading skills are still absolutely primary. Once you've learned to read well, you can become a life long learner. The whole idea that you are going to be a life long learner is what I'm trying to instill in my nine-year-old grandson.

Learning isn't necessarily about curriculum in the schools. It's about critical thinking and critical reasoning and really figuring out as early as you can in life what your passion is and what you want written on your tombstone. That leads you in a much more creative direction because you engage your entire energy. We have such enormous power when we engage our entire energy.

Most of the old jobs didn't require more than ten per cent of who you were. Well, even companies are starting to realise now that they're not going to get any productivity out of that person organising work that way. That's what the whole total quality management is about. How can you have your employee bring more than ten per cent of them to the job?

So my advice to young people is to look at what you want to go into that you are passionate about and engages your full energy. It will be a very interesting path. It won't be risk free but it will sure be interesting.

The Jobs Letter: And what words of advice or encouragement would you give to people working at the front-line of employment issues?

Hazel Henderson : Well, it's really God's work. It really is. As my dear mentor EF Schumacher used to say in his book Small is Beautiful, our "work" is really the main way that we define who we are and how we want to express of our life in this world.

Work is not just a matter of survival . although, of course, for many people it is simply a matter of surviving. It's so precious to be able to help people make their work meaningful.


edited by Vivian Hutchinson for the Jobs Research Trust

from T H E J O B S L E T T E R 1 0 8 a subscriber-based letter published in New Zealand 24 September 1999

*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. ***

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