Friday 27 May 2022

The Henderson Cake

Extract from Understanding the Financial System is published as a tribute to Hazel Henderson ((27 March 1933-22 May 22) who passed away recently. She is thanked for her support and advice in the Acknowledgements to my book, and she endorsed my earlier book, What Everybody Really Wants to Know about Money.

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The Henderson Cake

Extract from Understanding the Financial System (p41-4)

The corporate world is concerned with the securing of ownership and control so that power can be exercised without responsibility. It is not particularly interested in the needs of the poor, the concerns of women or the state of the environment. The whole range of skills associated with what it is to be a mature human being, the skills Veblen termed ‘workmanlike’, are considered surplus to requirements by the formal money economy. Nevertheless the corporate world, and the political and economic institutions which give it body, remain utterly dependent upon the land and its people for their very existence. During the twentieth century a number of women have written perceptively on the problems caused by irresponsible profiteering, most notably Rachel Carson, Silent Spring.

The whole picture has been comprehensively summarised by Hazel Henderson, who likened the twentieth century economy to a layered cake. The top half of the cake consists of the monetised, officially measured forms of national production which generate all economic statistics, plus an estimated 15% of monetised but illegal ‘underground’ forms of tax dodging. The bottom half of the cake consists of the non-monetised altruistic ‘Counter-Economy’ of social co-operation, which itself is founded upon the real wealth of the natural world. The two bottom layers subsidise the monetised layers, providing essential unpaid labour and natural resources, with environmental costs being absorbed if possible. Henderson terms the ‘Counter-Economy’ ‘Sweat-Equity’: it includes ‘Do-it-yourself, bartering, familial, community structures, unpaid household and parenting, volunteering, sharing, mutual aid, caring for old and sick, home-based production for use, subsistence agriculture’. (See: The Politics of the Solar Age: The Alternative to Economism (1988) and Building a Win-Win World: Life beyond Global Economic Warfare (1996) The top monetised half of the ‘cake’ consists of all activities for which money changes hands. ‘Official’ market transactions are divided into private and public sectors, with the former taking precedence. Private sector transactions are concerned with production for market exchange, employment, consumption, investment and savings. Public sector transactions are concerned with the infrastructure, including roads, bridges, sewers, schools, defence, and municipal, local and state government.

It is possible to take issue with Henderson’s portrayal of the private sector of the cash economy as the top level of the ‘cake’, suggesting that, like the icing, it is the most desirable yet least sustainable part of the whole. To the simplistic controllers of the corporate world, acquiring more of the monetised ‘icing’ may well appear to be the only game worth playing. However, it is infants who tend to desire the icing, while rejecting the nourishing richness of the body of the cake. Feminist economist Susan Feiner has perceptively portrayed ‘Rational’ Economic Man, the key actor in the corporate world economy, as an infant, displaying a set of behaviour patterns associated with siblings vying for the favours of Mother Market. (See Susan Feiner,(1999) “A portrait of Homo Economicus as a Young Man”, in Martha Woodmansee and Mark Osteen (eds) The New Economic Criticism, Routledge.) As any parent knows, it is very difficult to reason with an incorrigible infant. So far as the dominant males holding positions of power within the key institutions of corporate capitalism are concerned, there is no earthly reason for them to hold in check their self-centred desires.

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Hazel Henderson (27 March 1933 – 22 May 2022)

was a British American futurist and an economic iconoclast. In her later career, she worked in television. She authored several books including Building a Win-Win World, Beyond Globalization, Planetary Citizenship (with Daisaku Ikeda), and Ethical Markets: Growing the Green Economy.

Henderson was a television producer for the public television series Ethical Markets. She was Regent's Lecturer at the University of California (Santa Barbara) and held the Horace Albright Chair in Conservation at the University of California (Berkeley), and worked as a travelling lecturer and panelist. In her later career, she has served on the boards of such publications as Futures Research Quarterly, The State of the Future Report, and E/The Environmental Magazine (US), Resurgence, Foresight and Futures (UK). She advised the US Office of Technology Assessment and the National Science Foundation from 1974 to 1980. She was listed in Who's Who in the World, Who's Who in Science and Technology, and in Who's Who in Business and Finance.

Fritjof Capra credits Henderson with being a major influence on his thinking on ecological issues.

In 2005, Henderson started Ethical Markets Media, LLC, to disseminate information on green investing, socially responsible investing, green business, green energy, business ethics news, environmentally friendly technology, good corporate citizenship and sustainable development by making available reports, articles, newsletters and video gathered from around the world. In 2007, Henderson started EthicalMarkets.TV to showcase video of people and organizations around the world with socially responsible endeavors. Henderson was awarded Honorary Doctor of Science degrees from the University of San Francisco, Soka University, and Worcester Polytechnic Institute.

(Taken from Wikipedia 27 May 22).

Wednesday 18 May 2022



Over the two decades when I was editing the mini-journal The Social Artist (incorporating The Social Crediter) we published a wealth of highly discussable material on the state of the world. What was lacking was a forum for discussion that would lead to practical reform of the world political economy as a whole. The material, which came from a wide variety of sources, remains available electronically on the Publications page of and on several other websites across the world. Moreover, it has dated very little with the passage of time.

The Spring 2019 Issue of The Social Artist carries lengthy extracts from German financial journalist Norbert Haering's "Who is behind the campaign to rid the world of cash?" As Haering explains "the seller and the person who manages your money are merging. This is there we are headed, not just in Amazon Go stores. In the future of payments, all convenience will be on our side, all the power will be with the other side." Amazon intends to make this convenience-cum-surveillance way of shopping the norm.

Haering spells out in detail ten advantages of retaining cash, not least of which is the retention of civil liberties.

"In a democracy, this judgement should be made after public discussion by lawmakers in a transparent procedure. Instead, ... , the far reaching removal of privacy in financial affairs has been decided far away from parliaments in a diffuse transnational nowhereland, through the mechanism of standard setting groups expert in evading democratic control."

Meanwhile, the general public and parliaments hardly even notice that this is going on. There are heated discussions about new data preservation rules in telecommunications, but the much more intrusive, very long-term storing and even active surveillance of our financial accounts and transactions go almost unnoticed. Nevertheless, control over a national currency has for a long time been an important factor underpinning the power of any national government. "If this authority should move to the Silicon Valley, a big part of traditional power of governments could move with it."

Haering reaches the following conclusion.

"Instead of hoping in vain for technological fixes, we need to go the way of pushing for political and societal changes. We have to pull parliamentarians out of their deep sleep. We have to tell them and the citizens at large which game is being played. They have to know that the decline in the use of cash is not a development that is unfolding naturally but something that a powerful alliance is pushing ahead by and coercion in the background. Ministers and central bankers have to be put under pressure to justify working in a partnership with companies like MasterCard and Visa against cash, despite all their public assurances that they want to do cash no harm. If this partnership is widely exposed dissolved, we will see that cash is anything but doomed. If allowed to thrive, cash will see a renaissance, because in a world in which more and more aspects of our lives are under surveillance and recorded, cash offers a refuge that will become more valuable for privacy and more valued by the people...."

Much food for thought here.

Article originally published in Real-world Economics Review,

Monday 16 May 2022

Threefold Commonwealth Research

COMMENT: This blog assumes that the reader is familiar with the anthroposophical journal New View. The suggestion is that anybody, as an individual or in a local group, can participate in the emerging Threefold Commonwealth Research Network.

In October 2006 I came across one of a series of pamphlets published by the Threefold Commonwealth Research Group in the 1930s. The pamphlet entitled "Law, Association and the Trade Union Movement", by Owen Barfield, carried the following introduction:

"The threefold commonwealth was first set before the world by Dr. Rudolf Steiner in the year 1919, in books and articles published, and lectures given, in Germany and Central Europe. His main book on this subject, "Die Kernpunkte der Sozialen Frage," was translated into English in 1920, and re-translated in 1923 for publication as The Threefold Commonwealth.

"The Threefold Commonwealth Research Group is a group of people, variously employed, who first came together in 1933 in a spirit of service to the threefold commonwealth of Rudolf Steiner, having been students of his work for some years. They desire to extend the understanding of its principles in the English-speaking world and, so far as may be, to hasten its application in practice. To this end they study to deepen their knowledge of these principles and to understand the actual events and institutions of the society in which they live in the light of the threefold idea. They will welcome the foundation of similar associations, and consider it a principal object to assist such other groups."

The group negotiated with the Anthroposophical Society in Great Britain for permission to use Rudolf Steiner House on Park Row, London, as a forwarding address. Their hope was to provide the stimulus necessary for ordinary people to initiate "a different model of a future society" through research and study based on the social threefolding ideas of Rudolf Steiner. The ideas had failed to take root at the end of the First World War, and Steiner predicted "it would have to wait another hundred years for another opportunity until the time was again propitious for it. .. Now, the time for it is not only propitious but critical." So writes Terry Boardman in the Spring 2022 Issue of New View.

There are already signs that a "great awakening is occurring on many levels today and a search is underway to understand the meaning of life". Lockdown regulations have spurred many people to widen their studies, research more deeply and read many more books. Our consumerist and materialistic approach to life must change. "Not only do our limited planetary resources demand a change but our inner health too. The quest for truth in the face of the falsehoods and half-truths we are all being fed is growing ... There are also many who recognise that we can no longer rely on or demand that the state provides what we need. Whether it is the education of our children, health care or even the wider social security system, the time has come to take back control of our own lives" So writes Bernard Jarman in the current issue of New View.

As is only too apparent in today's world, looking for leaders to provide us with ready-made answers can only lead us into some form of brave new dystopia along the lines of Brave New World, Nineteen Eighty-four, and Animal Farm all rolled into one. Predictions of "a future collapse of the entire global banking system followed by the installation of the cashless digital currencies" of The Great Reset must be taken seriously across the entire social spectrum if humanity is to survive. See Gavin Tang's article "Imagining and alternative to the banking system of the Great Reset" in New View, Spring 2022.

Taking back "control of our own lives" necessitates a steep learning curve on the part of individual members of every local community the world over. And that means research into the political, cultural and economic institutions that supply us with a roof over our head, clothes on our backs and our daily bread.

So - where do we start? How do we move beyond individual reading to group study of the existing threefold social order at local level? I would suggest we might take a leaf out of the book of the Quaker followers of the American economist Henry George (1839-97) and create study aids to explore our local economies wherever they happen to be. See my article entitled "Towards a Threefold Commonwealth" in the Winter 20-21 issue of New View. Note especially Footnote 13 which directs the reader to a free copy of the study material.

Wednesday 4 May 2022

Local Finance

In the late 1990s members of the UK Bromsgrove Group came across a Scottish version of the Landlords Game entitled Brer Fox and Brer Rabbit. It appears to have been drawn up as an aid to exploring the political economy of a local municipality in Scotland. Members of the Bromsgrove Group assembled copies of the board and rules, and used it as the basis for wide-ranging discussion. Evidently the Scottish version was designed to pursue issues of local finance of local production and an end to waged slavery. Note, it was the latter point on which Marx took issue with Henry George (see previous blog). The Georgist reforms assume the continued centralisation of finance in the hands of a powerful elite.

The Brer Fox 'n Brer Rabbit game is available to be printed out free on the Douglas Social Credit website, at the very base of the SOCIAL ART page . A tour round the sites of the Brer Fox 'game' offers a view of the local economy and its relationship with the national economy at the point when the board was drawn up (1913). We can assume that there were small farms, fisheries and common land to be seen locally. Equally, each city, town or village might feature a Poorhouse, a jail, newspaper offices and railway station. But Westminster Abbey, the House of Lords, and even a branch of Selfridges, an early supermarket would not be found in a Scottish urban settlement of 1913. What might have been in the minds of the creators of this game provides much food for thought.

The two financial institutions, the BANK and the PUBLIC TREASURY are centre stage, in the middle of the Board. The Game was devised in the second decade of the 20th century. At this time, in the UK, Fabians, Guild Socialists, members of the Cooperative movement, Trade Unionists and a wide variety of socialists and social reformers, including some anthroposophists, were in close collaboration. All puzzled about the role of finance in determining policy in throughout the political economy as a whole. But it was not until after the First World War that Clifford Hugh Douglas was in a position to make his analysis of the financial system available for study. He looked at the financial causes of war.

The First World War broke out a year after the Brer Fox game came onto the market. The trauma of the war led Clifford Hugh Douglas and prominent members of the UK Guild Socialist movement to study the financial causes of the war. Those studies gave rise to a massive literature that was discussed and debated through the worldwide movement for economic democracy known as Douglas Social Credit.

In 1900 the local social order could still be understood by the ordinary householder, whose home belonged in a specific place on the local map. Known individuals owned or rented property in the town, and provided services to the local community. Over the course of the 20th century global finance came to dominate the political, economic and cultural spheres of every local municipality, so that now, as explained in the Spring 2022 edition of New View, the Bank for International Settlements (BIS), the central banker to the world's central banks, has the potential to handle a global currency that would dominate the political economy of the entire world. As Gavin Tang explains:

"[A] number of wealthy banking families control the world's economy indirectly via the BIS control of the world's central banks. They also control the world's corporations via a system of ownership and cross-ownership that has at its apex of power in the non-publicly owned Vanguard investment entity."

The situation we face today is complex and precarious. As Tang further explains, in his lengthy article entitled "Imagining an alternative to the banking system of the Great Resent", the necessity is for development of a "commons banking system that can be put in place when the inevitable total collapse of the capitalist banking system occurs. It may well be that discussion of local threefolding ideas through study of the Brer Fox and Brer Rabbit Game facilitates development of commons banking as suggested by Tang.

NOTE: Understanding Life and Debt Blogs for April and May provide sketchy thoughts possible routes out of the financial quagmire currently facing humanity. See the Sheffield Collection for useful study material. See Frances Hutchinson (2010) Understanding the Financial System for references to relevant literature on the subject.

Tuesday 3 May 2022

Landlords Games

The history of Western 'Civilisation' can be viewed in two ways. For many it is the story of scientific, technological and economic progress, as humanity progressed from pre-industrial times when life was 'nasty, brutish and short' into the golden era of plenty. For others, it is a story of war, of the brutal oppression of the colonial era, the slave trade and the Highland Clearances that took families off their lands and into dependence upon waged slavery. Whichever way you look at it, the past has shaped the political, economic and cultural framework that currently supplies us with food, shelter, clothing and the everyday necessities of life.

Over the course of history many groups have protested against injustice. These include the Diggers and Levellers, the Chartists, the Tolpuddle Martyrs, the Luddites and so on. And various historians took it upon themselves to write about the political economy as they saw it. For Adam Smith (1723-90) the economy was all about Rational Economic Man pursuing his own self-interest wholeheartedly, so that the Invisible Hand can ensure that all become better off. For William Cobbett (1762-1835) the Protestant Revolution took power from church and community, and placed the control of political and economic affairs in the hands of a few powerful financiers and landowners. For Karl Marx (1818-83), it was up to the wage slaves to set about studying their history and planning the revolution. Less well known, perhaps is the American economist Henry George (1839-97 ). In the very late 19th century he drew a massive following in the USA and elsewhere. His Poverty and Progress ( 1879) was a popular read, and George attracted massive crowds wherever he went. At some point a group of Quakers set about devising a game to help them understand how George's Land Tax reforms might serve to create a more just and fair political economy. The first 'Landlords Game' was so popular that the idea caught on, and games were devised across the English-speaking world. Some four decades later, one version of the games was as a teaching aid for self-interested, Rational Economic Man and marketed as Monopoly in 1935.

The Landlords Games were played in three stages. The first showed the current state of affairs where landlords owning prime sites could benefit from the general economic progress by charging high rents simply through ownership of prime sites. Real wealth is created by the community as a whole. Individuals can benefit unfairly from the hard work of the community as a whole and the cultural heritage handed on from generation to generation. The second and third stages of the games show how, according to Georgist thinking, the defects of the capitalist system could be put right. Marx, the astute observer of human society, was scathing about George's analysis of the political economy. Nevertheless, the Georgist games provided an excellent opening for discussion of the political economy of any local municipality. The games were not devised as mere academic exercises. During the 20th century, in Denmark and several American states, Georgist reforms were introduced at local government level.

With so many issues crowding in around us, visual representations of the local geography, politics, infrastructure and institutional provisions, including business, health and education, could provide neutral ground for discussion about where we might go in the future. Group or individual study of the board and rules of Monopoly provides plenty of food for thought. How does it relate to the global corporate political economy of the 2020s?