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).