Category Archives: Economics

Profiting from water should trigger fee

There is something about the idea of taking our purest water, putting it into plastic bottles and shipping it overseas that just doesn’t seem right. Even less when the bottling company pays nothing for the water. The final straw is when it isn’t even a NZ company.

This has become a big issue in our district, among other places. The local owners of Otakiri Springs, which takes water of exceptional quality from the Otākiri aquifer, have decided to sell to Nongfu Spring Natural Mineral Water. Some locals, including neighbouring property owner and councillor Mike van der Boom, are objecting. The mayor, Tony Bonne, has welcomed it, saying it will provide jobs for the district. The issue reflects a growing national conflict around water rights and raises a number of questions that are worth exploring in more depth.

Otakiri Springs currently has a consent to take 1200 m3 (1,200,000 L) of water per day specifically for bottling. One report has Nongfu wanting to expand that to 5000m3. It costs them $2003 per year for administration costs on the consent, but they pay nothing for the actual water. The potential turnover with the current consent is in the hundreds of millions of dollars.

To put it in context, a random survey of water consents on the Rangitaiki Plains shows that there are dairy farms with much bigger daily allocations than 1200 m3. Dairy farming covers 80% of the plains and at least 10% of the plains is under irrigation. Like the water bottlers, farmers pay consent administration costs but nothing for the water that they use.

Is farming a better use than drinking? The water bottling takes a litre of water, puts it in a plastic bottle and ships it overseas. Dairying, on the other hand, takes close to 1000L of water to make 1L milk, although most of that is not from irrigation. One estimate suggests that across NZ as a whole about 160L of irrigation water go into each L of milk – although it varies from region to region. Ironically most of that milk is dried into powder and exported.

Water bottling has some serious environmental impacts, mostly from the waste from single use plastic bottles. Milk also comes in disposable containers – either plastic bottles or non-recyclable tetrapacks – but has some added environmental problems. Pastoral farming, as a whole, and dairy farming, in particular, is probably the most significant cause of New Zealand’s most serious environmental problems, from climate change to water degradation to soil loss.

Just this January a permanent warning has gone up not to eat pipi from the Waiotahe estuary due to contamination from local dairy farms. While many farmers are trying their best to reduce their environmental impacts, the sheer scale of dairy farming and the increasing intensification (often associated with irrigation) overwhelms these individual efforts.

On the other hand, dairy farming has more significant economic benefits than water bottling. The dairy industry supports a whole load of spin-off businesses that feed money through the local economy. Dairy farms also provide local jobs. Nongfu claims there will be 50 jobs in the bottling plant but it is hard to take that seriously. 50 jobs building the plant, maybe, but once it is up and running no doubt it will be an automated operation with a skeleton crew to oversee and maintain it. There is very little in the way of a supporting industry sector around water bottling.

Probably one of the things that concerns most people, and is the spark for the current debate, is the foreign ownership. Once Otakiri Springs is sold, all the profits will all be siphoned off-shore. This is also true for the increasing number of dairy farms owned off-shore. I do not believe that it is wise to allow New Zealand’s most precious resources – our land and our water – to be owned by overseas interests. I do not oppose all overseas investment, which can bring substantial benefits in terms of new capital, technology transfer and economic diversification. It is an argument for some limits.

The second major issue is the free use of our best water. It is a fallacy to say, as the Government does, that water is owned by no one. Water is owned by everyone, including the non-human users of it. It is a common wealth and should be treated as such, by making sure that anyone who makes a profit from water pays a resource rental back to the community. The rate would be fairly low, but high quality water, for example from the Otakiri aquifer, should attract a higher charge than non-potable water from shallow aquifers.

A resource rental has two benefits. Firstly it puts a price on commercial use of water. This drives more efficient use, in terms of water conservation and also in terms of shifting to higher value uses. There is little reason to use water efficiently when you pay nothing for it.

Secondly, a resource rental generates a fund that can be used in a variety of ways. It could off-set rates, to compensate for the new costs. Alternatively, it could be used to fund the management and restoration of our waterways, administered by a community organisation comprising mana whenua, commercial users, recreational users and environmentalists.

There is not much that can be done about any of this by the local council. The Regional Council deals with water consents and their hands are more or less tied by national legislation. To resolve it will take courage and leadership from the Government. I am not holding my breath.

(Published in the Whakatane Beacon 10 March 2017)

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Speech to Whakatane Grey Power

LIVICATION AND THANKS TO ORGANISERS

 
Many people think they know who I am – that cannabis guy or the skateboarder. Perhaps you even saw something about the work I did as an MP – my clean slate bill to conceal people’s minor offences after 7 years without re-offending, or the Waste Minimisation Act that I introduced to Parliament and shepherded to near unanimous support, to promote less waste and more recycling. But even if you had seen every article written about me as an MP, you would still have a very distorted view of what kind of person I am. That’s the nature of media.

 
So I thought I’d start today by introducing myself.

 
Ko Tisza te awa – the Tisza is my river. My fathers ancestors have lived on the banks of the Tisza, in Hungary, for a thousand years and for many hundreds of years we have been boat people, barging goods up and down it and into the Duna, the mighty Danube.

 
Many of my cousins still live on its banks, in a city called Szeged. I don’t, of course, because in 1956 my father, who was a marine engineering student, returned to College in Budapest from a break visitng family and when he stepped off the train at midnight he found himself in the middle of an armed uprising. What had begun as a peaceful student demonstration to call for greater freedom had turned into a revolution after the secret police opened fire on the demonstrators and killed a number of them. The Hungarians rose up against the Russian military occupation of their country that had been there since WWII, organised themselves into militias to fight the Russians, formed a revolutionary government and withdrew from the Warsaw Pact.

 
The Hungarians actually managed to achieve freedom for a few weeks. They set up Workers Councils and Village Councils to run the country. The Russians began talks with the revolutionary government saying they were willing to negotiate a withdrawal of Russian forces, at the same time they began secretly amassing tanks near the border. When they felt the time was ripe they invited the head of the revolutionary army Pal Meleter to talks and kidnapped and executed him. Then they brought in the tanks.

 
The retribution was brutal. 2500 Hungarians were killed. Denouncements and mass arrests continued for many months. The revolutionary prime minister, Imre Nagy, was also arrested and executed. 200,000 fled across the border into Austria and became refugees, including my father – who ended up being accepted into Britain a year or so later.

 
I really honour my father. He is a man of principle, of honour and courage. Life is never easy for refugees and he managed to make a good life for himself in England and here in Aotearoa, contribute to society and be a good father to me and my brother.

 
Ko Hoerikwaggo te maunga – my mountain is Hoerikwaggo – Table Mountain, the Mountain that Floats in the Sea. Before any Bantu tribes came to South Africa, before the Zulu, the Xhosa, the Pondo, Sotho or Ndebele, the original people of South Africa were the different nations of the Khoi Khoi and the Khoi San – the Gorinqua, Koranna, nama etc. What people call the bushmen. The Khoi traded with the Dutch East India Company when they first began to use the Cape as a provisioning stop on the way to their colonies in South East Asia. Soon Dutch demand outstripped their willingness to supply so the Dutch began to steal their cattle. Eventually they took land by force to set up Dutch farmers to supply the ships. At the same time the Zulu and other more northern tribes were expanding south. The khoi were caught between two expanding empires and were crushed. Although remnants of Khoi culture survives in places like the Kalahari Desert, by and large khoi were either assimilated into the Bantu peoples as they moved south or into the settlement at Cape Town, where they formed the core of what was to become the Cape Coloured.

 
So those are my mother’s people. We are descended from Khoi, Dutch, English, German and no doubt others as well.

 
My mother is, like my father, courageous. Although she grew up in a small town along the coast, she was well educated for that time. My grandparents were teachers and she had been to boarding school in Cape Town. In the early 1950’s her cousin said she was going to go to London and that my mother should come. She agreed, and even though her cousin pulled out in the end, she decided to go anyway. It was by boat in those days of course. She had a letter of introduction to someone in London and so she went, got herself a job and built a new life or herself in a new land.

 
She lived in London for a number of years before she met my father and they got married. When my brother was born, my father was still unable to return home for fear of arrest for his part in the uprising, so she took my brother by train to Hungary to meet his grandparents. Travelling behind the Iron Curtain was at that time unheard of for a woman in her position. She spoke no Hungarian and the family spoke no English, yet she went without hesitation.

 
My older brother and I were both born in England. The family came to Aotearoa in the mid 1970’s and I finished school here. Over my life I have lived in Hungary for a time and in the UK for a number of years. I have been involved in grass-roots political organising all my life. I also have run a number of businesses, got myself a university degree, been an MP for almost 9 years and married a local woman from Murupara. Even before I met her I was drawn to this area, to its beauty, its rich cultural landscape, its raw energy, and we talked about moving here for many years. In 2014 we finally did, and it is everything we hoped.

 
So now you have a better idea of who I am. If you will allow me, let me also share a little about what interests me the most right now.

 
PERMACULTURE
I am going to begin by talking about a word I came across when reading a book called “The Way” by Edward Goldsmith. Goldsmith was the founder of The Ecologist magazine and a great thinker. In “The Way” he describes the characteristics of natural ecosystems, which he describes as highly purposive. Healthy natural systems are, he says, homeotelic. It is a word he created to describe something he could find no word for. It comes from the Greek – homeo (the same) and tellus (a goal). In a healthy natural system all parts have the same ultimate purpose, which is to maintain and enhance the integrity of the whole. The default behaviour of any healthy part of the system serves to maintain and enhance the integrity of the whole. So the default behaviour of a single cell serves to maintain and enhance the integrity of the organ of which it is part. And the behaviour of an organ serves to maintain and enhance the integrity of the organism of which it is part. And the organism – let’s say it is a tiger – acts to maintain the integrity of the bioregion that it is part of, perhaps a jungle. The behaviour of the jungle maintains the integrity of the region, and so on until we get to the planetary whole. And the same applies in reverse.

 
Natural human culture, what Goldsmith calls ‘vernacular culture’, is also homeotelic. Indigenous culture, whether Polynesian, European, African, Asian or American, often after causing massive ecological changes including extinctions, had to find a balance with the ecology that it was now part of, and it did. Over hundreds and thousands of years human culture found a life-enhancing balance with its place. Industrial culture, however, is different. It is heterotelic – that is the default behaviour of human individuals in our system serves to undermine and degrade the integrity of the ecological whole. That is why in our system it takes more effort and cost, in general, to act in a responsible way.

 
It is that system, in fact, which has brought us to the point where we are approaching or have already exceeded a number of critical ecological thresholds beyond which abrupt and catastrophic changes to the life-support functions of the planet could occur. Human beings rely on wild species for our very survival – they pollinate our crops, purify our air and clean our water, among a host of other things. Yet we stand on the brink of the sixth mass extinction in the planet’s history, an extinction caused by human action.

 
So this word ‘homeotelic’ was a bit of a revelation for me, because it showed me really clearly what our most important mission is in the world today. To recreate our society and culture as a homeotelic culture. Most importantly to recreate our economic system, which is the biggest driver of this heterotelic impulse, as a homeotelic system. To transform our economic system, which reduces all other values (ecological, social, aesthetic) to the financial, which relies on continued, never-ending growth to balance the books. It is interesting that China has now started talking about becoming an ecological civilisation. I’m not sure how serious they are, but that is essentially what we must all do.

 
How do we do it?

 
There are no simple or easy answers to that question. If any of you (and I suspect and hope that many of you have) tried to grapple with what it really means to become even sustainable, never mind to live in a way that maintains and enhances the integrity of life on this planet, then you will appreciate that this is something we are having to figure out as we go along. With all our compromises, inadequacies and paradoxes. And that is ok – I drove a car to get here, but that just means I accept I am not perfect. It doesn’t mean I stop trying. But we must face the reality of the world that we live in and accept that we MUST change, in ways we don’t even understand right now, but that we have to begin and we have to be serious about it. For the sake not just of our children, grandchildren, great grandchildren, but for all of life that we share this beautiful planet with.

 
What’s more, in changing, we have the possibility of creating a far better life than we enjoy right now. One where human well-being rather than money is the measure – because despite what economists will tell us, they are not the same thing. One where community, relationships, helping each other out, a beautiful and healing environment are more valued than how much we have in the bank or in a portfolio.

 
Having said that there are no simple answers, I think there are many pieces of the puzzle already in our hands.

 
For me, one of the most important is Permaculture Systems Design. In fact Permaculture is the only approach I have come across that provides real and practical design tools for doing just that, for designing systems that homeotelic. Systems that are sustainable, resilient and regenerative.

 
Sustainable, meaning systems that are capable of lasting indefinitely. There is a lot of confusion and imprecise thinking around this term ‘sustainable’ but for me it is quite simple. Sustainability just means good economics – spending income not capital, whether we are talking about financial capital, social capital or natural capital. In terms of environmental sustainability, that means harvesting in a way that does not exceed regeneration rates and not emitting wastes beyond the natural assimilation rates of ecosystems.

 
Resilient. Many people, even so called experts, confuse resilience and robustness. Robust comes from the Latin robus for oak, strength. It is the ability to shrug off threats and withstand shocks. Resilience is from the Latin resilīre to spring back, rebound. It is like grass in the wind, that gets blown over but springs back up. It is about the ability to recover from system shocks, even system failure. Robust systems tend to be highly efficient and specialised. Resilient systems tend to include strategic redundancy. With all the uncertainty in the world today, ensuring a capacity for resilience is IMO one of the most important things we can do.

 
And regenerative because it is not enough to simply sustain our highly degraded environment as it is now. We have done so much damage to the intricate web of life that we need to actually start to stitch it back together. Not ripping it further is no longer enough.

 
Permaculture takes natural systems as the best model of how to do this. It looks at the characteristics of natural systems and asks how we can design those kinds of characteristics into a human centred system? Permaculture design is most usually applied to land management systems, but has also been the organising philosophy behind things like the Transition Towns movement. This is an international grass-roots movement that began in Cornwall in England and seeks to build community resilience and economic resilience in the face of climate change, resource depletion, and social and financial instability. Their guiding principle is that we used extraordinary creativity to power up our current energy intensive civilisation and we will use the same amount of creativity as we (by necessity) power down, to create a more human centred and more enjoyable way of living.

 
There is also a growing interest in applying permaculture design to business and economic development and you can see it’s influence in things like the 8 principles of Regenerative Capitalism developed by John Fullerton and Hunter Lovins.

 
So what is Permaculture? It begins with three ethics – Earth care, people care, fair share (or share the surplus). In contrast, neo-liberalism is fundamentally based around the pursuit of self-interest and greed as the highest value. A permaculture economics is not about accumulation and the self but is based on cooperation, reciprocity and sharing. I’d argue that this is more in line with normal human behaviour, and our natural human impulse

 
A permaculture designer takes many things into account in producing a design and I don’t have time to do a complete survey of how those ideas would apply in permacultural community development, but I wanted to touch on a couple of brief illustrations of how that might look. I thought I’d start by playing with two or three of David Holmgrem’s 12 design principles of permaculture.

 
The first of those is Observe and Interact. Holmgren says “By taking the time to engage with nature and society we can design solutions that suit our particular situation.” In contrast, neo-liberalism offers a ‘one size fits all’ solution to any problem – less regulation and more private property. The only observation required is the rate of growth.

 
A permaculture economy would begin with the specifics of a place and a people. It would look at a range of indicators before proposing any solutions – a property designer would look at a range of soils tests, but also make a careful observation of indicator plants, energy flows on site, potential micro-climates. Ideally this observation would be over a full time cycle so as to understand temporal patterns and changes. Similarly an community design would look at a range of social indicators, to understand the local possibilities that a place holds.

 
If we take a place like Whakatane, for example, it would begin with a real engagement with all the different elements of the community, to provide opportunities for people to share their ideas about what they want their community to look like, how they think things could be improved. It starts with talking to the people affected by decisions – not as a box-ticking exercise but because decisions tend to be better if the people involved get to have a say.

 
A good example is the recent redesign of the Pak n Save in Kopeopeo. I’d say it was designed by someone in Auckland or Wellington, who has never worked on a supermarket checkout. Probably someone who has barely even been in a supermarket actually. In frustration, I recently asked one of the check-out staff if they had been consulted about the design. She looked at me like I was mad. But honestly, if you were going to redesign a supermarket, wouldn’t the first thing you do be to ask the people who actually work there how to make it work better?

 
I was listening to a similar thing on National Radio the other morning, about a doctor who had involved the families of children in oncology wards in discussing how to improve things for them. The result – massive improvements not just in terms of pain reduction, but also safer practise, better use of hospital resources, cost savings. It seems obvious, yet this kind of approach is almost revolutionary in these contexts.

 
So I think this is a general principle. Ask the people affected what they think, and ask early in the process rather than as a box ticking exercise at the end.

 
Councils of course are required by law to consult the community on their long term plans, but this is usually seen in terms of how council can get the community to endorse what the council already plans to do. I’m not targeting WDC, this is true almost everywhere, but where is the opportunity for the community to really have a say about what its long term vision is for itself? I was in Taranaki a couple of years ago and the NPDC was running a stall at the market, asking people in a very open ended way what they wanted their community to look like in 50 years time. I was really impressed, because to me that is what councils should be doing – genuinely engaging their people in a broad discussion about their vision for their community. And in line with the permaculture principle to value diversity, that needs to include all parts of the community – from Grey Power to Youth groups, from police to gangs.

 
Another principle is to Catch and Store Energy. Holmgren says that by developing systems that collect resources when they are abundant, we can use them in times of need. The saying “make hay while the sun shines” reminds us that we have a limited time to catch and store energy, for later use. To put that another way, this principle speaks to the imperative to build up capital stocks for the future.

 
Permaculture systems are not designed to maximise efficiency or profit. Rather than ‘foot to the floor’ they are designed to find that cruising sweet spot that leaves a bit of acceleration to spare for when it is needed. Its a balance that values all kinds of yields from the system, including profit but also relationships, quality of life, ecological diversity and such. During times of plenty, as the dairy industry experienced until recently, a permacultural approach would be to catch and store financial energy, by using high returns to invest in sustainability and resilience. This might mean reducing debt, improving land management, up-skilling workers or a myriad of other on and off farm investments. Some farmers did indeed take this path and are now in a viable position during the downturn. Under the leadership of Fonterra, and with the encouragement of the Government and the banks, however, many farmers were encouraged to take on debt to expand and grow their operations – an approach that values efficiency but to the detriment of system resilience.

 
Another form of energy that we waste is that of our young people. We invest enormous energy in raising them, educating them and preparing them for life, and then watch them leave our community because of a lack of social and economic opportunity. The council’s economic development plan seems to consist of building a retirement village, which is not itself a bad idea if we leave aside the question of where they intend to put it, but it is not in itself an answer. My question is, what are we doing for young people in this town? The consultation on the Long Term Community Plan didn’t mention them once that I could see. Keeping young people in our community by creating opportunities for them is critical if we want our community to thrive.

 
CONCLUSION
These are just a few introductory thoughts about how permacultural systems design thinking can be applied to community development. What really interests me is how we apply this kind of thinking to this specific locality. As a newcomer to the area I actually think that this could easily become a national and international example of sustainability, resilience and regenerativity. We have an amazing climate, an incredibly rich ecological, social and cultural landscape, creative and innovative people, young people hungry for work and experience, and a community minded population (as evidence by things like this very organisation) – we have all the ingredients we need. What we seem to lack is a compelling vision.

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PERMACULTURE AND ECONOMICS

14 August 2015, Christchurch

(This is the speech I wrote for a panel on new economics organised by ‘It’s Our Future’ as part of a week of action against the TPPA. As usual, it changed a bit on the night)

I am going to begin by talking about a word I came across when reading a book called “The Way” by Edward Goldsmith. Goldsmith was the founder of The Ecologist magazine and a great thinker. In “The Way” he describes the characteristics of natural ecosystems, which he describes as highly purposive. Healthy natural systems are, he says, homeotelic. It is a word he created to describe something he could find no word for. It comes from the Greek – homeo (the same) and tellus (a goal). In a healthy natural system all parts have the same ultimate purpose, which is to maintain and enhance the integrity of the whole. The default behaviour of any healthy part of the system serves to maintain and enhance the integrity of the whole. So the default behaviour of a single cell serves to maintain and enhance the integrity of the organ of which it is part. And the behaviour of an organ serves to maintain and enhance the integrity of the organism of which it is part. And the organism – let’s say it is a tiger – acts to maintain the integrity of the bioregion that it is part of, perhaps a jungle. The behaviour of the jungle maintains the integrity of the region, and so on until we get to the planetary whole. And the same applies in reverse.

Natural human culture, what Goldsmith calls ‘vernacular culture’, is also homeotelic. Industrial culture, and in my view most, but perhaps not all, civilisation is the opposite. It is heterotelic – that is the default behaviour of human individuals in our system serves to undermine and degrade the integrity of the ecological whole. That is why in our system it takes more effort and cost, in general, to act in a responsible way.

This word was a bit of a revelation for me, because it showed me really clearly what our mission is in the world today. To recreate our society and culture as a homeotelic culture. Most importantly to recreate our economic system, which is the biggest driver of this heterotelic impulse, as a homeotelic system. It is interesting that China has now started talking about becoming an ecological civilisation. I’m not sure how serious they are, but that is in fact what needs to happen. Industrial civilisation must become an ecological civilisation.

The real question, though, is how do we do that?

This is why I think permaculture is so important. Permaculture systems design is the only approach I have come across that provides real and practical design tools for doing just that, for designing systems that homeotelic. Systems that are sustainable, resilient and regenerative.

Sustainable, meaning systems that are capable of lasting indefinitely – or to put that another way, where harvests do not exceed regeneration rates or wastes exceed natural assimilation rates of the ecosystems they are based on.

Resilient. Many people, even so called experts, confuse resilience and robustness. Robust comes from the Latin robus for oak, strength. It is the ability to shrug off threats. Resilience is from the Latin resilīre to spring back, rebound. It is like grass in the wind, that gets blown over but springs back up. Robust systems tend to be highly efficient and specialised. Resilient systems tend to include strategic redundancy.

And regenerative because it is not enough to simply sustain our highly degraded environment as it is now. We have done so much damage to the intricate web of life that we need to actually start to stitch it back together. Not ripping it further is no longer enough.

Permaculture takes natural systems as the best model of how to do this. It looks at the characteristics of natural systems and asks how we can design those kinds of characteristics into a human centred system? Permaculture design is most usually applied to land management systems, but has also been the organising philosophy behind things like the Transition Towns movement. There is a growing interest in applying permaculture design to business and economic development and you can see it’s influence in things like the 8 principles of Regenerative Capitalism developed by John Fullerton and Hunter Lovins.

Permaculture begins with three ethics – Earth care, people care, fair share (or share the surplus). In contrast, capitalism is fundamentally based around the accumulation of capital, and the pursuit of self-interest and greed as the highest value. A permaculture economics is not about accumulation and the self but is based on cooperation, reciprocity and sharing.

A permaculture designer takes many things into account in producing a design and I don’t have time to do a complete survey of how those ideas would apply in developing permacultural economics, but I wanted to touch on a couple of brief illustrations of how that might look. I thought I’d start by playing with two or three of David Holmgrem’s 12 design principles of permaculture.

The first of those is Observe and Interact. Holmgren says “By taking the time to engage with nature and society we can design solutions that suit our particular situation.” In contrast, neo-liberalism offers a ‘one size fits all’ solution to any problem – less regulation and more private property. The only observation required is the rate of growth.

A permaculture economy would begin with the specifics of a place and a people. It would look at a range of indicators before proposing any solutions – a property designer would look at a range of soils tests, but also make a careful observation of indicator plants, energy flows on site, potential micro-climates. Ideally this observation would be over a full time cycle so as to understand temporal patterns and changes. Similarly an economic design would look at a range of social indicators, to understand the local economic possibilities that a place holds. Kind of the opposite to the Christchurch rebuild it would seem.

If we take the dairy industry as an example, milk prices are the only things that people seem to talk about very much, but an observation of farm ownership patterns, debt levels, declining profitability, social and psychological stress among farmers, changing rural demographics and loss of community would suggest that even when there are high milk prices, something in the system is wrong.

Another principle is to Catch and Store Energy. Holmgren says that by developing systems that collect resources when they are abundant, we can use them in times of need. The saying “make hay while the sun shines” reminds us that we have a limited time to catch and store energy, for later use.

Permaculture systems are not designed to maximise efficiency or profit. The are designed to find a balance that values all kinds of yields from the system, including profit but also relationships, quality of life, ecological diversity and such. During times of plenty, as the dairy industry has recently experienced until this year, a permacultural approach would be to catch and store financial energy, by using high returns to invest in sustainability and resilience. This might mean reducing debt, improving land management, up-skilling workers or a myriad of other on and off farm investments. Under the leadership of Fonterra, the Government and the banks, however, many farmers were encouraged to take on debt to expand and grow their operations – an approach that values efficiency but to the detriment of system resilience.

In contrast, Margaret’s talk tonight about savings pools demonstrates one way that we can proactively create systems to catch and store financial energy within our local communities rather than allow it to drain away as dividends to shareholders in overseas banks.

The principle of applying self-regulation and accepting feedback tells us that we need to discourage inappropriate activity to ensure that systems can continue to function well. We note that negative feedback is often slow to emerge.

A permaculture economy would self consciously build in feedback loops and pay attention to those already existing. One of the feedback loops that has been systematically removed from the current economic model is the true cost of doing business. I recall coming to Christchurch in 2005 to campaign against Graeme Hart and Meadowfresh ending the reuse of glass milk bottle in Christchurch. It is a small example of the way that a cost of doing business that had previously been internalised by the company – that is, the after-use processing of the container – was externalised to the community. By getting rid of the process of collecting, washing and reusing milk bottles, Meadowfresh saved money. By moving to disposable containers which are thrown in the rubbish, they transferred those cost to the community. The price of the milk no longer reflects the cost of dealing with the container.


This externalising costs has always been a failing of the market system. People talk about corporate capitalism privatising profits and externalising costs. So petrol prices do not reflect the costs of climate change, ecological devastation in the Niger Delta or the costs of treating respiratory diseases. The price of food rarely reflects the true costs of production in terms of soil loss, habitat loss, chemical inputs into the environment or, in the case of pastoral farming, declining water quality and impact on climate change. In general, corporations have been aggressively externalising costs as quickly as they can in a bid to improve profitability.


One way of internalising costs, and so adding in a price related feedback loop to customers, is by the use of Pigovian taxes. These are taxes added to products on the basis of their externalised costs. If products carry the true cost of production, price will favour the least ecologically and socially destructive product. To be most beneficial, these taxes need to be revenue neutral, that is any increased tax take should be given back to the community by cutting tax on the first $10,000 or so of income. These kinds of measures are strongly resisted in the current framework – for example pricing carbon as a bid to internalise those costs is enormously unpopular from those industries that most need to receive those feedback loops, such as dairy farming.

These are just a few introductory thoughts about how permacultural systems design thinking can be applied to economics. It is an area that has hardly been explored and one that I feel has huge potential for us as we collectively try to turn our society from a hetereotelic to a homeotelic one.

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Archive of my writing 2009 – 2012

Most of what I wrote after leaving Parliament in mid 2008 until 2012 can be found at rasnandor.blogspot.co.nz. This includes copies of columns for the Waikato Times and the original Monkeywrenching column for the TV3 News website

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