tag:theconversation.com,2011:/id/topics/capital-10012/articlesCapital – The Conversation2023-05-18T20:01:59Ztag:theconversation.com,2011:article/2027502023-05-18T20:01:59Z2023-05-18T20:01:59ZFriday essay: what is ‘time activism’ – and why do we desperately need it?<figure><img src="https://images.theconversation.com/files/526452/original/file-20230516-24-hvo9ru.jpg?ixlib=rb-1.1.0&rect=71%2C0%2C5919%2C3997&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Stephanie Montelongo/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>When my daughter was in the early years of primary school, her class was asked what their parents’ hobbies were. My daughter piped up promptly with mine: “Reading, sleeping, and drinking wine.” This disclosure of my deficiencies — among the more well-adapted offerings of cycling, gardening, Pilates practice and marathon-running — got me in the soft nervous centre of my self-worth. </p>
<p>Sleeping, reading and drinking wine are three things I have always felt guilty about. They are emblematic of my chronic tendency to procrastinate, my lax self-regulation, my failure to use time productively. Excluding my contribution to the wine industry, they have no dollar value. They produce nothing of immediate, measurable value. They have no rounded sense of task completion at their end. </p>
<p>All of them require a loose and idle relationship with time. Reading US essayist Sheila Liming’s <a href="https://www.blackincbooks.com.au/books/hanging-out">Hanging Out: The radical power of killing time</a>, I realise that, in indulging my dubious pastimes, I am in fact simply “hanging out” with myself. </p>
<p>And “hanging out” — that generous, time-lazy, day-squandering activity that seems to belong only to childhood and adolescence — may well be, Liming says, not only a “survival mechanism” and deeply human need, but an act of refusal, an act with a “radical character”. </p>
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<p><em>Saving Time: Discovering a life beyond the clock – Jenny Odell (The Bodley Head); Hanging Out: The radical power of killing time – Sheila Liming (Black Inc.)</em></p>
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<p>Reading Liming’s effortlessly intelligent book, I begin to more deeply understand where my guilt comes from. It’s not just coming from my liver. And I’m not sleeping ten hours a day just to refresh myself for more productive work. I don’t <a href="https://theconversation.com/can-reading-help-heal-us-and-process-our-emotions-or-is-that-just-a-story-we-tell-ourselves-197789">read</a> merely to become erudite and informed enough to pen articles like this.</p>
<p>I’m guilty because hanging out — either alone or with friends — has become anxiety-ridden, overthought, over-structured, over-laden. Unfree. <em>All those other things I should be doing.</em> And I can’t dismiss them, because they have colonised my very being.</p>
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<span class="caption">Hanging out has become anxiety-ridden.</span>
<span class="attribution"><span class="source">Annie Spratt/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>Liming locates this colonisation — and by extension the guilt of the modern Western world — partly in the <a href="https://theconversation.com/how-martin-luther-gave-us-the-roots-of-the-protestant-work-ethic-86350">Protestant work ethic</a> and the policing of self that equated idleness with the devil’s work. Idleness — always viewed suspiciously, especially if you were poor — became increasingly a moral sin that required vigilant resistance. </p>
<p>It’s a phenomenon Barbara Ehrenreich also wrote about in her 2010 critique of the US positive-thinking industry, <a href="https://www.allenandunwin.com/browse/book/Barbara-Ehrenreich-Smile-Or-Die-9781783787531/">Smile Or Die: How positive thinking fooled America and the world</a>: a deep Calvinist contempt for the unimproved self that seeped into the bones and flesh of America, holding the individual responsible for their misfortunes in the face of brutal systemic and structural inequity. </p>
<p>This “pull yourself up by your bootstraps” culture (a phrase which, as Jenny Odell points out in <a href="https://www.penguin.com.au/books/saving-time-9781847926852">Saving Time: Discovering a Life Beyond the Clock</a>, is in itself oxymoronic) has metastasised into a full-body brutality driven relentlessly at the self: multi-directional, time insistent, waste-not want-not. </p>
<p>The strapping and tethering of time to the ends of free-market productivity rules out the conditions required for stretching and growing. We’ve known this, of course, since Marx’s Das Kapital (<a href="https://www.penguin.com.au/books/capital-volume-one-9780394726571">Capital</a>) of 1867 – and we know it in our bodies on a daily basis, when we shed time like skin, until we are red and raw at the end of the day.</p>
<p>Here is where fun – where “hanging out” – becomes a powerful act of resistance. Fun is suspect because it hovers and refuses to land; it nets nothing and feeds the moment, not the bottom line. </p>
<p>“Fun threatens to infect and pervert the sanctity of labour,” writes Liming, “and also the power of those who would have us do more of it, for free, by cramming more into the slim, pre-existing spaces of paychecks and contracts.” </p>
<p>Lassitude and playfulness, she writes, are necessary precursors to invention, imagination, connective social thought and behaviour. Sometimes a revelatory idea needs to come out of nowhere and not out of the focused training of the mind on a problem. </p>
<p>Commodified fun, of course, makes a profit for someone somewhere, and relies on the often poorly paid labour of someone somewhere. But fun that exists outside this space — whether it’s two bodies coming together, or 20, or a hundred; in a park or on a beach or in someone’s pebble-mix back garden — can be a powerful, soul-replenishing “No” to the warped logic of the world. </p>
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Read more:
<a href="https://theconversation.com/barbara-ehrenreich-never-stopped-trying-to-change-the-world-189953">Barbara Ehrenreich never stopped trying to change the world</a>
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<h2>Childhood time and jamming</h2>
<p>Was the actual texture of life, of human interaction, different in childhood: when time swam and wandered and then ebbed with the sun and the call to dinner?</p>
<p>Who is to say that the time I experience now — task-driven, minute-counting — is conceptually truer than that experienced by children? “When is it Christmas again?” I remember asking my mother. She shook her head sadly: “Not for many months. Not till well after your birthday.” </p>
<p>How was it possible to wait through so much time? I imagined it like mud or treacle — a stretch of sticky, recalcitrant experience to be trudged through. I came to the compelling conclusion there must be a trick adults didn’t tell you about. That you just woke up one day to find you were old.</p>
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<a href="https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526478/original/file-20230516-19-s3vsmi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Childhood time feels different. ‘I imagined it like mud or treacle.’</span>
<span class="attribution"><span class="source">Michael Morse/Pexels</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>Songs come to mind. Pink Floyd, describing how you catch up with the Sun, only to find it coming up behind you again. Ageing you every time.</p>
<p>Plays and literature come to mind: the purposeless waiting of <a href="https://theconversation.com/guide-to-the-classics-samuel-becketts-waiting-for-godot-a-tragicomedy-for-our-times-157962">Waiting for Godot</a>, the real-time deterioration of <a href="https://theconversation.com/the-picture-of-dorian-grey-review-eryn-jean-norvill-stuns-in-all-26-roles-150165">Dorian Gray</a>’s portrait, the backwards trajectory of <a href="https://www.simonandschuster.com/books/The-Curious-Case-of-Benjamin-Button/F-Scott-Fitzgerald/9781416556053">Benjamin Button</a>. Time ticks ineluctably down. Or is a thing we must fill – a container, with deeds and experiences and successes – while we can? Or a thing to be escaped: the oldest bogeyman in the book.</p>
<p>Hanging out allows us to reconceptualise time. For me, Liming’s most potent example of differently experienced time was her chapter on jamming as a form of hanging out. </p>
<p>A group of musicians comes together and, with trust and space, their creativities converge into a time-swelling conversation. It is a conversation that is ephemeral, tenuous, delicate sometimes, robust sometimes. And it comes from a place of attuned listening and connecting. </p>
<p>To improvise with other musicians involves the courage to magnanimously court error. It doesn’t capture time so much as fully inhabit it, in a dialogue in many parts and many voices. And because of its ephemerality, it eludes commodification. If the “record” button is never hit, it exists in uncommodifiable space and time.</p>
<p>Reading Liming on jamming and improvisation, I was reminded of the title story of E. Annie Proulx’s 1995 <a href="https://www.goodreads.com/en/book/show/28003">Heartsongs</a>. In this story, we meet Snipe, a no-hoper conman, out for the next exploitable opportunity when he stumbles on the hokey mountaintop Twilight family. </p>
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<a href="https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526495/original/file-20230516-15-s7yp8i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Musicians improvising together don’t capture time so much as ‘fully inhabit it’.</span>
<span class="attribution"><span class="source">Edward Eyer/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>He can’t quite work out the relationships between the family members, but at the end of a meal he is invited to, he is welcomed into their family musical circle. Hardly a word is uttered in this strange after-dinner ritual, but when the Twilights pick up their instruments and begin to play, Snipe becomes increasingly excited: propelled by the rhythms and strands and subtleties they create. </p>
<p>He sees at once that this is something beautiful and exquisite, precious and rare. Invaluable. But when he proposes to the Twilight family that he manage them, tour them — that there are unimaginable profits to be made — they are not only indifferent, but reject his proposition out of hand. Snipe slinks away, after various fruitless efforts to convince: he has no frame of reference for their refusal.</p>
<p>I kept coming back to Heartsongs while reading Hanging Out — in fact, it’s the only story I recall in Proulx’s collection. It is a lesson in humility, I think: stubborn, ethical humility that remains impervious to the marketing imperatives of the world. Improvisation, it tells us, can be a way of living. Time does not have to be turned into dollars. </p>
<h2>‘Politically subversive’ sleep</h2>
<p>My battle with excessive <a href="https://theconversation.com/explainer-how-much-sleep-do-we-need-29759">sleep</a>, and the “waste of time” it represents has endured throughout my whole adult life. I have tried to curtail my sleeping, tried to sleep like others do (less), tried to stay awake in front of a computer screen when my eyes are rolling back in my head. </p>
<p>I have felt incessantly guilty about my need for sleep, and frightened when I read articles that tell me <a href="https://theconversation.com/research-check-can-sleeping-too-much-lead-to-an-early-death-101323">too much sleep</a> will shorten my life. I have slept under desks in classrooms, on office floors, on couches in libraries and seats in parks. I have slept at a live music venue while the band played. </p>
<p>And I have slept at parties. Many, many parties. In my twenties, I threw large dinner parties where I’d spend the whole day cooking and preparing, and then, at 9pm, when the food was eaten, I’d go off to my bedroom and sleep. Having babies gave me the perfect excuse; I’d take them off to bed, breastfeed them, and never resurface.</p>
<p>There must be others like me, I thought. I briefly entertained the notion of instigating a Sleep Club in Melbourne’s CBD, a place where people like me could go to safely sleep in between other activities. But how to ensure Sleep Club didn’t turn into Sex Club? How to pay for sheets and blankets and mattresses (and CBD rent)? And how to make Sleep Club profitable? Here was the very crux of the problem: how could I charge people to sleep? And wouldn’t that contradict the whole purpose of my idea? </p>
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<span class="caption">My battle with ‘excessive sleep’ and the ‘waste of time’ it represents has lasted my adult life.</span>
<span class="attribution"><span class="source">Gregory Pappas/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>In Saving Time, Jenny Odell tells us of activist and poet Tricia Hersey’s organisation <a href="https://thenapministry.wordpress.com/">Nap Ministry</a>, established to address “the sleep deprivation of enslaved peoples and their status as commodifed bodies”. Nap Ministry encourages collective napping experiences, as well as performances and workshops geared to the reinstituting of sleep as a human right. </p>
<p>Hersey claims sleep as a politically subversive action (which helps me legitimise my own sleeping habits). But in Hanging Out, Sheila Liming writes of sleeping in a way that reveals to me what perhaps I was seeking in my own soporific social withdrawals. </p>
<p>Sleeping at parties, she writes, provides the “serenity of effortless inclusion”. It is safety made even safer by the murmur of social pleasure: a kind of umbrella or arc of exuberant warmth. This same hum of warmth and sociality and protection soothed me as a child when my parents’ dinner parties extended late into the night. </p>
<p>In this way, the pleasure of “hanging out” can be experienced vicariously. Liming cites <a href="https://www.womenshistory.org/education-resources/biographies/audre-lorde">Audre Lorde</a>’s poem <a href="https://hellopoetry.com/poem/18770/the-electric-slide-boogie/">The Electric Slide Boogie</a>, in which a dying woman listens to a party in full swing on the other side of her wall. There is no “Rage, rage against the dying of the light” in her musings, but a soft, gentle and ultimately generous lament: “How hard it is to sleep/in the middle of life.”</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/wellness-is-not-womens-friend-its-a-distraction-from-what-really-ails-us-177446">Wellness is not women's friend. It’s a distraction from what really ails us</a>
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<h2>Time and the extraction of labour</h2>
<p>When did the productive use of time begin to be a measurement of human worth?
Before the advent of modern clock-time, Jenny Odell tells us, the “tools of coordination” — in Western Christendom at least — were bells, enforcing the “temporal discipline” of Benedictine and Cistercian monks. </p>
<p>How gentle and undemanding bells seem to us in the 21st century; a languorous form of time-marking, which called us to prayer and food and sleep. Last year I was fortunate enough to spend a week in the tiny town of Sivignon in southern France: there I forgot about my watch all together, guided by half-hour chimes that didn’t even interrupt my sleep, though they continued unabated throughout the night.</p>
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<p>In Saving Time, Odell locates the invention of fungible time — time that can be broken down into smaller and smaller measurable, productive increments — in the spreadsheets of Southern plantation owners. </p>
<p>Modern time, she suggests, came about as a product of slavery and its reduction of human worth to the extraction of labour. Reading this, it’s hard not to conclude humans are the inherent exploiters of other humans by any technology available or inventable – including the shared technology of time. Some of us have possessed time, and, in the process, dispossessed others of it.</p>
<p>Centuries years later, we live in a world where time is even more minutely monitored. Workers might not clock in and out on the job anymore (old-fashioned punch cards at least marked a beginning and an end to a day’s work), but their time is as <a href="https://theconversation.com/a-question-of-trust-should-bosses-be-able-to-spy-on-workers-even-when-they-work-from-home-140623">effectively surveilled</a> by keystroke monitoring, key performance indicators, and continuous improvement cycles – winnowing lives into smaller and smaller particles of data. Work bleeds into leisure and leisure bleeds into work; clear boundaries no longer exist. </p>
<p>Leisure itself has become merely another opportunity for self-optimisation (the above-mentioned marathons and Pilates). Slowness — initially a refutation of the obsessive equating of busyness with moral good — has been turned into its own form of consumption, and a form of consumption quarantined for the well-off. Slow-cooking, slow-living, “self-care” can’t be indulged by those frantically trying to make ends meet with a series of casual jobs in a gig economy. Time, writes Odell, has become “the punitive dimension”.</p>
<p>The “science of time”, most notably formalised in Frederick Winslow Taylor’s 1911 <a href="https://www.goodreads.com/book/show/958259.The_Principles_of_Scientific_Management">The Principles of Scientific Management</a>, has given us a linear, task-oriented way of making sense of ourselves. Drawing on the work of German philosopher Josef Pieper, Odell argues leisure should be “vertical” not “horizontal”: “[T]rue leisure requires the kind of emptiness in which you remember the fact of your own aliveness.”</p>
<p>Many of us experienced this emptiness during Covid; we became “estranged from common forms of marking time” and thus more alive to time’s natural rhythms. We took long walks and noticed new buds on trees, watched fledgling falcons rouse from nests on the roofs of skyscrapers, heard the birdsong that had always existed behind the incessant industry and traffic of daily life. </p>
<p>In retrospect, COVID lockdown might seem merely a period of hiatus, from which the world has decisively returned. But there is political potential in the experience and the way it released us – briefly anyway – from our normal temporal subjugations. </p>
<p>Odell cites 19th-century labour leader Ira Steward to make further sense of this experience. He described the experience of leisure as a “blank — a negative — a piece of white paper”, not something to be filled or pre-inscribed. Steward’s “blank”, writes Odell, “was less like foam padding keeping a hierarchy in place than like a gas whose every increase carried the potential of more cracks in the system.” </p>
<p>In a world of temporal urgencies — of corporate and political greed; climate crisis; economic, race and gender inequality — we need these cracks. And we need the gas that creates them.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/as-boundaries-between-work-and-home-vanish-employees-need-a-right-to-disconnect-158897">As boundaries between work and home vanish, employees need a 'right to disconnect'</a>
</strong>
</em>
</p>
<hr>
<h2>Women’s time ‘didn’t economically exist’</h2>
<p>Central to any discussion of time is the way women have experienced the economic devaluation of their time. <a href="https://theconversation.com/what-is-emotional-labour-and-how-do-we-get-it-wrong-185773">Arlie Russell Hochschild</a> wrote in 1989 of the way feminism in effect created a “<a href="https://www.nytimes.com/1989/06/25/books/she-minds-the-child-he-minds-the-dog.html">second shift</a>” for women. </p>
<p>I’ve often thought of this as feminism’s gift to men, releasing them from the unilateral burden of bringing in a wage, but without repositioning them to take up their share of child-rearing and <a href="https://theconversation.com/how-last-nights-fight-affects-the-way-couples-divide-housework-92582">housework</a>: in this brave new world, women simply did both forms of labour, paid and unpaid. </p>
<p>“Where women are concerned,” <a href="https://libcom.org/article/power-women-and-subversion-community-mariarosa-dalla-costa-and-selma-james">wrote</a> Mariarosa Dalla Costa and Selma James, proponents of the 1970s Wages for Housework movement, “their labour appears to be a personal service outside of capital.” </p>
<p>Odell tells of the first New Zealand member of parliament Marilyn Wearing, who studied the provisioning for women’s time and unpaid labour in existing economic structures for her 1988 book <a href="https://www.marilynwaring.com/publications/if-women-counted.asp">If Women Counted: A New Feminist Economics</a>. She found, quite simply, that women’s time, and women’s work, didn’t economically exist.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="clothes on line" src="https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526492/original/file-20230516-29-ike089.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In this brave new world, women simply did both forms of labour, paid and unpaid: ‘feminism’s gift to men’.</span>
<span class="attribution"><span class="source">Brina Blum/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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</figure>
<p>And if women’s work time doesn’t exist, what of women’s leisure time? In 1929, in <a href="https://theconversation.com/guide-to-the-classics-a-room-of-ones-own-virginia-woolfs-feminist-call-to-arms-145398">A Room of One’s Own</a>, Virginia Woolf asked: </p>
<blockquote>
<p>[W]hat alternations of work and rest [might women] need, interpreting rest as not doing nothing but as doing something but something that is different; and what should that difference be? All this should be discussed and discovered.</p>
</blockquote>
<p>As with so many of Virginia Woolf’s questions, the answers remain at large.</p>
<p>Were women in the past more wretchedly used by time? Or are the uses just different now: the burdens outsourced, displaced onto others so new burdens might be absorbed? I’ve often wondered, how — when they hardly had hot water and ran their clothes through a mangle after sloshing them in sudsy water with a paddle — women of the past managed so decisively to outdo us when it came to keeping the world clean? </p>
<p>I haven’t run an iron over an article of clothing in years. Boiling things, steaming things, soaking things, making vinegar and bicarb solutions, using lemon juice in remarkable ways to get out stains. Hard-bristled floor brushes on flagged floors, followed by mopping (with boiled water). How did they get all the grit out of the tiles and the baked on charcoal out of ovens? Did they use their time better than us? </p>
<p>In a certain part of Malaysia, Odell tells us, a <em>woman’s</em> measurement of time prevails; to the question “how long does it take to get there?” the answer might be “three-rice-cookings”. I like this remoulding of time in the shape of women’s traditional chores. How long does it take to get there? “Four nappy changes.” “Six loads of washing.” “Thirteen bedtime stories.”</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-do-women-want-freuds-infamous-question-invites-voyeurism-but-examining-what-they-do-is-far-more-revealing-199202">What do women want? Freud's infamous question invites voyeurism – but examining what they do is far more revealing</a>
</strong>
</em>
</p>
<hr>
<h2>Redefining time</h2>
<p>Odell leads us from our small, narrow, self-flagellating experience of time to its deeper manifestations and inhabitations. She begins with moss: invisibly moving, formidably growing, in a way that is reminiscent of <a href="https://theconversation.com/how-sylvia-plaths-profound-nature-poetry-elevates-her-writing-beyond-tragedy-and-despair-200024">Sylvia Plath</a>’s poem <a href="https://www.bl.uk/learning/langlit/poetryperformance/plath/poem1/plath1.html">Mushrooms</a>. In the creeping pathway of moss that grows in a cactus planter on her windowsill, Odell observes continuity at work, the feeding of time with more time: “Tomorrow was growing raw out of the husk of today.”</p>
<p>Plants, Odell writes, are “the ongoing materialisation of time itself”. And in rocks and stone and pebbles we bear witness to a geological time that is past, present and future all at once. We cannot suppress time or nature, or the nature–time confluence of events such as landslides. The subjecthood and agency of the non-human, of the apparently inert, teach us something that clocks cannot.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=565&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=565&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526487/original/file-20230516-19-wfpbe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=565&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Jenny Odell observes of moss on her windowsill cactus, ‘Tomorrow was growing raw out of the husk of today.’</span>
<span class="attribution"><span class="source">Annie Spratt/Unsplash</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>As do Indigenous notions of time. Bill Gammage’s 2012 book <a href="https://www.allenandunwin.com/browse/book/Bill-Gammage-Biggest-Estate-on-Earth-9781743311325">The Biggest Estate on Earth</a> was revelatory upon publication not because of its carefully organised evidence of Indigenous plant cultivation, but because of the Indigenous conceptualisation of time the book conveyed. </p>
<p><a href="https://theconversation.com/dates-add-nothing-to-our-culture-everywhen-explores-indigenous-deep-history-challenging-linear-colonial-narratives-199871">Indigenous time</a> was too vast to make fungible: it was understood across huge expanses of land, imagined well beyond the lifetime of the individual, connective of past, present and future. It was a conceptualisation of time so foreign to colonisers, the architects of fungible time, that it was ungraspable, only demeanable. </p>
<p>In measuring time so finely, in cutting it down and down into microscopic forms of accountability, we have demeaned time. We have made it sad and attenuated. We deny it its power and sanctity.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/dates-add-nothing-to-our-culture-everywhen-explores-indigenous-deep-history-challenging-linear-colonial-narratives-199871">'Dates add nothing to our culture': Everywhen explores Indigenous deep history, challenging linear, colonial narratives</a>
</strong>
</em>
</p>
<hr>
<h2>Modern time feels ‘poisonous’</h2>
<p>Strangely, while reading Odell’s and Liming’s books, and thinking about this article, my wristwatch stopped working. It has remained on my arm regardless, stuck at an eternal 11:10, and I keep referring to it out of habit. I wish this were a source of calm for me, that it made me stop and think in ways other than minutes and hours. But it doesn’t. It makes me ill at ease, and reminds me of yet another thing to put on my to-do list (get battery).</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=934&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=934&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=934&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1173&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1173&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526484/original/file-20230516-15-dmbv3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1173&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Pa</span></span>
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<p>I can’t find the “temporal latitude” to disengage myself from the anxieties of a stopped watch, because I don’t live on a mountain or in a cave. I have a mortgage to pay and children to shepherd properly into adulthood. I don’t have the time to be loose, or big, about time. And this is the crux of so many of our current problems and neuroses. We know it. We know how modern time feels in our bodies — like quicksilver, poisonous, impossible to pin down.</p>
<p>Both Odell and Liming propose “time activism” as part of a larger project to address the urgent issues our world faces. We need a “strategic confiscation of time,” Liming says: we need to kill time good and dead and let it resurface in its own natural, communal rhythms – informed by our needs and not our labour value.</p>
<p>But perhaps we also need to treat it more gently, to tend it with care and understanding. “Would it be possible,” writes Odell, “not to save and spend time, but to garden it – by saving, inventing, and stewarding different rhythms of life?”</p><img src="https://counter.theconversation.com/content/202750/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Edwina Preston received funding from the Australia Council for the Arts for her most recent novel Bad Art Mother.</span></em></p>Edwina Preston reflects on the lost art of hanging out – which feeds creativity – and the need to reclaim time from the pressures of productivity. She draws on new books by Jenny Odell and Sheila Liming.Edwina Preston, PhD Candidate, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1959342023-02-07T19:04:47Z2023-02-07T19:04:47ZDark Emu has sold over 250,000 copies – but its value can’t be measured in money alone<figure><img src="https://images.theconversation.com/files/508553/original/file-20230207-13-pqykou.jpg?ixlib=rb-1.1.0&rect=0%2C16%2C3723%2C2942&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Bruce Pascoe</span> <span class="attribution"><span class="source">Linsey Rendell</span></span></figcaption></figure><p>Bruce Pascoe’s <a href="https://www.magabala.com/products/dark-emu?_pos=27&_sid=160b08e95&_ss=r">Dark Emu</a>, first published in 2014, represents that rare bird in small press and independent publishing in Australia: a long-term sales success. </p>
<p>Dark Emu attempts to debunk the idea that pre-European Aboriginal people were purely “hunter-gatherers”. </p>
<p>Indeed, it suited settler-colonists, Pascoe argues, to fail to recognise Indigenous agricultural practices as organised, intelligent land management. In the original publisher’s press release, Pascoe described it as a book “about food production, housing construction and clothing”. </p>
<p>By mid-2021, seven years later, it <a href="https://www.themonthly.com.au/issue/2021/july/1625061600/james-boyce/transforming-national-imagination-dark-emu-debate#mtr">had sold</a> an impressive 250,000 copies.</p>
<p>But sales are just one way to demonstrate the success, or value, of a book. </p>
<h2>Measuring value beyond sales figures</h2>
<p><a href="https://www.tandfonline.com/doi/abs/10.1080/14443058.2022.2147573">We tracked</a> the impact of the original edition of Dark Emu over five years, from 2014 to 2019, to look at how it contributed to (or otherwise altered) six categories of value, or “capital”. They were: financial (the primary way our culture measures a book’s success), but also social, human, intellectual, manufactured and natural. </p>
<p>We borrowed these six categories from a value-reporting mechanism used in the corporate sustainability sector, <a href="https://www.integratedreporting.org/resource/international-ir-framework/">The Integrated Reporting Framework</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=956&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=956&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=956&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1202&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1202&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505566/original/file-20230120-22-cs6mv4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1202&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>Dark Emu was one of around 20,000 books published in Australia in 2014. Most of these works would have been aimed at <a href="https://theconversation.com/how-to-read-the-australian-book-industry-in-a-time-of-change-49044">a modest market</a>, with print runs of between 2,000 and 4,000. </p>
<p>By 2016, Dark Emu was reported to have sold more than 100,000 copies. Many local releases all but disappear from bookshop shelves within a few months of their release. But instead, Dark Emu gathered slow momentum. </p>
<p>Five years later, in 2019, it <a href="https://www.smh.com.au/culture/books/i-m-hoping-it-s-a-blip-sales-down-in-difficult-year-for-publishing-industry-20200109-p53q43.html">reportedly sold</a> 115,300 copies in Australia and New Zealand in a single year.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/friday-essay-how-our-new-archaeological-research-investigates-dark-emus-idea-of-aboriginal-agriculture-and-villages-146754">Friday essay: how our new archaeological research investigates Dark Emu's idea of Aboriginal 'agriculture' and villages</a>
</strong>
</em>
</p>
<hr>
<h2>Impact on manufacturing</h2>
<p>Manufactured capital looks at the physical object that’s been created. In this case, that’s the first-edition physical book of Dark Emu, as well as subsequent physical objects generated by or through it (including reprints).</p>
<p>Between 2014 and 2019, Dark Emu was <a href="https://www.screenhub.com.au/newsarticle/%20news/writing-and-publishing/performing-arts-editor/dark-emu-to-be-adapted-as-tv-documentary-259030">reprinted 28 times</a>. It was also produced as an e-book and an audio book. </p>
<p>By 2017, world rights were sold to Scribe, which published North American and UK editions in 2018. An <a href="https://www.magabala.com/products/young-dark-emu?_pos=1&_sid=160b08e95&_ss=r">edition for younger readers</a> was released by its original publisher, <a href="https://www.magabala.com/">Magabala</a>, in 2019. Magabala also published at least one secondary text: a resource for secondary school teachers, <a href="https://www.magabala.com/products/dark-emu-in-the-classroom?_pos=11&_sid=160b08e95&_ss=r">Dark Emu in the Classroom</a>. </p>
<p>We tracked the significant impact on manufacturing from this single book title as it was reproduced in various forms, showing evidence of its impact across a range of allied book industry sectors – especially the print industry – both in Australia and internationally. </p>
<h2>Supporting Indigenous creators</h2>
<p>In the five years immediately following the release of the original edition of Dark Emu, it accumulated considerable intellectual capital. </p>
<p>Numerous arts and literary sector awards recognised the book’s outstanding public, literary and cultural value between 2014 and 2019. This recognition culminated in Bruce Pascoe being awarded the Australia Council for the Arts Lifetime Achievement Award for Literature in 2018.</p>
<p>The publication of Dark Emu had a significant impact on its small not-for-profit publisher, <a href="https://www.magabala.com/pages/about-us">Magabala Books</a>. Founded in 1984, Magabala is Aboriginal owned and led, and focuses on celebrating and nurturing Aboriginal and Torres Strait Islander voices.</p>
<p>After Dark Emu was published, Magabala expanded its publishing program.</p>
<p>Magabala was shortlisted for Small Publisher of the Year at the Australian Book Industry Awards in 2017 and 2019. That second year, it was also the fastest-growing independent small publisher in Australia.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=410&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=410&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=410&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=515&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=515&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505546/original/file-20230120-20-ct6ye3.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=515&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Peter Bibby, Merrilee Lands and June Oscar heading to a Magabala book launch in 1990.</span>
<span class="attribution"><span class="source">Magabala Books</span></span>
</figcaption>
</figure>
<p>Magabala also invested in philanthropy. Its <a href="https://www.magabala.com/pages/scholarships">Creative Development Scholarship</a> to “support professional development relating to writing, illustration and storytelling” for Aboriginal and Torres Strait Islander storytellers, writers, illustrators and artists supported 27 scholars between 2014 and 2019. </p>
<p>Dark Emu created jobs in the performing arts, too. </p>
<p>A dance adaptation by <a href="https://theconversation.com/bangarras-dark-emu-is-beautiful-but-lacks-the-punch-of-its-source-material-98628">Bangarra Dance Theatre</a> premiered at the Sydney Opera House in 2018, involving more than 30 arts workers. Program notes for the national tour list three choreographers, 17 dancers and a production team of six, as well as 11 musicians and a composer employed to work on the production. </p>
<p>In 2019, <a href="https://www.smh.com.au/culture/tv-and-radio/bruce-pascoe-s-dark-emu-series-for-abc-tv-likely-to-still-go-ahead-20210701-p585za.html">Screen Australia</a> announced a documentary series would be developed based on the book. While delayed by COVID-19, the series is still in production. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505549/original/file-20230120-24-rmmstq.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Bangarra Dance Theatre’s production of Dark Emu was just one way the book led to arts jobs.</span>
<span class="attribution"><span class="source">Bangarra/Daniel Boud</span></span>
</figcaption>
</figure>
<h2>New understandings of Australian history</h2>
<p>To measure the book’s social impact, we focused on how it contributed to the human rights, health and wellbeing of Indigenous peoples in Australia, as well as how it contributed to broad public understanding of Australian history. </p>
<p>Then we looked at how the book increased public debate. (We should note, we didn’t include Peter Sutton and Kerry Walsh’s 2021 book rebutting Dark Emu, <a href="https://theconversation.com/how-the-dark-emu-debate-limits-representation-of-aboriginal-people-in-australia-163006">Farmers or Hunter-gatherers?</a>, as it was beyond the scope of our study: our research spanned 2015-2019.)</p>
<p>Digital forums provide short, sharp narratives that bring qualitative value into focus. (<a href="https://bridges.monash.edu/articles/monograph/What_Matters_Talking_Value_in_Australian_Culture/12821456">So-called</a> “parables of value”.)</p>
<p>On <a href="https://www.booktopia.com.au/dark-emu-bruce-pascoe/book/9781921248016.html">Booktopia</a>, many hundreds of readers reviewed Dark Emu; 86% of them gave the book five stars, reflecting its broad popularity. This selection of Booktopia reviews speaks to the way Dark Emu contributed to new understandings of Australian history: </p>
<blockquote>
<p>A marvellous book, full of information and insights which were new and fascinating to me. Well researched and well written. It should be compulsory reading for all Australian schoolchildren.</p>
<p>Super interesting and I wish I’d been taught more of this earlier in life.</p>
<p>I have only just started using this resource for my Year 9 class […] It has thus far provoked conversation and questions. It is particularly interesting as we live in an area that Major Mitchell explored, and there are numerous tracks etc named after him. Always interesting [to be] given the other side of history.</p>
<p>I couldn’t stop thinking about this book […] after reading it and going through any bush in Australia you see the landscape very differently.</p>
</blockquote>
<p>Our analysis identified an extraordinary degree of public debate generated by the book – in part because it soon provoked another chapter in the “<a href="https://www.themonthly.com.au/blog/russell-marks/2020/05/2020/1580868886/taking-sides-over-dark-emu">Australian History Wars</a>”. </p>
<p>Social commentator Andrew Bolt, for example, published several columns on Dark Emu in the Herald Sun during 2018-19. He drew heavily on an anonymous website, Dark Emu Exposed, which purports to “expose” and “debunk” what it asserts are the book’s many myths, exaggerations and “fabrications”. </p>
<p>Interestingly, <a href="https://www.themonthly.com.au/blog/russell-marks/2020/05/2020/1580868886/taking-sides-over-dark-emu">Russell Marks</a> links the extraordinary sales success of Dark Emu in 2019 directly to the increase in public debate fuelled by Bolt.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-the-dark-emu-debate-limits-representation-of-aboriginal-people-in-australia-163006">How the Dark Emu debate limits representation of Aboriginal people in Australia</a>
</strong>
</em>
</p>
<hr>
<h2>Environmental impacts</h2>
<p>It is not possible to precisely measure the air, water, land, minerals and forests required to produce and distribute Dark Emu. But we were able to make some informed estimates. </p>
<p>Figures from <a href="https://www.isonomia.co.uk/balancing-the-books-the-environmental-impacts-of-digital-reading/">an overseas study</a> found that the paper required to produce 100 books requires about one tree. On this basis, copies of the original Dark Emu title sold in Australia in 2019 consumed the equivalent of 1,153 trees. </p>
<p><a href="https://climateinemergency.wordpress.com/2016/04/12/the-carbon-footprint-of-a-book/">Other sources</a> estimate the carbon footprint of a single book is 2.71 kilograms carbon dioxide equivalent (CO₂ equivalent). On this basis, Dark Emu’s sales in Australia in 2019 could be said to have produced 312,467kg of CO₂ emissions. That’s the equivalent of emissions produced from 5,002kg of beef – or, the amount of beef consumed by 200 Australians <a href="https://www.agriculture.gov.au/abares/research-topics/agricultural-outlook">in an average year</a>. </p>
<p>But unlike many other Australian books, Dark Emu has not just consumed natural capital: it has also contributed to it. </p>
<p>With earnings from his royalties, Pascoe purchased <a href="https://www.theguardian.com/artanddesign/2020/may/13/its-time-to-embrace-the-history-of-the-country-first-harvest-of-dancing-grass-in-200-years#img-1">farmland in regional Victoria</a>. There, he is applying knowledge gained through research for the book to regenerate the local ecology, using Indigenous agricultural practices. He says:</p>
<blockquote>
<p>The farm I’m working on, I got rid of the cattle and within a season the grass was knee-high again. And areas that had been cut, that should never have been cleared at all, where they were showing their bones through the soil, they’ve come good again.</p>
</blockquote>
<p>Pascoe’s appointment as <a href="https://findanexpert.unimelb.edu.au/profile/185335-bruce-pascoe">Enterprise Professor in Indigenous Agriculture</a> at the University of Melbourne makes likely further positive contributions to natural capital: via teaching and research in Indigenous land management. All traceable to a single book title. </p>
<h2>Why do we measure value beyond money?</h2>
<p>In a capitalist world, it sometimes seems like the almighty dollar is the only marker of value. So many conversations about value stem from that single category – but there’s far more to it than that. </p>
<p>Our interest in value in relation to Australian books is informed by multiple disciplines that together enable a more holistic conceptualisation of value. From cultural economics, a sub-discipline of economics concerned with the economic analysis of the arts and culture, researchers like <a href="https://www.cambridge.org/core/books/economics-and-culture/14439A4E891452AA74D15EFAF3C69EC4">David Throsby</a> distinguish economic value from cultural value. </p>
<p><a href="http://www.klamer.nl/book/the-value-culture/">Arjo Klamer</a> is a Dutch cultural economist whose valued-based approach has been described as advocating “humanonics” (economics with humans and meaning left in). His work helps us consider the impact of the environment around us on how and why things become valued as social and cultural practices. </p>
<p>He cautions that attempting to measure the value of culture in purely quantitative terms invokes the “<a href="https://ideas.repec.org/p/wpa/wuwpgt/9904004.html">Heisenberg principle of economics</a>”: what is measured impacts how value is perceived. (So, for instance, measuring the value of Dark Emu in terms of its sales alone ignores other “value dimensions” that are generated.)</p>
<p>In the discipline of sociology, Pierre Bourdieu describes how cultural fields are shaped by <a href="https://www.marxists.org/reference/subject/philosophy/works/fr/bourdieu-forms-capital.htm">symbolic capital</a>. To use the field of book production as an example, writers or publishers accrue symbolic capital through markers of prestige, such as when their books receive favourable reviews or win prizes. </p>
<p>John Frow further <a href="https://uwap.uwa.edu.au/products/the-practice-of-value-essays-on-literature-in-cultural-studies">explains</a> that the value of cultural objects is derived from their use in different contexts (or “regimes of value”). </p>
<p>For example, within the Australian tertiary education sector, a cultural object like an Arts degree has value it would not have in another industry. And a book might be chosen for the <a href="https://theconversation.com/nostalgic-classics-or-edgy-contemporary-texts-what-books-are-kids-reading-in-australian-schools-and-does-it-matter-198234">Australian school curriculum</a> based on aesthetic principles (like the quality of its prose), but also on criteria such as its depiction of a particular idea of Australia, or its relationship to other parts of the curriculum. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/two-thirds-of-australian-authors-are-women-new-research-finds-they-earn-just-18-200-a-year-from-their-writing-195426">Two thirds of Australian authors are women – new research finds they earn just $18,200 a year from their writing</a>
</strong>
</em>
</p>
<hr>
<h2>The national value of Australian books</h2>
<p>What do locally written and produced books contribute to Australian life? </p>
<p>At a time of national cultural policy renewal – and as so many Australian authors <a href="https://theconversation.com/two-thirds-of-australian-authors-are-women-new-research-finds-they-earn-just-18-200-a-year-from-their-writing-195426">struggle to survive financially</a> – our preliminary work with Dark Emu shines light on this question. </p>
<p>Our research shows how Australian books circulate in our culture and what they bring – not just in dollar terms, but across a range of other important dimensions. </p>
<p>It’s the kind of work – collecting data relevant to our local book industry – that many contributors to last year’s <a href="https://www.arts.gov.au/have-your-say/new-national-cultural-policy">national consultation</a> on a new Australian cultural policy have called for. </p>
<p>This investment is urgent, with the <a href="https://theconversation.com/after-years-of-austerity-revive-writes-the-next-chapter-in-australian-literary-culture-198758">new cultural policy, Revive</a>, sending a strong message that Australian authors and literature have a vital role to play in “telling Australian stories”. The evidence for gauging policy success over time will need to be broad – beyond measures of economic impact alone.</p>
<p>We need data that will complement and help contextualise the economic indicators of a book’s success, through an expanded frame of reference. </p>
<p>These additional indicators might include health and wellbeing, social inclusion and educational value, and the contributions a book makes to place-making and truth-telling. </p>
<p>Dark Emu is an extraordinary book. In many ways, it’s one of a kind. </p>
<p>But our work in measuring Dark Emu’s impact over a five-year period offers interesting future possibilities. Possibilities for how we might measure and articulate a broader set of value dimensions in relation to Australian books. The question of what a book might really be worth can – and should – be answered across multiple dimensions.</p><img src="https://counter.theconversation.com/content/195934/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Julienne van Loon has been a recipient of funding from Creative Victoria, ArtsWA and the Australia Council for the Arts. She is a member of the Australian Society of Authors.</span></em></p><p class="fine-print"><em><span>Bronwyn Coate has been a recipient of funding from the Australian Research Council (ARC) and the Australia Council for the Arts. She is currently the Executive Secretary/Treasurer for the Association for Cultural Economics International (ACEI). </span></em></p><p class="fine-print"><em><span>Millicent Weber does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Our research team tracked the impact of Dark Emu, Bruce Pascoe’s bestseller, over five years. We measured its value across a range of criteria, from financial to environmental.Julienne van Loon, Associate Professor, Writing and Publishing, School of Media & Communication, RMIT UniversityBronwyn Coate, Senior Lecturer in Economics, RMIT UniversityMillicent Weber, Senior lecturer, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1956812022-12-23T12:55:37Z2022-12-23T12:55:37ZHow Monopoly informs academia and economics, even when it’s not obvious<figure><img src="https://images.theconversation.com/files/502545/original/file-20221222-24-crvxot.png?ixlib=rb-1.1.0&rect=4%2C0%2C1465%2C740&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Designed by Elizabeth Magie in the early 20th century, _The Landlord Game_ would go on to inspire _Monopoly_.</span> <span class="attribution"><a class="source" href="https://upload.wikimedia.org/wikipedia/commons/5/52/Landlords_Game_1906_image_courtesy_of_T_Forsyth_owner_of_the_registered_trademark_20151119.jpg">Creative Commons</a></span></figcaption></figure><p>At the top hat’s turn to roll, the dice land on ‘Chance’ and it’s a one-way ticket to Mayfair. Aged just ten years old, I won my first game of <em>Monopoly</em>, but I strangely didn’t feel a sense of joy. I was rich, very rich indeed. But I was the sole proprietor of the houses, hotels and lots left behind by a fictional society of which I was the last remaining survivor.</p>
<p>Perhaps even back then, I suspected that the true lesson of <em>Monopoly</em> was that capitalism (in its most radical form) would lead most of us either to solitude, if we were lucky, or to bankruptcy, if we weren’t.</p>
<p>And this is exactly what the game’s creator was trying to tell us all along.</p>
<h2>The birth of Georgism</h2>
<p>At its inception, in 1903, the initial version of the game of <em>Monopoly</em>, which was then called <a href="https://landlordsgame.info/"><em>The Landlord’s Game</em></a>, was intended as a warning against the ills of capitalism. Just like in the modern version, players would play until the last card was drawn and the last hotel was placed.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/442555/original/file-20220125-21-sqtdpg.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/442555/original/file-20220125-21-sqtdpg.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=895&fit=crop&dpr=1 600w, https://images.theconversation.com/files/442555/original/file-20220125-21-sqtdpg.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=895&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/442555/original/file-20220125-21-sqtdpg.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=895&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/442555/original/file-20220125-21-sqtdpg.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1125&fit=crop&dpr=1 754w, https://images.theconversation.com/files/442555/original/file-20220125-21-sqtdpg.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1125&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/442555/original/file-20220125-21-sqtdpg.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1125&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">First patented board for <em>The Landlord’s Game</em>, 1904.</span>
<span class="attribution"><a class="source" href="https://fr.wikipedia.org/wiki/Elizabeth_Magie#/media/Fichier:BoardGamePatentMagie.png">US National Archives./Wikimedia</a></span>
</figcaption>
</figure>
<p>Unlike its current format, however, the original allowed two jaded and frustrated players to team up against this brutal social experiment. They could revolutionise the game-play by setting alternative rules such as nationalising the bank, converting the jail into a school or giving all stations free state access to water and electricity. But don’t be fooled; this was in no way a proletarian revolution, as all players remained the individual proprietors of their hotels, houses and assets in a sort of balance between state-run and private property.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/442549/original/file-20220125-21-ljw4hs.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/442549/original/file-20220125-21-ljw4hs.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=408&fit=crop&dpr=1 600w, https://images.theconversation.com/files/442549/original/file-20220125-21-ljw4hs.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=408&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/442549/original/file-20220125-21-ljw4hs.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=408&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/442549/original/file-20220125-21-ljw4hs.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=513&fit=crop&dpr=1 754w, https://images.theconversation.com/files/442549/original/file-20220125-21-ljw4hs.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=513&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/442549/original/file-20220125-21-ljw4hs.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=513&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Georgist postcard, date unknown.</span>
<span class="attribution"><a class="source" href="https://fr.wikipedia.org/wiki/Georgisme#/media/Fichier:Everybody_works_but_the_vacant_lot_(cropped).jpg">New York Public library/Wikimedia</a></span>
</figcaption>
</figure>
<p>Although now largely unknown, this utopian model was once popular in the United States <a href="https://en.wikipedia.org/wiki/Georgism">under the name of Georgism</a>. The movement advocated a world where individual success and the American dream could be achieved as tangible, real concepts, while countervailing state power would prevent the emergence of large monopolies and help redistribute wealth. Georgism supported the idea of a single tax on land, minerals and inheritances, which would allow us all to reap the fruits of our labour and do away with unearned income. This brings us neatly to our household game, which strove to show how monopolies would generate misery and poverty, whereas opposing models of economic management would ensure well-being and prosperity for all. In the Georgist world, winning the game meant getting rich without causing others to go bust.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=851&fit=crop&dpr=1 600w, https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=851&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=851&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1069&fit=crop&dpr=1 754w, https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1069&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/442552/original/file-20220125-17-cozo88.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1069&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Henry George, whose writings and advocacy formed the basis for Georgism.</span>
<span class="attribution"><a class="source" href="https://fr.wikipedia.org/wiki/Georgisme#/media/Fichier:Henry_George.png">Wikimedia</a></span>
</figcaption>
</figure>
<h2>Elizabeth Magie: social justice pioneer</h2>
<p><em>The Landlord’s Game</em> was the brainchild of the much-unsung Georgist activist and feminist Elizabeth Magie, whose story is chronicled in <em>The Monopolists</em> by American journalist and author <a href="https://www.marypilon.com/monopoly">Mary Pilon</a>. The book tells how Magie was never able to enjoy the rewards of her ingenious creation and how her name was lost to the annals for decades. Although Magie’s game did not sell well and was poorly promoted, it was met with avid acclaim from those who shared her Georgist ideals. As the game spread along the East Coast, activists and fans copied the model and passed on the rules by word of mouth, playing in university dorms, parks, smoking rooms and even in the lecture hall. Magie’s game bore many names on its journey to becoming the now-familiar <em>Monopoly</em>.</p>
<p>This game made tangible comparisons between capitalism and Georgism, using the material forms of wealth, banknotes and assets. We can only guess at how many young minds of Princeton and Columbia might have experienced this new rhetoric of numerals, but we know for sure that one of them was Harold Hotelling. A gifted statistician, outstanding economist and <a href="https://read.dukeupress.edu/hope/article-abstract/53/5/925/174115/Rescuing-Henry-GeorgeOptimization-Welfare-and-the?redirectedFrom=fulltext">devotee of Georgism</a>, Hotelling went on to become the thesis advisor of two Nobel Prize winners.</p>
<p>Hotelling enjoyed playing <em>Monopoly</em> with his family, with students, and even alone at night before succumbing to sleep. His chosen version was, naturally, the original Georgist one. Eventually and no doubt subconsciously, he began incorporating the game into his later-renowned economic models. Following a consistently similar writing structure, <a href="https://books.google.fr/books?id=vZfbBwAAQBAJ&pg=PA15&lpg=PA15&dq=darnell+hotelling+papers">Hotelling’s articles</a> dealt with subjects as disparate as taxation, non-renewable resources, geographical economics and social welfare. </p>
<h2>Hotelling’s social optimum</h2>
<p>Firstly, Hotelling defined a model for society and proposed to study the effects that capitalist policy would have on it. He then compared these potential effects with those offered by alternatives such as socialist management. The resulting blend was what he coined the <a href="https://theothereconomy.com/fr/fiches/la-regle-de-hotelling/">“social optimum”</a>, his choice of policy that would help achieve the best for society as a whole.</p>
<p>Aspects for us to optimise always depend on the issue at hand, whether this be maximum well-being, more efficient geographical distribution or optimal exploitation of resources. But regardless of topic, Hotelling’s models consistently drew correlations between the social optimum and Georgist policy. To be clear, Hotelling never actually wrote of “Georgism” in his articles, instead concealing his ideology behind rigorous mathematical proofs. He expressed his ideas by describing ever-accumulating sums of money, leaving aside everything except solid logic and discussing it all in terms of social welfare. However, an ingeniously playful theme runs through his articles, whereby he compares various social utopias by replicating them into the microcosm of the board game.</p>
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<p>Driven by a tireless thirst for knowledge, Hotelling rose through the ranks of American academia and eventually achieved international renown. The apex of his career as an economist came in 1938 when he turned his attention to natural monopolies, referring to those that make any form of market competition nigh on impossible. These economic phenomena usually occur when initial investment costs are so high that it is extremely difficult and ultimately infeasible for two companies to invest and compete. Some examples are rail transport, electricity and drinking water. Yes, these are the very same companies present on the <em>Monopoly</em> board and <a href="https://read.dukeupress.edu/hope/article-abstract/53/5/925/174115/Rescuing-Henry-GeorgeOptimization-Welfare-and-the?redirectedFrom=fulltext">no, this is not a coincidence</a>.</p>
<p>Using some <a href="https://www.jstor.org/stable/pdf/1907054.pdf">clever calculations</a> to compare the level of well-being that would be created by different social models, Hotelling managed to demonstrate how much train tickets, drinking water and electricity would need to be subsidised in order to service the common good. Again, he drew comparisons between capitalist society and his social optimum. And again, the ideas of Elizabeth Magie became reincarnated as an economic model.</p>
<h2>A flourishing hypothesis</h2>
<p>Hotelling’s writings from 1938 on natural monopolies met with unexpected success. In France, after a turbulent discussion that culminated in a profound friendship with Hotelling, economist Maurice Allais used the idea to support a cogent political argument to change the face of French power and rail management. Meanwhile across the Atlantic, <a href="https://news.yale.edu/2020/03/10/giving-economist-nancy-ruggles-her-due">Nancy Ruggle</a> (another researcher whose work deserves more visibility) and a <a href="http://coin.wne.uw.edu.pl/mbrzezinski/teaching/HE4/BlaugWelfareTheorems2007.pdf">handful of other economists</a> were gradually transforming Hotelling’s concepts into what we now know as the <a href="https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics">second theorem of welfare economics</a>.</p>
<p>It was also because of Hotelling that one of Allais’s students, Gérard Debreu, came to the United States and brought a new topological angle to the issue at the heart of Hotelling’s 1938 idea. Debreu’s theories were fed by the ever more complex and impassioned debates that he was privy to with Hotelling and Allais. He later applied his method to what is now arguably the most celebrated economic theorem, the <a href="https://fr.wikipedia.org/wiki/Mod%C3%A8le_Arrow-Debreu">Arrow–Debreu model</a>. Kenneth Arrow, a talented student of Hotelling’s, also took his teacher’s social optimum concept further and won a Nobel Prize for it. Another of Hotelling’s protégés was Will Vickrey, who also won a Nobel Prize and expanded on a number of his teacher’s ideas.</p>
<p>Although Hotelling was likely unaware of the existence of Elizabeth Magie, he never stopped playing <em>Monopoly</em>. To this day, the popular board game continues to hide references to a number of economic models, while Georgist ideals have found their way into modern economics under the guise of “social optimum”. So, <em>Monopoly</em> is celebrated and referenced every day by economists and academics the world over. Some will have no knowledge of Magie and her game, nor the teachings of Georgism. And yet, the game continues to creep unnoticed into their research, textbooks and lectures.</p>
<p><em>Translated from the French by Enda Boorman for <a href="http://www.fastforword.fr/en">Fast ForWord</a></em></p><img src="https://counter.theconversation.com/content/195681/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Michael Mueller ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>The game’s roots provide insights into capitalism that form part of teaching and research to this day.Thomas Michael Mueller, Maître de conférence HDR en histoire de la pensée économique à l'Université Paris 8, Université catholique de Louvain (UCLouvain)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1519452020-12-16T13:24:04Z2020-12-16T13:24:04ZFooting the COVID-19 bill: economic case for tax hike on wealthy<figure><img src="https://images.theconversation.com/files/374595/original/file-20201213-20-1760vw0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Sheila Fitzgerald / Shutterstock.com</span></span></figcaption></figure><p>Governments shouldn’t be worried that raising taxes on the rich will harm their economies when deciding on how to pay for COVID-19. Our <a href="http://eprints.lse.ac.uk/107919/">new research</a>, which has yet to be peer reviewed, on 18 advanced economies shows that major tax cuts for the rich over the past 50 years have pushed up inequality but have had no significant effects on economic growth or unemployment. </p>
<p>These findings shed new light on a debate that has long divided policymakers, with one side claiming higher taxes on the rich could raise revenue and reduce inequality, and the other arguing that low taxes on the rich are the best route to wider <a href="https://www.theguardian.com/us-news/2017/dec/16/donald-trump-republican-tax-cuts-us-economy-rock">economic prosperity</a>.</p>
<p>The data suggests that low taxes on the rich bring economies little benefit, and this suggests there is a strong economic case for raising taxes on the rich to help repair public finances following the pandemic.</p>
<p>As the COVID-19 pandemic is putting government finances under pressure worldwide, higher taxes on the rich are back on the political agenda. In the US, the president-elect, Joe Biden, has promised to <a href="https://www.cnbc.com/2020/11/10/heres-whats-ahead-for-president-elect-bidens-tax-plan.html">raise taxes on top income earners and corporations</a>. Voices demanding a wealth tax have also become louder in the <a href="https://blogs.lse.ac.uk/businessreview/2020/12/09/is-it-time-for-a-wealth-tax-to-offset-the-economic-damage-from-covid-19/">UK</a> and <a href="https://theconversation.com/how-a-one-off-tax-on-wealth-could-cover-the-economic-cost-of-the-coronavirus-crisis-137677">Germany</a>. Given the damage the pandemic has done to economies, the notion of getting the most affluent to help foot the bill is one that has many supporters. But once again this is being countered by those who insist that low taxes are crucial for stimulating the economy.</p>
<p>Such arguments about the efficiency advantages of low taxes on the rich have been powerful drivers of previous tax cuts. The graph below shows <a href="https://www.taxrich.uk/data">a new comprehensive indicator</a> that measures taxes on the rich across countries and over time by combining the most important taxes on the rich including taxes on top incomes, capital and inheritances. Since the 1980s, many countries have legislated major tax cuts for the rich. For instance, the two Reagan tax cuts in the US reduced top rate taxes substantially in 1982 and 1987. In the UK, taxes on the rich dropped significantly under the Thatcher administration, with major tax cuts in 1979 and 1988.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=381&fit=crop&dpr=1 600w, https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=381&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=381&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=479&fit=crop&dpr=1 754w, https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=479&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/374495/original/file-20201211-20-b6tw65.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=479&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Note: Vertical red lines show years with major tax cuts for the rich.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>Falling taxes on the rich have coincided with a period of rising inequality, especially at the top of the income distribution as the graph below shows. This trend has been most severe in the Anglo-Saxon countries. The US really stands out, with over one-fifth of pre-tax national income now going to the richest 1% of individuals.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=380&fit=crop&dpr=1 600w, https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=380&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=380&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=477&fit=crop&dpr=1 754w, https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=477&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/374497/original/file-20201211-22-mqmlwh.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=477&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">World Inequality Database, wid.world (data accessed 10 July 2020)</span></span>
</figcaption>
</figure>
<h2>Few economic benefits of low taxes on the rich</h2>
<p>Our research compared countries that passed laws for major tax cuts in a given year with those that didn’t. For example, we looked at economic outcomes in Australia following the 1987 tax reform and the USA following the 1982 tax cuts and compare them to economic outcomes in countries that did not cut taxes on the rich at the same time (the results are in the graph below). We repeated such comparisons for each major tax cut for the rich in 18 Organisation for Economic Co-operation and Development (OECD) member countries from 1965 to 2015.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=330&fit=crop&dpr=1 600w, https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=330&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=330&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=415&fit=crop&dpr=1 754w, https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=415&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/374490/original/file-20201211-23-n797us.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=415&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Note: Red squares show years with major tax cuts for the rich, and blue squares show years without.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>Our results show that countries that implemented major tax cuts saw the richest 1% increase their income share in the following years. Five years after reform, the effect was a more than 0.8 percentage points increase in the top 1% income share (see the graph below). As a comparison, in the US, the poorest 10% of income earners have a total income share of 1.8%. In contrast, we did not find any significant effect of tax cuts on economic growth and unemployment. Gross domestic product per capita and unemployment rates are nearly identical after five years in countries that cut taxes on the rich and in those that did not.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/374491/original/file-20201211-17-1j3cm87.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/374491/original/file-20201211-17-1j3cm87.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=262&fit=crop&dpr=1 600w, https://images.theconversation.com/files/374491/original/file-20201211-17-1j3cm87.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=262&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/374491/original/file-20201211-17-1j3cm87.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=262&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/374491/original/file-20201211-17-1j3cm87.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=329&fit=crop&dpr=1 754w, https://images.theconversation.com/files/374491/original/file-20201211-17-1j3cm87.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=329&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/374491/original/file-20201211-17-1j3cm87.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=329&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Note: Dark blue line shows the effect of major tax cut for the rich over time. 95% confidence area is shaded in light blue.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<h2>The rich could pay the coronavirus bill</h2>
<p>Many analysts and policymakers believe that taxes will need to rise in the coming years to ensure the sustainability of public finances. Higher taxes on the rich could help to fund the substantial and <a href="https://theconversation.com/coronavirus-has-brought-the-welfare-state-back-and-it-might-be-here-to-stay-138564">potentially long-lasting</a> expansion of government spending and social protection seen during the pandemic. They could also help address health and economic inequalities, which have only been <a href="https://theconversation.com/the-coronavirus-pandemic-is-already-increasing-inequality-135992">exacerbated by COVID-19</a> and its economic fallout. </p>
<p>Such tax rises after crises are not unprecedented. Historically, the main drivers of taxes on the rich were <a href="https://theconversation.com/are-we-ready-to-raise-taxes-on-the-rich-history-says-no-57777">wars</a> and <a href="https://academic.oup.com/ser/advance-article-abstract/doi/10.1093/ser/mwz055/5704798">economic catastrophes</a>. The COVID-19 crisis might have a similar effect. </p>
<p>Our <a href="https://www.taxrich.uk/">recent research</a> shows that the economic case for low taxes on the rich is weak. Major tax cuts for the rich since the 1980s have <a href="https://theconversation.com/inequality-in-the-oecd-is-at-a-record-high-and-society-is-suffering-as-a-result-119962">worsened income inequality</a> without boosting economic performance. This might be welcome news for supporters of higher taxes on the rich in the wake of the pandemic.</p><img src="https://counter.theconversation.com/content/151945/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We find low taxes on the rich bring economies little benefit. This suggests there is a strong economic case for raising taxes on the rich to help repair public finances following the pandemic.David Hope, Lecturer in Political Economy, King's College LondonJulian Limberg, Lecturer in Public Policy, King's College LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1226212019-08-30T09:17:12Z2019-08-30T09:17:12ZAssessing Jokowi’s $33-billion project to move Indonesia’s capital for the country’s economic development<figure><img src="https://images.theconversation.com/files/290242/original/file-20190830-115412-4la6p7.jpg?ixlib=rb-1.1.0&rect=1%2C0%2C997%2C664&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Jakarta’s shortcomings as a capital are obvious: it has headline-grabbing problems with congestion, pollution, and land subsidence. </span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Indonesian President Joko “Jokowi” Widodo, known for various infrastructure projects during his tenure, is embarking on another mega-project yet with his plan to <a href="https://www.bloomberg.com/news/articles/2019-08-26/jokowi-picks-borneo-for-new-capital-as-jakarta-nears-gridlock">build a brand-new national capital in East Kalimantan province on the island of Borneo</a>. </p>
<p>The estimated cost to relocate the capital 1,400 kilometers away from Jakarta is <a href="https://www.washingtonpost.com/business/energy/why-indonesia-is-shifting-its-capital-from-jakarta/2019/08/26/5be9427e-c7dd-11e9-9615-8f1a32962e04_story.html">US$33 billion</a>, or around <a href="https://jakartaglobe.id/context/jokowi-announces-location-of-indonesias-new-capital/">18%</a> of Indonesia’s <a href="https://www.reuters.com/article/us-indonesia-president-budget/indonesia-president-proposes-178-billion-budget-for-2020-with-focus-on-education-idUSKCN1V60KI">$178 billion state budget</a>.</p>
<p>Jokowi hinted a sense of urgency in his decision, saying that the construction will start next year, as the <a href="http://www.futuredirections.org.au/publication/jakarta-predicted-to-become-the-worlds-most-populous-city-in-2030-some-opportunities-and-challenges/">polluted and sinking Jakarta is under considerable pressure as a capital city</a>. He announced a site and relocation plan on Monday. </p>
<p>But Jakarta’s problems may not be the only reason for Jokowi’s plan to move the capital. We can also see his move as an effort to shift economic activity and address infrastructure gaps in Indonesia’s side of Borneo, sealing his reputation as the country’s ‘<a href="https://www.economist.com/asia/2018/05/05/indonesias-leader-jokowi-is-splurging-on-infrastructure">infrastructure president</a>’ </p>
<h2>Indonesia’s infrastructure gaps</h2>
<p>As an archipelago, Indonesia’s economic activities are spread unevenly across islands – and so are its infrastructure projects. </p>
<p>Java Island, where Jakarta is situated, dominates the country’s economic activities. It is home to almost <a href="https://www.bloomberg.com/news/articles/2019-08-26/jokowi-picks-borneo-for-new-capital-as-jakarta-nears-gridlock">60%</a> of Indonesia’s population and contributes about <a href="https://www.bloomberg.com/news/articles/2019-08-26/jokowi-picks-borneo-for-new-capital-as-jakarta-nears-gridlock">58%</a> of its gross domestic product (GDP). Sumatra has about 19% of the population and its contribution to <a href="https://www.indonesia-investments.com/id/news/todays-headlines/indonesias-most-populous-island-of-java-continues-to-dominate-the-economy/item972">GDP hovers around 23%</a>. Meanwhile, Kalimantan accounts for <a href="https://www.bloomberg.com/news/articles/2019-08-26/jokowi-picks-borneo-for-new-capital-as-jakarta-nears-gridlock">5.8%</a> of the population and contributes <a href="https://www.bloomberg.com/news/articles/2019-08-26/jokowi-picks-borneo-for-new-capital-as-jakarta-nears-gridlock">8.2%</a> of GDP.</p>
<p>Foreign investors, which Jokowi targets to develop the country’s emerging industries, also mostly operate in Java. Japan, a top investor in Indonesia, channels 93% of its investment to Java. <a href="https://perthusasia.edu.au/events/past-conferences/defence-forum-2019/2019-indo-pacific-defence-conference-videos/keynotes-and-feature-presentations/pu-134-japan-book-web.aspx">Only 1% currently goes to Kalimantan</a>.</p>
<p>Given Java and Sumatra’s economic dominance, it is no surprise they have the highest concentration of infrastructure, <a href="https://drive.google.com/open?id=1R2JXANlCvp0vlAKdk3hRl1iVnlqquhmP&usp=sharing">dotted with numerous road, highway, and toll road projects</a> to help smooth the movement of millions of people and goods. </p>
<p>According to the country’s <a href="https://kppip.go.id/en/national-strategic-projects/">National Strategic Projects pipeline</a>, Java and Sumatra have 154 projects planned compared to 79 in the rest of the country</p>
<p>Meanwhile, infrastructure projects in Kalimantan were almost nonexistent until Jokowi’s presidency. </p>
<p>Under Jokowi, East Kalimantan has <a href="https://en.tempo.co/read/920117/east-kalimantan-railway-investment-to-be-discussed-in-russia">railways</a> planned and a <a href="https://www.thejakartapost.com/news/2019/02/17/kalimantans-first-toll-road-to-be-opened-in-august.html">toll road</a> between the cities of Balikpapan and Samarinda under construction near the proposed site. </p>
<h2>Betting on the new capital</h2>
<p>To build a new capital, the government must upgrade existing city infrastructures and plan new projects in the region <a href="https://perthusasia.edu.au/our-work/building-bridges-navigating-indonesias">to support businesses</a>. Otherwise, Jokowi won’t be able to achieve his growth targets and connect Indonesia’s new capital with the global economy.</p>
<p>Jokowi seems to be betting on the idea that relocating the bureaucracy of the world’s third-largest democracy would bring a critical mass of supporting institutions, industries, and investment to enrich a province on the outside of the Java-Sumatra core. </p>
<p>The relocation plans include moving the headquarters of <a href="https://www.thejakartapost.com/news/2019/08/27/jokowi-picks-east-kalimantan.html?src=mostviewed&pg=/">powerful ministries and institutions</a> to the new capital starting in 2024. </p>
<p>Diplomatic missions to Indonesia and the ASEAN Secretariat, based in Jakarta, would <a href="https://www.thestar.com.my/news/regional/2019/08/26/jakarta-based-diplomats-question-capital-move">presumably relocate as well</a>. </p>
<h2>Development initiatives in Kalimantan</h2>
<p>Indonesian firms, mostly state-owned firms (SOEs) will likely be the first to break ground in East Kalimantan next year. </p>
<p>They are currently <a href="https://www.economist.com/asia/2018/05/05/indonesias-leader-jokowi-is-splurging-on-infrastructure">building and managing 80%</a> of Indonesia’s infrastructure projects. </p>
<p>Using state companies is a convenient way to expedite new projects because the government often has <a href="https://www.newmandala.org/building-a-better-infrastructure-policy-after-indonesias-elections/">direct influence over the firm</a>. </p>
<p>It also bypasses slow processes like project proposal designs and competitive tendering. But, relying on state companies to lay the foundations for a new city in a comparatively remote region like East Kalimantan has its drawbacks. Overreliance crowds out much-needed private investment and undermines the benefits of competition among contractors. Indonesia’s business community has <a href="https://finance.detik.com/berita-ekonomi-bisnis/d-3673862/kritik-bumn-kuasai-proyek-pengusaha-kita-mau-jadi-pemain-utama">echoed these sentiments</a>.</p>
<p>Meanwhile, a big question hangs over how the Indonesian government will involve competing infrastructure and connectivity initiatives such <a href="https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative">China’s Belt and Road Initiative (BRI)</a> and <a href="https://www.mofa.go.jp/policy/oda/page18_000076.html">Japan’s Partnership for Quality Infrastructure (PQI)</a> in the construction of the new capital. </p>
<p>The World Bank and Asian Development Bank have long provided much-needed capital and technical assistance in Indonesia, while the China-led Asian Infrastructure Investment Bank (AIIB) is a newcomer.</p>
<p>Indonesia has invited China’s BRI to invest in projects in adjacent North Kalimantan province, in particular a <a href="https://www.thejakartapost.com/news/2018/04/19/powerchina-to-build-hydropower-plants-for-17-8-billion.html">$17.8 billion hydropower project</a>. </p>
<p>BRI is known for its willingness to pursue projects in challenging regions, but the initiative has suffered from credibility problems in Indonesia. BRI’s flagship project in Indonesia, a high-speed train connecting Jakarta and Bandung, West Java has failed to meet deadlines and officials have begun to view the management of the project as <a href="https://www.bloomberg.com/news/articles/2019-03-31/indonesia-may-be-next-asian-country-to-spurn-china-in-election">non-transparent</a>.</p>
<h2>Bankability challenges</h2>
<p>To attract more investment for the development of the new national capital, Indonesia needs to solve its bankability problem in infrastructure projects, where lenders are not satisfied enough with the project’s risk profile to invest in it. </p>
<p>Developing a pipeline of bankable projects is an opportunity to engage with the above-mentioned infrastructure initiatives. Well-designed projects that estimate everything from a project’s profitability to its environmental and social impact will be key.</p>
<p>Moving the capital to East Kalimantan promises to disrupt the present geographic spread of development in Indonesia. Jokowi has created an occasion to turn a peripheral region into a new core of economic activity. The infrastructure demands of building a new capital city afford Jokowi yet another opportunity: to call on the resources of Indonesia’s neighbours in the Indo-Pacific region and put their competing infrastructure initiatives to work.</p><img src="https://counter.theconversation.com/content/122621/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kyle Springer receives funding from the Western Australian State Government and Australian Federal Government. Perth USAsia Centre also receives funding from corporate partners: <a href="https://perthusasia.edu.au/our-partners">https://perthusasia.edu.au/our-partners</a> </span></em></p>Indonesian President Joko “Jokowi” decision to relocate the country’s capital is seen as an effort to shift economic activity and address infrastructure gaps outside of Java and Sumatra.Kyle Springer, Senior Analyst at the Perth USAsia Centre, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1174972019-05-27T05:06:08Z2019-05-27T05:06:08ZDoes Indonesia really need to move its capital?<figure><img src="https://images.theconversation.com/files/276056/original/file-20190523-187176-1o1y15j.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C2986%2C1378&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Indonesia's capital city Jakarta. </span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Indonesia has long considered moving its capital Jakarta, a low-lying city on the northwest coast of the island of Java in Southeast Asia. The idea has been floated since the days of the first president, Sukarno, who declared the country’s independence from the Dutch in Jakarta in 1945. Now the idea might come true as President Joko “Jokowi” Widodo, recently elected for a second term, seems serious about moving the capital. </p>
<p>Jokowi has visited <a href="https://regional.kompas.com/read/2019/05/08/09044891/perjalanan-jokowi-mencari-ibu-kota-baru-dari-bukit-soeharto-kaltim-ke?page=all">several possible locations in Kalimantan, Indonesia’s side of the island of Borneo</a>. The country’s Development Planning Agency (Bappenas) said moving the capital has been <a href="https://money.kompas.com/read/2019/05/09/184859926/kepala-bappenas-pemindahan-ibu-kota-masuk-rpjmn-2020-2024">included in the 2020-2024 National Development Plan</a>. </p>
<p>The government has argued that moving the capital will reduce the development gap between Java and other islands and that Jakarta is overburdened by population growth. I study urban/rural issues. I believe the government’s reasoning to move the capital is weak. </p>
<h2>Imagination of equitable development</h2>
<p>Data from the <a href="https://www.bps.go.id/pressrelease/2019/02/06/1619/ekonomi-indonesia-2018-tumbuh-5-17-persen.html">Country’s Statistics Agency in 2018</a> show economic activity in Java has contributed 58.48% of Indonesia’s gross domestic product (GDP). The eastern part of Indonesia, which includes Kalimantan, Sulawesi, Maluku and Papua, and covers 64% of the nation’s total area, contributes only 16.8% of GDP. This situation has not changed much since <a href="https://www.bps.go.id/pressrelease/2011/02/07/891/pertumbuhan-pdb-tahun-2010-mencapai-6-1-persen.html">2010</a>.</p>
<p>The government argues that moving the capital out of Java will support equitable development in eastern Indonesia.</p>
<p>But to support growth in less developed areas the government needs to distribute more new centres of growth and economic opportunities, chiefly to eastern Indonesia. Moving the capital city alone will not be enough. </p>
<p>The government’s 2015-2019 Development Plan included policies to create these new growth centres. But we’ve yet to see how the policies have been implemented. </p>
<p><a href="http://www.smeru.or.id/sites/default/files/publication/regionalheterogeneity_eng_0_0.pdf">Research on decentralisation</a> has shown that regional development has the potential to reduce poverty and inequality. Decentralisation allows the emergence of new economic growth poles such as Bantaeng (South Sulawesi) and Banyuwangi (East Java).</p>
<p>But, in its effort to support villages, the central government often carried out rushed interventions and did not consider the diversity of contexts plus needs of the local area, a <a href="http://www.smeru.or.id/sites/default/files/publication/uudes_endline.pdf">study</a> shows. </p>
<p>The government should avoid creating the impression that all problems can only be overcome by central intervention. The idea that moving the capital will solve inequality is centralistic and runs against the spirit of equitable development.</p>
<h2>Contradiction in carrying capacity of Jakarta</h2>
<p>The second reason the government uses to support moving the capital relates to population and environmental pressure on Jakarta. The capital has been considered as not conducive for government.</p>
<p><a href="https://www.youtube.com/watch?v=eqZVnMC3mRM">Bappenas</a> argues that Jakarta continues to experience population pressure due to urbanisation. Jakarta has risks of earthquake, floods and water shortages. The <a href="https://megapolitan.kompas.com/read/2018/09/06/05485461/61-persen-sungai-dki-tercemar-berat">river is heavily polluted</a>. Also, traffic congestion in Jakarta results in <a href="https://properti.kompas.com/read/2019/01/09/103050221/rp-65-triliun-hilang-per-tahun-akibat-kemacetan-di-jadebotabek">economic losses reaching Rp56 trillion (USD$3.8 billion)</a> per year.</p>
<p>The government argues that moving the capital will reduce Jakarta’s burden. The new capital city will be designed as a government centre and separate from the business centre. This concept is the same as in Australia, with <a href="https://www.nca.gov.au/canberra-seat-government">Canberra and Sydney</a>, and Malaysia, with <a href="http://ufdcimages.uflib.ufl.edu/UF/E0/04/18/15/00001/tran_l.pdf">Putra Jaya and Kuala Lumpur</a>.</p>
<p>But government activities contribute <a href="http://www.tribunnews.com/nasional/2019/04/29/ibu-kota-indonesia-bakal-pindah-anies-baswedan-tak-akan-mengurangi-kemacetan-jakarta">only 10% of the capital’s burden</a>. </p>
<p>The transfer of the capital seems like an attempt to escape the problem of chronic diseases in Jakarta that need to be addressed immediately. If not, activities in Jakarta will be paralysed and disrupt the Indonesian economy because <a href="https://m.detik.com/finance/berita-ekonomi-bisnis/d-2181083/jakarta-kuasai-70-perputaran-uang-sayangnya-kesenjangan-tinggi">70% of the country’s money circulation occurs in Jakarta</a>.</p>
<p>Moreover, Indonesia aims to make Jakarta a <a href="https://m.detik.com/20detik/blak-blakan/20190515-190515014/blak-blakan-kepala-bappenas-kenapa-ibu-kota-harus-pindah">centre of global business</a>. </p>
<p><a href="https://www.jstor.org/stable/j.ctt2jc93q">To become a global city</a> a city must be home to international-scale activities, such as being a financial centre, global tourism destination, have international organisation offices, and host of world events. This can be found in world cities such as London in England, Tokyo in Japan, and Paris in France.</p>
<p>Meanwhile, the new capital, which will only carry out government functions, will not be effective as a new growth centre, because such a <a href="https://www.amazon.com/New-Town-Planning-Principles-Practice/dp/0471310387">city needs a strong economic base, such as an industrial or business centre</a>.</p>
<h2>Problems with Bappenas data transparency</h2>
<p>Bappenas, which is responsible for assessing the plan to move the capital, has never actually publicised its study of the capital transfer to the public. </p>
<p>As a result, many parties are asking what the urgency of moving the capital city is. Indeed, they see this as an attempt to <a href="https://nasional.sindonews.com/read/1400069/12/wacana-ibu-kota-pindah-diminta-jangan-jadi-pengalihan-isu-pemilu-1556589914">distract from other issues during the election campaign</a>.</p>
<p>Before arguing about where the right location for the new capital city is, we must be sure the decision has been supported by evidence and comprehensive analysis of its implications. Otherwise, we risk repeating the same mistakes and creating problems in the new capital. </p>
<hr>
<p><em>Amira Swastika Dianty translated this article from Indonesian.</em></p><img src="https://counter.theconversation.com/content/117497/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rendy A. Diningrat tidak bekerja, menjadi konsultan, memiliki saham, atau menerima dana dari perusahaan atau organisasi mana pun yang akan mengambil untung dari artikel ini, dan telah mengungkapkan bahwa ia tidak memiliki afiliasi selain yang telah disebut di atas.</span></em></p>Indonesia has plans to move its capital outside of Java, but the government has yet to make the case for this move.Rendy A. Diningrat, Researcher, SMERU Research InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/960252018-05-04T07:13:00Z2018-05-04T07:13:00ZKarl Marx at 200: why the workers’ way of knowing still matters<figure><img src="https://images.theconversation.com/files/217512/original/file-20180503-153884-1ewowts.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Karl Marx.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Thinking of the relevance of <a href="http://www.bbc.co.uk/history/historic_figures/marx_karl.shtml">Karl Marx</a> on the 200th anniversary of his birth on 5 May 1818, takes me back to a wonderful picture of him in Algeria. It was taken in his final year in 1882. Underneath the full white beard is that familiar glint in his eye. He is up to something. </p>
<p>Though seriously ill he took an active interest in local life penning a long letter to his daughter Laura. He <a href="https://hutnyk.wordpress.com/2015/08/18/on-marx-in-algeria-1882/">wrote</a> appreciatively:</p>
<blockquote>
<p>For the Muslims there is no such thing as subordination; they are neither ‘subjects’ nor ‘administrés’ … something which Europeans have totally failed to understand. Nevertheless, they will go to rack and ruin without a revolutionary movement.</p>
</blockquote>
<p>In his last years, after the <a href="https://www.marxist.com/paris-commune-of-1871.htm">Paris Commune</a> of 1871 when working people rose up against the capitalist state, he became interested in alternative paths to socialism. In his <a href="http://journals.sagepub.com/doi/pdf/10.1177/0308275X7500100407"><em>Ethnological Notebooks</em></a> compiled in 1881, he critically read ethnographers, praising the freedom that the Native American <a href="http://www.womenhistoryblog.com/2008/05/iroquois-women.html">Iroquois women</a> had compared to women in “civilized” societies.</p>
<p>It was live human beings and their reason that remained essential – not the mechanical materialism that Marxism is often reduced to. Marx was a revolutionary humanist, open to – and inspired by – the new passions and forces that spring up and open new avenues to a truly human society.</p>
<h2>Capitalism’s relentless march</h2>
<p>Marx spent most of his life analysing capitalism. No one would deny that today it is well-nigh impossible to escape capitalism as it rushes faster and faster down the path of what he called the <a href="https://readingcapitalsydney.wordpress.com/2010/04/24/capital-i-chapter-25-the-general-law-of-capitalist-accumulation/">general law of capitalist accumulation</a>. </p>
<p>The accumulation of wealth on one side and the accumulation of misery on the other is reflected, for example, in the <a href="https://www.oxfam.org/en/pressroom/pressreleases/2017-01-16/just-8-men-own-same-wealth-half-world">recent Oxfam report</a> that eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity.</p>
<p>At the same time, what Marx called the increasing “absolute mass of the proletariat and the productiveness of its labour” and the absolute mass of the “surplus population”, is reflected in the size of the <a href="https://www.mckinsey.com/featured-insights/employment-and-growth/the-world-at-work">global workforce</a> estimated at about 3.5 billion. The majority of them, of course, live in the global South. </p>
<p>Global wealth and global inequality are massive, and the pauperisation and precariousness of human existence is terribly real. </p>
<p>Marx’s critique of capital is based on a philosophic perspective that could be considered radically humanist. It’s not simply a critique of alienation but a critique based on the reality of human life eaten up by the fetish of capital accumulation. Capitalism’s bloody and violent <a href="https://www.marxists.org/archive/dunayevskaya/works/1979/outline-capital/ch13.htm">“rosy dawn”</a>, what Marx called “primitive accumulation”, is a process to which contemporary capitalism continuously returns. </p>
<p>Workers are free to sell their labour for wages because they are violently alienated from other means of survival. Capitalism becomes naturalised and takes on a fetish character as the subject of life. Alienation becomes the coin of all social relations. The idea that people <a href="https://www.marxists.org/archive/marx/works/1867-c1/ch01.htm#S4">fetishise</a> commodities, spending their waking and dreaming time thinking about them is caused by the simple inversion that gives commodities subjectivity and reduces human labourers to objects. </p>
<p>Marx warned that, although unveiling the secret of the fetish was crucial, that alone wouldn’t free us from its blinding power. Rather, it was only human beings in struggle who could vanquish the fetish, capitalism. </p>
<p>We revolt because we have to. Resistance to capital is inevitable and takes new and unexpected forms inside and outside of production.</p>
<p>Capitalism, however, marches on in its endless search for free labour and free goods, ruthlessly exploiting human beings, animals and the environment. But, Marx argued, it is also resistance and capitalist crisis that forces it to innovate and defy spatial and temporal restrictions.</p>
<p>Commodifying everything, its ideological prizefighters dress up expropriation as the freedom to exploit oneself in casual and precarious labour. The <a href="https://www.washingtonpost.com/news/on-small-business/wp/2017/06/28/the-app-economy-is-about-to-explode/?utm_term=.2b1b89fb5816">“app” economy</a> – <a href="https://www.techopedia.com/definition/28141/app-economy">described</a> as the “economic activity surrounding mobile applications” – is just the latest manifestation of Marx’s prescience. </p>
<h2>Theory of liberation</h2>
<p>The founder of the philosophy of Marxist Humanism, <a href="https://newsandletters.org/raya-dunayevskaya/">Raya Dunayevskaya</a> <a href="https://newsandletters.org/PDF-ARCHIVE/1987/1987-07-25.pdf">described</a> Marxism as a theory of liberation – or nothing. Marx was not a lonely intellectual sitting in the British Museum. He was a philosopher and activist constantly involved with revolutionary movements.</p>
<p>To say that Marx was a genius is to recognise that his ideas were intimately connected with – and elucidated by – the logic and history of ongoing struggles. </p>
<p>It was the <a href="http://www.breadandrosescentennial.org/node/103">weavers</a> in the Prussian province of Silesia in 1844 that taught him the importance of workers’ own self-conscious action. It was the Paris Commune that taught him the importance of self-activity in developing a new form of social organisation. It was the <a href="http://www.theirishstory.com/2017/03/07/the-fenians-an-overview/#.WurkJKSFPIU">Fenian activity</a> of the Irish workers opposing British imperialism that taught him the importance of the autonomy of the Irish struggle and the chauvinism of the British trade unions. </p>
<p>Marx viewed capitalism as a living hell that chewed up human life. It was the workers’ way of knowing, their self-organisation, that interested him as it spoke to the necessity of a dual movement: uprooting capitalism and developing a new society based on human needs. Thinking <em>with</em> Marx on his 200th birthday means recognising the importance of thought in this confrontation.</p><img src="https://counter.theconversation.com/content/96025/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nigel Gibson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Thinking with Karl Marx on his 200th birthday means recognising the importance of thought.Nigel Gibson, Associate Professor of Interdisciplinary Studies, Emerson CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/734222017-03-08T03:07:30Z2017-03-08T03:07:30ZDraining the swamp: A guide for outsiders and career politicians<figure><img src="https://images.theconversation.com/files/159241/original/image-20170303-24346-1mtki5a.jpg?ixlib=rb-1.1.0&rect=39%2C33%2C915%2C611&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Illustration titled, "If you want to get rid of mosquitos, drain the swamp that breeds them." (1909)</span> <span class="attribution"><a class="source" href="http://www.loc.gov/pictures/item/2011647495/">Library of Congress</a></span></figcaption></figure><p>What do Ron Paul, Nancy Pelosi and President Donald Trump have in common? They’ve all <a href="http://www.rollcall.com/news/politics/history-of-draining-the-swamp">promised</a> to “drain the swamp” of Washington politics.</p>
<p>These ambitious “hydraulic engineers” rely on a phrase that is deeply mired in our political discourse. The metaphor gets its clout from the notion that Washington was built in an actual physical swamp, whose foul landscape has somehow nourished rotten politics.</p>
<p>The assumption is just plain wrong: Washington was never a swamp, as <a href="https://www.uncpress.org/book/9780807848050/political-terrain/?title_id=724">I’ve discovered</a> in exploring its first two centuries. </p>
<h2>Establishing a capital</h2>
<p>George Washington knew exactly what he was doing in early 1791 when he led the three-member commission that Congress had authorized to pick the site for the nation’s capital. There was never much doubt that the new federal district and city would be near the head of navigation on the Potomac River, adjacent to the thriving port town of Georgetown and well away from the squishy margins of Chesapeake Bay. Washington knew the region intimately as a nearby landowner and resident, and the site for Washington looked much like his home at Mount Vernon – a rolling riverside terrain of old tobacco fields.</p>
<iframe src="https://www.google.com/maps/embed?pb=!1m18!1m12!1m3!1d99398.47860667948!2d-77.05543126254466!3d38.87360956372721!2m3!1f0!2f0!3f0!3m2!1i1024!2i768!4f13.1!3m3!1m2!1s0x89b7c6de5af6e45b%3A0xc2524522d4885d2a!2sWashington%2C+DC!5e0!3m2!1sen!2sus!4v1488509689958" width="100%" height="450" frameborder="0" style="border:0" allowfullscreen=""></iframe>
<p>Like many other early American cities such as Philadelphia and Cincinnati, Washington was built on a firm and dry riverbank. The land sloped steadily upward away from the Potomac between Rock Creek and the Anacostia River, then called the Eastern Branch of the Potomac. </p>
<p>The spurs of land that extended northward from the main river were immediately obvious to <a href="https://www.nps.gov/nr/travel/wash/lenfant.htm">Pierre L’Enfant</a>, the French immigrant who mapped out the streets and squares for the new city. He picked one high point for the presidential mansion and one for the houses of Congress. After all, it’s Capitol Hill, originally called Jenkins Hill, not Capitol Slough. </p>
<p>Flowing between the Capitol and White House was Tiber Creek, a perfectly respectable watercourse whose route took it southward, roughly along North Capitol Avenue, skirted the future Union Station Plaza and turned west where Constitution Avenue now runs. The western part of the creek was turned into the Washington City Canal in 1815. The canal was pretty unpleasant by the 1840s, but that was because of inadequate sewers, not because of inherent swampiness. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=471&fit=crop&dpr=1 600w, https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=471&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=471&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=592&fit=crop&dpr=1 754w, https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=592&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/159848/original/image-20170307-14941-1lurt7p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=592&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">‘City of Washington from Beyond the Navy Yard’</span>
<span class="attribution"><a class="source" href="http://www.loc.gov/pictures/item/92520609/">Library of Congress/G. Cooke and W.J. Bennett.</a></span>
</figcaption>
</figure>
<p>Pictorial panoramas of the city proliferated during the 19th century as ways to instill national pride in Washington, and are one of the best sources for understanding early Washington. Leaf through the images in the Library of Congress and you’ll see a dry landscape with buildings that would not have survived to the present had their foundations been sunk in muck. The Smithsonian Castle, for example, has been standing straight since the late 1840s. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/159849/original/image-20170307-14976-1g8lt2g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/159849/original/image-20170307-14976-1g8lt2g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=681&fit=crop&dpr=1 600w, https://images.theconversation.com/files/159849/original/image-20170307-14976-1g8lt2g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=681&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/159849/original/image-20170307-14976-1g8lt2g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=681&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/159849/original/image-20170307-14976-1g8lt2g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=856&fit=crop&dpr=1 754w, https://images.theconversation.com/files/159849/original/image-20170307-14976-1g8lt2g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=856&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/159849/original/image-20170307-14976-1g8lt2g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=856&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Map from Harper’s Magazine, 1852.</span>
<span class="attribution"><span class="source">Library of Congress</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Early maps show the same. In 1826, Anne Royall, possibly the first female professional journalist in the United States and author of “<a href="https://books.google.com/books/about/Sketches_of_History_Life_and_Manners_in.html?id=yERh6NxHR1sC">Sketches of History, Life and Manners, in the United States</a>,” described “the elevated site of the city; its undulating surface, covered with very handsome buildings.” She continued her inventory of the city without mentioning a single swamp and concluded, perhaps with too much enthusiasm, that “it is not in the power of imagination to conceive a scene so replete with every species of beauty.”</p>
<p>Visitors, especially from Britain, enjoyed needling the new city, but it was the manners and pretensions of its inhabitants that were the lightning rod for criticism, not the landscape. In 1830, English visitor <a href="http://gutenberg.org/ebooks/10345">Frances Trollope</a>, usually happy to criticism anything American, wrote: “I was delighted with the whole aspect of Washington, light, cheerful, and airy; it reminded me of our fashionable watering-places.”</p>
<h2>Washington’s waterfront</h2>
<p>The truly muddiest episode in Washington’s development came in the mid-19th century. After the Civil War, decades of farming in the Potomac River hinterland led to erosion that sent masses of silt downriver. As the Potomac slowed below its last rapids – where the river entered the District of Columbia – the silt precipitated into massive mudflats on the city side of the river. </p>
<p>In the 1880s and 1890s, the Corps of Engineers began to reshape the flats into the Reflecting Pool, Tidal Basin and hundreds of acres of adjacent park lands for presidential memorials and blossoming cherry trees, creating a riverfront park that nobody today would associate with the word “swamp.”</p>
<p>None of this is to say that the capital lived up to George Washington’s vision of a comprehensive metropolis with commerce and culture to rival or surpass Philadelphia. The Erie Canal with its boost to New York certainly put a crimp on Washington’s ambitions, but it was the aggressive growth of Baltimore that made Washington an also-ran in Mid-Atlantic commerce. English commentator James Bryce wrote in “<a href="http://oll.libertyfund.org/titles/bryce-the-american-commonwealth-vol-1">The American Commonwealth</a>” that the United States was the only great country without a true capital, but that was a dig at New York as much as at Washington.</p>
<p>It might be time to retire the metaphor and quit trying to pull the plug on Washington.</p>
<p>Politicians who have spent any time in Washington (hey, Nancy Pelosi) should know better. After all, the city is filled with neighborhoods with names like Friendship Heights, Mount Pleasant, Columbia Heights, Crestwood, Washington Highlands and “fine view” (Kalorama). </p>
<p>Having summered in Washington, I’m not writing to defend the climate. But a steam bath does not make a swamp. I don’t expect the facts of Washington’s historical geography will fully undercut a catchy bipartisan slogan, but take it for what it is – a facile phrase without an anchor in the city’s history.</p><img src="https://counter.theconversation.com/content/73422/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Carl Abbott does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An urban planning expert goes knee-deep into the murky history behind this popular phrase often used to describe the nation’s capital.Carl Abbott, Professor of Urban Studies and Planning, Emeritus, Portland State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/733552017-02-23T19:23:48Z2017-02-23T19:23:48ZVital Signs: there’s never been a tougher time to be a central banker<figure><img src="https://images.theconversation.com/files/158016/original/image-20170223-6413-iux3ez.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> </figcaption></figure><p><em>Vital Signs is a weekly economic wrap from UNSW economics professor and Harvard PhD Richard Holden (@profholden). Vital Signs aims to contextualise weekly economic events and cut through the noise of the data affecting global economies.</em></p>
<p><em>This week: The Governor of the Reserve Bank of Australia calls for business investment and the US Federal Reserve tries to unwind its balance sheet.</em></p>
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<p>The two central banks that matter most for Australians - the <a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2017/2017-02-07.html">Reserve Bank of Australia (RBA)</a> and <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20170201.pdf">the US Federal Reserve (the Fed)</a> - released minutes from their latest meetings this week. And although there were not a lot of surprises, there was a fair bit of detail about what we can expect on interest rates going forward.</p>
<p>The Federal Open Market Committee’s (FOMC) main message was unmistakable -expect interest rate rises, and expect them sooner rather than later:</p>
<blockquote>
<p>Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations or if the risks of overshooting the committee’s maximum-employment and inflation objectives increased.</p>
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<p>and that they:</p>
<blockquote>
<p>continued to see only a modest risk of a scenario in which the unemployment rate would substantially undershoot its longer-run normal level and inflation pressures would increase significantly.</p>
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<p>This is exactly what markets have been expecting, and it seems clear that the balance of risks is no longer that the labour market is too weak or inflation too low, but that the Fed might wait too long to continue its path of rate rises.</p>
<p>The really big unknown is how the Fed goes about unwinding a good chunk of its balance sheet, which involves US$2.64 trillion (with a “T”) of treasury bonds that were purchased as part of its effort to stimulate the economy in the wake of the financial crisis. The Fed also holds around US$1.75 trillion of mortgage-backed securities (“MBSs”).</p>
<p>The natural way to unwind this is by not reinvesting those funds when the securities mature. The Fed gets its money back and doesn’t purchase new treasuries or MBSs.</p>
<p>But it’s more complicated than that. New post-crisis capital rules require commercial banks to keep a large amount of reserves sitting at the Fed. This is now around US$2 trillion. The Fed has to match this liability with assets, like treasuries.</p>
<p>Nobody knows, but my guess is that the Fed shifts MBSs to treasuries over time, but has to keep a large asset side of the balance sheet. This suggests that maybe the whole balance sheet unwinding problem may not be as significant an issue as first thought. But this is genuinely unchartered territory.</p>
<p>At home, the RBA minutes confirmed the ongoing dilemma governor Philip Lowe faces. Like his predecessor, Glenn Stevens, Lowe is trying to manage: unemployment, the Aussie dollar exchange rate, business investment, overall growth, inflation and housing price stability all at the same time, but with only one instrument: the cash rate.</p>
<p>To see this, just look at the opening sentences of the long section of the <a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/">RBA minutes</a> titled “Considerations for Monetary Policy”. They read as follows:</p>
<blockquote>
<p>In considering the stance of monetary policy, members viewed the near-term prospects for global growth as being more positive, although recognised the risks from policy uncertainty in the medium term… Domestically, the economy was continuing its transition following the end of the mining investment boom… Non-mining business investment was also expected to gain some momentum…</p>
<p>Conditions in housing markets varied considerably across the country… Inflation outcomes for the December quarter were much as had been expected and there had been very little change to the forecast for inflation…Labour cost pressures were expected to build gradually from their current low levels…</p>
</blockquote>
<p>Wow. That’s a whole lot of targets to try and hit with a single (non-magic, non-silver) bullet. No wonder Dr Lowe has now taken to giving speeches that essentially plead businesses to invest.</p>
<p>It hasn’t quite gotten to “there’s never been a better time to be a business in Australia”. But close. It may, however, be that it’s never been a tougher time to be a governor of the RBA.</p><img src="https://counter.theconversation.com/content/73355/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden is an ARC Future Fellow.</span></em></p>There was a fair bit of detail this week about what we can expect from the RBA and US Fed on interest rates going forward.Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/668952016-11-18T03:34:21Z2016-11-18T03:34:21ZDeutsche Bank turmoil shows risks of weakening bank capital standards<p>Deutsche Bank, a venerable 146-year-old bank whose very name symbolizes the German financial system, has recently found itself in considerable turmoil. </p>
<p>The kicker came in September when the <a href="http://www.wsj.com/articles/deutsche-bank-is-asked-to-pay-14-billion-to-resolve-u-s-probe-into-mortgage-securities-1473975404">Department of Justice slapped</a> it with a US$14 billion fine for alleged wrongdoing during the financial crisis. But Deutsche Bank was already being buffeted by a string of bad news. Its <a href="https://www.theguardian.com/business/2016/sep/26/deutsche-bank-share-price-lowest-mid-1980s">stock price has slumped</a> over the past year due to a decline in investment banking and dim prospects for its commercial banking business. </p>
<p>This has led to <a href="https://www.google.com/search?client=safari&rls=en&q=deutsche+bank+lehman+moment&ie=UTF-8&oe=UTF-8">speculation</a> about whether the German government will have to bail it out and, if it doesn’t, whether markets will soon experience another “Lehman moment” – referring to how the collapse of the U.S. investment bank sparked a global financial meltdown in 2008. </p>
<p>As I see it, these concerns obscure the much deeper problem that afflicts the European banking sector and that a bailout alone will do nothing to resolve: a lack of capital. </p>
<p>It also offers a stark warning for U.S. regulators amid talk of changes to banking rules – <a href="http://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp">especially Dodd-Frank</a> – under the new administration. While some changes to the U.S. financial system may be worthwhile, easing capital standards would be a mistake and make another financial crisis much more likely. </p>
<p>Instead, regulators on both sides of the Atlantic need to make sure there’s no question their banks are able to withstand a shock – whether a billion-dollar fine or something much more severe. </p>
<h2>Why Deutsche Bank won’t be bailed out</h2>
<p>While allowing a bank that has the size and prominence of Deutsche Bank to fail is obviously an event that could have seismic repercussions, bailing it out is not something that would be easy for the German government to do. </p>
<p><a href="http://www.cnbc.com/2016/09/30/deutsche-bank-bailout-would-be-political-suicide-for-merkel-analysts-warn.html">There are many reasons for this</a>. One is reputational. Angela Merkel, the German chancellor, has been critical of other governments (especially in Europe) for using taxpayer funds to bail out their banks.</p>
<p>Second, there is little support among German taxpayers for the bailout, so it would also be politically costly.</p>
<p>While it’s interesting to speculate about this, there are other questions that are even more pertinent. First, what is the real problem here? Why is Deutsche Bank in the mess it finds itself in? What can we do to prevent our major financial institutions from being so fragile in the future?</p>
<p>There are many factors responsible for what ails Deutsche Bank. Perhaps none figures more prominently than its capital position during and after the crisis. </p>
<h2>Who’s the riskiest of them all?</h2>
<p>Among its peer institutions, Deutsche Bank is the riskiest based on its “leverage ratio,” which essentially measures how much equity capital it has as a percentage of total assets. </p>
<p>On June 30, its leverage ratio stood at a <a href="http://www.bloomberg.com/news/articles/2016-09-20/deutsche-bank-s-low-capital-makes-it-no-1-for-risk-hoenig-says">shockingly low 2.68 percent</a>, or about half the average for the eight biggest U.S. banks, according to the Federal Deposit Insurance Corporation. That means it had only $2.68 in equity for every $100 in assets. </p>
<p>A low ratio means it has less cushion if there’s a problem. Since banks are required to mark many of their assets to market, an adverse price movement that reduces the value of its assets by just 3 percent would completely wipe out its equity. </p>
<p>We can see that the bank’s low capital is bad from at least two perspectives. One is that a 2.68 percent leverage ratio is less than what Bear Stearns had (2.78 percent) in early 2008 <a href="http://www.slate.com/articles/business/moneybox/2008/03/bear_run.html">before it collapsed</a> and had to be rescued by the U.S. government via a deal with JPMorgan Chase. </p>
<p>Another is that under the <a href="http://www.bis.org/bcbs/basel3.htm">Basel III’s capital rules</a>, banks are required to have a leverage ratio exceeding 3 percent. As an interesting contrast, U.S. bank regulators have adopted a 5 percent minimum leverage ratio for domestic banks. (One caveat is that European regulators [European Banking Authority] gave Deutsche Bank a ratio of 2.96 percent earlier this year,slightly higher than what the FDIC gave it, but still very worrisome.) </p>
<h2>The ‘doom spiral’</h2>
<p><a href="http://rfs.oxfordjournals.org/content/early/2011/02/09/rfs.hhq022">Extensive academic research</a> has revealed that a lot of bad things can happen when a bank has critically low capital. </p>
<p>One is that its internal culture gets skewed in favor of growth and excessive risk taking. Deals that can make the bank a lot of money if they pan out (but can also cost the taxpayers a lot) become more attractive. The other consequence is that there is “debt overhang” – so much debt that shareholders are unwilling to infuse any more equity into the bank since most of the benefits of the new equity will flow to the depositors and other creditors.</p>
<p>So this creates a sort of “doom spiral”: More equity is needed to rescue the bank, but excessive debt stands in the way. So the government finds itself on the horns of a dilemma, either let the bank fail or infuse taxpayer money to rescue it.</p>
<p>Finally, more highly levered banks also make a bigger contribution to systemic risk, which is the risk that the whole system will fail, as we saw during the financial crisis.</p>
<p>We see some evidence of these forces operating at Deutsche Bank. <a href="http://www.zerohedge.com/news/2016-10-08/deutsche-bank-raises-3-billion-debt-hedge-fund-explains-what-its-bail-would-look">Reports suggest</a> the bank is unlikely to raise new equity because its stock price is “too low” and trading at about 25 percent of the book value of its equity. That means the market thinks the value of the bank’s equity is worth just 25 cents when the bank’s balance sheet states it as one dollar. Put slightly differently, if Duetsche bank states its shareholders equity on its balance sheet as $100, the market will actually pay only $25 to buy it.</p>
<p>One reason for the low stock price is its dim business prospects, thanks to anemic economic growth in Europe and tighter banking regulations. The other, of course, is the aforementioned debt overhang.</p>
<p>With such low capital, it is also hardly surprising that its <a href="https://www.ft.com/content/9a018afe-3e37-11e6-9f2c-36b487ebd80a">U.S. unit failed the Federal Reserve Bank’s stress test</a> in June. The only other major bank that failed was the U.S. unit of Santander. When a bank fails a test, it is not allowed to remit dividends back to its parent company and may face harsher sanctions. In addition there is reputational damage and potential loss of customer trust, which can be very damaging to the stock price.</p>
<p>Moreover, consistent with the predictions of <a href="http://www.annualreviews.org/doi/abs/10.1146/annurev-financial-110613-034531">academic research</a>, the <a href="http://www.bloomberg.com/news/articles/2016-06-30/deutsche-bank-may-be-top-contributor-to-systemic-risk-imf-says">International Monetary Fund named</a> the bank as “the most important net contributor to systemic risk.” In other words, by keeping capital that is too low from a prudential regulation standpoint, Deutsche Bank is creating risk, not only for itself but for the whole global financial system. </p>
<h2>The real concern</h2>
<p>So, the real problem for global financial stability is not whether Deutsche Bank will be bailed out. It is the question of what bank regulators are going to do to get more equity capital into banking. </p>
<p>In this regard, U.S. bank regulators have done considerably better than European (and <a href="http://www.wsj.com/articles/warning-from-tokyo-dont-let-bank-regulators-create-another-japan-1470084857">Japanese</a>) bank regulators. During the financial crisis, the U.S. government took equity stakes in banks, effectively recapitalizing them. When the shareholders of these banks repurchased the government’s stakes, private equity capital replaced taxpayer-provided capital, and the U.S. banking system ended up on a much sounder footing as a result. </p>
<p>By contrast, this did not happen in Europe. In fact, <a href="http://uk.reuters.com/article/uk-banks-leverage-idUKBREA0C0G020140113">banks in Europe lobbied</a> their bank regulators to water down the Basel III capital rules so as to avoid having to raise billions of euros in new capital. As a result, banking fragility in Europe remains considerably higher than in the U.S.</p>
<p>What should be done going forward? I think the single biggest regulatory imperative in banking is to get banks to have significantly higher capital ratios, both in the U.S. and in Europe, although the problem in Europe is more pressing. </p>
<p>And American taxpayers and bank regulators cannot afford to be smug about American banks being better capitalized than European banks. There may be lobbying of the new administration to water down capital requirements but doing so will be bad for the economy, both here and globally. Hopefully we will not repeat the mistakes made in Europe.</p>
<p>We live in a highly interconnected global financial system. European banking fragility imperils the U.S. and indeed the global financial system. Bailouts generally do not foster future financial stability; higher capital does. That’s where the answer lies.</p><img src="https://counter.theconversation.com/content/66895/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anjan V. Thakor does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Is the financial system headed for another ‘Lehman moment’? Perhaps, but a bailout isn’t the solution. More capital is, something Trump should remember as he rewrites U.S. bank rules.Anjan V. Thakor, Professor of Finance, Washington University in St. LouisLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/651892016-09-21T19:00:12Z2016-09-21T19:00:12ZNature is priceless, which is why turning it into ‘natural capital’ is wrong<figure><img src="https://images.theconversation.com/files/138429/original/image-20160920-11117-10p4n3d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Natural capital a dangerous illusion that masks the way capitalist growth undermines conservation itself.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>An increasingly popular line of argument is that, by turning nature into capital, it is possible to reconcile a capitalist growth economy with conservation. In this way, <a href="http://www.huffingtonpost.com/natural-capital-coalition-/when-it-comes-to-natural_b_12043244.html">proponents</a> assert, conservation can be expressed in a language that economists, policy-makers and CEOs understand. </p>
<p>But this strategy is not just self-defeating. It is a dangerous illusion that masks the way capitalist growth undermines conservation itself. </p>
<p>The concept of natural capital is hot. Over the past decade a growing network of actors and organisations has <a href="https://theconversation.com/nature-is-being-renamed-natural-capital-but-is-it-really-the-planet-that-will-profit-65273">banded around promotion of this concept</a> as the key to the future of sustainable development. At the recent <a href="http://www.iucnworldconservationcongress.org/">World Conservation Congress</a>, natural capital was front and centre, with a launch celebration of the Natural Capital Protocol and announcement of yet another <a href="http://nr.iisd.org/news/coalition-for-private-investment-in-conservation-natural-capital-protocol-presented-at-iucn-wcc/">new coalition</a> to develop private finance for conservation.</p>
<p>These, and many other initiatives, describe natural capital in simple terms as the nature, water, or the air that we live with on a daily basis. The <a href="http://naturalcapitalforum.com/about/">Natural Capital Forum</a>, for example, says the concept refers to </p>
<blockquote>
<p>the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. </p>
</blockquote>
<p>This example - and indeed <a href="http://www.corporateecoforum.com/valuing-natural-capital-initiative/">most</a> <a href="http://www.naturalcapitalinitiative.org.uk/">others</a> are premised on the fundamental assumption that “natural capital” can become the basis for a sustainable economy.</p>
<p>Clearly, things are not this simple, as even many proponents of these initiatives acknowledge. What’s worse is that the two main assumptions in this agenda (nature can become capital and provide services, and this could be the basis for a sustainable economy) are based on fundamental fallacies. They will not reverse the negative effects of our global growth-economy. They will in fact make them worse.</p>
<h2>What “capital” really means</h2>
<p>The fact that the food we eat and the water we drink apparently need to be labeled “natural capital” only becomes meaningful in the context of capitalist growth. In this context everything should, in principle, become “capital”. </p>
<p>It is therefore vital to be clear on what “capital” really means. In daily conversations and some economic theory, the term is frequently defined as a “<a href="http://www.investopedia.com/terms/c/capitalstock.asp">stock</a>” or as “<a href="http://www.investopedia.com/terms/c/capital.asp">assets</a>”. More accurate, however, is to see capital as a process, a dynamic. It is about investing money (or value) in order to make more money (or value). In short, capital is “<a href="http://davidharvey.org/">value in motion</a>”.</p>
<p>Capital in a capitalist economy is therefore never invested for the sake of it. The aim is to extract more money or value than had been invested. Otherwise it would not be capital.</p>
<p>It follows that the move from “nature” to “natural capital” is not an innocent change in terminology, another word for the same thing. Rather, it constitutes a fundamental reconceptualisation and revaluation of nature. Natural capital is about putting nature to work for capitalist growth – euphemistically referred to as <a href="http://www.oecd.org/greengrowth/">green growth</a>.</p>
<p>The move from nature to natural capital is problematic because it assumes that different forms of capital - human, financial, natural - can be made equivalent and exchanged. In practice - and despite proponents’s <a href="http://www.huffingtonpost.com/natural-capital-coalition-/when-it-comes-to-natural_b_12043244.html">insistence to the contrary</a> - this means that everything must potentially be expressed through a common, quantitative unit: money. But complex, qualitative, heterogeneous natures, <a href="http://www.huffingtonpost.com/natural-capital-coalition-/when-it-comes-to-natural_b_12043244.html">as these same proponents acknowledge</a>, can never adequately be represented in quantitative, homogenous money-units. </p>
<p>And even if we try, there is an untenable tension between the limitlessness of money (we can always generate more money) and the limits of natural capital (we cannot exchange evermore money-capital into natural capital, for all eternity). </p>
<p>Natural capital is therefore inherently anti-ecological and has little to do with giving value to nature, or rendering this value visible. It is the exploitation of nature to inject more value, and seeming legitimacy, into a faltering capitalist growth economy.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/138431/original/image-20160920-11134-1w4crk0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Natural capital is inherently anti-ecological and has little to do with giving value to nature.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Failing capital markets</h2>
<p>Another assumption is that natural capital can form the basis for a sustainable society. In practice, however, it has become clear that investing in natural capital is not all that attractive for most companies, investment firms or even governments. So, even if a price tag has been put on nature - which can never adequately capture its total value - <a href="http://www.tandfonline.com/doi/abs/10.1080/24694452.2016.1140018">recent research</a> shows that markets for natural capital and ecosystem services are mostly failing. In practice they are usually not even markets at all. Rather, they are <a href="http://www.sciencedirect.com/science/article/pii/S0016718511002107">subsidies in disguise</a>.</p>
<p>Further, actual private investments in natural capital are negligible compared to investments in unsustainable economic activities. This is because these are much more profitable, and hence a much better form of capital or “value in motion”. </p>
<p>When Ecuador, for example, asked government and private actors to invest in conservation of the Yasuni protected area, the <a href="https://www.theguardian.com/world/2013/aug/16/ecuador-abandons-yasuni-amazon-drilling">promised investments stayed far below what was hoped for</a>. Actual donations were much lower still. As a result, the country is now allowing companies to <a href="https://www.theguardian.com/environment/2014/may/23/ecuador-amazon-yasuni-national-park-oil-drill">drill for oil in the park</a>. </p>
<p>The common argument made by proponents of natural capital, namely that it helps to <a href="http://www.teebweb.org/">make the value of nature visible</a>, is therefore deeply flawed. The value of nature is perfectly visible to investors. They know that destroying it is far more profitable than saving it.</p>
<h2>Destruction for protection?</h2>
<p>An even more fundamental point is that destruction of nature is increasingly becoming the basis for the conservation of nature. Programmes built on natural capital are usually geared towards <a href="http://www.naturalcapitalinitiative.org.uk/events/towards-no-net-loss-and-beyond/">offsetting the destruction of nature</a>, which becomes the main source of the money needed for investing in conservation. In the logic of natural capital, investments in unsustainable economic activities are therefore “compensated” by equal investments in sustainable activities.</p>
<p>This practice, which in theory should lead to <a href="http://bbop.forest-trends.org/pages/biodiversity_offsets">no net loss</a> of – or better yet, <a href="https://www.iucn.org/content/making-case-net-positive-impact-biodiversity">net positive impact</a> on - nature and biodiversity, leads to an untenable contradiction. It means that nature can only be conserved if it is first destroyed.</p>
<p>But as indicated above, this is still mostly a virtual problem since actual investments in conserving natural capital have remained <a href="http://www.tandfonline.com/doi/abs/10.1080/24694452.2016.1140018">insignificant</a>. Even worse, companies generally invest much more in strong lobbies to keep environmental regulation to <a href="https://lobbyfacts.eu/news/29-10-2015/volkswagen-top-10-list-biggest-companies-lobbying-eu">an absolute minimum</a>. If they really believed that conservation would be profitable, there would be little incentive to pursue this lobbying any more.</p>
<h2>From quantity of growth to quality of life</h2>
<p>The conclusion is clear: natural capital is no practical or realistic solution to integrate nature into the economy or make its values visible. It is a dangerous illusion that will not only worsen but also legitimate the environmental crisis. And while some probably really believe in its potential, most of those at the helm of the current economic system must see on a daily basis that natural capital is illusory. </p>
<p>But by participating in it, they also know that more fundamental questions about the logic of our economy and who benefits from it are not asked. And hence they do not have to provide any answers.</p>
<p>But we do have to ask these questions: should we not start weaning ourselves off an economy predicated on an unsustainable <a href="http://www.degrowth.org/">quantitative growth-fetish</a>? Should we not build an economy focused on people, nature and equality rather than one based on putting forth money only to ultimately make more money? Most especially, should we not build an economy focused on quality of life rather than quantity of growth? </p>
<p>With some imagination, the answers are not only straightforward but also practical, logical and truly sustainable.</p><img src="https://counter.theconversation.com/content/65189/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bram Büscher receives funding from the Netherland Organisation for Scientific Research (NWO). </span></em></p><p class="fine-print"><em><span>Robert Fletcher does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Natural capital is a hot topic that proponents have jumped onto, believing it is the future of sustainable development. But this concept is based on fundamental fallacies.Bram Büscher, Professor of Geography, Environmental Management and Energy Studies, University of Johannesburg; Research Associate, Stellenbosch University; Professor of Sociology of Development and Change, Wageningen UniversityRobert Fletcher, Associate Professor, Sociology of Development and Change, Wageningen UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/548942016-02-19T04:15:30Z2016-02-19T04:15:30ZLimiting startup tax incentives could exclude an important group of early stage investors<figure><img src="https://images.theconversation.com/files/112075/original/image-20160219-12655-go4n28.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Restricting the tax offsets for investing in start-ups to just those with plenty of money will hurt entrepreneurs.</span> <span class="attribution"><span class="source">RicardoCorralT/flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>As part of its innovation agenda the Coalition government is offering a tax offset of 20 cents for every dollar invested into a startup, as well as an exemption from capital gains tax for up to 10 years. However, it has emerged that this incentive could be limited to only ‘sophisticated’ investors, defined as those earning more than $250,000 per annum or having a net worth of more than $2.5 million.</p>
<p>Placing this restriction on startup investment could potentially disadvantage a key group of seed capital providers namely family and friends or informal investors. Family and friends provided $66 billion of startup capital to <a href="http://www.angelcapitalassociation.org/data/Documents/Press%20Center/What%20Ents%20Should%20Know%20About%20Angels%202009.pdf">emerging ventures in the United States</a> This is about three times more than either venture capitalists or professional angel investors. </p>
<p>Many of today’s largest listed US companies took seed capital from informal investors. For example <a href="http://www.businesspundit.com/fortune-500-rags-to-riches/">Whole Foods Market</a>, a $10 billion American organic food company, was started with founder savings and capital provided by family and friends. </p>
<p>These investors each provide anywhere between $1,000 to $30,000 in seed funding, yet many of them would not qualify as sophisticated investors under the Australian government’s definition.</p>
<p>Australian startups face serious challenges in accessing capital at almost every stage in their growth cycle. In particular, difficulties in accessing seed capital, needed to help turn an idea into an operating business, appears to be a critical road block for many aspiring Australian entrepreneurs. </p>
<p>For example, <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/8167.0Main%20Features62013-14?opendocument&tabname=Summary&prodno=8167.0&issue=2013-14&num=&view=">one in five startups cite</a> restricted access to capital as a major barrier to innovation. </p>
<p>So where can startups access very early stage capital? It appears the sources are limited. The <a href="http://www.avcal.com.au/documents/item/1169">latest data</a> from the Australian Venture Capital Association shows that very few seed investments are made in Australia by venture capitalists. </p>
<p>Further, the angel and incubator community is only just <a href="http://www.startupsmart.com.au/finance-2/venture-capital/spreets-founder-dean-mcevoy-says-australia-needs-to-get-better-at-angel-investment/">emerging</a>, with only about 12 active groups across the country. This further points to the important role that informal investors can play in filling the capital cap that occurs at a venture’s seed stage. </p>
<p>It is true that informal investors stand to lose a greater proportion of their wealth in comparison to high net worth individuals when investing in startups. However another important innovation agenda reform, <a href="http://www.innovation.gov.au/page/access-crowd-sourced-equity-funding">equity crowdfunding</a> whereby ordinary mum and dad investors can take an equity stake in a startup through an online portal, would allow them to diversify their risks across many ventures, beyond those in which they have personal connections.</p>
<p>With this in mind, there are several reasons to believe that encouraging, rather than penalising small unsophisticated investors, is an important step to help young Australian startups to grow.</p>
<p>Family and friend investors have a personal connection with the founder, and typically will invest out of loyalty, trust and a belief in the founder’s ability. Such relationship characteristics are difficult to replicate with professional investors, who will often price down a company’s value to account for the possibility of moral hazard or unscrupulous founder motives. </p>
<p>In fact, if a start-up can grow through family and friend investments, often venture capitalist and angels <a href="http://www.forbes.com/2010/02/12/funding-for-startups-entrepreneurs-finance-zwilling.html">become more inclined to offer follow-on funding</a>, because the fact that informal investors have put their trust (and money) in the founder is a strong signal of the entrepreneur’s integrity and ability. </p>
<p>Bringing on formal or sophisticated investors too early can also <a href="https://hbr.org/1992/11/bootstrap-finance-the-art-of-start-ups">stifle innovation</a>. Venture capitalists are certainly not patient. They look for an exit in five years. Angel investors are a little more patient, but still look at a 10 year time frame. Often developing an innovative business can take much longer. For example, Glenn Martin the founder of <a href="http://www.martinjetpack.com/history">Martin Jetpack</a>, a Kiwi startup that listed on the ASX last year, first started work on the jet pack in 1981. </p>
<p>Further, a slower start to a venture is often a safer start, where the entrepreneur can take a “try it, fix it” approach and has ample opportunity to correct errors from poor decisions. Informal investors are more likely to be hands-off in their investment approach and thus far more likely to tolerate such an uncertain environment. </p>
<p>On the other hand, professional investors are much more hands-on and may prefer the safe proven routes learnt from previous investments, when in fact an experimental try-it, fix-it approach may be more conducive to innovation.</p>
<p>In order to ensure that our taxation system creates incentives that promote a successful startup ecosystem, careful consideration should be given to how early stage ventures are developed in other successful startup environments. </p>
<p>The Australian government’s efforts to recently <a href="http://www.startupsmart.com.au/growing/australian-entrepreneurs-to-get-access-to-a-startups-paradise-that-once-housed-uber-and-spotify/">secure a “landing-pad”</a> in San Francisco’s highly successful <a href="https://rocketspace.com/">RocketSpace hub</a>, is exactly the kind of initiative that will help Australians learn how to foster a more vibrant domestic startup ecosystem. </p>
<p>While this will not directly address the seed capital gap, helping founders to access valuable networks and to develop their ideas through co-working with others, will certainly enhance their future capital raising capabilities.</p><img src="https://counter.theconversation.com/content/54894/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Zein receives funding from the Australian Research Council. </span></em></p>The government should be encouraging informal investors to put their money into start-ups, not barring them from tax offsets that encourage them to do so.Jason Zein, Associate Professor, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/478042015-10-02T04:39:23Z2015-10-02T04:39:23ZWhy inequality matters – for the rich and the poor<figure><img src="https://images.theconversation.com/files/96957/original/image-20151001-23072-kq9819.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Workers in a bank watch as Occupy Wall Street protesters march in New York as part of the populist movement protesting economic inequality.</span> <span class="attribution"><span class="source">Reuters/Joshua Lott </span></span></figcaption></figure><p>In the last decade there has been a renaissance in studies stressing the relevance of inequality worldwide, particularly in the aftermath of the 2008 global financial crisis. The loud cry of the <a href="http://www.theguardian.com/world/ng-interactive/2015/sep/16/occupy-wall-street-four-years-later-timeline">Occupy movement</a> gained worldwide attention in its denunciation of the increasing polarisation of incomes and assets in the hands of an infamous 1%. </p>
<p>Thomas Piketty’s <a href="http://www.amazon.com/Capital-Twenty-First-Century-Thomas-Piketty/dp/1491534656">Capital in the Twenty-first Century</a> has largely supported the claims of global social movements that capitalism is moulding a world for the few against the many. It is not a coincidence that the name of his book recalls Karl Marx’s famous <a href="https://www.marxists.org/archive/marx/works/download/pdf/Capital-Volume-I.pdf">critique of political economy</a>. </p>
<p>Since the 1950s, mainstream economic narratives have been obsessed with modelling the relationship between inequality and growth. They also deployed questionable indicators of inequality based on an “average” distribution (the Gini coefficient). </p>
<p>Piketty has broken this mould. His work has focused on the extremes of the distribution and on elite’s capture since the origins of capitalism in western economies. </p>
<p>This enabled him to highlight what capitalism does best if left unchecked: namely, increasing returns to capital, rewarding and reproducing the creation of wealth. The book has been widely reviewed – favourably and unfavourably. Truth is, whatever one thinks about it, it returned inequality to the core of political economy debates on capitalism where it belongs.</p>
<h2>Roots of inequality</h2>
<p>In many instances, the historical roots of intercountry inequalities lie in slavery and colonialism. This is too often overlooked by contemporary economic analyses whose timeline is generally quite narrow. The <a href="http://www.theguardian.com/world/2015/sep/30/slavery-reparations-call-overshadows-david-camerons-visit-to-jamaica">Jamaican government</a> is currently reminding the UK that slavery can hardly be dismissed as a “thing of the past”.</p>
<p>Intracountry and intercountry inequalities interplay in the world economy. The increasing polarisation of the income shares of capital and labour is embedded in an equally polarised global division of labour. </p>
<p>This counterpoises countries hosting the majority of the world’s rich, led by the US, and those gathering the majority of the world’s working poor – Asia, Africa and Latin America. In the post-colonial era national capital has played its own role in processes of exploitation and dispossession against the working poor. </p>
<p>British-Indian writer <a href="http://www.theguardian.com/books/2014/mar/21/capital-portrait-twenty-first-century-delhi-review">Rana Dasgupta</a> has illustrated how these processes unfolded in the making of Delhi as a modern metropolis. Intriguingly, he has done so in a book also called Capital - a portrait of Delhi in the 21st century.</p>
<p>Even emerging economies like India or China, which are experiencing “global convergence”, are building their economic fortune on the shoulders of the working poor.</p>
<h2>The cost of inequality</h2>
<p>The human and social cost of highly unequal processes of capitalist development for low classes and for the working poor is substantial. This should be the primary reason for our interest in inequality. </p>
<p>The <a href="https://www.opendemocracy.net/roger-southall/south-africas-massacre-peeling-onion">Marikana tragedy</a>, which saw South African police firing on striking miners with live ammunition killing thirty-four, has indicated the violent nature of the struggles over resources and income shares. Piketty himself refers to the Marikana case to highlight the extreme consequences of fights over redistribution. </p>
<p>In Cambodia in 2014, <a href="http://theconversation.com/cambodian-sweatshop-protests-reveal-the-blood-on-our-clothes-21811">workers were shot</a> in the streets of Phnom Penh as they asked for an increase in their minimum wage. Inequality must be fought because it perpetuates social injustice.</p>
<p>Even those hardly moved by these arguments are increasingly aware of the challenges highly unequal distributions of income and wealth imply. Inequality was high on the agenda at the <a href="http://www.theguardian.com/public-leaders-network/2015/jan/25/davos-2015-overriding-pessimism-over-growing-inequality">World Economic Forum 2015</a> in Davos, certainly not your average activists’ network. This is because high levels of inequality have clear economic and social costs. </p>
<p>High inequality may undermine growth, as in South Africa. It can lead to violence and tensions, compelling the rich to live in gated communities, like in Brazil. In <a href="http://theconversation.com/gated-communities-lock-cities-into-cycles-of-inequality-33516">Buenos Aires</a> there were 90 gated communities in the 1990s. They became 285 by 2001, and 541 by 2008. </p>
<p>The proliferation of borders, fences and walls, not only in <a href="http://www.theguardian.com/global-development/2014/may/02/gated-communities-blade-runner-dystopia-unhappiness-un-joan-clos">urban spaces</a>, is gaining momentum across the world, even in developed countries, leading to increasingly segregated livelihoods. In the end, also the rich may not want to live like this.</p>
<h2>What to do about it?</h2>
<p>This is hardly an easy question to answer. Economics studies, even bestsellers like Piketty’s, still tell us little about who is more likely to bear the brunt of inequality. This is a crucial issue as inequality is a <a href="http://www3.qeh.ox.ac.uk/pdf/qehwp/qehwps81.pdf">“horizontal”</a>, “group phenomenon” experienced collectively. </p>
<p>And income and wealth – material inequality – may only represent the final outcome of far more rooted structures of oppression. </p>
<p>Ultimately, inequality is experienced on the basis of class, gender, race, caste or geographical provenance. In South Africa, one cannot understand inequality without addressing the legacy of apartheid. In India, one cannot decouple inequality from colonialism and <a href="http://www.thehindu.com/opinion/lead/contours-of-caste-disadvantage/article6442860.ece">caste</a>. In the US, inequality is linked to racial discrimination. In Europe, it is increasingly linked to migration, as many undocumented migrant workers are subjected to “slavery-like” <a href="http://www.reuters.com/article/2009/09/28/us-italy-immigrants-tomatoes-idUSTRE58R1TW20090928">working conditions</a>.</p>
<p>The fight against inequality must be fought on many fronts. It is a fight worth fighting. As highlighted in all books of the Capital “trilogy” mentioned here, from Marx to Piketty and Dasgupta, inequality is a key functioning mechanism of capitalism. It must be addressed as a matter of social justice. </p>
<p>Furthermore, it may also soon become both economically unviable and socially undesirable for the few to exclude the many. As the few reinforce fences and gates, the many may be really becoming too many, particularly across the developing world. They may even start demanding their share.</p><img src="https://counter.theconversation.com/content/47804/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>In the past, Alessandra Mezzadri has received funding from ESRC-DfID and from the British Academy. </span></em></p>The Marikana tragedy has indicated the violent nature of the struggles over resources and income shares. Inequality must be fought because it perpetuates social injustice.Alessandra Mezzadri, Lecturer in Development Studies, SOAS, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/257702014-04-22T05:09:54Z2014-04-22T05:09:54ZPiketty has redefined capital, after 200 years of confusion<figure><img src="https://images.theconversation.com/files/46716/original/8yp29mwx-1397761189.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Those houses won't buy themselves.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/daviddmuir/2125697998">David Muir</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>Thomas Piketty’s bestselling book <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674430006">Capital in the Twenty-First Century</a> shows that in a selection of developed countries the stock of capital is growing faster than economic output, causing disturbing increases in wealth inequality. His thesis has sparked a major global debate about capitalism, inequality and taxation policy.</p>
<p>His redefinition of the central concept of capital has received less attention. For Piketty, capital is a saleable asset that can receive a monetary return. This is the everyday notion of capital that is used in business circles. Hence, for Piketty, capital includes cash, bonds, and shares, collateralisable assets such as buildings, land, machinery, and intellectual property. From its origins in Italy in the 13th century, capital has meant the fund of money to be invested, or the monetary value of tangible or intangible assets owned and usable as collateral.</p>
<p>By contrast, since Adam Smith, economists have contrived definitions of capital that are very different from that found in everyday business. Elsewhere I outline this change of usage and argue for <a href="http://cje.oxfordjournals.org/content/early/2014/04/03/cje.beu013.abstract">a return to the original definition</a>. Shifting attention from ownership rights in assets to the physical things themselves, Smith changed the meaning of “capital” from the money-value of an investment to the physical assets that were purchased and used in production. Smith further argued that labour was a productive resource and could also be regarded as “capital”. The term “human capital” was devised later.</p>
<p>Since Smith, economists have long argued over the meaning and theory of capital. But generally they have treated as physical assets, powers, or resources that are involved in the production of wealth. Karl Marx tried to link “capital” to the class structure of the capitalist system, but he still referred to physical assets. The Cambridge capital controversies of the 1960s and 1970s were also mostly over problems of measuring lots of different physical resources. Issues of ownership and collateralisation have been side-lined by economists for more than 200 years.</p>
<p>After Nobel Laureate Gary Becker popularised the term “<a href="http://www.econlib.org/library/Enc/HumanCapital.html">human capital</a>” in the 1960s, the word “capital” has become promiscuous. Sociologists Pierre Bourdieu and James Coleman promoted the term “<a href="http://www.marxists.org/reference/subject/philosophy/works/fr/bourdieu-forms-capital.htm">social capital</a>”. Now we also have “environmental capital”, “health capital”, “symbolic capital”, “cultural capital”, “political capital” and even “<a href="http://www.theguardian.com/books/2011/aug/19/honey-money-catherine-hakim-review">erotic capital</a>”. Economists and sociologists have stretched the meaning of the term to cover any asset.</p>
<p>These highly extended usages of the term are far-removed from the business meaning of capital as the money value of an investment. Take the terms “social capital”, “symbolic capital” or “cultural capital”. These refer to assets that largely are not owned as property, cannot be sold, and cannot be used as collateral. But extensions of secure property rights, and the development of financial institutions through which property can be used as collateral to secure loans for investment, have been hallmark developments in the evolution of capitalism over the past 300 years.</p>
<p>A few economists have objected to the perversion of meaning of the term capital. One of these was Joseph Schumpeter, who wrote in his <a href="http://digamo.free.fr/schumphea.pdf">History of Economic Analysis</a>: </p>
<blockquote>
<p>The concept was essentially monetary, meaning either actual money, or claims to money, or some goods evaluated in money … What a mass of confused, futile, and downright silly controversies it would have saved us, if economists had had the sense to stick to those monetary and accounting meanings of the term instead of trying to ‘deepen’ them!</p>
</blockquote>
<p>What about “human capital”? Humans are fully saleable and usable as collateral only when they are slaves. In the <a href="http://cje.oxfordjournals.org/content/early/2014/04/03/cje.beu013.abstract">Cambridge Journal of Economics</a> I point out that the first known usage of the term – in 1842 – was in the context of slavery.</p>
<p>Piketty likewise restricts the description of humans as capital to when they are slaves. In his book he points out that the capital value of slaves from the founding of the United States until 1863, was about 150% of annual national income. With Abraham Lincoln’s 1863 Emancipation Proclamation, they were no longer objects of alienable property. As slaves were transformed into wage labourers, the human component of total US capital assets was reduced to zero.</p>
<p>Piketty had to reverse more than two centuries of abuse by economists and sociologists of the notion of capital to make his powerful empirical and theoretical case. His data are based on a commendable redefinition of the concept that ends an age of obscurantism.</p>
<p>Capitalism is arguably a historically specific system where capital plays a dominant role. Other forms of so-called “capital” have a much greater longevity. “Social capital” goes back to the primates. If “human capital” means any learned capacity for labour, then that too goes back millions of years. The use of stone tools (“capital goods”?) also has great longevity. </p>
<p>But the life of “capital” as a saleable asset valued in money is less than one-thousandth that of social capital, human capital or capital goods. Capital (as defined by business people, Schumpeter, Piketty and myself) is much more historically specific than its purported relatives, and hence is much more useful in identifying the highly dynamic system of capitalism that first emerged a few hundred years ago.</p><img src="https://counter.theconversation.com/content/25770/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoffrey M Hodgson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Thomas Piketty’s bestselling book Capital in the Twenty-First Century shows that in a selection of developed countries the stock of capital is growing faster than economic output, causing disturbing increases…Geoffrey M Hodgson, Research Professor, Hertfordshire Business School, University of HertfordshireLicensed as Creative Commons – attribution, no derivatives.