Thinking about a Heritage Economy

The American Public Media show Marketplace Money usually drives me batty with inane fluff that seems to make people feel less personally responsible for their money and spending, and promotes unnecessary consumerism. For example, they did a story on a family that was foreclosed in Vegas and wanted to tear our hearts out with this quote:

We redid all the cupboards, put all new appliances in, redid the floor, everything in there is all brand new.

And now someone else was going to enjoy it. The purpose of the story was to make us feel badly for the family who redid their house and then couldn't afford to keep it. There was no mention of the idea...hey, maybe stick with the old appliances until you can legitimately afford new ones.

The show also did a "cute" story about how "there is only so much you can teach your kids" about consuming because some people just have genetic predispositions to shopping. (Bill still enjoys listening to the show on Saturday mornings, but I do my best to block it out, so these stories were both from 2010 and the links are no longer active, but my rageful, completely unbiased, summary exists at the link above.)

Marketplace Money did a show recently, though, that I found to be more insightful than everything I've heard in the last two years combined. It was a panel discussion on the topic "Are, we the people, to blame: Do we get the banks we deserve?" (Eliot Spitzer still made me yell at the computer, so I did get my standard marketplace weekend rise in blood pressure).

In a show about money, one of the panelists voluntarily brings up the environment (around 34:00). The question was about adjusting our expectations about growth and being satisfied with 1-2% growth instead of 3-4%. The CEO from the Royal Bank of Canada was asked if people would be ok with lowered expectations and his reply was "we have no choice. We are on a planet that is running out of resources."

And then a dude from Occupy ruins the whole thing...but for a minute, I was slightly shocked that the show was making sense to me.

I think of the sort of economy where we focus on working within our realistic means as a Heritage Economy - one that builds on the success of those that came before us and is also concerned about leaving something good for the future. It's the economy of happy grandparents rocking on their front porch, drinking lemonade and watching their grandkids running in the front yard, rather than the economy of over-groomed people rushing through a city while talking, texting and watching their kid's tuba recital on a smart phone.

The way I think of it, money is not a thing in itself. It is merely a tool for measuring resources. Nearly all of our planet's resources come from the sun. We are essentially a closed system and we receive a measured amount of energy from the sun each year. Among other things, this energy causes weather and makes the plants grow that feeds bugs, chickens, cows and us.

Millions of years ago, the energy that came from the sun allowed the growth of the algae and zooplankton that eventually turned into crude oil.

Because we live in an economy dependent on that oil, each year we are using more than one year's worth of energy. So, in 2011, we consumed much of the energy that came from the sun in 2011 and the energy that came from the sun many years ago and has since turned to oil. In a closed system, you can't consume more than you bring in for very long.

"We have no choice" but to live within the means of the resources we receive.