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Just wondering is a "sustainable economy" an oxymoron? The reason I ask is because last night I watched a program on Frontline, about one woman who warned financial derivates many years back

http://www.pbs.org/wgbh/pages/frontline/warning/

And it got me thinking is it possible to design an economic system that is sustainable.

We know that people once exposed to a consumer economy have every growing economic expectations which means public revenues, or government spending always grows; yet "Sustainability" implies avoiding depletion or excluding constant growth.

If you watch the frontline program, what shocked me is dogmatic view of greenspan who believed in free markets (aka efficient market hypothesis ), and did pretty much everything in his power to prevent regulators from enforcing any government rules (including any government regulations to prevent fraud).

So if you were to design an economic system from the ground on up, what would features would you want included in your ideal economy? Would you want no rules so human ingenuity and Darwinism (i.e. survival of the fittest), make the rules. Or the other extreme would would want to micro manage every detail!

So care to share a list of ideas to create a "sustainable economy" for example one idea I think would help an economy become stable over the long run, is to condition people to invest for the long run and discourage short term speculation. I'd do this is by taxing any short term capital gains for any investment like stocks, commodities or real estate held a year or less at 50%, anything held between 1 and 10 years would have a cap gains tax rate rate of 30%, and anything held longer than 10 years would have a cap gains tax rate rate of 22%. Like everyone else I dislike paying taxes, but I acknowledge that some government is needed to set and enforce basic rules, and install basic infrastructure such as transportaion systems, and educate citizens so that people have the skill set needed along with confidence and certainity to participate in an economy.

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With the sudden implosion of the global economy this past year, like many others, I've been trying to figure out what happened.

Because I have no formal training in economics I'm not having to re-evalue my world view wheather its free market supply side, Keynesian or the Austrian School of Economics.

For example last week on a planet money pod cast, Russ Roberts of George Mason University economist and host of EconTalk, explains why he thinks is economics is an imperfect science. In the pod cast he talks about lots of economics is too often based on personal faith, philosophy and ideology, not on empirical data.

http://public.npr.org/anon.npr-mp3/npr/pmoney/2009/12/podcast12.07....

Took a brief look at your "rainbow trading" and like the idea that you have thought about trying to assign some kind of value to various types of fuel(s), but in a way it kinda reminded me of what president bush tried to do with his homeland terriorism threat level system.

http://en.wikipedia.org/wiki/Homeland_Security_Advisory_System

I've got a background in the physics sciences, and I don't really see the problem as being with any specific monitary system, because no matter if its US dollars, dutch Guilders, japanese yen, etc., local money is always going to have two basic characteristics:

1) a store of value and
2) a means of exchange

The big problem I see is one of society as a whole placing too much value on shit that in the long run does not really advance the progress of the human race.

To give ya an extreme example of what I consider misplaced values, since you're from holland and I know from past history that your country had a tradition of sailing and trading (Dutch East India Company), suppose random people were given a choice between a book and formal training on how to build a boat and flawless 100 ct flawless blue diamond. I'm 100% sure in the modern world everyone would choose the 100 ct flawless blue diamond because they know its something vary rare and its worth lots of local money. But if someone were stranded on a desert island, the skill set of knowing how to build a boat would allow an individual to exercise lots of options such as fishing, which could given time, evolve into a trading system.

What I'm trying to point out is modern society has evolved to the point that too many people place too much value on consumption of bling, and lack the basic imagination and skill set to build things of lasting value.

I'm not a very religious person, but since I know calvin was a significant historical figure in your neck of the woods, and there are lots of bible thumpers and self proclaimed jesus freaks over here in the USA (frm president bush for example), I'd say the current state of the economy reflects exactly what was planted becase as you sow so you reap (which is basically an idea out of galatians in the old testament), I'd also suggest that too many people weather of the religious persuasion or not have "consumption" as their god

http://en.wikipedia.org/wiki/I_am_the_Lord_your_God

I'm guessing the reason "why so few economists responded to this question" is because in way its a question that can't be well defined and is subjective. Basically IMHO the formal study of economics is much like the study of famous art in that there are very few great artists that art critics and connoisseurs try and explain away using an imperfect language hoping somehow to capture the genius captured by the created work.

Was down at my local cafe for my coffee and croissant, and read in the dec 15th Financial Times there was a reprint of an economics article titled "How to rebuild a shamed subject"

http://www.skidelskyr.com/site/article/how-to-rebuild-a-shamed-subj...

personally I think the field of economics is just another tool that can and should be used to advance the progress of the human race, and if it happens that a person happens to be able to benefit economically from some kind of creative insight, good for them because that's the way nature is (good ideas and organizations become much better and stronger over time thru evolution). As it stands lots of people are just trying to survive this economic downturn, personally I think its an opportunity to position myself to take advantage of the next interesting economic wave ride, that of green tech!
First of all happy new year; now down to business....

Seems the idea of a Rainbow Trading is trying to condition market players to minimize use of red (energy), max out the use of green (recycled content), and minimize use of blue (non recycled content).

Problem is how does one trade or earn various RGB colors? Keep in mind in a modern economy everyone one is use to trading some kind of local currency in numeric units; for example the EURO has replaced the Guilder as the official currency in the Netherlands. When I mentioned the homeland security system, I was referring to the idea of president bush trying to convey a degree of ugrency or threat.

Without a means of exchange or a store of value, I'd think your proposed rainbow trading system is better used as a type of consumer behavior indicator like in the Ford Fusion Hybrid where there is a SmartGauge Display that shows a wispy icon of a plant that adds green leaves as your driving habits become more eco-friendly.

As someone who is very concerned about the state of the environment, I see a need to make people more aware of the environmental costs, but as a pragmatist I realize that one needs to work from within the existing framework. Changes do not happen over night, and its requires individuals like Matt Kistler, Wal-Mart's senior vice president for sustainability to nudge the culture in the right direction, so that even a Wal-Mart size organization can start a labeling system to reflect green environmental concerns

I am very concerned about the state of the environment, and these past few years have shown that the blind love of money has made people take lots of foolish un-sustainable management decision(s), which is reflected in the poor state of the economy. If people took a longer view, and sought to take into account not only economic, but also social and environmental opportunities, I'd say its very possible to have your cake and eat it too! For example in my neck of the woods, I've made an economic investment that tries to take into consideration economic and social concerns in my own neighborhood.
Rob,

Back when I was in school, I remember the first time I actually thought about how wacked the some economic definitions are. I was taking a seminar class with Roger Revelle, when the Exxon Valdez had a little problem with a drunk driver.

Anyway I decided to try and do some analysis on the accident, and calculate some of the costs. Since I wasn't econ major, I remember looking looking up the definition of GDP and was surprised that the concept did not differentiate between good and bad; in other words the oil spill which ruined the environment and included lots of un-necessary clean up work, "on paper" contributed to the GDP of the state of alaska because there was "increased" economic activity.

Ever since then I've always wondered why econ students, aren't taught this as a case study of misguided economic indicators. Guess its un-cool to say economics isn't an exact science like Newtonian physics; and most likely most economists don't feel comfortable with describing economic forcasts in terms of something like schrodinger's wave equation which is the basis of quantium mechanics and calculates the probability which is a way of expressing knowledge or belief that an event will occur or has occurred.

BTW this past week I caught an interesting pod cast on how inexact economic forcasting is.

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