AFWW Newletter #10 - Economics and Social Transformation 10 Oct 2008

Quotable Quote
"You can never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete"
- Buckminster Fuller

A Good Book
Three Cups of Tea
An awesome read. Pakistan. Afghanistan. 9/11. Humans at their very human best. Read to be informed, uplifted, and inspired to serve or provide support to those who do.

A Good Flick
Pray the Devil Back to Hell
Winner of the 2008 Tribeca Film Festival. A documentary on the Liberian Women's Peace Movement. "The women held the men hostage until they made peace." To be released in November 2008.

A Future Without War
Believe in it.
Envision it.
Work for it.
And we will achieve it.

The theme of this newsletter is ECONOMICS
"We seem always ready to pay the price for war. Almost gladly we give our time and our treasure-our limbs and even our lives-for war. But yet we expect to get peace for nothing." - Peace Pilgrim

One of AFWW's 9 cornerstones is SHIFT OUR ECONOMIES. An essential of any campaign to abolish war is that we shift from economies based on war (or at a minimum, ones that greatly facilitate wars) to economies that will serve to abolish war. The logic underlying this cornerstone is that we can't seriously propose to create a just, sustainable, and peaceful (or non-warring) future if we continue to tolerate war because:

  • War uses up limited resources urgently needed to build our vision of a just and peaceful future.
  • War is a toleration of the rule of some over others ultimately enforced by violence, a direct violation of what we claim we want to create.

This newsletter provides:

  • a meeting notice - devoted to business and a better future - abstracts due November 1, 2008,
  • examples of outrageous financial wastes of war,
  • a gut sense for how much money a trillion dollars really is,
  • fun and informative websites on things economic,
  • a summary of research on the relationship between "moral sentiments" and economic incentives,
  • four books on economics; Birdsall, Shermer, Toffler, and Eisler,
  • links to 19 organizations working on economic issues as these relate to shaping a more just, sustainable, and nonviolent future.

Your Help Needed
Global Forum
Case Western's Global Forum 2009 - Call for Papers. 500 word abstracts due Nov 1, 2008.
The Case Western "Center for Business as an Agent For World Benefit" is pleased to invite you to join in another landmark event to be hosted at Case Western Reserve University's Weatherhead School of Management June 3rd-6th, 2009. The Forum will bring together leading executives, designers, management scholars, civil society leaders, government policy makers, and visionary students to identify and leverage new solutions with the potential to change 21st-century society for the better. The format and content will encircle the globe and include both face-to-face and virtual venues. The first Global Forum-building on the convening capacity of the Academy of Management and UN Global Compact - included well over one thousand leaders and scholars from 57 countries; that number is expected to increase.
Waste of War
Outrageous Financial Waste of War
Cost examples:
  • $5.8 Trillion spent on the U.S. Nuclear program as of 1998
  • Ultimate U.S. Projected costs of Afghan and Iraq wars--between $1 trillion and $1.4 trillion
  • U.S. costs of the wars in Afghanistan and Iraq as of 2005--$300 billion
  • U.S. costs (in 2005 dollars) for WW I and the Vietnam War - $613 billion and $623 billion, respectively
  • F/A-22 Raptor - $64 billion - $100 million/plane
  • Central Intelligence Agency Budget (2005) - $ 44 billion
  • Homeland Security, U.S. (2003) - $ 38 billion
  • Anthrax Vaccine development - $5.6 billion
  • One U.S. Nuclear Submarine - $ 1.6 billion. The U.S., in 2004, had fifty
  • Two new 4,000-bed prisons in Iraq (requested by U.S. administration) - $400 million
  • One U.S. M1 Tank - $4.3 million - the U.S. had a 2004 inventory of 403
  • Perchlorate cleanup in San Bernardino, California - $6.5 million

To quote Congressman Everett Dirksen: "A billion here, a billion there, sooner or later it adds up to real money." Real money that, in the case of war and its weapons, should be better spent elsewhere.

How Much is a Trillion Dollars?
If you tried to count to $1 trillion at $1 a second it would take almost 12 days to reach $1 million, nearly 32 years to reach $1 billion, and 31,709 years to reach 1 trillion. If you tried to count to $5.5 trillion, it would take about 174,400 years. Steven Schwartz (the source of these values), in his book Atomic Audit, writes that taking into account spending since 1996 and making further adjustments for inflation, the total the United States has sunk into its nuclear weapons program as of 2006 was $7.5 trillion and counting.
A Graphical View
Oreo Cookies, Beebees, A War Money Counter, and The Budget Pie, Oh My
A Picture Can Be Better than a Thousand Words.
The following websites have visuals or interactive graphics that relate to the costs of war and to the apportionment of the U.S. Annual Budget.

Beebees and the U.S. Nuclear Arsenal - A video depicting the number of Missiles in the U.S. Nuclear Arsenal and the cost of maintaining them: fun/ (no endorsement of True is implied)
An entertaining video comparison, only slightly outdated, of Pentagon Budget with other U.S. Budget items: fun/ Click on Oreo video (no endorsement of True is implied)
The War Counter - an animated counter of the costs of the Iraq war compared to spending in the U.S. on pre-school, kid's health, public education, college scholarships, public housing, world hunger, the AIDS epidemic, and world immunization. This site is a trove of financial information. National Priorities Project:
nationalpriorities. org
Playing with the U.S. Budget - an interactive site that let's you see the U.S. allocation of taxes and lets you change the values and then compare YOUR ideal budget with the actual U.S. budget. benjerry. com/americanpie/
(no endorsement of the site or it accuracy is implied)

Moral Sentiments vs. Material Interests
"Science," the journal of the American Association of Science, published in their 20 June 2008 issue a review by Samuel Bowles of the Santa Fe Institute. The author summarizes results from 41 economic studies. The title: "Policies designed for self-interested citizens may undermine 'The Moral Sentiments': evidence from economic experiments."

This scientific review paper throws light on the relationships-positive and negative-between economic incentives used to motivate citizens to act in the common good and our innate moral sentiments. It's a paper to cite when writing or discussing the practical issues of how best to shift our economies.

In addition, its clear finding that individuals do not always act in selfish self-interest lends further support to our growing understanding of the nature of what can be called "innate human goodness."

Dr. Bowels cites Bruno Frey who warned that "a constitution for knaves may produce knaves."

The review's conclusions are as follows:

  • Humans do have innate "moral sentiments," the basis upon which all commerce is built.
  • Economic incentives intended to foster behavior that serves the common good by appealing to selfish self-interest may fail when they undermine the moral values that lead people to act altruistically or in other public-spirited ways.
  • Economic incentives may be counter productive when they signal that selfishness is an appropriate response; they constitute a learning environment through which over time people come to adopt more self-interested motivation; they compromise the individual's sense of self-determination and thereby degrade intrinsic motivations; or they convey a message of distrust, disrespect, and unfair intent.
  • Many of the (negative) unintended effects of incentives occur because people act not only to acquire economic goods and services, but also to constitute themselves as dignified, autonomous, and moral individuals.
  • Good organizations and institutional design can channel our material interests for the achievement of social goals while also enhancing the contribution of the moral sentiments to the same ends.

To obtain a copy of the article write:

The White House and the World
A Global Development Agenda for the Next U.S. President.

The Center for Global Development is a gold mine of literature and ideas relating to problems of development. CGD president Nancy Birdsall edited The White House and the World and wrote the lead essay, "Why Development Matters for Americans and What the Next President Should Do about It." At this site she discussed the book's themes on the eve of the 2008 Democratic and Republican conventions.
Evolutionary Economics
Human Nature and Resources
In Women, Power, and the Biology of Peace (pp. 43-44) (FREE download at evolutionary biologist Judith Hand explains why no social edifice can persist over time if it conflicts with a fundamental (evolved) aspect of human nature. Over time, no social or economic edifice is stronger than human nature itself.

To shift our economies, we need to understand how human nature relates to economics (the acquiring and distribution of resources). Only then can we know what sort of economic system can be sustained over time-what we can and can not do. What policies will get us where we want to go. How to avoid self-defeating policies.

Hand provides the following as one example of how innate human (evolved) characteristics limit our possible plans: "You might convince goodly numbers of the members of a society to allow children from impoverished, dangerous neighborhoods to be bussed into their own, safe neighborhood to attend school-providing you convince the adults that such an effort serves some very great good. But you would never convince any significant number of people to bus their children into an unsafe neighborhood, no matter how hard you might try or how worthy your cause (p. 44)."

Michael Shermer, editor of "Skeptic Magazine," monthly editor for "Scientific American," and President of the Skeptics Society, has written The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics. NY: Times Books/Henry Holt. 2008.

This book presents an extensive review of behavioral and neurophysiological research relating human nature to economic (and other) choices we make. Unless with work with our biology, not against it, we can't create sustainable change. Hence the need to understand our biology.

The key conclusion is that the idea of humans making economic decisions only selfishly, rationally, and efficiently, as has been assumed by most economists until recently, is fundamentally incorrect. An economics built on those incorrect assumptions is going to be in error.

He reviews studies on what makes people happy, and explains and ultimately recommends an economic system called libertarian paternalism (from Cass Sunstein and Richard Thaler) that maximizes freedom while using the best knowledge from biology to determine the minimum restrictions needed to shape interactions in complex societies.

For a sample of reviews see:
Reviews on Shermer's Website

Toffler's Economic Insights
The brilliant and classic books by Alvin and Heidi Toffler, Future Shock and The Third Wave, are an absolute MUST READ for anyone serious about social change and our future.

In chapter 20 of The Third Wave, the Tofflers address the future of economic change. They include discussion not only of traditional areas of concern to economists, but non-traditional areas that are hugely important to fully understanding how humans use and exchange resources but areas which were, and for the most part still are, virtually ignored.

Toffler divided economic elements into two parts he called Sector A and Sector B. Here we quote from the book (pp. 252-253):

"Sector A comprises all that unpaid work done directly by people for themselves, their families, or their communities. Sector B comprises all the production of goods or services for sale or swap through the exchange network or market." In the First Wave economies (the period of time after the Agricultural Revolution and before the Industrial Revolution), "Sector A-based on production for use-was enormous, while Sector B was minimal. During the second Wave (after the Industrial Revolution) the reverse was true. In fact, the production of goods and services for the market mushroomed to such an extent that Second Wave economists virtually forgot the existence of Sector A. The very word 'economy' was defined to exclude all forms of work or production not intended for the market, and the prosumer (someone who produces and consumes what he or she produces) became invisible.

"This meant, for example, that all the unpaid work done by women in the home, all the cleaning , scrubbing, child-rearing, the community organizing, was contemptuously dismissed as "non-economic," even thought Sector B - the visible economy - could not have existed without the goods and services produced in Sector A - the invisible economy."

"Today ... politicians and experts still bandy about economic statistics based entirely on Sector B transactions ... Yet so long as they continue to think in Second Wave categories, so long as they ignore Sector A and regard it as outside the economy - and so long as the prosumer remains invisible - they will never be able to mange our economic affairs."

The chapter is 22 pages long ... and should be read and studied by anyone who needs to understand economics while working to shape a better future.

Real Wealth of Nations
Riane Eisler's The Real Wealth of Nations: Creating a Caring Economics

If we are to shift our economies, we are led to ask, shift them to what? This 2007 book by social historian Riane Eisler is an answer to that question. She reviews the essentials of socialism, communism, and capitalism, all of which result in and emerge from a dominator model of living that is enforced, ultimately, by violence.

She urges us to set our sights on a shift to an economic system she calls partnerism - a caring economics that includes financial value for the work of care-giving. She is essentially putting great stress on and calling for attention to an important part of what Toffler included in his "Sector A." (see the preceding newsletter entry)

As Eisler notes, it will take time and intense effort by many experts to fully shape the actual economics of partnerism. It will, she further notes, take an equal or greater effort to implement the changes. But she provides of vision of what a new economics can look like. It would place more stress on cooperation than competition.

Skeptics will say that humans are too selfish to ever make the paradigm shift she describes. An ever growing weight of research on human nature indicates that, to the contrary, humans have evolved to be cooperative when their environment favors cooperation (for examples and references supporting this cooperative view of human nature see the Shermer book mentioned above. See also the short essay on "Essential Human Goodness" at

Organizations Seeking to Shape our Economic Future
AFWW provides links to 19 Organizations Working on the "Shift Our Economies" Cornerstone

With warm wishes and hope.
- Judith
Contact Info
A Future Without War
Dr. Judith Hand
P.O. Box 270074, San Diego, CA 92198
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