Introduction

Before entering any field of study, it is wise to first take stock of the field as a whole. Without such an overview, it is too easy to seize upon one aspect of the field and to misinterpret all other data in the light of that aspect. Green economics (a term which I hold to encompass : Ecological, Environmental, Steady State, Balanced, New, or Sustainable Economics - all of which I regard as being subsets of the term Green, which throws its net most widely) is a relatively new discipline and so this is an important moment in which to try to establish an orientation and to produce a sketch map of the field. This paper is a modest attempt to provide a provisional plan. Its aim is to place the various elements of green economics into relationship with each other rather than to provide a detailed exposition or argument for each point. An excellent technical and detailed exposition is available in Steady State Economics. Daly (1991) .

The Ecological Foundation of Economics

Ecology and economics are closely related both etymologically and philosophically. Eco- signifies home or habitat, -logy refers to study, and -nomy relates to management. Philosophically, they are therefore sister disciplines: understanding must underpin management: therefore ecology must underpin economics. In this way, green economics is simply bringing economics back to its rightful intellectual grounding.

Ecology

Ecology is the branch of science that studies the distribution and abundance of living organisms, and the interactions or interrelationship between organisms and their environment. Ecology describes the world in terms of systems - assemblages of inter-related elements comprising a unified whole - rather than in terms of single, linear or isolated events.

Economics

"Economics is the study of how society decides what and how and for whom to produce" (Begg Fischer and Dornbusch 2003) Economics strives to be a science whereas the subject matter places economics within the social sciences that study and explain human behaviour. It describes how scarce resources are allocated between competing claims on their use.

Economics' status as a science is debatable. Soros (1998) argues that as the subject matter of economics is thought, the thinking applied to the subject matter may affect the outturn of the process which is being considered. Therefore it cannot be classified alongside the more hard edged sciences of chemistry or physics, where (aside from Heisenberg's Principle) the subject matter is not much affected by the presence of the observer.

Ecological economics

Ecological economics can be defined as the social science of the interaction between the production, consumption and transfer of goods and services by humans, taken in relationship to the physical and processes of the ecosystems that support all life.

Economic science can be subdivided into the positive - descriptive of what flows from given assumptions - and the normative, when it prescribes that a certain action should be taken. Sustainable economics, it is argued here, is decidedly normative.

It is sobering to consider that non-sustainable economics by definition implies a breakdown of the current system at some point in the future. It is perhaps because of this that there has been a tendency by some economists writers to degrade the meaning of the term "sustainable". See definitions of sustainable development.

The Axiomatic Basis Of Green Economics

I propose that Green Economics is based on three axioms :
1. It is impossible to expand forever into a finite space
2. It is impossible to take forever from a finite resource.
3. Everything is interconnected.

The effect of applying these axioms to economics should be to harmonise human activities with the processes of nature. Harmonise would mean that the human economic system will be able to nest comfortably within the living ecosystem that surrounds and supports it, with a benign, dynamic, continuous, two-way interaction between one and the other.

The Structure of the Economy

The foundations of any economy are natural resources. These are wrongly regarded as "inputs" by conventional economics and as an infinite resource to be used and discarded at will with no cost, price or value above that of the current market transaction. Green Economics turns this whole structure upside down.

For the purposes of comprehension in this essay the economy will be divided into four ranks to emphasise the relative positions of the natural world an human economic institutions.

The first rank of the economy

The first rank of the economy relates to producing from our environment the necessities of life, namely:
1. water
2. food
3. energy
4. shelter
5. safe management of waste products.
This production is the universal basis of all economies, from Robinson Crusoe to New York City. In advanced economies, these processes are hidden and simply assumed to exist; but closer examination shows that the economic basics are everywhere compromised, both in developing and in advanced economies. The water distribution system in the UK is deteriorating; food production is highly demanding in terms of energy and pesticides, while it also erodes the soil which is the substrate of food production; we are excessively dependent on animal protein, which is inefficient in land use terms, and involves much abuse of animals. Our energy use is simply unsustainable, and is also disrupting the climate; and finally we are poisoning the oceans with waste products that ought properly to be returned to the land as fertiliser.

Land use, carrying capacity - and population

All of these first rank activities assume access to, and use of, a certain area of land. This is known as the ecological footprint, although the term as used here must include surface area needed to absorb waste products, which is sometimes left out of consideration. In a free and democratic society this access should be seen as a birthright for every human being. Each human has a notional right to a proportion of the earth's surface. Therefore, anyone holding an area of land should pay a rent to the community in recognition of their being allowed special enjoyment of that land. This consideration is the basis of the Land (or Site) Value Tax which is a core green tax, and it also forms the philosophical basis for the Citizen's Income (see below) where the productivity of the land is symbolised by an unconditional income for every citizen.

The corollary of this right of access is the duty to be sure that we do not overburden the land, in accordance with the first and second axioms. Any area of land has a finite carrying capacity - defined as the ability to sustain a certain population of any species. The finite nature of carrying capacity is an incontrovertible ecological fact. The ecological footprint is the land and water area that is required to the material standard of living of a given human population, using prevailing technology. It can be understood as the product of population numbers and consumption patterns, so that one hundred people with a more sustainable consumption pattern might have a smaller footprint than fifty people with a careless lifestyle but even if the entire human population had the most frugal and ecologically sound consumption patterns possible, it would still be the case that there is a limit to the capacity of the planet to carry a human population.

The appropriated carrying capacity is another name for ecological footprint, appropriated signifying that it is claimed captured or occupied. It reminds us that we appropriate ecological capacity for food, energy, waste absorption etc. In industrial regions a large part of these first rank goods are imported. (Chambers, Simmons and Wackernagel., 2000)
Unfortunately when these facts are considered in a human context, there is a clash with the human right for any couple to have as many babies as they wish. This clash between libertarian ideals and ecological imperatives belongs more to the realm of politics than economics, but it should be noted that the Green position is that the issue must be resolved through education rather than compulsion, and that a thorough understanding of the realities of population growth needs be taught in schools.

The second rank of the economy

The second rank of the economy covers the activities of distribution, trade and the manufacture of tools. They imply a societal formation, (rather than a single individual in a subsistence situation), and a certain amount of division of labour.

The tertiary rank

The tertiary rank evolves in a more complex society, comprising administration and public services. Public services ensure that adequate amounts of the first rank items are available to all, in addition to health, education, and welfare. It should be noted that human beings are social animals, and that therefore public services are a necessary and natural part of an economy.

The quaternary rank

The quaternary rank, consisting of financial or monetary services is useful in the most complex economies.

It can be seen from this approach that green economics turns the approach to the subject on its head. Money is the fourth rank of the economy in green terms, although it is always taken as the starting point of macroeconomics in conventional discussions. This difference underpins the difference between green and conventional economics. To adapt an old saying, food will get you through times of no money better than money will get you through times of no food. This is not to deny the importance of money in economic theory, but it is simply to assert that money is a servant of economic functioning, not the master.

Money, Wealth and Resources

Indices

The way in which we gather data to measure the health of an economy is an important determinant of whether money or reality is the basis of economics. Gross Domestic Product is a measure based on finance, which conflates costs, benefits and changes in capital stock Daly (1992) , argues that this is a highly dubious accounting procedure. In preference, green economics would use metrics such as the Index of Sustainable Economic Welfare which measures, among other things, environmental conditions, loss of natural capital and social conditions Ekins (1992) to reflect more accurately the state of affairs in the real economy. It is noteworthy that in a period when the UK GNP showed steady growth, the ISEW shows a recession.

Money

Money is a symbol of value, a symbol that represents the power to obtain real goods and services. Money has no intrinsic value. Its purpose is to serve the smooth running of the economy, and should not be to dominate or dictate the way the economy functions.

The huge international trade in money is intrinsically irrational as it is trade in a symbol, not a commodity or a service. The proposed Tobin Tax on this trade, set at a fraction of one percent of transactions to be hypothecated to the poorest regions of the earth, would help to stabilise this trade and would inhibit divergence between rich and poor at the same time.

Theories and practices that treat money as an entity are not sustainable in the long term as they allow financial value to drift away from the ecological and social realities of life - things which are classed as "externalities" in conventional economics. Green economics internalises these realities into monetary or market values at every opportunity and uses concepts of fairness and ethics to try to reallocate them more constructively to where they might be usefully originate. Conventional economics makes society as a whole pay for these hidden costs.

Conventionally, money can be created from nothing through debt, on the basis of risk assessment by private banks . Debt and interest are one of the drivers of economic growth (Hoogendijk, 1991) , through the cycle of borrowing to increase productivity, followed by increased productivity to pay for the loan.

Green economics will move towards greater provision of money creation by the community on the basis of ecological or social need together with the resources and person power available to fulfil that need. Huber and Robertson (Creating New Money) present a lucid argument and blueprint for this reform.

Money has become the greatest source of power in the world. In theory, ultimate power in democracies should lie with the people, but in practice, state power lies with the wealthy, who can buy public opinion by owning newspapers and broadcasting industries. (Palast 2003) . This political system is more accurately described as a plutocracy or monetocracy than democracy. Green politics would limit the power of individuals and corporations to monopolise the media as part of a healthy economy.

There is a wiki set up for Green Party members to discuss financial reform here.

Dealing with Downturns

Far from being the self equilibrating system that its devotees assume, the free-market economy is inherently unstable, as evidenced by the boom-bust cycles. Given the mismatch between the cornucopian assumptions of market economists and the finite nature of real resources, the parlous state of the American economy in 2006, the fact that Iran is selling its oil in euros rather than the dollar,and especially the imminent arrival of Peak Oil, green economists should plan for how to manage in the event of a Great Depression of the kind that occurred in the 1930's.

One instrument that should be considered in the event of another Great Depression should be the system of money proposed by Sylvio Gesell and (Blanc used in the Austrian town of Worgl in the 1930s. The municipality issued (against an identical amount held by the municipality) 14,000 schillings of currency which the holder had to have stamped for a small fee each month in order to maintain its validity. Money holding in Worgl became a game of pass the dangerous parcel: people were only too keen to pay their bills, and to have people do work for them, in order to get the money off their hands. The result was that Worgl flourished while neighbouring towns languished in economic depression, until an unholy alliance of Banks and Trade Unions compelled the experiment to stop.

Wealth

Wealth is created from natural resources by work. We take a resource from the environment and act (or work) upon it to increase its utility or value for humans or the environment.

Resources

At its most simple, the resource may be an apple, and the action is that of grasping and eating it. At its most complex, it may involve the many operations involved in making a computer, involving science, theory, innovation, design, planning, mining, refining, moulding, assembly, marketing, distribution, support and recycling.

Resources are either finite or renewable.

Finite resources

Schumacher (1989) pointed out that at least some of the wealth generated by using finite resources must be devoted to helping us to become independent of those finite resources.
Resource taxes internalise the costs of depleting primary resources, and make recycling more economic both through increasing the cost of primary resources, and if necessary through tax breaks for recycling industries.
In the case of finite fuels ( coal, oil, gas, uranium) the resource taxes should be hypothecated to energy conservation and the development of renewable energy.

Renewable resources

It is one thing to deplete a finite resource, but to destroy renewable resources such as fish stocks, forests and soil is in an entirely different league of thoughtless irrationality - yet conventional economics and politics is providing an environment which allows this to happen with almost no thought or discussion. Green economics carefully regulates their use to ensure that their capacity is maintained and improved.

Throughput of Resources and Economic Growth

Physically, a sustainable economy that aims to comply with the three axioms will minimise throughput of materials and maximise reuse and recycling of materials. This means moving the model of production from the current linear mode (mine-manufacture-use-dispose) to a new cyclical mode (recover-manufacture-use-reuse-recycle). Both forms require throughput, but in the case of cyclical production the throughput is enormously reduced.
No releases should be permitted that could overwhelm the capability of the biosphere to absorb them, and any persistent toxins must be either not produced, or must be sequestered and/or neutralised. Direct regulation rather than taxation, applies in this case.

Durability must be in-built into products, instead of the current tendency towards failure and disposability, ("planned obsolescence") in order to reduce throughput.

The first and second axioms invalidate the prevailing shibboleth of unconditional economic growth as a measure of the health of an economy, because all economic activity, no matter how cyclical in mode, must involve some throughput (Douthwaite 1992) . It is important however to realise that it is the growth of throughput - that is, the linear process - that makes indefinite economic growth physically impossible, and not necessarily the growth in activity or services per se.
A period of expansion in the green sector of the economy is actually desirable at the present time, as growth could take place in activities connected with the healing, maintenance and development of environmental and social well-being. This green growth would reduce unemployment significantly, at least until the steady - state economy is attained.

Taxation : Internalising costs

Conventional economics disregards any values that do not lie in the financial sphere. Profit is all; damage to society or environment is regarded as an "externality", something which the economist can disregard. Green economics on the other hand demands that these costs are internalised into the product or process by applying a financial value to represent the ecological or social costs of the damage done. The following instruments will be used:

Resource Taxes

In order to reduce throughput and enable recycling to become truly economic, a resource tax will be placed on any process that takes finite resources from the environment. This will include fossil fuels, water, or minerals.

The Polluter Pays Principle

In a Green economy, a product has an impact on health or on the environment, and if the impact is not sufficiently severe to warrant banning the product, a tax or levy is built into the price to cure the problem that has been caused. This principle applies not only to products and processes with an environmental impact, but also to those with an impact on human health Lawson (1996) .

Producer Responsibility

This simple principle, which underlies the whole juridical process as a matter of course when applied to individual behaviour, is a revolutionary idea to economics. It is assented to in principle by successive UK Governments, but they draw back from implementing it, because they fear it would be too difficult.(Personal communication).
Producer responsibility involves placing a levy on all processes and products sufficient to pay for
(a) the cost of researching any effects the products may have, e.g. on the health of environment or humans, and then, if such effects are found,
(b) the cost of neutralising these effects.
It is easy to see where the Government's difficulty lies: it is not a technical problem, but the worry is over the impact on competitiveness, since if not applied simultaneously, the country that applied this measure would find itself at a disadvantage in the market place.
This problem has now been elegantly sidestepped by the Simultaneous Policy proposal Bunzl (2001) . Under this mechanism, political leaders are asked to make pledges to act when an agreed number of competitor leaders have made the same pledge.

Hypothecation of taxes

Since green taxes are often applied for a set purpose, it is appropriate that they should, insofar as is practical, be applied to remedy the problem that they were applied for in the first place. The logic of this process aids in making the tax acceptable to the taxpayer. For instance, some of the tax on cars and fuel should go to support public transport; a tax on sugar should go to re-create a free NHS dental service: a tax on saturated fats should help to pay the NHS for the cost of preventing and treating heart disease, and so on.

Positive Inducements

While levies and taxes will be placed on products and processes which harm health or the environment, socially and environmentally beneficial products and processes can be encouraged with tax breaks and other financial advantages.

Tradeable Credits

One of the disadvantages of the tax instrument is that the rich can continue to pollute and take while the poor simply have to do without. For this reason Tradeable Credits, a form of rationing, could be used. In the case of carbon credits, each citizen will be offered credits for carbon dioxide emissions which they can either use, or place on the market. This is a more equitable and convergent method which can complement the tax instrument. The total amount of credits in circulation can be managed reduced and modified according to society's needs and balanced with resource issues and ecological health.

Work

Work and resources create value. Work can be seen as a way of reducing the entropy of (increasing the order in) a system. The work of the home maker/parent involves a huge amount of re-ordering. The young child is an entropy engine, creating disorder wherever it goes. Parenting involves teaching to distinguish between delight and danger, toy and tool, food and faeces.

In first rank terms, order is the placing of food and water in the stomach of a person who is hungry and thirsty; creating a distinction between a cold wet environment and a warm dry home; and the positioning of waste matter where it will benefit the vegetable kingdom without contaminating the water supply. Viewed in this way, work is an intrinsic part of our lives.

Good work (that is, work that benefits society and environment) can be stimulated in the absence of money, as evidenced by the Local Exchange Trading Systems (LETs) or Time Bank schemes that are growing in scope and number. In these schemes, money is replaced by credits that are exchanged within the participating community for goods or services Tibbett (1997) .

Work has been shown to have a beneficial impact on the health of individuals and also of society (Lawson 1996). Surprisingly, work has been rated close to the top of the list of activities which bring happiness. This is associated with self esteem, financial reward, time structure and the socialisation associated with work. However, some kinds of work, for instance excessive hours, or undemocratic management structures, may have an adverse effect on health.
Green economics affirms the value of good work , although we hope with the increase in ability of machines to relieve us of routine work, work time will decrease and leisure time will increase.
It can be argued that work in manufacture of armaments and explosives should be redefined as a species of anti-work, since their end effect is to increase, not decrease the entropy in the environment.

Unemployment is intrinsically divergent (see below) in its effects. The present benefit system, which applies 100% marginal taxation onto benefits at the point when a claimant finds work, acts to perpetuate unemployment. It is irrational to trap people in unemployment and poverty when there is more than enough work that needs to be done in serving, healing and protecting both society and environment.

A sustainable society would provide benefits to those unable to work, help the able bodied to find good work, and would not withdraw those benefits at the time that the person moves into socially and environmentally useful work. This amounts to a green wage subsidy which could be implemented by allowing companies whose product is certified to be socially and environmentally beneficial to take on new workers, who could retain their benefits. This gradualist approach to the Citizen's Income scheme is set out in Bills of Health (Lawson 1996) . The Citizen's Income is the provision of basic necessities for all from a common fund. Lord (2003) .

The green economy will be more labour intensive, partly because fuels will be more expensive as demand outstrips failing supplies with the onset of Peak Oil. If a job can be done either through burning fossil fuel or through paying a labourer, it is the job of the Chancellor of the Exchequer or the Fiance Minister to make sure that it is economical to employ the labourer.

One of the virtues of the Citizen's Income is that it acknowledges the economic contribution of the unwaged - parents, home makers and carers.

Localisation

Green economics emphasises the importance of the local economy, since it minimises transport impacts, fosters a sense of community and self reliance, empowers people and enhances awareness of our rootedness in our immediate environment. It is not the case that Green economists oppose all trade - only inappropriate and wasteful trade.

Equity, Capitalism and Divergence

A sustainable society maximises equity and justice. It aims for optimal distribution of resources within any nation, between nations, and between the present and future generations.

Intra-national equity

Capitalism has an intrinsic property of increasing the income differential between rich and poor. Green economics seeks ways of minimising this tendency (see below).

International equity

Sustainability requires convergence between the fortunes of rich and poor countries. "Third World" Debt Retirement and the Tobin Tax are available instruments. It should be noted that solar energy will make tropical countries energy rich, and that this, taken with water conservation measures and reafforestation will help produce economic convergence between developed and less developed countries.

Intergenerational equity

Sharing our wealth with succeeding generations involves the gradual decrease in the discount rate, which is defined in Wikipedia (http://en.wikipedia.org/wiki) as follows: The interest rate used in accounting procedures to determine the present value of future cash flows, i.e. the discounted value of an amount of cash at some future date. The concept of a discount rate is an old one - the future is uncertain, and having something now is worth more than (maybe) having it later. This is reflected in the saying "A bird in the hand is worth two in the bush."

However, the discount principle is also covered by another saying, "Blow you Jack, I'm all right" since the costs that future generations will have to bear, for instance in correcting problems caused by global warming caused by our own use of fossil fuels, has been discounted by economists. Green economics gradually changes this discount rate to reflect costs to future generations of present activities, which is another incentive to develop sustainability.

Although most of the legacies that we leave to our descendants are unwelcome, we can leave three positive legacies to future generations: knowledge, culture and trees. Reafforestation acts as a carbon sink and carries many other positive benefits. Financial incentives can therefore be extended to ecologically sound, community based reafforestation schemes. In tropical countries, reafforestation should be commenced in coastal areas and gradually extended inland, and must always be carried out on a community, not an industrial basis.

Capitalism and the Market

"Capitalism" is a word in need of definition, as it comes with strong political and emotional overtones.
Wikipaedia gives the following definition:

Capitalism has not one universally accepted definition, although there are many different definitions of capitalism, but generally refers to one or more of the following:

• a system based on one or more of the following economic practices, most of which became institutionalized in Europe between the 16th and 19th centuries, involving the right of individuals and groups of individuals acting as "artificial legal persons" (corporations) to own and trade private property, especially capital goods such as land and labor, in a relatively free market with the price determined by supply and demand, for profit, and relying on the protection by the state of private property rights and the adjudication by the state or contractually specified third parties of explicit and implicit contractual obligations rather than on feudal protection and obligations.
• competing theories often meant to justify the private ownership of capital, to explain the operation of such markets, to guide the application or elimination of government regulation of property and markets, to advocate a "free market", and in some cases meant to advocate elimination of the state itself (the last almost always referred to as anarcho-capitalism rather than capitalism).
• a belief in, and arguments for, the advantages of such practices and/or theories.

Neither free market capitalism (termed "market fundamentalism" by Soros ), nor the command economies of the communist countries have managed to achieve sustainability. They have failed to produce real human happiness and equity. A sustainable system of economic activity should avoid both free market capitalism and the command economy.
A useful distinction may be made between micro-capitalism, or entrepreneurialism, and mega-capitalism of the giant corporations, where their sheer scale and overweening influence tends to work against human and environmental values.
Of course, some micro-capital enterprises change into mega-capital enterprises, and this process can be met with corporation taxes. Ironically, mega-capital (trans national corporations) often pay less taxes, by means of complex and sophisticated tax avoidance schemes. Lang and Hines (1993) propose a "Site Here To Sell Here" policy to overcome this tendency.

As we have seen earlier, social and environmental impacts of economic activities which are currently classed as externalities will be brought into the price equation through a variety of economic instruments such as taxes and levies. I propose that this system might be termed a guided market.

The guided market values entrepreneurialism, which is an analogue of the tendency of biological species to find and adapt themselves to ecological niches, but subjects the entrepreneur to ecological cost internalisations together with regulations designed to ensure the health of society and environment.

The Green economy will be a mixed economy, containing both private and public sectors.

Consumption and Desire

The conventional economy depends on artificially stimulating demand for goods by means of advertising. Through the ages, wise persons, spiritual leaders and religions have stressed that this is not the way to happiness. We need to learn to desire less things, not more things, not just for the sake of our planet, but for the sake of our happiness.

Corporations

Business corporations have set themselves up as entities with legal rights, but their responsibilities are not nearly so clear. One of the salient characteristics of a corporation is the fact that its members have limited liability, that is, they cannot lose more than they put in. Their sole raison d'etre is to make money. The only inhibitions on this process is the possibility that antisocial actions, once they become known, might damage the brand image of the corporation.

Clearly, there is a need for intrinsic corporate rights to be balanced with intrinsic corporate responsibilities.

• They must be made accountable not just to shareholders but also to stakeholders - that is, all those persons that are affected by their operations.
• They must report on, and be accountable for, the environmental impacts of their operations.
• If people are harmed in overseas operations of a company, those people must be able to take action in the country in which the company is based.
• Corporate Social Responsibility could be scored and ranked into a league table of corporate environmental and social responsibility, allowing people to judge at a glance the standing of any firm. If this standing came to be reflected in the stock markets, an intrinsic connection between duty to shareholders and stakeholders would be established.
• Directors' salaries and bonuses should be reduced if the company is found guilty of breaches of regulations.
  

  These reforms need to be implemented on an international basis, and to do this the Government should employ Simultaneous Policy - the tactic of laying down a pledge to act when a set number of other governments have also laid down a pledge.

   

  
  Economic Divergence and Convergence

  
  There is a tendency in any capitalist economy, especially in Anglo-Saxon capitalist systems for the rich to get richer and the poor to get poorer. This tendency might be called divergence and its opposite, convergence. Divergence is intrinsic in capitalism, as capital can grow by being loaned at interest, whereas lack of capital compels people to take out loans which deplete their wealth by requiring interest payments over time. The creditor/debtor relationship is an unequal power relationship. Redistributive taxation attempts to rectify this, but is usually too weak to offset the divergent power of capitalism itself. The Citizen's Income helps to provide a floor for those without capital resources, but green economics faces a challenge in making sure that resource taxes do not put those on low incomes at a disadvantage. Tradeable credits have intrinsically convergent properties.

  
  Divergence, apart from being unethical, is not ecologically sustainable in the long term, as it leads to tensions between social classes, which in turn leads to conflict, which is always environmentally and socially destructive. Recent studies of the causes of human happiness have found that people were happiest in societies where the highest paid individuals received no more than five times the lowest paid . A truly sustainable economy will therefore be convergent.

  
  The debt/interest system is intrinsically divergent in its effects, and must be corrected. Any correction must be gradual and careful, since the income of many vulnerable people, particularly pensioners, is dependent on interest. Reform of the financial system should begin with taxes and levies on financial transactions that are calculated to make money out of money - the Tobin tax.

  
  Green Keynesianism

  
  Green Keynesianism could smooth out the amplitude of the variations on the economic cycle by using money raised by the state (or community, where appropriate) to stimulate good work during times of economic recession. Good work is work that is of benefit to society or the environment.

  
  Far from being the self equilibrating system that its devotees assume, the free-market economy is inherently unstable, as evidenced by the boom-bust cycles. Given the mismatch between the cornucopian assumptions of market economists and the finite nature of real resources, and especially the imminent arrival of Peak Oil, when demand for oil begins to exceed supply, Green economists should develop plans for managing a Great Depression of the kind that occurred in the 1930's.

  
  One instrument that should be considered in the event of another Great Depression should be the system of money proposed by Sylvio Gesell (Blanc J, 1998) and used in the Austrian town of Worgl in the 1930s. The municipality issued (against an identical amount held by the municipality) 14,000 schillings of currency which the holder had to have stamped for a small fee each month in order to maintain its validity. Money holding in Worgl became a game of pass the parcel: people were only too keen to pay their bills, and to have people do work for them, in order to get the money off their hands. The result was that Worgl flourished while neighbouring towns languished in economic depression, until an unholy alliance of Banks and Trade Unions compelled the experiment to stop.

  In the 1930's the economic stimulation provided by war put an end to the Depression. The danger is that any 21st century Depression could likewise lead to war - over resources. The opportunity for wise leadership is in correcting an any economic downturn by major programmes of work in environmental and social restitution - that is, Green Keynesianism.

  
  Globalisation

  
  The globalisation of trade spearheaded by the World Trade Organisation (WTO), and resulting in the Global Agreement on Trade in Services is an attempt to free commercial enterprises from all environmental, social, and moral constraints. Peter Sutherland, former Director General of the GATT opined that "Government should interfere with the conduct of trade as little as possible , Martin Khor, director of the Third World Network, states that globalisation is driven by a set of values that directly contradicts and undermines the "sustainable development paradigm" . As presently set up, globalisation is incompatible with green economics, and large corporations need to be subject to environmental and social legislation. Ultimately, globalisation represents the victory of business over policy, since the corporations have more wealth and power than many governments. The power of the corporations must be limited by new policies designed for that purpose (Lang and Hines1993) . They also have unconscionable power over politicians since political parties are to a significant extent funded by business. For this reason, political parties ought to be funded by the state on the basis of votes received, and donations by business interests must be made illegal. New trade globalisation treaties are needed (Woodin and Lucas 2004) that will reflect the ecological imperatives that should condition economics.

  Militarism and sustainability

  To change the world economy from its present unsustainable form to a truly sustainable system is possible, but is a huge undertaking, requiring the mobilisation of enormous resources of finance and human energy. These mobilisations are routinely realised by nations in times of war. Sustainability is achievable, but only if the disproportionate spending on arms by governments around the world is brought under rational and reasonable control, and resources diverted to the military are diverted to sustainability.

  
  Conclusion

To create a sustainable economy is not technically difficult. Indeed, it is far easier than coping with the social and environmental difficulties that will flow from continuing conventional economics. The problem arises in summoning the political will to enable meaningful changes to be made in time to prevent irreversible damage to society and environment.

References

Herman E Daly, "Steady State Economics", Earthscan 1992
Begg D. Fischer S. and Dornbusch R. Economics. 7th Edition. McGraw Hill. 2003
Soros G. The Crisis of Global Capitalism, Little Brown and Co. 1998
Chambers N. Simmons, C. Wackernagel. M. , "Sharing Natures Interest, Ecological footprints" Earthscan 2000
Herman E Daley, "Steady State Economics", Earthscan 1992
Jackson T and Marks N "Measuring Sustainable Economic Welfare - A pilot" Insec 1950 - 1990 Stockholm Environment Institute , Stockholm, 1994
Ekins, Paul, "Wealth Beyond Measure", Gaia Books 1992
Mahbub ul Haq, Kaul I, and Grunberg I, eds. "The Tobin Tax: Coping with Financial Volatility", Oxford University Press. New York, London 1996
Hoogendijk W. "The Economic Revolution", Green Print 1991
Palast G "The best democracy money can buy" Robinson. 2003
Blanc J ." Trust and Money - system of stamped money proposed by Silvio Gesell," American Journal of Economics and Sociology, 1998
Schumacher E F, "Small is Beautiful", London, Abacus, 1973
Douthwaite, R. "The Growth Illusion", Dublin, Lilliput Press 1992
Daley, Ibid.
Lawson R, "Bills of Health", Radcliffe Medical Press 1996
Bunzl J. "The Simultaneous Policy", New European Publications, London ISBN 0-1872410-15-4
Tibbett, R. 'Alternative Currencies: A Challenge to Globalisation?" New Political Economy Vol. 2 No. 9 pp 127-133 .1997
Lawson, ibid.
Schumacher EF, "Good Work", Abacus, London1980
Lawson, ibid
Lord C. "A citizen's income" Jon Carpenter Books 2003
Mahbub ul Haq, Kaul I, and Grunberg I, eds. "The Tobin Tax: Coping with Financial Volatility", Oxford University Press. New York, London 1996
Soros, ibid.
Lang T, Hines C "The New Protectionism", Earthscan, London 1993
Layard R, "Happiness" Penguin, London 2005
Mahbub ul Haq, ibid.
Deffeyes K. "Hubbert's Peak : The Impending World Oil Shortage" Princeton University Press 2003
Speech in New York, 3 March 1994
Kohr M. "Globalisation and the Crisis of Sustainable Development" Penang, Malaysia, 2001
Lang T, Hines C "The New Protectionism", Earthscan, London 1993
Woodin M, Lucas C , "Green Alternatives to Globalisation", Pluto Press 2004