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Friday
May022014

« Maybe We Don't Want Our Investments to Grow (Much) »

It’s assumed that we want our investments to grow. Everyday the financial news is thought to be good when stocks go up, and bad when stocks go down—though “market corrections” are recognized as part of any growth trend.

But wanting our own portfolios to grow and grow does not reconcile with being stewards of a planet that has limits, or living inside of her community of life—instead of above it. Seeking a new approach to investing is part of OneEarth living. However, since everyone with a pension is counting on growth of investments, we go against our own self-interest if we opt for anything less than a growing portfolio. Or do we? I‘m proposing here that growing our portfolio can actually be going against our self-interest. Other than hedging on cost of living, growth does not fit as a strategy for this planet at the moment.

Years ago I sought refuge in Socially Responsible Investing (SRI). But SRI does not bring us OneEarth living. It’s no more than a somewhat more ethical version of greener, keep-growing capitalism.

At issue is the matter that money and wealth are two different realities. Money is an abstraction without concrete substance. We now know that the Federal Reserve “created” 13 trillion dollars in 2008 to assure the survival of the financial institutions. I say “created,” but they didn’t even print money. They only entered new amounts in a computer, fed those into Wall Street to issue short term credit, purchase securities, and provide guarantees for securities (David Korten).  That’s the degree of abstraction we are dealing with. Frederick Soddy, Nobel Laureate in chemistry, has warned economists that such abstractions are sure to take them into many mistakes because they contravene the laws of thermodynamics—basic laws in our universe.

Wealth has to do with food, shelter, healthcare, education, making peace, and all that adds to life. Life, not money, is the primary measure of whether or not something qualifies as wealth. Money can grow as it degrades life throughout an eco-region; wealth can increase only when the full balance of life, as required for a healthy eco-region, is sustained. That’s going acutely against our self-interest.

To have investments today most like means to have a MultiEarth portfolio which means that it’s about growing money, not wealth. We might ask, “How could it be otherwise since our society and economy are ruled by MultiEarth thinking?”

Hazel Henderson continues to be a leader in urging us to get to OneEarth management of wealth. Her essay, “Real Economies and the Illusions of Abstraction,” says more about what I’ve written on this blog and suggests changes and solutions to get us into investing in wealth instead of money. Her changes get abstraction levels reduced and reconnected to wealth. A .1% fee (that’s less than 1%) on every financial transaction curbs high-frequency trading and speculation (It’s on the agenda of the G-20 nations). State-owned banks like North Dakota has holds finance closer to the location of real activity (over a dozen states have proposals underway). Financial news that only considers what stocks did or where the GDP is trending are reporting abstactions, not wealth. Hazel Henderson pioneered with others the Calvert-Henderson Quality of Life Indicators. These 12 indicators are regularly updated by experts in the fields covered. They measure wealth.

Now, how are Juanita and I going to bring our portfolios in line with this? 

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Reader Comments (1)

What great grist to chew on, Lee. Thanks!
Tony
May 6, 2014 | Unregistered CommenterTony Wolfe

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