In 1776 the United States of America declared their independence from Great Britain, and Adam Smith published his "Inquiry into the Nature and Causes of the Wealth of Nations." The U.S. Constitution was adopted and ratified by the new nation in 1788. Drafters of the constitution included scholars who apparently shared Smith’s economic views, regardless of whether they had studied his new book. Smith’s concluded that pursuit of individual self-interest would be transformed into outcomes serving the public interest, as if by an "invisible hand." Nothing in the constitution would lead one to believe that promotion of the "General Welfare" would require the public to be protected from the forces of economic self-interest.
The assumptions supporting Adam Smith’s "invisible hand" theory of public welfare were probably reasonable for the America of 200 years go. Businesses were mostly small, individual proprietorships, none of which individually could measurably affect prices or quantities in their markets as a whole. Productive resources; land, labor, capital, and management; were embodied in the same economic entities. Consumer tastes and preferences could be taken as given -- as determined by their inherent needs and desires and not subject to question or manipulation by producers. Transactions were mostly face-to-face and personal, between producer and consumer, which left little room for deception or misinformation. The human population was too small to inflict any irreversible damage to the natural environment. And, strong cultural, moral, and social values clearly defined the bounds of "acceptable" behavior. Under these conditions, the "invisible hand" was indeed a protector of the general economic welfare.
However, none of the key assumptions above are true in the American economy of today. One doesn’t need to review business statistics to know that large national and multinational corporations dominate today’s markets for nearly all classes of products. Adam Smith gave stern warnings that corporations -- even those of 200 years ago -- represented a grave threat to free market competition. He could not have conceived that a 1924 Supreme Court decision would confer the status of "person" to corporations. Land, labor, capital, and management are now separated among those who own, those who work, those who invest, and those who manage. And, it matters how profit is allocated among them. Today, businesses spend billions of dollars each year attempting to shape consumer tastes and preferences to fit their need – not just to satisfy them. Many vertical layers of markets and middlemen typically separate consumers and producers. Legal deception and seduction of consumers has become "acceptable" business practice.
Today’s human population is clearly capable, and seemingly willing, to inflict irreparable damage to the natural environment in pursuit of its short run self-interest. And a belief that the "greatest greed yields the greatest good" seems to have replaced, or perhaps destroyed, the cultural values of human caring and responsibility. Ironically, belief in Smith’s invisible hand seems to have achieved its greatest acceptance at a time when the assumptions that support it are least valid.
If the U.S. Constitution were to be written today, by true scholars of today, it would have to include Economic and Ecological Bills Rights to complement the political and social Bill or Rights adopted in 1788. Nothing today indicates that the General Welfare can be further promoted without constitutional assurances that the economic and ecological rights of humanity will be protected from the greed-driven machinations of an out-of-control, corporate economy. Lacking constitutional protection for our economic and ecological rights, our social democracy quite simply is not sustainable.
The Wisdom of Changing the Constitution
The drafters of the constitution meant it to be a living document, capable of changing to meet the changing needs of the time. In the words of Thomas Jefferson, "I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors." (Taken from a letter to Samuel Kercheval, July 12, 1816, and inscribed on the walls of the Jefferson Memorial).
Thomas Paine, in his essay, "Rights of Man" stated: "It is perhaps impossible to establish any thing that combines principles with opinions and practice, which the progress of circumstances, through length of years, will not in some measure derange, or render inconsistent; and therefore, to prevent inconveniences accumulating, till they discourage reformations or provoke revolutions, it is best to regulate them as they occur. The rights of man are the rights of all generations of men, and cannot be monopolized by any… The best constitution that could now be devised, consistent with the conditions of the present moment, may be far short of that excellence which a few years may afford."
Thomas Jefferson and Thomas Paine could not have foreseen today’s social and ecological consequences of our blind pursuit of materialism and short-run, economic self-interests. Yet, they clearly anticipated that such derangements and inconsistencies would arise, and to limit their accumulation and prevent revolution, civilized society must at times stop and remove the yolk of our barbarous ancestors by amending, or rewriting, the constitution. Payne also pointed out that it is the responsibility of the people, not the government, to write and amend constitutions. "The fact therefore must be, that the individuals themselves, each in his own personal sovereign right, entered into a compact with each other to produce a government: and this is the only mode in which governments have a right to arise, and the only principle on which they have a right to exist. A Constitution is a thing antecedent to government, and a government is only the creature of a constitution. The constitution of a country is not the act of its government, but of the people constituting a government." Thus we, the people, are responsible for recreating our government so it may promote the General Welfare by ensuring a sustainable human society.
Paine also argues that constitutions and governments must be built upon a foundation of the natural rights of man -- from this point on in this paper to be referred to as basic human rights. In his "Rights of Man," He develops a case to support the following conclusions. 1st, Every civil right grows out of a basic human right. 2nd, Civil power, the power of government, is made up of the aggregate of that class of human rights that individuals lack the power to exercise alone, but can exercise collectively through the organization of government. 3rd, Civil power, government power, cannot be allowed to invade basic human rights that could otherwise be exercised by individuals. Constitutions, in fact, must constitute a consensus of the governed regarding the nature of basic human rights, individual rights which can be exercised alone and civil rights requiring protection by government, and rights requiring protection from government. Upon this foundation, the structure and functioning of government, as outlined in the constitution, must be built.
Toward an Economic Democracy
Many interesting similarities exist between progressive thinking during the times of the democratic movement of the late 1700s and the progressive thinking of today. One example is the chaordic organizational model advocated by Dee Hock (founder and past CEO of Visa Corporation). The model’s foundation of fundamental purpose, guiding principles, and flexible structure bears a striking resemblance to the democratic form of government.
Fritjof Capra’s, in his book "Web of Life," claims that all living organisms are characterized by three interrelated criteria: (1) autopoiesis, or "self-making," patterns of organization, (2) dissipative or continually changing structures, and (3) cognitive processes which continually regenerate the physical structure according to the fixed pattern of organization. In a healthy society, the process of democracy must continually regenerate its economic and civil structure in accordance with the fundamental purpose and principles encoded in its constitution. A healthy democracy is a living democracy. A democracy that has lost its "self-making" ability is already dead.
Zohar and Marshall, in "The Quantum Society," propose a new societal worldview, consistent with new theories of quantum physics, to replace the currently dominant worldview that evolved from the mechanical theories of Newton and Descartes. They state: "Government and public institutions have a spiritual, not just a political, responsibility to make room for dialogue, to encourage it, and to make clear that it is a spiritual process, as the basis for our deeper, shared meaning (our covenant)." Such a dialogue and covenant will be necessary if we are to build a sustainable democracy.
The framers of the U.S. constitution created a civil democracy. They did not create an economic and ecological democracy because they saw no need to do so. However, they created a pattern of organization and procedures for structural change clearly intended to support a process of continual renewal. Provisions for constitutional amendments and constitutional conventions send a clear signal to American society to change the constitution as the human mind "becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances. "
Nothing in the U.S. Constitution would lead one to believe the framers intended to create a civil democracy in order to protect an economic tyranny. They assumed the economy would be democratic because they could not conceive that it might be otherwise. But it is clear that today’s American economy is not an economic democracy – but instead is economic tyranny. The rein of the economically powerful reign over the economically weak is reminiscent of the rule of Great Britain over the American colonies. An uncontrolled corporate economy is exploiting and degrading both natural and human resources of the nation much as if the corporation were king and the people of all lands were its colonial subjects. (See David Korten’s, "When Corporations Rule the World," for full development of this argument.)
Even if the constitution writers of past generations had not intended an economic democracy, it is clear they would not have intended to preclude the current generation from creating one. Their rejection of the rule of monarchy was based on their firm belief that no generation could be forced to sacrifice their rights simply because some previous generation had failed to claim them, or had given them away. In the words of Thomas Paine, "A certain former generation made a will, to take away the rights of the commencing generation, and all future ones, and to convey those rights to a third person, who afterwards comes forward, and tells them that they have no rights, that their rights are already bequeathed to him, and that he will govern in contempt, of them. From such principles, and such ignorance, Good Lord deliver the world!"
There is no fundamental right to continue the economic tyranny, regardless of past court decisions and current economic policies. The people of this generation have every right to do whatever is necessary to claim their right to create within this nation an economic democracy. The people of this generation have a clear civic and moral responsibility to defend this right and to pass it on to the next generation and to all generations to come. The sustainability of humanity will require nothing less.
Economic Rights and Responsibilities of Humans
The Declaration of Independence includes in its opening statement; "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness." The U.S. Constitution is built upon this foundation of the most basic of human rights. The Bill of Rights, the first ten amendments, in general, only clarify and elaborate upon these basic rights. The global Human Rights Initiative of Jimmy Carter’s administration was a more direct attempt to build consensus for a basic set of Human Rights of all people in all countries.
The current public disenchantment with government may provide a unique opportunity for renewing the consensus building process. A consensus concerning basic Human Rights and Responsibilities could provide the foundation for a revised constitution designed to ensure a economic, ecological, and social democracy.
The preamble to any such rights should continue to be: We hold these truths to be self-evident that all people are created equal, and they are endowed by their creation with certain unalienable rights, among which are Life, Liberty, and the Pursuit of Happiness.
We might then more clearly articulate a set of basic human rights, accompanied by their social, ecological and economic implications. In general, social rights represent rights which individuals lack the power to exercise alone but can exercise collectively, and thus, must be protected by government. Economic rights represent those that can be exercised individually and must be protected from government and corporate entities. And ecological rights represent those derived most directly from basic human rights – the ethical and moral rights of future generations. Ecological rights also represent the right of people to live in harmony with other people and with their natural environment.
The list below is provided for illustrative purposes only. Any canonized set of basic human rights, and their accompanying economic, ecological, and social derivatives, would need to result from a national dialogue arriving at a national consensus, and thus, providing the foundation for a sustainable democracy.
BASIC HUMAN RIGHTS AND RESPONSIBILITIES
These basic human rights shall not be denied or restrained, unless exercise of rights by one person denies or restrains one or more basic rights of another. Even in those cases, rights cannot be denied or restrained without due process of law -- except in self-defense of one’s rights against the immediate, unlawful threat to those rights by another.
Any society has a responsibility
to ensure that these rights are available to all, to the extent that they
are available to any within that society. The current generation has a
responsibility to ensure these rights for future generations, to the extent
that they are available to those of the current generation. These rights
may not be bought, sold, or otherwise obtained or given for any reason.
The most difficulty challenges in implementing a sustainable democracy are likely to arise from the integration of its economic, social, and ecological dimensions. This will require a consistent means of resolving short run conflicts or contradictions. Some issues are clearly economic – the costs and benefits accrue almost exclusively to individuals. Others issues are clearly social – individuals must share in the effort if rewards are to be realized. Ecological issues are fundamentally matters of principle – this generation accepts the responsibility to protect the rights of future generations as a matter of ethical or moral principle. The challenges arise from issues that have important economic, social, and ecological dimensions – at the margins or intersections among the three.
Issues of sustainability are not hierarchical, at not least in the conventional sense, but rather is systemic in nature. The economy is a subsystem of society, which in turn is a subsystem of the natural or ecological system. Thus, nature might seem to be dominant over society and society dominant over the economy. However, the economy can either enhance or destroy society, which in turn can enhance or destroy the natural ecosystem. So an interdependent relationship exists among the three – none can survive independent of the other. Of course, nature might well survive the ravages of both economy and society, but it likely would be a nature incapable of sustaining contemporary human society.
The hierarchy of sustainability arises from the source of organizational principles or rules of by which the system as a whole functions. The concept of ecology presumes there are inviolate rules of nature -- a higher order of things within which all else, including human society, ultimately must find harmony. The economy is a creation of society. Thus, society sets the rules by which an economy must function. Thus, there is a natural hierarchy among ecosystems, social systems, and economic systems. Violation of this hierarchy principle is neither impossible nor uncommon, but continual or egregious violations quite simply are not sustainable.
Thus, the natural hierarchy among ecological, social, and economic systems should be reflected in the new bill of rights. The rights of society must first conform with our ethical and moral responsibilities to humanity – not to degrade or destroy those things upon which the future of humanity depends. Only within this context can we meaningfully realize and sustain societal rights – to be a part of a caring, sharing, civil, and productive society. Our economic rights, in turn, can be sustained only within the context of our societal rights. Thus, issues of conflict can be resolved, conceptually, by relying on this natural hierarchy. The challenge of translating the concept into reality may prove far more difficult.
Economics of Sustainability
The economics of sustainability must evolve from the hierarchy of human rights and responsibilities. Theories must be developed which are consistent with the long run sustainability of humanity, not just with short run profit and growth. Current economic theories were developed for a mostly empty, disconnected world, but the world is rapidly becoming full and interconnected. As stated previously, the old assumptions are no longer valid. A new economics, based on new realities, is needed to help ensure the sustainability of human society.
The new economics will require years, if not decades, of intellectual development. However, a few examples of what is needed may demonstrate the general nature of the task.
Human progress cannot be
measured in dollars and cents. It makes no ethical or moral sense to put
prices on natural resources or the lives of people as if they were basic
economic commodities. The dignity and integrity of nature and people must
be protected from the market, even while markets are utilized to facilitate
effective allocation are allowed to price their services – within the framework
of a sustainable bill or rights. Natural and human services, once priced,
will be treated as commodities rather than the source and essence of life
itself. Those who have the most money will get to use the most. Nature
and people will be used up and discarded. We must have an economic theory
that treats nature as something sacred and people as something special.
We must design an economy that supports society and a society that supports
nature, if any of the three are to be sustainable over the long run.
Hock, Dee, "The Trillion-Dollar Vision of Dee Hock, " available from Chaordic Alliance Web Site, DeeHock@ix.netcom.com. 1996.
Jefferson, Thomas. Best of Letters of Thomas Jefferson. Edited by J.G. de Roulhac Hamilton, Houghton Mifflin Co., New York, NY. 1926.
Korten, David. When Corporations Rule the World. Kumarian Press, Inc. West Hartford, CT and Berrett-Koehler Publishers, Inc. San Francisco, CA. 1995.
Paine, Thomas. "The Rights of Man," in Thomas Paine by Harry Hayden Clark, American Book Company, New York, NY. 1944. (pp. 54-223).
Smith, Adam. An Inquiry into the Nature and Causes of Wealth of Nations. (1776) Modern Library, New York, NY. 1937.
U.S. Constitution. Copy accessible at web site: http://www.law.emory.edu/FEDERAL/usconst.html
Zohar, Danah and Ian Marshall. The Quantum Society, William Morrow and Co. New York, NY. 1994.