September 25, 2010
from ActivistPost Website



The economy is to serve the people,

not the people to serve the economy.

Manfred Max-Neef



Acclaimed economist Manfred Max-Neef, author of the award-winning book From the Outside Looking in - Experiences in 'Barefoot Economics' (Spanish version: Economia Descalza - SeŮales Desde el Mundo Invisible) recently appeared in a must-see interview on Democracy Now (far below video) where he says a second, more catastrophic crisis is unavoidable because our economic model is "dramatically poisonous."





Max-Neef explains that,

"Greed is the dominant value today in the world and as long as that persists, we're done!"

But he doesn't just mean done economically, he means done as a species.

Going beyond facts and figures to describe economics, his philosophy is based on a macro-world view, where he accounts for the biosphere, human creativity, security and happiness, and life in all of its manifestations. He reveals that the majority of economists have great knowledge, more than ever before, but they lack understanding.


The two differ as,

"knowledge is a function of science, whereas understanding is holistic," explained Max-Neef.

Using the metaphor of love to simplify: we may read and accumulate great knowledge about love, but we can never fully understand it until we fall in love and experience it.

His philosophy of humanizing economics, or "Barefoot Economics," stems from spending years living in and studying the culture of poverty to better understand the economics of it. He concludes that the poverty culture has entirely different principles than our modern culture, where they must depend on enormous creativity, cooperation and solidarity of people.


In poverty,

"you cannot be an idiot if you want to survive," he quipped.

He emphatically assures Amy Goodman in the interview that,

"the next crisis is coming, and it will be twice as much as this one (referring to financial collapse of 2008)." Only for this one, "there will not be enough money anymore - so that will be it!"

Even more frightening are his views that the ecosystem may be beyond critical tipping points.


He says,

"Some important scientists believe that it is definite, we are finished... I have not reached that point, but I believe we are close."

Max-Neef claims the biggest problem is that economists view nature as a subset of the economy, not the other way around, where,

"economists don't realize that if the bees disappear, so will he disappear."

In other words, the notion that infinite growth can persist in a finite biosphere is dead wrong. And we may already have reached a point of no return.

When asked what he thinks needs to change, he replied:

"Oh, almost everything! We act systematically against the evidences we have."

He believes the economy will "catastrophically" self-correct and a new model must emerge with principles to humanize the economy in balance with the biosphere.


His five principles and values to develop a humanized economy are as follows:

  1. The economy is to serve the people, not the people to serve the economy.

  2. Development is about people, and not about objects.

  3. Growth is not the same as development, and development does not necessarily require growth.

  4. No economy is possible in the absence of ecosystem services.

  5. The economy is a subsystem of a larger finite system - the biosphere, hence permanent growth is impossible.

The fundamental value that is needed to sustain this new economy is,

"No economic interest, under any circumstances, can be more important than LIFE in all its manifestations."

When the engineered collapse comes, we can bet that the corporate-government will offer up their "solutions." It's not good enough for the Human World Order simply to oppose tyranny; we must also present logical solutions.


Manfred Max-Neef is offering a philosophy to re-humanize the economy. From the ashes of the collapse will come the opportunity to build a new economy based on human principles of valuing all life. Ultimately, he is hopeful because of the amazing human creativity and solidarity witnessed among the impoverished.


We shall create our way out of the crisis, but it must take place in an entirely new economic model to be successful.

Watch below the entire interview with Amy Goodman on Democracy Now. And follow Manfred Max-Neef's books and speaking engagements here.


Below is an older video describing his work in an indigenous village in South America.













While President Obama is reporting looking into tapping a former corporate executive to become his next top economic adviser, many economists question the path the United States is on.


We speak to the acclaimed Chilean economist Manfred Max-Neef.


He won the Right Livelihood Award in 1983, two years after the publication of his book From the Outside Looking in - Experiences in 'Barefoot Economics.




Chilean Economist Manfred Max-Neef

U.S. Is Becoming an "Underdeveloping Nation"

September 22, 2010








While President Obama is reporting looking into tapping a former corporate executive to become his next top economic adviser, many economists question the path the United States is on. Last week, during our trip to Bonn, Germany, I had a chance to speak with the acclaimed Chilean economist Manfred Max-Neef.


He won the Right Livelihood Award in 1983, two years after the publication of his book Outside Looking In: Experiences in Barefoot Economics. I began by asking him to explain what barefoot economics is.


Well, itís a metaphor, but a metaphor that originated in a concrete experience. I worked for about ten years of my life in areas of extreme poverty in the Sierras, in the jungle, in urban areas in different parts of Latin America.


And at the beginning of that period, I was one day in an Indian village in the Sierra in Peru.


It was an ugly day. It had been raining all the time. And I was standing in the slum. And across me, another guy also standing in the mud - not in the slum, in the mud. And, well, we looked at each other, and this was a short guy, thin, hungry, jobless, five kids, a wife and a grandmother. And I was the fine economist from Berkeley, teaching in Berkeley, having taught in Berkeley and so on.


And we were looking at each other, and then suddenly I realized that I had nothing coherent to say to that man in those circumstances, that my whole language as an economist, you know, was absolutely useless.


Should I tell him that he should be happy because the GDP had grown five percent or something? Everything was absurd.

So I discovered that I had no language in that environment and that we had to invent a new language. And thatís the origin of the metaphor of barefoot economics, which concretely means that is the economics that an economist who dares to step into the mud must practice.


The point is, you know, that economists study and analyze poverty in their nice offices, have all the statistics, make all the models, and are convinced that they know everything that you can know about poverty. But they donít understand poverty. And thatís the big problem. And thatís why poverty is still there. And that changed my life as an economist completely.


I invented a language that is coherent with those situations and conditions.



And what is that language? How do you apply economics or have those situations explain economics changing?


No, the thing is much deeper. I mean, itís not like a recipe typical of someone in your country, fifteen lessons or satisfaction guaranteed or your money back. Thatís not the point. The point is much deeper. You know, I would - let me put it this way.


We have reached a point in our evolution in which we know a lot. We know a hell of a lot. But we understand very little. Never in human history has there been such an accumulation of knowledge like in the last 100 years. Look how we are. What was that knowledge for? What did we do with it?


And the point is that knowledge alone is not enough, that we lack understanding.

And the difference between knowledge and understanding, I can give it as an example. Let us assume that you have studied everything that you can study, from a theological, sociological, anthropological, biological and even biochemical point of view, of a human phenomenon called love. So the result is that you will know everything that you can know about love.


But sooner or later, you will realize that you will never understand love unless you fall in love. What does that mean? That you can only attempt to understand that of which you become a part. If we fall in love, as the Latin song says, we are much more than two. When you belong, you understand. When youíre separated, you can accumulate knowledge.


And that is - thatís been the function of science. Now, science is divided into parts, but understanding is holistic.

And that happens with poverty. I understood poverty because I was there. I lived with them. I ate with them. I slept with them, you know, etc. And then you begin to learn that in that environment there are different values, different principles from - compared to those from where you are coming, and that you can learn an enormous amount of fantastic things among poverty.


What I have learned from the poor is much more than I learned in the universities. But very few people have that experience, you see? They look at it from the outside, instead of living it from the inside.

And you learn extraordinary things. The first thing you learn, that people who want to work in order to overcome poverty and donít know, is that in poverty there is an enormous creativity. You cannot be an idiot if you want to survive.


Every minute, you have to be thinking, what next? What do I know? What trick can I do here? Whatís this and that, that, that, that? And so, your creativity is constant.


In addition, I mean, that itís combined, you know, with networks of cooperation, mutual aid, you know, and all sort of extraordinary things which youíll no longer find in our dominant society, which is individualistic, greedy, egoistical, etc. Itís just the opposite of what you find there.


And itís sometimes so shocking that you may find people much happier in poverty than what you would find, you know, in your own environment, which also means, you know, that poverty is not just a question of money.


Itís a much more complex thing.



What do you think we need to change?


Oh, almost everything. We are simply, dramatically stupid. We act systematically against the evidences we have. We know everything that should not be done. Thereís nobody that doesnít know that. Particularly the big politicians know exactly what should not be done. Yet they do it.


After what happened since October 2008, I mean, elementally, you would think what? That now theyíre going to change. I mean, they see that the model is not working. The model is even poisonous, you know? Dramatically poisonous. And what is the result, and what happened in the last meeting of the European Union? They are more fundamentalist now than before.


So, the only thing you know that you can be sure of, that the next crisis is coming, and it will be twice as much as this one. And for that one, there wonít be enough money anymore. So that will be it.


And that is the consequence of systematical human stupidity.



So, to avoid another catastrophe, collision, if you were in charge, what would you say has to happen?


First of all, we need cultured economists again, who know the history, where they come from, how the ideas originated, who did what, and so on and so on; second, an economics now that understands itself very clearly as a subsystem of a larger system that is finite, the biosphere, hence economic growth as an impossibility; and third, a system that understands that it cannot function without the seriousness of ecosystems. And economists know nothing about ecosystems.


They donít know nothing about thermodynamics, you know, nothing about biodiversity or anything. I mean, they are totally ignorant in that respect. And I donít see what harm it would do, you know, to an economist to know that if the beasts would disappear, he would disappear as well, because there wouldnít be food anymore.


But he doesnít know that, you know, that we depend absolutely from nature. But for these economists we have, nature is a subsystem of the economy. I mean, itís absolutely crazy.

And then, in addition, you know, bring consumption closer to production. I live in the south of Chile, in the deep south. And that area is a fantastic area, you know, in milk products and what have you. Top. Technologically, like the maximum, you know? I was, a few months ago, in a hotel, and there in the south, for breakfast, and there are these little butter things, you know? I get one, and itís butter from New Zealand. I mean, if that isnít crazy, you know?


And why? Because economists donít know how to calculate really costs, you know? To bring butter from 20,000 kilometers to a place where you make the best butter, under the argument that it was cheaper, is a colossal stupidity, because they donít take into consideration what is the impact of 20,000 kilometers of transport?


What is the impact on the environment of that transportation, you know, and all those things? And in addition, I mean, itís cheaper because itís subsidized. So itís clearly a case in which the prices never tell the truth. Itís all tricks, you know? And those tricks do colossal harms. And if you bring consumption closer to production, you will eat better, you will have better food, you know, and everything. You will know where it comes from. You may even know the person who produces it.


You humanize this thing, you know? But the way the economists practice today is totally dehumanized.



You donít think the earth will force this different way of thinking, that weíre reaching the end?


Oh, well, yes. Yes. I believe, you know, that - well, there are some important scientists that already are saying, I believe. I have not reached that point yet. But some believe, you know, and state that itís definite: we are finished. We are finished. In a few more decades, I mean, there will be no humanity anymore. I donít think we have reached that point of it, but I believe that we are pretty close to it. Iíll say that we already crossed one of the three rivers.


And if you look at it and what is happening everywhere, I mean, itís quite frightening how the amount of catastrophes are increasing all over the place, you know, in all manifestations - storms, earthquakes, you know, volcanoes erupting. I mean, the amount of events is growing dramatically. I mean, itís really frightening. And we continue with the same.



What have you learned that gives you hope in the poor communities that youíve worked in and lived in?


Solidarity of people. You know, respect for the others. Mutual aid. No greed. I mean, that is a value that is absent in poverty. And you would be inclined to think that there should be more there than elsewhere, you know, that greed should be of people who have nothing. No, quite the contrary.


The more you have, the more greedy you become, you know. And all this crisis is the product of greed. Greed is the dominant value today in the world. And as long as that persists, well, we are done.



And if youíre teaching young economists, the principles you would teach them, what theyíd be?


The principles, you know, of an economics which should be are based in five postulates and one fundamental value principle.

  • One, the economy is to serve the people and not the people to serve the economy.

  • Two, development is about people and not about objects.

  • Three, growth is not the same as development, and development does not necessarily require growth.

  • Four, no economy is possible in the absence of ecosystem services.

  • Five, the economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible.

And the fundamental value to sustain a new economy should be that no economic interest, under no circumstance, can be above the reverence of life.



Explain that further.


Nothing can be more important than life. And I say life, not human beings, because, for me, the center is the miracle of life in all its manifestations. But if there is an economic interest, I mean, you forget about life, not only of other living beings, but even of human beings.


If you go through that list, one after the other, what we have today is exactly the opposite.



Go back to three: growth and development. Explain that further.


Growth is a quantitative accumulation. Development is the liberation of creative possibilities. Every living system in nature grows up to a certain point and stops growing.


You are not growing anymore, nor he nor me. But we continue developing ourselves. Otherwise we wouldnít be dialoguing here now. So development has no limits. Growth has limits. And that is a very big thing, you know, that economists and politicians donít understand. They are obsessed with the fetish of economic growth.

And I am working, several decades. Many studies have been done. Iím the author of a famous hypothesis, the threshold hypothesis, which says that in every society there is a period in which economic growth, conventionally understood or no, brings about an improvement of the quality of life. But only up to a point, the threshold point, beyond which, if there is more growth, quality of life begins to decline. And that is the situation in which we are now.

I mean, your country is the most dramatic example that you can find. I have gone as far as saying - and this is a chapter of a book of mine that is published next month in England, the title of which is Economics Unmasked.


There is a chapter called "The United States, an Underdeveloping Nation," which is a new category.


We have developed, underdeveloped and developing. Now you have underdeveloping. And your country is an example, in which the one percent of the Americans, you know, are doing better and better and better, and the 99 percent is going down, in all sorts of manifestations. People living in their cars now and sleeping in their cars, you know, parked in front of the house that used to be their house - thousands of people.


Millions of people, you know, have lost everything. But the speculators that brought about the whole mess, oh, they are fantastically well off. No problem. No problem.



So how would you turn that around?


Well, I donít know how to turn it around. I mean, it will turn around itself, you know, in catastrophic manners. I mean, I donít understand how there isnít - millions of people can all of a sudden go out in the streets in the United States and begin destroying things, I donít know. That may perfectly happen.


You know, the situation is absolutely dramatic. Absolutely dramatic. And it is supposed to be the most powerful country in the world, you know, and so on. And even in those conditions, they continue with those stupid wars, you know, and spend more, more, more millions and trillions.


Thirteen trillion dollars for the speculators; not one cent for the people who lost their homes!


I mean, what kind of logic is that?


Acclaimed Chilean economist Manfred Max-Neef, a Right Livelihood laureate. I spoke to him in Bonn, Germany, last week. Among his books, Outside Looking In: Experiences in Barefoot Economics.