System earth: the world is a whole of flows
When making a schematic inventory of all the flows in the present societal system – which constitute the base of the economic reality system – it is very useful to go far enough back in time in order to see its upbuilding and development.
Phase of the mere natural flows
At the beginning of the era when the human species lived as hunters and collectors, the main activity of daily life was providing for food and shelter. Plants and animals, as the sources of food, depended just as men did, on the flows of air, sunlight and water. Of course there was some competitive struggle with several existing animal species. In case climate circumstances became temporarily or for a longer period unfavourable, survival of men, as well as of surrounding fauna and flora, was threatened. Except for ingenuity and readiness to fight against other species or even other groups of people for the available means, men completely depended on nature. In contrast with animals, which were restricted to locations with sufficiently favourable life conditions, men could disperse to less suitable habitats as soon as they mastered fire, on condition that the new regions offered sufficient firewood and base material for extra clothing.
It was a first little step on the way to limit the dependency on the normally necessary biosphere, but at the same time it was also the beginning of an extra pressure on the ecosystem.
With the transition to agriculture and cattle breeding, requiring sedentary living, the biosphere earth became the world for men, for from that point in time on we have an ordering imposed by a part of humanity that wanted to be accepted and respected by the other men.
In terms of flows it is the first decisive intervening step to get a better yield from the natural flows in order to make nature more subservient to men.
Nature still remained the decisive factor for the size of the human species and its locations of settlement. By their interventions men became more conscious of their dependency on regular availability of warmth and light from the sun and rain, and societal rules came about to protect the personal efforts added to the natural processes.
The strive of the smallest entity (family, tribe) for progress (more certainty concerning the means of living) was from then on complemented by the necessity of solidarity – sharing the common interests at the profit of the own progress – with (groups of) other entities. Almost everybody understood from the own living environment the necessity and the benefit of limited societal rules. To the extent that transportation (mainly by water) was possible, the possibility of producing more than the proper needs and of exchanging products arose; that activity in turn contributed to a more structured, ordered world.
Up to and including agricultural societies, control of the flows, which consisted of ordering and structuring the natural flows needed for production of food and clothing, mainly lay in the hands of the mass of small (family) entities, which could dispose of the yield for which they had done efforts.
Phase of physical flows initiated by men
Compared with the duration of the hunter and collector societies the say ten thousand years of agricultural societies are a rather short period. In technological respect it was a restricted transition.
The slow evolution within that system has accomplished limited progress that did not give rise to substantial inequality.
Since the second millennium of our chronology the situation drastically changed by the introduction of among others new agricultural systems, chemistry, and the measuring of time by mechanical clocks. In the eyes of nowadays people this development was not impressive.
It went slowly and in steps with long intervals, but in the meantime men managed to add new flows of essential importance to the natural ones.
The former (primitive) mastering of metallurgy (bronze and iron) was of course also due to unnatural processes, but its influence on daily life was limited. The changes in the world have got into impressive rapids only with the industrial development. Mastering the thermal energy has made it finally possible to disconnect production processes from human and/or animal muscular strength and wind- or watermills.
From then on there seemed to exist no other limit than the availability of necessary materials or base products in nature to start ever more new additional flows of goods. At the beginning one was not (sufficiently) conscious of the fact, or denied it, that the equilibrium of the ecological system was disturbed by winnings, by the increased production in nature, and by the consequences of additional production processes. The biological system earth however is a limited and not growing system in which man has started supplementary flows of waste by his new processes. Compared with the size of the biological system earth those flows are scanty, and it took a long period of time for the effect(s) to become visible or measurable, but that does not alter the fact that the impact caused in the meantime could be irreversible.
For the countless small family entities the transition to the industrial society meant two important changes.
On the one hand a lot of domestic production moved to factories. The time spent to working for own production was indeed exchanged for (often low) paid working hours, for one could no longer do much or earn anything by his own skills, or knowledge of the material, and personal inventiveness. Workers also did not participate in the profits from large-scale production, because small domestic production capacities were taken over without any compensation.
On the other hand the power got lost to decide on the use of the possibly saved means: when investing in the own limited production capacity did not any longer make sense, then only financial investing remained the (second best) option. Financial investing merely leaves a compensation for the provision of money, while the choices of (physical) investing – by which other goals apart from profit can be realized – are made by the much smaller groups of entrepreneurs and assigned managers, who focus mainly on profit, for they are also usually remunerated on that base.
At the same time radical changes took place on the world level. The system of agricultural societies, differing only slightly in technological respect and enabling fair trade among them based upon the comparative local advantages, was replaced by a structural inequality, because the regions showed very distinct technological levels and the agricultural societies, which stayed behind, got into much weaker positions as to the exchanging of products. Because they did not share the knowledge, on which technology based its lead, the gap could be maintained and even further enlarged.
While the volume of the additional flows in the biological system earth drastically increased, the grasp of most small family entities on those flows, and therefore their power, diminished despite the fact that they were the goal of those flows. So much the worse, even the natural flows of water and combustibles (wood) gradually escaped from the grip of men.
Phase of dominance of the flows by covering systems and structures
The transition from the predominantly small autarchic entities (agriculture, fishing, hunting) to societies in which strongly specialized entities (industry, trade) played an ever growing role, caused two other (sub)systems to arise strongly: the money or capital system and the government. Those systems existed already before, but now they got important extra roles.
The entities that started to produce on an industrial scale, needed capital: the specialized economic entities required huge physical investments and were forced to keep large supplies in order to be able to produce continuously. For the other entities (mainly families) this offered the possibility of investing their savings by participating in the capital provisioning money for short or long term loans. Until then, money served mainly as a means of exchange and of storing value, but the extra role of means for financial investing, that grew strongly, could only be realized efficiently by the introduction of another kind of specialized entities: banks.
In agricultural societies the role of government was usually restricted to defence and order: crops and cattle had to be protected against foray by nearby living nations, whereas the vulnerability of those societies on account of their dependence on nature required a strict discipline and effort of all members. In the technologically highly developed societies government also has the duty to take care of infrastructure (physical as well as institutional and educational), which is necessary and indispensable for the full development of the individual specialized entities.
Only well understood and well organized solidarity makes that possible.
A reliable organization of defence and order requires a strong central authority embodied by individual men of power who can make decisions. As soon as government has to create an adequate infrastructure, correct and effective decisions can only result from a thorough examination of the diverting interests and a sound compromise: only division of power and a democratic process can sufficiently take into account the diverging interests and opinions.
The grasp by small family entities, which represent the majority of the world population, on the additional flows, created by human activity, is mainly lost as a consequence of two types of ‘neglects’.
On the one hand the first led to the creation of money systems needed to allow the economic sphere to develop, but the target group concerned did not simultaneously get the necessary control and say in the development of that process: the cooperative vision was no match for the capitalist vision.
On the other hand the facilitating government had expanded, but the necessary equal say of the different interest groups was distorted from the beginning in favour of the financial more powerful entities and individuals. Democracy has not been able to prohibit this, because it served its article in the development that was taking place, and did not have at its disposal a model to try out on reality, which was changing strongly in a short time.
Only a recasting of the economy into the cooperative mould and bringing the power (the government, the structures) as completely as possible under effective democratic control can turn the tide and bring these dimensions of life back into the service of humanity in order to create greater equality.
Technological development and scaling up of economic entities concentrating on production – to which a big part of humanity has to thank the progress of comfort and well-being – need not automatically be accompanied by an increasing inequality. It only is possible to bend that negative trend, if the much more numerous family entities with their low individual weight line up and behave in a more cooperative and solidary way. For the smaller group of ‘producing’ entities, which focus mainly on profit, it is easier to pull the same string than for the very large group of ‘consuming’ entities, which want to realize several goals in a balanced way at the same time.