The Economists' Celebration
Paris, December, 2012
The whole room was swinging with the sensual rhythms of the gypsy
violin as Bo Larsson and his fellow economists enjoyed a well-deserved
evening of dancing, singing and jazz at Le Hot Club Grappelli,
on the Rue de Rivoli in the heart of Paris. They were exultant.
What a triumph! On Monday, Bo had been the proud recipient of
the Nobel Prize for Economic Sciences for his work in cobudgeting,
awarded by King Carl Gustav in the grandeur of Stockholm's beautiful
Concert Hall, with all of Sweden watching. On Tuesday he had addressed
the European Union's Council of Ministers in Brussels, and yesterday
he had been treated to a private lunch at one of Paris's top restaurants
with Marcel Duceppe, the French Minister of Finance. All week
long the European financial media had been chasing him for interviews.
The economists' good humour gave Le Hot Club that extra charge,
bringing out the best in the musicians. Bo's wife Dagmar was sitting
across from him, playing footsie with him under the table while
he told his fellow economists about his lunch with Duceppe, laughing
at how little the minister knew about the principles of integrative
and disintegrative budgeting. Speaking in Swedish, they felt free
to be outrageously rude, knowing that hardly anyone in France
Bo and Dagmar were in their early forties, and brought a much
appreciated glamour to the economists' social circle. After years
of being the butt of such jokes as "Why did so-and-so become an
economist? Because he lacked the charisma to become an accountant,"
or "Why did God make economists? To make weather-forecasters
look exciting," it felt good to have done something so radical
that they had become the envy of the academic crowd. Watching
Dagmar flick her blond hair back while flirting with the lead
violinist made up for all the years of Swedish philosophers sneering
at them, saying (for the hundredth time), "An economist is a man
who knows a hundred ways to make love, but doesn't know any women."
Well, guess who was laughing now - and to rub it in, cobudgeting
was grounded in the most exciting breakthrough in philosophy since
Descartes announced the birth of dualism with his Discourse
on Method and unceremoniously dumped integrative thinking
into the Seine almost 400 years ago.
To tell the truth, cobudgeting had not started with Bo Larssen's
interest in integrative philosophy and syntropy theory. It had
started with Bo's step-son Tord, Dagmar's son by her first marriage.
As teenagers, Dagmar and her first husband had been heavy drinkers,
with the tragic result that their son Tord was born with fetal
alcohol syndrome (alcohol poisoning of the fetus), though it was
not diagnosed until he was six years old. When Tord was four,
Dagmar divorced her husband, joined Alcoholics Anonymous, and
then fell in love with Bo. Bo took an immediate liking to Tord,
but sensed there was something seriously wrong, for while Tord
was very affectionate, he was slow to learn, impulsive, and easily
influenced by his friends, who used to enjoy getting him into
As an economist, Bo specialized in full (or social) cost accounting,
the difficult art of measuring the hidden costs of things such
as air pollution or inadequate childhood diet, and bringing them
into the open. It had always frustrated him that for the lack
of a relatively small expenditure at the beginning of a problem,
there were often such enormous costs at the end. If only he could
find a way to link the two ends together, and allow the principles
of investment and return to work in the social realm, the same
way that they did in the business realm.
Tord's difficulties fuelled Bo' frustration. Digging into the
research on fetal alcohol syndrome, he discovered that as many
as twenty percent of the occupants of Europe's prisons were believed
to be victims of the syndrome, costing the taxpayers enormous
sums of money every year to pay for the crime, the legal costs,
the time in prison and the subsequent rehabilitation. If as little
as 1 percent of these costs could be spent on pre-natal education
and alcohol counselling, much of those expenditures could be avoided,
generating potentially massive returns. If only he could demonstrate
the budgetary connections in such a way that it would entice investors
to finance the front-end expenditures. The disintegrative nature
of traditional budgeting lay at the root of the problem, breaking
the deeper connections.
Bo was struggling with the problem in 2006 when he, Dagmar and
Tord took a holiday in Tuscany. Bo took some reading to catch
up on, including the bestseller Syntropy by Jean-Marc Kharoun
and Elizabeth Mitchell, which was the talk of the world. Syntropy
was the newly discovered tendency of all consciousness to seek
organization and integration, the mirror-image of entropy, which
was the well-known tendency of matter and energy to become disorganized.
It was syntropy that provided evolution's fuel as it groped its
way towards greater consciousness and wholeness. It was syntropy
that inspired the eternal tango between hope and defeat, spiritual
drive and material decay. By placing consciousness firmly at the
heart of all that exists, Kharoun and Mitchell re-integrated consciousness
into the heart of reality, not just in physics and the life sciences,
but within the human spirit.
Bo was enthralled. This tension between syntropy and entropy
was the very same tension he was struggling with in his budgetary
problems. Surely, he thought, as he gazed on Tuscany's peaceful
villas and distant hills, disintegrative budgeting was just another
reflection of social entropy. What was needed, he realized with
a flash, was syntropic budgeting, integrative budgeting - budgeting
which would start from the premise that all things were connected
and would go on to construct an entire assemblage of connections,
linking the previously isolated departments. All over the world,
governments put "law and order" in one department and "social
welfare" in another; "environmental protection" in one department
and "health" in another, when their natural state was connection,
not separation. Looking up at the brilliant blue of the Italian
summer sky, Bo knew that it could be done, and that he would be
the one to do it.
Back amidst the falling leaves of Stockholm's autumn, he immersed
himself in the world of chaos theory, meta-organizational principles,
and integrational software programs. To anyone outside the enclosed
world of the university economics department, it would have appeared
incomprehensible, but as Bo worked, he kept a photo of Tord on
his desk to remind him that he was working both for Tord and for
the millions of Tords all over the world, wherever the inefficiencies
of disintegrative budgeting undermined the principles of social
and ecological wholeness.
In the spring of 2008 he presented his work to the Swedish Ministry
of Finance, and that fall the government set up a pilot project
linking the budget for crime and prisons to the budget for youth
and community development. Swedish studies indicated that for
every krone invested in community development and youth projects,
seven krone could be saved in prison and legal costs. By linking
the budgets through an integrative loop, an expenditure in one
department could be turned into a saving in the other, and an
investment could be made to generate a return. Once the process
was in place, the government invited the public to invest $100
million in social bonds, with the promise of a good long-term
return on their investment, potentially as high as 700 percent
over twenty years, reflecting the sevenfold nature of the losses
that occurred through disintegrative budgeting. Suddenly the sleepy
world of budgetary finance was awake with incoming e-mails, and
long before the investments had a chance to render their returns,
people were paying attention.
Over the next three years the principles of cobudgeting were
extended to other departments. In addition to social bonds, Swedish
investors were able to purchase health bonds, family bonds and
ecological bonds, the money from which was used to finance investments
in a range of projects designed to heal a certain aspect of society.
For a relatively small investment in making the homes of elderly
people safe against falls, for instance, investors could enjoy
a 300 percent return on the budget savings from avoided accidents
and their associated medical costs.
Sitting that night with his wife and friends in Le Hot Club Grappelli,
Bo knew that even while they celebrated, the social bonds he and
Dagmar had purchased were paying for the additional help that
Tord needed in school, to protect him from his fetal alcohol impulsiveness.
Across the world, in the watersheds of Washington and British
Columbia, ecological bonds were financing the restoration of salmon
stocks, while in Alabama and Texas, family bonds were being used
to finance pre-marital relationship courses for young couples,
to increase their chance of enjoying stable, successful marriages.
He felt proud that his work was being recognized around the world.
The night was young, and the music was good. He had worked hard
to earn this. "Hej - Dagmar, Jan, Kerstin. Hej - Eric ! Skol !
Here's to all those boring Swedish philosophers !" And they laughed
together, raising their glasses of ice-cocktail guava juice.
I have coined the word "cobudgeting," but I do not know of any
country where the idea is being practiced yet. It is widely accepted
that a dollar spent on programs for youth at risk saves $7 in
prison and legal costs - and that's not counting the emotional
and personal costs to the teenagers and their families, or the
victims of their crimes. Similarly, a dollar spent on measures
that prevent older people from falling saves $11 on medical bills.
Once we start thinking in terms of wholeness, there are many synergies
and positive mechanisms which can work to the benefit of humans,
nature and the planet.
First published in Earthfuture: Stories from a Sustainable
World, by Guy Dauncey (New Society Publishers, 1999). (www.earthfuture.com/earthfuture)
About the author
Guy Dauncey is an author, organizer and sustainable communities
consultant who specializes in developing a positive vision of
an environmentally sustainable future, and translating that vision
into action. He is the author of Stormy Weather : 101 Solutions
to Global Climate Change (New Society Publishers, July 2001),
and ‘A Sustainable Energy Plan for the US’ (Earth Island
Journal, August 2003). He is also the publisher of EcoNews (a
monthly newsletter), co-founder of the Victoria Car-Share Cooperative,
and a consultant in ecovillage and green building development.
He lives in Victoria, on the west coast of Canada.
His website is www.earthfuture.com