A Conversation with Dr. Hazel Henderson
(The complete Flip interview, with only minor edits, not found in the book)

Dr. Hazel Henderson (www.hazelhenerson.com) is a world-renowned futurist, evolutionary economist, a worldwide syndicated columnist, consultant on sustainable development, and the author of Beyond Globalization and seven other books. Her editorials appear in twenty-seven languages and more than four hundred newspapers syndicated by InterPress Service.

She told us that her alternative view of economics was rooted in her childhood environment: “I grew up in the English countryside, which could make any kid fall in love with Nature. I also grew up in a way that was very unusual in this age, in that my mother grew all of our own food in a plot of about an acre. It had everything—fruit trees and berry bushes, corn and asparagus, tomatoes, peas, potatoes, everything you could imagine. This was during World War II, when everything was rationed. But Mother could take us down to the pier to bargain with the fishers, and we got our milk from a farm nearby. Experiencing that made me realize that Nature is our prime source of sustenance. For me, Nature was absolutely magical and productive and to be worshiped.

“My mother was very loving and she always had enough love for all four of us. Everybody in our village loved her because she did all of this volunteer work. I grew up really admiring my mother and wanting to be like her. The only thing that was weird was that – even though my father was an accountant and had a pretty good salary – my mother was never allowed to control any money. That led me to an ambition: How do you empower the loving people? How do you create a gender-neutral kind of economics which can elevate caring, cooperative, sharing activities to the same prominence and rewards that competitive, profit-maximizing, self-centered activities receive?”

Living as an adult in New York City, Hazel became politically active out of a concern for her own daughter’s health. “I started a group in New York City in 1964 called Citizens for Clean Air because I had just had a baby and I was really worried about my little girl getting sick from breathing the air. I began to ask why corporations were getting away with pollution. So I started reading books on business and economics and began to figure out what was wrong with corporate law. I wrote my first article and sent it almost as a joke to the Harvard Business Review, to the only woman on the masthead, with quite a belligerent letter saying I was a citizen activist and we were getting laws passed in New York City about not burning trash, and incinerators, and so on. About three weeks later, I got a call from the manager editor of the Harvard Business Review, saying they were going to publish it. I literally rolled on the floor laughing! I never went to college.

“Suddenly I found myself launched into this whole debate about corporate social responsibility. In the early 70’s when nobody was really thinking about business ethics, I would be invited to give lectures at the big business schools. I would always ask, ‘Don’t you have someone more qualified? I’m just a citizen activist who wrote a few articles based on my experience.’ And they would say, ’Well, no. We don’t actually have a course on business ethics; it isn’t even an elective.’ So I figured that I might as well go and let my little light shine, right?

“Things evolved for me from there. And I’m thrilled to see corporate responsibility evolving as well, with full-time corporate responsibility positions in some of the largest companies. As we’ve moved to 24/7 worldwide electronic markets, companies realize their stock price can be broken instantly by making ethical mistakes that can ruin their precious brand. I think the driver has been active citizens and media.”

We asked Hazel if she believes short-term thinking is a flaw inherent to our economic system. “Short-termism is one of the shortcomings of economic theory. I was on the advisory council to the U.S. Congress Office of Technology from 1974 to 1980. We knew all about global warming back then and I used to say, ‘well why can’t we get ahead of this? Why do we have to let this thing unfold?’ It seemed to me that the information people paid attention to was incomplete at best. What doesn’t get into the loop is the value of the environment and ecological assets. And the value of unpaid caring, sharing work—whether done by men or women.

“My book The Politics of the Solar Age laid out the case for a shift from fossil fuels and nuclear power to sustainable energy sources, renewable recycling, remanufacturing – all of that. The 1980’s should have been the decade for this shift, but Ronald Reagan took office and removed the Carter administration’s very limited subsidies for these alternative energy sources. It was so frustrating because everything was in place! Even if Reagan had followed his own free market ideology and simply removed existing coal, oil, and nuclear subsidies, then renewable energy sources would have been able to compete in a heartbeat.

“I was arguing for the tax code to have oil depletion taxes instead of oil depletion allowances. I advocated moving from taxation of incomes and payrolls to taxation of waste pollution, planned obsolescence, and virgin material extraction. Twenty years later we’re still not talking about that kind of tax shift. The current administration is trying to figure out what to do with the tax code and going 180 degrees in the wrong direction.”

Hazel asks a lot of great questions. And increasingly, she’s not alone. “The drivers are becoming obvious in our ecosystem—whether it’s global warming or desertification or sprawl. The issues of oil and energy dependence are causing people to connect the dots and ask, ‘Why is America spending all these hundreds of billions and fighting wars in the Middle East? How could this not be about oil?’

“The problem is politicians and economists who are trying to override the public’s common sense. When I started Citizens for Clean Air, I used to go on radio and TV shows to debate economists from energy companies. They would say, ‘Oh, no, we can’t really afford to do any of the things that this nice lady wants us to do. She’s a very nice lady but she doesn’t understand economics.’ And I always answered, ‘Look, I don’t care how many of these theoretical arguments you put out to me, you cannot override the senses and common sense of ordinary people who smell the polluted air, who can see the dirty water. You can’t override people’s direct experience.’

“There are other problems with our economic assumptions, of course. For one thing, I came to realize how false the Gross National Product (GNP) model of progress really was. It considered education as money thrown down the rat hole instead of the most basic investment we make in our human capital. It carried human beings at the value of zero, the environment at zero, and there was overvalue given to bombs and bullets. It was so completely off the wall.

“I thought, ‘well, nothing is going to change unless we put out an alternative.’ So I devised an alternative set of indicators, which I first published in Paradigms in Progress in 1991. Basically, these social-value indicators have to be multi-disciplinary. You cannot turn everything into economics. And if you’re trying to measure environmental pollution or air quality, you don’t use money coefficients, you use parts per million of junk in the air.

“I traveled all over the world and I would see in other countries evidence of progress that had nothing to do with GNP growth. For instance, the streets in Tokyo were spotless and there was no crime. I remember being on a subway in Tokyo and leaving my purse; when I was walking out of the station this lady runs up to me, puffing, with my purse. How do you measure these things? Those wonderful trains, a 98 percent literacy rate, and none of that would figure into our GNP. In fact, American economists keep going over to Japan and telling them that they’re making a mess of everything.

“Economics is a noble profession. But it’s a stretch to call economics a science. And it can’t run the whole game. The policy inputs to all departments of the government, to scientific studies, have to be multi-disciplinary. And you have to use appropriate metrics for whatever phenomenon you’re studying. Step aside and let anthropologists and ecologists and all kinds of other people get into the policy game.

“I came up with twelve ‘quality of life’ indicators to counter the GNP methodology. Some could be measured in terms of money, but most could not. I decided the key was to produce a holistic score card of progress for a country and make it very clear, so that it would be politically transparent, and you could not in any way aggregate the components into money coefficients to come up with one insane number.

“It was funny… I was telling Herman Daley about this systems approach with multiple unbundled indicators. His objection was, ‘you won’t get your media sound bite.’ But what happens if your media sound bite doesn’t illuminate the public any more than GNP? What I’m trying to do here is slower and more conscientious. It’s really public education. Quality of life is holistic concept.

“Many Americans are already demonstrating an intuitive understanding of this. Surveys by The Center for the New American Dream show that 28 percent of Americans have taken jobs with less salary in order to improve their quality of life, moving to smaller towns where their kids can walk to school, the air is still clean, the community remains intact, and water quality is still good.”

Are other countries rising above the GNP mentality? “In Europe, productivity is measured as total social productivity. When I first went to China in 1986, they were way ahead of us on all kinds of social indicators. It was the same in Japan, mostly because they are very holistic cultures. But right now I would say the leader in all of this is Brazil. Since 1992, when they hosted the Earth Summit, the whole idea of sustainable development became indigenized very quickly. And their statisticians are doing an amazing job. In October of 2003, Brazil hosted the first international conference on indicators of sustainability and quality of life.

“Brazil has even been able to get into dialogue with the International Monetary Fund (IMF) about correcting the GNP and Gross Domestic Product (GDP) models. GDP, as you may know, has no asset account. It’s a cash flow model. So when taxpayer’s money is used to invest in infrastructure – new hospitals, schools, watersheds – that investment is not carried on the books as a hugely valuable new asset. It’s simply expensed in the single year. Well, Brazil is a very urban country, requiring major investment in sewage treatment plants and other infrastructure. But initially the IMF was telling them, ‘Oh no, if you spend all this money on public infrastructure, it all gets loaded into the public debt that you’re carrying and it’s just too big.’

“If you needed to build a production facility – but you couldn’t amortize it, and you couldn’t carry it on your books as a useful asset and amortize it over the lifespan of that asset – you couldn’t run a company. The Brazilian finance minister made that argument to the IMF, and… guess what? The IMF backed off.

“I’ve already mentioned the incredible quality of life in Japan. By current measures, Japan’s public debt is 160% of GDP. That sounds terrible. But fully account for Japan’s assets – the bullet trains and universities, etc – and you cut that percentage in half. In fact, when this argument is completely won with the IMF, and GDP accounts all carry infrastructure assets on the books, it will cut every country’s indebtedness in half. The resulting drop in interest rates could release millions of people from poverty. This is how important statistics are.”

Does Hazel see a hope for the economic flip? “Well, I see all kinds of signs of hope. For example, for the first time, governments are realizing that poverty gaps have to be closed. There’s no doubt now in the minds of most people who are governing societies that a global economy cannot be floating an affluent group in a sea of misery.

“We lose the game by concentrating on military power and weapons. We don’t realize that the game has changed and that it’s all about information and values now. I think the U.S as a global empire is probably going to be the shortest run of any empire in human history.

“For example, the city of Detroit can’t rely on the U.S. automobile industry now; the Japanese are running rings around them. But here’s the most interesting thing: the Chinese are developing their own automobile industry using all of the European emission standards. They have partnerships now with Daimler-Chrysler to produce fuel cell automobiles. And U.S cars will not be sold in China because they don’t meet Chinese emission controls. So you see how we shoot ourselves in the foot over and over again.

“What’s good for most of humanity is for a country that isn’t thinking very far ahead and has regressive policies to be surrounded by other counties that think in more systemic terms. What you have now is a group of countries – India, China, and Brazil – with very new and different thinking that represents most of the world’s population. These new power centers are beginning to take charge and run the debate in the United Nations. They may actually be better leaders than we have been for the past few years.

“What I’m personally trying to do is get the most leverage that I possible can. The way you get the most leverage on social change is to alter the ‘source code’ that’s running the country. As I say, we have a malfunctioning economic source code. Once you expose that and help people to understand why it’s driving them over the cliff, then it’s much easier to get a conversation going.”

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The Flip, by Jared Rosen and David Rippe, illuminates a clear path to a vibrant enlightened world where millions of people already live and thrive. It describes in vivid detail and real examples evidence of an upside down world in decay and a Right Side Up world of authentic beings bright with possibility.
The Flip is an owner’s manual for the twenty-first century full of insights, conversations with recognized experts, thought leaders, and visionaries, and actionable exercises and tips you can use to begin your own personal flip.

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