RETHINKING CAPITALISM Dr. Simón Levy Dabbah May 2018

The Current Economic Model Technology is modifying our lives, and one of the ways it has changed us is how we get a job. Formal employment is diminishing in the world, especialy since the 2008 crisis. After WW II unemployment levels of 1 to 2% where expected in developed countries. Today the Federal Reserve says that the maximum long term unemployment level is at 5.5%. Do you know how many people does that level represent? The percentage of unemployed people int he world has tripled since 1960, and many jobs today are part time. Today people work more in two or more jobs, instead of only one, and have less to spend, with very little or no job securities. There are more workers competing for a limited number of work positions. Unemployment is linked to 20% of suicides.

The Current Economic Model The labour force is now global, not only local. The cell phone is our mobile office and physical distances have practically disppeared. Quality of jobs is so low that many people prefer to become freelance. Only in the United States there are more that 6.5 million people working in that model. For every 1% increase in part time or freelance jobs, income inequality grows by 1.6% (Silver, Forces of Labor). 34% of full time workers in the United States live hand to mouth, and couldn’t survive with their savings for more than a month. Imagine the situation in less developed countries! There’s a lot of talk about economic recovery, but that doesn’t translate to quality of jobs and quality of lfe. The world economy has become a clunker for generation of jobs and also modifies realities in urban environments.

The Current Economic Model The United Nations has said: “Cities have become trash cans for excedent population and in magnets for low quality jobs in commerce and services”. Industry is over and we are now a neoliberal distributor. Exactly the opposite of capitalism. What can we do? We have to transform our beliefs and reset all that has been taught to us. We can’t live off or consume that we don’t have, to save we must produce. But how? Turn ourselves into specialists to that which generates value, where few can replace us. We must be willing to do that which we haven’t done. Creating value isn’t discovering or creating a need, it’s collaborating to solve the existing needs. We must understand that the economy is collaborative, we must use instead of possess.

The Current Economic Model Karl Marx had already described this in the “General Law of Capitalist Accumulation”. Neoliberalism has become the enemy of capitalism: our opportunity lies within the participative economy. In all political elections in most countries, we can see the rejection of neoliberal sickness. Due to this and to corrupt leaders that kneeled to this model we have such high levels of rejection. The umbrella for this rejection lies in not knowing how to say no to the neoliberal model. Creating a new model doesn´t mean disconnecting ourselves from the world, but preparing ourselves better for it.

The Circular Economy Between 1900 and 2015, the urbanized population increased from 14% to 54%, and is forecasted to grow to 65% by 2050. Cities generated 1.3 billion tonnes of solid waste per year in 2012 and is expected to rise to 2.2 billion tonnes by 2025. More than two thirds of the world’s energy is consumed in cities, accounting for over 70% of global CO2 emissions. Resource extraction increased 12-fold between 1900 and 2015 and is expected to double again by 2050. Material consumption by the world’s cities will grow from 40 billion tonnes in 2010 to about 90 billion tonnes by 2050.

What is the Circular Economy? An economic system based in business models which replace the “end-of-life” concept with reducing, reusing, recycling and recovering materials. Operates at the micro, meso and macro levels to accomplish sustainable development. Micro level: Products, people Meso level: Eco-industrial parks Macro level: City, region, nation, more

The Circular Economy Principles Sustainable use of raw materials Closed-loop manufacturing (No waste at the end of the product life cycle) Adoption of sustainable methods of consumption More extensive commodity markets for keeping products in use Before use: Upstream circularity. Managing resources efficiently Improving productivity in production and consumption processes Minimizing waste Keeping product costs as low as possible After use: Downstream circularity. Preserving the value in otherwise waste materials Maximizing the extraction of that vaue within the system SUMMARY: Value Preservation, Resource Optimization, System Efectiveness

Going Circular: Cities are Key A circular city embeds the principles of a circular economy: Establish an urban system that is regenerative and restorative by design. The idea of waste is eliminated Assets kept at their highest level of utility at all times Use of digital technologies a vital process enabler A Circular City aims to generate prosperity and economic resilience for itself and its citizens, while decoupling value creation from the consumption of the resources. Amsterdam´s seven principles: Closed loop – All materials enter an infinite cycle of use Reduced Emissions – All energy from renewable sources Value Generation Modular Design Innovative Business Models Region oriented Reverse Logistics Natural Systems Upgradation – Includes reconstruction of Human Capital

What Drives a Circular Economy? Growth of awareness that the linear model has resulted in depletion of raw materials and increased pollution, driving to a Circular Economy through: Intellgent Urbanization Supply and Price Risks Ecosystem Degradation Enviromental Accountability Consumer Behaviour Advances in Technology Benefits of the Circular Economy: Changing consumer behaviour Regulating production processes Generating new avenues for employment Reducing demand for new raw materials. Creating a circular supply chain Recovering the resource value of materials to create new value Extending the work life of a product Improving the usage rates of products through shared use

Barriers to Embracing Circular Economies