Page 241 - Sustainable Cities and Communities Design Handbook

The Next Economics: CiviceSocial Capitalism Chapter j 11 215

understand how businesses work and can only do that with deeper definitions,
meanings, and backgrounds of organizations, people, and their interactions.
The goal of economics must be to take quantitative and qualitative data and
derive rules. Economics needs to expose universal rules based and tested in
reality on a combination of statistics and interactions. From rules, laws can be
articulated (Perkins, 1996). Scientists in fields such as linguistics (Chomsky,
1968) and developmental cognition (Cicourel, 1974) have long investigated
science in terms of developing universal rules and laws. Just like the natural
sciences, natural sciences use observation, description, and hypothesis testing
(Chomsky, 1980). The science argument is spelled out in other works (Clark
and Fast, 2008) and some aspects of the qualitative economic theories are
presented in the following discussion.

The Advantages of Cooperation Over Competition
The first economic principle supporting an agile energy system is that coop-
eration among companies, and among consumers, helps increase civic good
and societal purpose. Clearly an important side benefit, however, is sustainable
development. Or to put it another way, the growth of environmental and clean
energy-friendly businesses is needed as an overall public policy. As California
State Treasurer put it in a speech delivered to the United Nations in November
2003, California must “mobilized financial capital in new and innovative ways,
consistent with the highest fiduciary standards, to meet our ‘double bottom
line’ goals of achieving positive financial returns and fostering sustainable
growth and sound environmental practices” (Angelides, 2003a,b, p. 1).
One of the lessons of the personal computer technological revolution is that
by having an open architecture and allowing other firms to follow standards
and achieve standardization, the IBM model succeeded over other firms that
were trying to go alone. Indeed, the notion of firm cooperation is not new or
unique to alternative economics, but it is clear that it plays a central role in
thinking about how to introduce a new technology and energy system.
Competition will not, and should not, go away in California. Governor
Schwarzenegger appears to be headed into a middle pathway as well,
following much of the “civic market” approach to economics. Today, Cali-
fornia has an electrical generation system, and a minimally competitive retail
market. Due to both legal and practical reasons, there is little reason to
consider reverting to the market structures of the vertically integrated energy
system dominated by three monopolies that the state had before deregulation.
The companies that purchased the bulk of the state’s generation capacity after
deregulation now, since the energy crisis, have medium-term contracts of up to
10 years to sell power to the state’s utilities at fixed rates. This is a significant
shift from the spot market mechanisms.
The California Power Exchange, which is now bankrupt, was created by
deregulation in 1996. It still holds (2004) over $2 billion in assets as the courts