The Holigent Economic Solution

by A. Nicholas Frank

During 2003, I toured college campuses across California talking to students and encouraging them to prepare for a reality in their post-college years that would be substantially different from what they were then expecting. We talked about the approaching end of cheap oil, rise in pollution, impending environmental disasters, and a probable collapse of the global economy, all of which could come at the time these students would be ready to start their own families. Among the many spirited conversations that sparked, I remember one with a student who assured me that he was not worried about the future because he believed that the boundless inventiveness of the human mind is capable of creating infinite wealth.  

I explained to him that wealth is not created, but rather generated, much like electricity. Electricity generation comes to an end when the power plant runs out of materials, such as fossil fuels that are convertible to electrical energy. Similarly, wealth generation ends when the earth runs out of raw materials, energy and the essential life support capacity required for the value-adding processes that generate wealth. I am not certain that I changed the student’s mind; hard-held personal belief rarely yields to reasoning.

The roots of my concerns for the future of my children and indeed, the entire generation that will inherit this endangered world go back to my childhood. I was born in central Europe during the Great Depression that led to, and ended with, World War II.  My concerns for a world wherein such disasters could occur progressively deepened over the years as I learned about peek oil, global warming, and the vulnerability of the American economy built on speculative wealth and borrowing.

Unlike the Great Depression that took place in the simpler times of the 20th century, a 21st century depression will arrive as a complex package in which economic failure will be bundled with energy crises, higher food prices, climate change, and a new multi-polarization of our globe with the potential for increased global terrorism and the high probability of nuclear war. This will all be the result of negative trends that we’ve failed to stem within the last century. Since 1929, the world population has tripled, resources have diminished, the life support capacity of our planet has been stressed and potential conflicts have multiplied.

There are no political or market solutions for these challenges. Never has the world faced such a complex convergence of problems and there are no tools in America’s toolbox that could fix them. If the government were to succeed in revving up the economy by bailing out faltering financial institutions, it would succeed in raising the energy demand and oil prices higher. In the next round, government would have to bail out airlines and trucking industries to keep people and goods moving. Soon after, the government would have to bail out farmers whose crops got destroyed by global warming fueled by global economic growth that was artificially amplified by bailouts. In a domino affect, the cost of fighting additional wars against new adversaries and terrorists will cost hundreds of billions of dollars, followed by the cost of accommodating or controlling millions of environmental and war refugees. 

Bailouts do not fix broken systems only prolong them. Throwing good money after bad money will continue to pile on an additional multi-trillion dollar debt on top of the existing $10 trillion U.S. debt. At some point, foreign creditors will stop lending to the U.S., at which time the federal government will have no other option but to print money. This will lead to hyperinflation – a road well travelled by bankrupt third world nations, past and present.

On the heap of this socioeconomic rubble, Americans will envy past imperial powers that decayed at a slower pace. The rapid decline of America’s wealth does not provide time for acclimation. The result will be high collective social stress and anger leading to urban riots that will sweep across the U.S. and demolish the remnants of civic and economic order. Cities and states with empty treasuries will be powerless to put out the fires.

A New Socioeconomic Experiment

It is a relatively recent realization that capitalist-consumerism, in its present form, is unsustainable. The reasons are multiple: our endangered planet can no longer carry the global expansion rate of production and consumption to generate the economic growth that sustains capitalism. The concentration of wealth that is inherent in capitalism and the degree of polarization it has caused in the world, for over the past two centuries, is now beyond repair.

Capitalism has become an endangered global economic monoculture in a world without a Plan B. We are witnessing a condition that could lead to the end of economic and social order as we know it and endanger civilization itself. Therefore, the most urgent task we have on our planet is to develop and implement a Plan B to assure the future of our children and of generations beyond.

There is no separate fix for the economy.  21st century economic problems come inseparably bundled with the other big problems of our planet. The solution, therefore, must be an appropriately complex bundle that tackles all of the problems at once.

The Holigent Economic Solution is just such a holistic-systemic solution bundle. It proposes to reengineer the way we live, work, commute, consume and govern ourselves. It also proposes the introduction of a hybrid system of value generation and wealth distribution. Furthermore, it introduces a quality of life measure (QLM) to assure the well-being of people, all at a minimal and sustainable rate of environmental impact.

We propose that governments, philanthropists, foundations, corporations and individuals all pitch in and fund the construction of a model Transitional/Holigent Urban Village on the banks of the soon-to-be revitalized Los Angeles River near downtown Los Angeles. See: The Los Angeles Peace and Sustainability Project*

First: Build a Model Transitional Urban Village.

The transitional compact urban village we propose is a mix of for-profit and nonprofit developments. It is a walkable community with a pedestrian core that consists of low, mid and high-rise mixed-use residential structures. The village will provide light industrial, office, and commercial spaces, a shopping promenade and parks with recreational facilities. Such “live/work” multi-purpose developments will bring employments within close proximity to residences while facilitating the transition from suburban sprawl to vertical expansion and from car-dependent to car-free and sustainable living. Transitional Urban Villages will not sprawl beyond their designated capacity to preserve the walkable human scale. To satisfy growing demand, additional compact urban villages will be built and joined by a high-speed train or monorail.

The community will provide a car-share program that will help facilitate residents’ transition to a car-free lifestyle. The nonprofit complexes will provide affordable housing by rent reduction through community credit (C-credit) earned in community service. Transitional Urban Villages will also enable the introduction of a hybrid economic arrangement offered by the Holigent Solution.

Residents form teams to perform community service and earn community credit (C-credit). Residents will practice their existing skills or learn new ones to apply in their community team activities. Community work may include construction, maintenance, landscaping, environmental restoration, social services, crime prevention, community outreach and mentoring at-risk youth. The Village will provide various options to facilitate the transition to car-free living as well as provide affordable housing by allowing participating residents to pay a portion of their rents with community credit earned through community service. See: Transitional Urban Village

Second: Introducing the Holigent Solution – a Hybrid Economic Arrangement

The Holigent Solution focuses on economic rearrangements in order to provide a degree of separation between local and global economies. This separation facilitates the generation and retention of local wealth. With the Holigent arrangement, economic security and social harmony will be attainable even during severe downturns of the general/global economy.

The heart of the Holigent Solution is the Variable Commitment Allocation Plan (Delta Plan). It is a three-way agreement between participating employers, their employee-residents, and the nonprofit developer/management organization of the Holigent Urban Village community. Such a solution will provide live/work arrangements in mixed-use, car-free pedestrian communities. The Delta Plan contains agreements between participating employers and their employee-residents by which employees agree to work for lower wages during times when staying competitive in the global economy demands it. The pay-off is that car-free live/work arrangement and significantly lowered housing cost, facilitated by community credit earned through community service, allows employee-residents to work for lower wages yet maintaining their housing and quality of life.

During severe economic hard times, a participating affected company would go into a dormant state rather than shut down. Their employee-residents would go on unpaid temporary furlough rather than be laid off. Furloughed employees will be recalled when work is again available. Increased community work allows furloughed employee-residents to retain their apartments and pay most or all their rent with earned C-credit. Employers, in order to avoid permanent shutdown, must be debt-free, insured, subsidized, or otherwise capable of reorganizing or freezing obligations for the dormant period. This plan would preserve a company’s physical, business, and workforce assets as well as its employee-residents’ job, housing and essential quality of life.

The Delta Plan contains three general variations. The details of each plan are negotiated and agreements are drawn among participating employers, their employee-residents and the nonprofit community organization. This solution can be introduced to participating elements of a Transitional Urban Village or within a Holigent Urban Village.

While a Transitional Urban Village may share a substantial part of a village property with for-profit commercial developments, the Holigent Urban Village is mostly or wholly developed and operated as a nonprofit enterprise with reciprocal agreements and advantages for all participants. See: The Holigent Solution

Third: Implementation

During the fundraising process, we invite all to participate and donate. Lawmakers in state and federal governments have an opportunity to consider the advantages of this proposal and channel generous dollar amounts for the purpose of economic and social stabilization, dedicating funds to the Los Angeles Peace and Sustainability Projects.

The live/work arrangement will start on day one. FEMA (or other agencies) will lend mobile homes for use as temporary housing for the first residents of the future Transitional/Holigent Urban Village community. These residents will learn construction skills and engage in the construction of the community, working alongside professional construction crews, earning dollars and/or community credit (C-credit). The earned C-credit will be redeemable as rent payment once the residential units are built and occupied.

The light industrial, office and commercial spaces will be built in coordination with the residential units. When workplaces and residential units are completed, participating businesses and employee-residents can move in at the same time and begin operations.

On completion, when the units are occupied, the nonprofit developer/-management organization will begin to collect rent payments, the bulk of which will be reinvested in building additional mixed-use structures in the service of the

Holigent Solution for further community building.

Fourth: Up-scaling the Holigent Solution

When the completed Los Angeles Peace and Sustainability Project will demonstrate its capacity to fulfill its promises, lawmakers can rearrange priorities and allocate the funds this project deserves. This will mark a beginning of National participation in the race toward economic security, energy independence, and social harmony, in a climate of peace and sustainability.

Every billion dollars grant the federal government allocates to the Los Angeles Peace and Sustainability Project will build about 4,000 comfortable and well-constructed residential units. On the national scale, $100 billion will provide for the building of 400,000 nonprofit affordable housing units and the construction would provide hundreds of thousands of jobs. Once in operation, the 400,000 units would produce $360 million in income per year. Such nonprofit income will be reinvested to serve the stated purpose and mission of the nonprofit developer/management NGO to provide additional high quality living in low cost, secure and sustainable communities. At that level of self-generated income, the Holigent Solution will become self-financed, providing jobs, affordable housing, economic and social security with assured quality of life for a rapidly expanding circle of participants. 

The Potential Benefits of the Holigent Solution

For a fraction of the good money the federal government throws after bad money, the Holigent Solution, once sufficiently primed, could provide self-financed, self-replicating, and lasting solutions. This solution would save companies and jobs. It would fix America’s disadvantage in global competition and bring back wealth to America. The Holigent Solution will bring economic security, energy independence, social harmony and environmental sustainability to its growing number of participants and would positively impact a number of problems, such as:

Impact on Transportation

Reduce car-based commute • reduce traffic congestion • promote public transportation

Environmental Impact

Reduce CO2 emission • reduce chemical pollution • promote environmental restoration.

Social Impact

Provide affordable housing and social security • save or eliminate commute time • facilitate car-free living • promote walking and stress-free healthful living.

Economic Impact

Provide economic security • lower cost of living • reduce reliance on foreign oil and help the U.S. trade balance.

Reduce the Scope and Wastefulness of the Political Process

To a great extent, Holigent communities will be self-financed and self-organized. The managers and residents of such nonprofit communities will dedicate their time and resources to self-manage a wide range of social and economic issues, thus reducing reliance on politicians and the political process.

Reduce the Burden on Government

Once sufficiently primed, self-organized and self-financed Holigent communities will perform much of their own maintenance • provide social services • take care of their unemployed • prevent crime • provide for community outreach and mentor at-risk youth. By taking care of a wide-range of issues, Holigent communities will reduce the burden on local as well as state and federal governments. See: A Bright Scenario

Current Plans

I am currently involved full-time with Holigent.org (at a salary of $1 per year). I am engaged in fundraising for the construction and will build a model Transitional/Holigent Urban Village on the banks of the Los Angeles River (or another suitable location), when funds become available. My intention is to pull together private citizens with substantial wealth and lawmakers with political capital who are concerned about the future of civilization and the health of our planet to fund the Los Angeles Peace and Sustainability Project.

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* “Los Angeles” in the above title and throughout this website used as a geographic identifier.   This organization is not associated with, endorsed, or funded in any way by the City of Los Angeles, or any of its departments or agencies.  Further, all ideas, positions and urban-planning concepts presented herein are those of this organization or the credited authors, unless noted otherwise.