Tuesday, June 10, 2014

Debt: Facing the Music

What is music?  An agreement.  What is debt?  An agreement.   They are the same thing. No, they aren’t the same.  Let me explain.  

Music is an activity that people do together based on an agreement about the value of units of time, frequency of beats, frequency of tones,  loudness and dynamics and the intervals between tones in melody and harmony. Of course when I say it that way it seems kind of complicated.  What I’m getting at is that music exists based on human agreement and can’t exist without it.

When musicians play together they must agree to these musical standards and conventions in order to create music rather than chaos.  If the musicians are able to play at the same tempo, same dynamics,  same frequencies, and same harmonies, in effect, play the same song, then they create music together.  What happens when people play music together is a kind of surplus value, that is created when the group agrees to abide by certain standards and conventions.

Before money, which is a kind of handy intermediary between people, lenders lent things and borrowers paid back in the surplus value that they earned over time from utilizing the things that they borrowed. Things were more informal back then so there had to be a lot of fudge factor in the equivalence of loan to debt.  that changed with the invention of unit of account.  You know -“money” .

Nowadays, a  debt or IOU, is an agreement that I am borrowing something that equals an agreed amount of units of value and that I  will pay the equivalent back  plus some agreed upon extra units of value sometime in the future.  The lender agrees to lend the “money” and the borrower agrees to take it and then pay it back later.

With a loan, there has to be agreement or trust between the parties.  If I, the prospective borrower, say:  “ I’ll take your money but I have no intention of paying you back.”  chances are good, that you, the lender, are not going to enter into an agreement. If I have a history of defaulting on my debts, no-one is going to trust me or lend to me.

just as music is made possible by the agreement of the musicians to abide by the rules, debt is ideally about  the possibility of surplus value coming from capital by an agreement between borrower and lender about what is given and what is owed.

Many people, when they say the word “capital”  mean the money needed to get some enterprise going.  “It takes money to make money”  That sort-of thing.  But it’s not the money that creates surplus value it’s the real aspects of capital.

 Money is only virtual.  It only exists by virtue of agreement, and ceases to exist when the agreement breaks down.  Think of wallpapering your house with worthless money and what that says.  

Debt allows capital to be used by someone without having to pay for it now. I, Mr Capitalist, promise to pay you, Mrs.  Investor later, when, presumably I’ve made a profit from your investment.If I as a lender or investor own a debt, it’s because I believe that in the future that debt will generate income.

That’s where money comes into the picture.  Just as a debt represents the promise of future income, money represents the promise of future goods and services.

  If I have money, then I don’t have a thing.  If I buy a thing I don’t have that money anymore.  Thus I hold money because I believe that in the future I will be able to use it to purchase goods and services.  

Is this anything like music? No, because music is a real experience, not just a promise.  Consider songs.  Songs are composed by people and then they enter human society and history.  songs are reproduce-able: other music artists can cover a song, or anybody can sing along with a song.  Some songs are very popular for a generation, other songs like: “twinkle twinkle”  last for generations.  If I can sing in key and follow the right rhythm and melody I ought to be able to reproduce a song so that everyone who hears it recognizes it.  I suppose you could say that songs are a medium of re-creation.  I can pass along a song to others by teaching them or motivating them to learn it.  

Songs are much more than a medium of exchange, they are a medium of shared experience.  I can sing a song with my mother, and both of us can derive deep meaning from it.  I can sing a song in church with the congregation and we will all derive inner strength and passion from singing it together.  

sorry, money can’t do that.  Money is virtual and music is real.  My point here is that surplus value does not come from money it comes from our creativity in using resources and energy to produce goods and services.
Money lowers transaction costs, so it facilitates exchange. It is like adding oil to the gears in order to make the wheel turn easily.   But it has no value in itself.  Music has value in itself: we enjoy it, we teach and learn it, we pass it on, it has social, political,  emotional, and spiritual significance for us.   

Ideally, money as a unit of account, is a kind of messenger that informs us as to how we should organize our wants and desires. But the more debt we carry the more pressure that’s on us to make  more money, and to do the bidding of our creditors independently of what is going on in reality, and the higher the general level of debt the more pressure there is on governments and banks to create money or to favour creditors.

 This is where we find ourselves today.  We have a society where many children believe that the point of life is to grow up and make lots of money.  we have a society where some of the best and brightest go into financial services instead of science and education because that’s where they can make the most money.  We have a global system and global institutions that are about making the flow of money and capital easier, but the protection of human rights and the environment harder.  we have an economy where a tiny minority takes in a huge income and the vast majority barely get by.

someday this will all change and we will realize that money is not a measure of our lives or our happiness. Make music a part of your life, because music adds value by enriching your experience.  The same cannot be said for money.

Thursday, May 22, 2014

Building The New Commons: A Manifesto

Humanity’s strength is in  groups.  In fact, It is our way of cooperating and communicating together in small and large groups that has allowed us to become a dominant form of life on Earth.   

On the other hand the most important thing that we share with all other living things is  our need for energy.  

In fact, human evolution is intimately linked to the need for  energy.  The development of walking millions of years ago made it easier for proto-humans to go out on the savannah and get food;  The invention of stone tools for hunting and dressing meat gave access to a vital source of energy needed to support the growth and development of the larger brain size of modern human beings;  The mastering of fire; and then, hundreds of thousands of years later,  the domestication of plants and animals, and  the development of warfare and slavery -  all these major changes and innovations can be seen as ways of  capturing greater and greater amounts of energy.

As the form of energy that humans have been able to access has become more and more concentrated, our  power to extract from and to transform the earth has expanded exponentially.

 Our present industrial civilization has grown and prospered for the last two hundred and fifty years in lock-step with our growing use of  fossil fuels.  The expansion of human population, industrial infrastructure, our transportation and communication and international trade systems are all  dependent on the highly concentrated form of energy that comes from coal, oil, and natural gas.

Imagine our modern  world without cars, trucks, buses, freight trains, heavy equipment, motorboats, ocean-going tankers, chain saws and anything else that runs on fossil fuels.  It would be a very different world.   We would not be able to live in the same houses,  eat  the same foods, travel to the same destinations, or enjoy the same entertainment without fossil fuels.

With a global economy, for the first time in history billions of people are poised to achieve the same fossil fuel hungry life-styles that we have, here in North America.  But  will that actually happen?  

As the easy-to-get oil has mostly gone we are rapidly reaching diminishing returns, as we turn to the extraction of tar sands oil and tight oil and gas from fracking.  These unconventional forms of fossil fuels are a lot harder to get out of the ground than conventionals.  They require vastly greater expenditures for infrastructure as well as bigger flows of resources like water, natural gas and condensate.  And they  leave a much larger ecological  footprint and far greater output of greenhouse gases.

But the real reason that unconventionals are a dead end is that with each passing decade, the  amount of net energy gained from these extraction techniques becomes smaller and smaller.  In economics, this is called “diminishing returns” and it implies that as we throw more time and money at getting the oil out of the ground and refining it, we will be getting less economic product for our troubles.  Because almost every contemporary economic activity is dependent on fossil fuels it is inevitable  that our economies will slow down and start to contract, as a result.

 We are trending towards more and more resources and effort going into extracting fossil fuels and less of these resources available for human health and welfare.  As a result, we can expect to see future declines in life-expectancy and increases in chronic respiratory disease.

For two hundred and fifty years cheap  fossil fuels have  fueled the growth of the economy. This growth has had dangerous hidden costs.  Costs that, over time, have deeply undermined our ability to survive and sustain our civilization.  

 Economies grow by appropriating the natural  commons. Size matters - eventually the sheer amount of extracting, manufacturing, consuming, and wasting begins to overwhelm ecosystems.  The probability of ecosystem collapse then raises the possibility of human extinction.  This is a risk we don’t want to take on.

The two most important ways to stop ecosystem collapse: stopping fossil fuel use and stopping economic growth - will happen together inevitably, because of diminishing returns.

For most people abandoning fossil fuels makes little sense.  Cars and electricity are very useful.  But the global economic system is locked in a spiral of self-destruction caused by economic growth itself.  As economies grow, they suck up fossil fuels.   Over time the amount in the ground gets depleted and what is left has more impurities and is more inaccessible.  We are looking at the bottom-half of the barrel.

I’m convinced that decreasing my use of fossil fuels is better for my health.  Walking and cycling are fun, safe, and they help lower  stress.  It would obviously be healthier for everyone to use cars less often, but most of the incentives are towards using them more.  After all, buying more cars and using them more often have multiplier effects on the economy

 On the other hand I believe that the global effects of fossil fuel use make a far more persuasive and  powerful argument. An ever tightening series of booms and busts based on oil prices, increasing job losses, stagnant or decreasing wages, accelerating inequality, massive default on debt - that is what we are looking at when we look at the bottom of the barrel.  

For the global economy there is nowhere else to go.  Economic growth inevitably increases the demand for fossil fuels and causes more consumption and waste.  Global economic growth is already accelerating the depletion of resources and  diminishing returns from the energy sector.

What’s the answer?  Is it to find another planet to exploit?  Imagine the preposterous amounts of energy and materials from our own planet we would be wasting on that endeavor. But, if the economy stops growing how do we manage to survive?  The answer is in stopping and reversing the growth of the market and in rebuilding and reclaiming the commons.

Human evolution  is also linked to the development of complex forms of cooperation linked to our development and  use of  the commons. It was not our use of fossil fuels that first  differentiated us from the rest of nature,  it was our creation and development of rules, roles, and dispute mechanisms.

  As humans we collectively create and maintain organizations that further the common good.  Our way of living together, sharing, cooperating, and helping each other in families and communities is what separates us from the apes and all the rest of creation.

Marriage, extended families, clubs and associations,  schools, hospitals, public councils and governments, religions and the scientific process are all created and maintained through the active participation of countless groups of people. This is in  a social sphere of influence that can be described as a common space that humans alone inhabit.

  The commons are the things that we have in common, that no one is excluded from.  These are natural things like air, water, ecosystem services, climate, the ocean, etc.,  which we also share with all other living beings.  

There are also  very significant types of commons that are created from the human imagination: language, music, legal systems, and science are all systems that benefit everyone in society. 

One of the best examples of a human built commons is language.  A language is a commons, because everyone in a certain locality can speak it, everyone uses it everyday, and the evolution of the language, it’s words, pronunciation,  grammatical rules, etc., are all collectively determined.  

Why did humans develop language?  The obvious answer, that we are more intelligent than other animals, begs the question of how we got that way.  Did we create speech because we are intelligent, or did we become intelligent because we created  speech?

According to Christian theology, humans are different because God created us in God’s image. That’s a great metaphor,kind of flattering, although also pointing to our flaws as our own  fault, but it’s misleading as an explanation.

I think it is important to understand what the difference  between humans and our primate relatives is and how it came about.  A tall order, I know, but  the more we know  the real reason for the difference,  the
more consciously we can use this knowledge to adapt to the new challenges that now face us. 
Why did humans come to dominate the world?  Like all other animals we have to breathe, drink water, and eat.  How are we different?

By agreeing to live by rules  we  crossed an invisible line where we  created a common space in which everyone could participate and everyone could benefit. By doing so, we left behind the Darwinian world of dominance hierarchies.  
Not completely behind, mind you because dominance relationships are our default mode.  It takes constant and continual vigilance to maintain a commons, otherwise people take advantage and take over.  That’s what rules are for, but they must be enforced.  

All other primate spe
cies are organized according to dominance hierarchies.  The biggest strongest male gets the pick of the females and the choicest food. 

In contrast, human nature is about the constant   tension between  hierarchies and egalitarianism.  We have individuals who are leaders and who dominate others, but we also have rules and institutions like marriage, that help groups of people to live together peacefully.

When proto-humans developed stone tools they also developed the means to decisively overcome dominance hierarchies.  A man with  a stone blade can easily kill a physically stronger man.  According to the Anthropologist Christopher Boehm, evidence from various contemporary nomadic hunter-gatherers suggests that for most of human history, previous to the neolithic, we lived in egalitarian  bands where dominance hierarchies were actively suppressed by violence or the threat of violence.

It was by creating and maintaining small egalitarian societies that humans made the first rule-governed commons possible. This, more than any other factor, is the basis for human exceptionalism.  

We are not descended from chimpanzees,  but we share an ancestor from millions of years ago, so chimps are human’s   closest relatives.
 A group of humans  that is rule-governed is many times more effective than a group of chimpanzees in spite of the fact that chimpanzees are physically stronger.

A dominance hierarchy, the natural state of chimpanzee life is a lot like a corrupt political system.  The dominant male has control over resources and the life for the subordinates is stunted and unpleasant.   In a corrupt system, goods and services may trickle down to the rank and file, but the majority of benefits go to a small elite.  

In a human commons like language, the system is self-organized to benefit everyone.  Everyone participates and everyone benefits from sharing information. 

 In dominance hierarchies information is sequestered to serve or to avoid serving the interests of the dominant male.  This results in a lot of wasted resources that are  used solely to keep the majority impoverished while the dominant and his confederates get the lion’s share.

Language is representational. It can reveal  what is not visible or present to others and thus it benefits the group more than it benefits any particular individual. That is why it was much more likely that it developed once humans created egalitarian societies.

  Before the crucial development of human egalitarianism sharing information was not as desired a  trait.  For the dominant, language would have made it harder to keep what he had to himself. And it would have been the same for the subordinate.  For the subordinate to share would have meant giving up more of what she had appropriated to the dominant.

Language, organization, education, planning, and rule-making: these are all human abilities that have enabled us to  create thriving cultures and civilizations.  It is significant, that all of these activities are things that people do together that do not require fossil fuels.

Even though our present civilization depends on fossil fuels the human race has survived most of it’s existence without them and will do so again.  Adopting renewable forms of energy will be important, but because their net energy production is much lower than conventional fossil fuels, they are unlikely to power a modern economy let alone economic growth.  Also, aspects of their production may be equally dependent on fossil fuels. Thus, there may be no choice but for society and the economy to run on less power.

The problem is in our reaction to the economic damage that this will cause.  Declining pay cheques and increasing costs will fuel mass discontent and anger.  Because of the amount of money riding on these issues, people will likely be misinformed by corporate and government propaganda. There is a real danger that people will be manipulated by blind prejudice and hatred to turn to authoritarian and fascist regimes.

All the more reason that we need to start now to increase the growth in the Commons.  The more Commons we build together, the more we participate in building community.  The more we participate in building community the more we are immunizing ourselves from political forms of tyranny. By participating in governing the Commons we are inoculating ourselves  from apathy and raising the level of knowledge and the quality of discourse.  

   In order to survive for more than the next fifty years we must  leave fossil fuels in the ground.  But if we were to abandon fossil fuels too quickly we would risk economic, political, and social collapse. We must gradually abandon fossil fuels and build up new commons in their place.  This will help us maintain better health and welfare over future generations at the same time replacing the bipolar world of economic booms and busts with a system that serves everyone equitably.

Monday, October 14, 2013

How Old Are We?

I am sixty years old.  When confronting my age I realize that the older I get the more vulnerable I am to sickness and injury.  I know that as  we age we slowly lose physical strength and ability.  It is hard not to get depressed about this.  The prospect of eventually losing control over more areas of our lives and becoming increasingly dependent on others is not a happy one.

On the other hand ageing can be a deeply satisfying experience, if we are less likely to be under pressure from a job, or under the stress of raising children.  In that case,we can relax, sit back and see everything from the perspective of time and experience, and if they are receptive, we can pass on some of our knowledge to the next generation.

But what about our civilization?  In the past, all civilizations grew old and died, just as individual people did.  So what age do we perceive our present civilization to be?  Are we immortal, forever growing bigger and more complex, as most Economists seem to think, or have we reached a peak and are we starting our energy descent  now,  as many Permaculturists and Peak Oil types believe?

How old is Capitalism and what is its state of health at present?  The present day Capitalist system had its roots about three hundred years ago in eighteenth century Netherlands and England.  

Let’s imagine that a civilization is like an individual, it is born, grows up, matures and then dies.  I find it useful to use developmental psychologist Erik Erikson’s stages of life: trust versus mistrust in infancy;  Industry versus Inferiority in elementary school years; (I skipped a few stages here) -  Intimacy vs Isolation during the twenties and thirties,  Generativity versus Stagnation for the 40’s to 60’s and finally - Integrity versus Despair for the last years of  life.  So, what stage is our Capitalist civilization in? My guess is the last stage.

The last stage is the one that interests me because my parents are elderly and fragile and because I work with people of that same generation in a nursing home.  Integrity versus Despair -   Do we deal with ageing gracefully or do we rage against the dying of the light?  Do we feel it all was worth it or are we filled with bitterness and the  urge for self-destruction?

We’ve done the generativity vs stagnation stage.  We did not stagnate.  We out-produced the combined output of every other civilization in history  many times over. We can be very proud of ourselves.  But, now comes a reckoning time.   

The older you get the harder it is to take in food and process it.  It is the extraction of chemical energy from food that is the basis for our ability to do  physical work.   Ageing has to do with declining access to energy.
The elderly are physically weaker, with weaker muscles, circulation, digestive systems, and immune systems.

  All previous civilizations were agricultural and were fuelled by the domestication of plants and animals.  That all changed with the advent of Capitalism and Industrialism.   For two hundred and fifty years our Industrial civilization has run on the energy from fossil fuels.  Now we are  reaching the stage where access to fossil fuels is becoming constrained by natural and economic limits.  

The fact that we are now drilling more and more holes in deeper and more dangerous places and requiring more energy to extract the fossil fuels indicates that we’ve run out of the cheap stuff.  There’s still oil, but it takes more energy to get it, and at some point it won’t be economically feasible to extract it anymore.  This will inevitably lead to global economic contraction because access to energy is the basis for all of the physical output of the economy.

Our civilization is like a stroke victim. When you have a stroke it affects your coordination and often taking in food becomes more of a problem.  Food has to be pre-chewed or pureed. In effect, more external energy has to be applied to make the food digestible. It takes more energy to get the energy.  Just like fracking and digging up the tar sands.  

In Nature the process of taking more energy to obtain energy can quickly exhaust itself, leading to decline and death, and it is no different in civilizations.

Sorry for the bad news.  Now here’s the good news:  remember Integrity versus Despair, Erik Erikson’s last stage of development?  Here’s the Integrity side:  We can think about and relate what is happening now to our understanding of history. Instead of despair, we can build on our sense of integrity.
In the past, when one civilization died another replaced it after a few hundred years.  We don’t know what will happen when a global civilization kicks the dust because it has never happened before, but the effects could be much more encompassing and destructive.

To keep on fracking and digging up the tar sands as energy costs skyrocket is like giving someone at the end-stage of life aggressive and expensive life-support,  while outside the Intensive Care Unit, babies and children are dying of starvation.  

The point is, when the economy stops growing economic competition becomes more of a zero sum game. We cannot continue to let  the few benefit at the expense of the many. The key to our continued survival is in stopping and reversing the current trend towards greater inequality.   It’s going to be more inclusive and representative political institutions that will be the best chance of saving civilization.

Thursday, January 24, 2013

Debt: The First Two Billion Years

What  is debt?   The word is only one syllable, only four letters, but it packs an entire world of  significance and complexity that few other words do.  In the modern world debt is synonymous  with money. But if we stop at money, we are not doing the concept of debt justice, for it goes far deeper than money in both human and evolutionary history.

I think we need to look at debt as a more universal concept that includes all of life.  I see debt as an ever-changing balance between the present and the future.  If too much of what is present is consumed then debt grows too high and the  future is undermined.  If not enough of the present is taken  then we die before we even start.  There must be a balance.

OK, forget the metaphor.  What is it really? Debt is an obligation owed by the "debtor" to the "creditor".  It is an agreement, a contract, that rests on  legal  definitions of property and human rights. This  presupposes human society, governments, associations, and markets,  language, memory, and human intentions, and the ability of legal institutions to enforce those rights.  Debt exists over time periods that are bound by human events. In these time periods debts can be paid down, renegotiated, forgiven, kept in perpetuity, processed into derivatives, and  can even create a global financial meltdown.

The growth of debt and money are not subject to physical laws but to conceptual laws, ie, mathematics because symbolic concepts are what humans use to communicate and make agreements.  Since debt is not tied to physical laws it can, in theory, grow exponentially.

If humans went extinct there would be no debt, the debt would be paid, so to speak. So debt is ultimately bound by human mortality.  There are limits to the growth of debt therefore.  And human action depends on the existence of the Sun, the Earth and earth, as in dirt and rocks.  These are all finite although Economics treats them as virtually infinite as if they were contained within the human economy.  This is a fatal error, meaning the science of Economics needs to pull a 180.

Why do humans have debt, while other critters don't?   Maybe debt is a biological subject too.   What is the Darwinian explanation?  Let's go back to the metaphor - "an ever-changing  balance between the present and the future"  Every critter has some form of it:  Invest energy now to keep predators at bay in order to survive and pass on descendants; Consume too much and die back;  Exist in symbiosis with the eco-systems and maintain descendants;   Grow too big, too fast and run out of resources; Migrate to other continents, but eventually run out of eco-systems to destroy, then go terminal.

What I'm getting at is that while debt is a purely human invention, it's meaning and  history have a "biological" continuity.  We use debt in human society to finance investments that we expect to pay off in the future and to help pay for emergencies  All living things sometimes borrow from the future to keep from starving and being eaten.  As long as they succeed in balancing the present and the future they can keep on going, if not, not.   There are a lot of dumb ways to die.
Humans are known for being smart and problem solving.   Humans evolved the capacity to cooperate and share information.  That's what made language, technology and the economic system of trade and markets possible.

There is an ancient association of debt to morality.  The code of Hammarabi stated:  " an eye for an eye, tooth for a tooth."  This is moral reciprocity:  if I struck out your eye you could strike out my eye in retaliation.  The concept of punishment derives from this moral sense -  You do something wrong, and you have incurred a debt which gets repaid by a punishment.  When something goes wrong it has to be righted.  There is a balance.  the goddess of Justice with her scales exemplifies this moral sense of debt.

This derives from the need, in human society to  balance  individuals and groups.  Groups are what makes humans superior to other animals, but individuals are the source of variation.  Without individual variations populations cannot adapt to environmental changes and they go extinct.  But individuals can take advantage of group sharing and cooperation by free-riding without contributing to the group.

 Moral rules and religion are ways that groups control individuals, so that individuals are, for the most part, prevented from taking advantage of the group as a whole. If this were not the case, then groups would have fragmented long ago and humans would have lost out to other primates.

Primate societies operate on dominance relations.  One's ability to reproduce is reflected by one's social dominance.  This creates a social order but it leaves a lot of potential unrealized.  In human societies people are infinitely more cooperative.  Compared  to all other animals, only humans care for dependents for extended lengths of time.  The idea that  we owe a debt to our parents or to society has been around for a long time.  It reflects the time we have spent being fed and cared for before we are ready to strike out on our own.

Only humans have marriage, which is an agreement between two families that many ways resembles  a debt because it is the recognition of a mutual obligation.    There are countless wedding ceremonies and customs which in some way symbolize the transfer of debt from old to new, such as the customs of dowries and bride price. The exchange of rings symbolizes a down payment, and the marriage ceremony itself is a mutual contract. The object of marriage has traditionally been for procreation, thus the wedding can be seen as the loan of resources that are required to start a new family.  This may well be the original form of debt.

 Thus, in inventing and using the  concept of debt we recognize that our very existence derives from a give and take between generations and between humanity and nature. 

Unfortunately there is one difference between what the concept of debt means in the human economy and what it means in the bigger economy of nature.  In Nature's economy  we can't re-negotiate ourselves out of extinction by filing for bankruptcy.     Can humans negotiate with Climate Change?  In this sense I don't think the huge debts in non-renewable resources that we are piling up will ever be  forgiven.  I think we are in for a rude awakening.
The creativity with which we use the concept of debt today should not blind us to the fact that we need to understand the physical limits of human action and energy use.  In other words, we need to know how the human economy can exist and sustain itself within the Earth's Economy.  Let's use our brains and knowledge to manage all kinds of  debt wisely so that we can continue to have a future.

Saturday, June 2, 2012

The Economics of De-Growth

It is the law of the universe. What goes up must come down. And it’s not whether we are coming down, but how fast we will come down that is the issue.  

We seem stuck on economic growth, but it is not a wholesome growth, it is a growth that undermines itself.  The ecological economist Herman Daly asks:  “ When the economy is growing, what is it that is getting bigger?”.  

“Throughput is the relevant magnitude for answering the question of how big the economy is” , Daly says.    It’s “the metabolic flow of useful matter and energy from environmental sources, through the economic subsystem and back to the environmental sinks as a waste. “  

Most economists picture the human economy in a separate box somewhere, existing independently of nature.  It’s a way of simplifying the initial assumptions in order to build a model of human behaviour .  This assumption works  well for deriving supply and demand curves but there is a problem with these assumptions when the concept of economic growth is introduced.  With growth, our assumption of the economy being independent of nature leads to disastrous results.  

Why is this idea of throughput relevant? Because the earth and the living system that exists on it is finite. There is a finite amount of energy and materials available to the  web of life that supports us.

 The human economy is a part of the earth’s Eco-systems but the economy is growing big enough to threaten the entire web of life.  A major extinction event, like the one that finished off the dinosaurs 65 million years ago,  the kind that has happened about every 100 million years in Earth’s history, is happening right now.  And it’s human economic growth that is fueling it.  We are burning up our future inheritance in a giant flare of fossil fuels.

If the economy is growing what is growing?  Throughput.   Through-put is taking things from nature, then processing them and consuming them and sending the remains back into nature in a degraded state. The best illustration I have seen of this idea is  an entertaining two minute  youtube video called “The Impossible Hamster.”   

If we live on a world, that world has bounds.  We cannot escape those bounds. However,  we could extend out our future on Earth if we stopped economic growth.

 In his new book Prosperity Without Growth, British Economist Tim Jackson, explains what’s involved in stopping growth, why it’s controversial, and sketches how we would go about doing it.

One of Jackson’s arguments is that  The focus  of the present system on continually increasing the efficiency of  labour is  wrong when the result is increasing inequality,  job loss, and declining communities. .  A job is a fundamental part of a meaningful life.  Every community works better when there is less unemployment.  Jackson suggests that job-sharing and worker owned enterprises be expanded.  

This is a similar position that local, Vancouver author Conrad Schmidt also emphasizes in his book “Efficiency Shifting”. What economic efficiency usually means is needing less people to do the same thing.  So if agriculture becomes more efficient, then we get a lot of unemployed agricultural workers. 

Schmidt recognizes that we cannot keep growing the economy in order to reduce this  unemployment.  He argues that we can avoid  both growth and unemployment if we  let certain economic sectors such as education, healthcare, and agriculture become more inefficient by employing more labour.  Too much efficiency in education and healthcare leads to inferior quality and less caring. These are activities that benefit from people taking more time rather than less time to do the job right.  

Schmidt devotes a separate chapter to agriculture.  In it, he argues that a policy of encouraging organic farming would be better for farmers in less developed nations because it wouldn’t flood global markets with cheap food, as does present U.S. policy of encouraging industrial farming. Plus organic farming  employs more labour and uses less pesticides, and encourages less meat production than industrial farming.

Economic efficiency is not as important as the fulfilment of human potential.   People ought to be productively employed, jobs ought to be fulfilling and rewarding.  Economic incentives ought to be turned around to support investment in social capital, natural capital, and in strengthening the  public sector.   People’s worth and dignity need to always be respected over the demands of the market.  

As the authors of Economics Unmasked say:  Economy for the people, not people for the economy. Profits and prices need to be driving sustainability not the degradation of humanity and nature.

 As Tim Jackson argues, the financial sector needs to change into the Eco-economic sector:  the overall incentive structure should encourage investments in renewable energy and in increasing resource efficiencies, and discourage the underemployment of human resources.

There needs to be a massive shift from consumption to savings.  And a new incentive structure in place to encourage investment in public enterprises like mass transit, railways, universal education,  and in the conservation of Eco-systems for they form the basic support for our economies.If we invested in Eco-system health and maintenance we would be ensuring our survival and the stability of our civilization.  

Because the earth’s climate has gotten warmer we know we’ve reached a limit.  We need to stop the growth of throughput, if we are to save the earth’s biological systems from degrading.      Better to take a slow descent by putting on the brakes now, then overshooting the peak and running off a cliff.  Planning for the worst and making ourselves more resilient, more able to survive and adapt to shocks to the system  is the most prudent option.
 It’s not because it’s not possible, it’s because of the way we define economic variables and the way we’ve structured the system that it seems so difficult to see our way out of it.  Let’s redefine economics so that the economy is recognized as a part of the Earth’s biosphere.  This alone would lead to fundamental changes.  

The other big point of leverage is fossil fuel use.  Fossil fuels are exactly what has allowed our economies to  grow and they have done this by fueling the rapid acceleration of throughput.  This acceleration is at the heart of what is causing global warming and mass extinctions.  

One of the least difficult, but most significant things we could do to change this destructive spiral is to accompany our children to school, either by walking or by cycling, rather than driving them.   And if that is not physically possible consider moving to a community where it is safe to walk or cycle to school.   It is an opportunity to let our children  be more active and self-sufficient.  The results will be healthier adults and a healthier society.  

Our dependence on fossil fuels is a terrible trap that is slowly choking the life out of this planet. There should be massive dis-incentives to fossil-fuel use.  A carbon tax, should be put on all fossil fuels at the well-head or in the coal mine.  All subsidies to the fossil fuel industries should be eliminated.  It is, after all, the richest industry on the planet and can survive very well without subsidies.

There are many unacknowledged costs to economic growth and fossil fuel use. For example, destruction of clean water by fossil fuel extraction and processing.  The loss of local community from tv,internet, and corporate franchises. The greater risks of cancer from being downstream of tar sands oil extraction or nuclear plant disasters.   The increase in respiratory ailments due to particulate matter and toxic byproduct from burning fossil fuels.  The loss of our physical health from our overuse of motor vehicles and subsequent  lack of exercise.  Our loss of mental health and the destruction of once viable communities  due to the  Increasing isolation and excessive individualism of consumer, suburban, automobile culture. I’m only highlighting a few of the costs. And others could list many more.
Unfortunately our political and ideological systems are fixated on seeing economic growth as the only way forward.  This almost religious tendency -  to see growth as our salvation, is having the bizarre consequence of leading our political and economic elite to embed themselves with the fossil fuel industry.

It’s a big mistake to leave economic planning up to our political leaders.    We should All participate in planning a new economic system.

Sunday, July 24, 2011

Jeremiah and Resilience

Resilience is the ability of communities, cultures, and social systems to survive major shocks. When we look around us, what social institution stands out as being resilient over a major span of time?

What stands out for me is the history of Judaism. What other religion, language, or people has survived in the face of repeated foreign conquests, forced exiles, and enslavement for 3000 years and counting? I would call the continued survival and prospering of Judaism the prime historical example of human resilience.

What is it then that made Judaism resilient? Strange as it seems, I believe that part of the answer to this question lies in the writings of the Hebrew prophet Jeremiah.

The lifetime of Jeremiah ( 655 -586 BCE) was a profoundly crucial time in Jewish history. Jeremiah had predicted that Jerusalem, the Jewish capital, home to Solomon’s great Temple, was about to be conquered by the Babylonians, a prediction which was not implausible given that at the time the Babylonian army was laying waste to most of the rest of the Middle East.

But the people of Jerusalem were in denial. Jeremiah was characteristically unrelenting, he unnerved them, as he would us today. They did not want to hear Jeremiah’s message and they rejected him and brutalized him, treating him as a pariah.

Unfortunately for the people of Jerusalem, Jeremiah’s prophecy came true. After a prolonged siege, which caused terrible suffering, the Babylonian army took Jerusalem and destroyed the Jewish temple, put to death much of the Jewish leadership, and enslaved the rest of the Jews and marched them off to Babylon. Jeremiah they spared, and he was left to live where he chose.

At this point the Jews as an identifiable people should have disappeared from history. But, in fact, just the opposite occurred. During the next sixty years of slavery, the exiled Jewish community thrived and developed a resilience that is maintained to this day.

Within a hundred years of the exile the Hebrew Bible had been compiled and gathered together, largely in the form we see it today, with Genesis, Exodus, Deuteronomy, Kings, Lamentations, Psalms, the Prophets, and the wisdom literature.

What role did Jeremiah, who was left behind in the ruins of Jerusalem, have in all of this? Because the Jews were in exile, and the Jerusalem temple was no more, the strategy, championed previously by Jeremiah himself, of basing Judaism on a centralized temple with its hierarchy of temple priests became unworkable.

But this went against the whole tenor of ancient Middle-Eastern religions, which was that any particular religion was based on location.

Jeremiah, at some point, realized that basing a religion on sacrificing at a temple created a fatal vulnerability. His innovation was to promote the idea of an “inner covenant” - an inner relationship between individual Jews and God best exemplified by the daily Jewish prayer from Deuteronomy called the “Shema”.

By reciting this prayer everyday any Jew could keep covenant without the need to make sacrifices in the holy temple. Thus permitting Judaism to thrive in exile, or in any place where there were a gathering of Jews, even where a Jew existed outside of any Jewish community.

The Shema is still recited twice daily by observant Jews. At the very beginning of the day and at the end of the day. It goes:

Hear, O Israel: The Lord our God, the Lord is one. And thou shalt love the LORD thy God with all thy heart, and with all thy soul, and with all thy might. And these words, which I command thee this day, shall be upon thy heart...

The book of Deuteronomy, which contains the Shema, as well as a second retelling of the Ten Commandments, hence the name “Deuteronomy”, appears to have been “rediscovered” during King Josiah’s rein. Jeremiah was closely associated with King Josiah and there is good reason to believe that Jeremiah probably had a hand in writing Deuteronomy and in its “rediscovery”.

The centralization of Judaism in the sacrificial temple in Jerusalem had given the Hebrews the illusion of enduring power. But successive conquests by the Babylonians, Greeks, and Romans proved the folly of this idea.

When things fall apart, people often have difficulty facing and accepting the changes that are required to survive.The choices seem to be either to embrace expediency and abandon tradition altogether, or rigidly adhere to tradition and deny that anything has really changed.

But the first choice of abandoning tradition leads to dissolution and the eventual loss of identity. The second choice, of rigid adherence and denial leads to escape from reality and self-destruction as the familiar world falls apart around one’s ears.

This situation is a lot like the worsening ecological and economic crisis that confront us today. In the face of these crisis many people may recognize that there is a problem, but they will deny that we need to make any major changes to our comfortable way of life.

Like Jeremiah, modern environmentalists predict disaster but things still don’t seem that bad,so they are mocked and ignored as scolds and annoyances.

But, eventually this commonplace view will prove untenable, as the global economic and political crisis deepens. We may well have to adapt to severe economic shocks and the breakdown of social structures in the wake of these shocks. Our entire global civilization may be at risk of collapse.

In today’s world, political leaders have relied on the continuing prospect of economic growth to solve our most pressing problems - best exemplified by the idea that a rising tide lifts all boats. But the expanding global economy is rapidly drawing down our reserves of fossil fuels, while the global exponential increase in energy use is leading to the spectre of uncontrollable global warming.

The idea that we can continue growing our national and global economies in the face of finite resources and finite reserves of fossil fuels is a similar kind of illusion to the one in Jeremiah’s day that a religion could remain powerful only if it continued to be identified with a certain location.

. Our Industrial way of life, that is predicated on the massive utilization of cheap fossil fuels, appears to us as powerful and impregnable. But it is incredibly vulnerable to disruption once we reach peak oil, and the effects of climate change begin to overwhelm us.

The signs of these coming catastrophes are all around us, but, as in Jeremiah’s time, most people choose to ignore them or discount their relevance. The lesson of Jeremiah is that resilience - the ability to survive shocks and insults - comes not from economic or political power or advanced technology. Resilience comes from inside of us as we work together on achieving a sustainable civilization.