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.