Economics is supposedly a study of how we allocate scarce resources within our society. There is, however, a problem with that definition. That comes from the fact that we are now seemingly intent on destroying those resources rather than allocating them.
As The Guardian notes this morning:
Humanity is “on the precipice” of shattering Earth's limits, and will suffer huge costs if we fail to act on biodiversity loss, experts warn. This week, world leaders meet in Cali, Colombia, for the Cop16 UN biodiversity conference to discuss action on the global crisis. As they prepare for negotiations, scientists and experts around the world have warned that the stakes are high, and there is “no time to waste”.
I have no doubt this is correct. All the evidence suggests that we are on the brink of a quite literal existential crisis.
The causes of this problem are not hard to find.
First, humanity decided that the world revolved around its needs rather than that we revolved on the world.
Second, it was determined that the resource that was scarce in the world was the amount of money concentrated in the hands of a very few of the human population, which sum was, it was decided by those with the power to make that decision, to be maximised, with indifference being shown to all objections and the fact that this actually destroyed the world's scarce resources.
The consequence is plain to see. The world has been despoiled to benefit a few, with some in countries like ours being paid off with sufficient creature comforts to ensure that we do not object.
What can be done about it?
Four things. First, we have to redefine the resources available to us. The world is not ours to destroy. If we do, we destroy our capital, and as a consequence, we get poorer - as we face the very real risk of doing very rapidly right now.
Secondly, we have to stop viewing monetary reward as the goal of economic activity. Money is, after all, the one resource that we have of which there is no shortage in supply; governments can create it without limit, even if it might not always be wise to do so.
Third, we need to change the decision-making processes. Since those we have are clearly destroying our planet, they cannot be fit for purpose.
Fourth, we need to change our human recording of well-being to reflect the fact that we are utterly dependent upon the world around us for our survival.
To put it another way, we need a new story, a new concept of capital, and a new measurement system so that we might tell a story of survival when, right now, what we have is a story of destruction.
Technically, these things remain possible. The only problem is that those with the power to decide upon these things do not want to change what we have because they think, utterly unwisely, that what we have suits them very well.
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Capitalism only “works” (for those at the top) if the economy is growing. That is not possible on our finite planet. Decoupling is a scam.
We need to abandon capitalism.
Scarce resources are by design, you can make more profit from them. It’s why the OPEC oil crisis occurred in 1973. By rationing and outsourcing water, electricity and gas in the UK, it forces up prices and generates more profits. That’s why we have no energy and food sovereignty.
Neoliberalism: Profit before people.
Had the economic and business mainstream any intention of living within planetary limits, it would have happened by now.
Prof Pigou identified externalities and proposed Pigouvian taxes to forcefully cost them into economic production about one hundred years ago. It did not happen.
The corporates and finance are still in denial about their impacts on climate and ecosphere, still pushing back about the consequences of their actions.
The tragedy of the commons has become the tragedy of the entire planet.
The entire system, just as with economic theory and practice, is predicated on the falsehood of infinite growth and unlimited supply, and this will not change. “Things fall apart”, is the best we can hope for, from this utterly destructive edifice, and sub human controlling elite.
And we have a numpty of a Prime Minister calling for more of the same, and fewer controls of malign practice.
Pity our grandchildren.
“First, humanity decided that the world revolved around its needs rather than that we revolved on the world…We are utterly dependent upon the world around us for our survival.”
I’m reminded of this quote, attributed to David Suzuki:
“There are some things in the world we can’t change – gravity, entropy, the speed of light, and our biological nature that requires clean air, clean water, clean soil, clean energy and biodiversity for our health and well being. Protecting the biosphere should be our highest priority or else we sicken and die.
Other things, like capitalism, free enterprise, the economy, currency, the market, are not forces of nature, we invented them.
They are not immutable and we can change them.
It makes no sense to elevate [bad] economics above the biosphere.”
Thanks
I am reminded of the 17th century Digger and Leveller Gerald Winstanley
And hereupon, The Earth (which was made to be a Common Treasury of relief for all, both Beasts and Men) was hedged in to In-closures by the teachers and rulers, and the others were made Servants and Slaves: And that Earth that is within this Creation made a Common Store-house for all, is bought and sold, and kept in the hands of a few, whereby the great Creator is mightily dishonoured, as if he were a respector of persons, delighting int he comfortable Livelihoods of some, and rejoycing in the miserable povertie and straits of others. From the beginning it was not so.
He got there a long time ago
Thank you and well said, Richard.
Please don’t tell Starmer as he hates tree huggers, as per https://www.thetimes.com/uk/politics/article/i-hate-tree-huggers-keir-starmer-explodes-over-green-policy-6hhnj9r9x. He may explode at you as he did after Ed Miliband spoke at a shadow cabinet meeting.
He may explode at me if he wishes
I would then ghave the right to explode back – but would try to keep calm and reply rationally
Thank you, Richard.
I wonder if Starmer and his cabinet have any contact with the world outside that narrow clique of advisers.
Indeed we need a new story about pretty much everything.
Unfortunately I have come to believe that much of the populace of the rich countries simply has to again learn what it means to truly value the natural resources that enable our rather comfy life.
I began seeing my life and everyday existence with a natural resource perspective in mind and tried to support others do the same – to no avail. I use about half of the resources or less than the average person of my first-world-rich-country without living anything less comfy. Alas absolutely no one else would like to take that as an example. Not family, friends, kids.
As long as we believe more is better (in terms of natural resources but of course not friendship) things will remain the same.
Just two examples that characterise the mindset of normal people around me, which are to say, pretty much everyone, everywhere behaves like that on some level (and I mean everywhere, as I have lived years of my life in various countries, rich and poor, and people are decoupled from their base of natural resources everywhere!):
Yesterday a friend brought 1,2 liters of water to the boil in a kettle with a scale. To pour a cup of tea of 200 ml! That is, thermodynamically speaking, a very efficient way to waste a lot of energy, unless the aim was to heat my kitchen through the kettle… She simply didn’t care to consider natural resources. Not because she’s evil but simply careless.
People I know rinse their dishes in running hot water without holding it back in a sink. Literally hot tap on, rinse all of the dishes without even touching the darn thing, tap off. And I have witnessed this behaviour in countries with solar heating, but very scarce fresh water availability, so it is mostly a waste of water and resources needed for its supply but also in Europe last year throughout the natural gas price crisis with the result of thousands of Euros of supplementary payment to the utilities. The latter was done by a couple who migrated from a oil rich country.
I spoke to all the people involved about the resources wasted and no one cared just one bit even if it measurably hurt their rather tight bottom line.
A third one for good measure: During the height of the Cape Town water crisis 2017/2018 I witnessed people washing cars, using pools, watering lawns, leaving taps running aimlessly, generating water from illegal wells, and even drilling new wells (!), very near the shore (salt water intrusion).
Now imagine you were born with running, clean, potable water out of wall at all times. Electricity out of wall at all times etc etc
Long story short: I realised everyone has to begin change small and with themselves, if only to enable oneself to see the problems at hand before trying to change the systems we built to keep us alive at the expense of the remaining planet.
@ Rob Link That is the nub.
On seeing the problems … and thinking differently …
Last night on “Countryfile”, there was a celebration of UK industrial arable farming.
We need our annual crop of potatoes kept at 2.5ºC to preserve it and prevent chitting.
In 2024 this is about 4.14 million tonnes.
Now the air-conditioning that is needed to keep potato stores at 2.5ºC is an energy efficient heat exchange process, but ALL the heat generated is simply dumped into the atmosphere. Nor did I notice any PV arrays on potato store roofs.
In any sensible resource management system this “waste” heat would either be used to heat adjacent domestic properties, or sustain glasshouse horticulture.
So far, at least for most rich countries, we have not faced any severe consequences that would force us to correct our destructive behaviour. The rich may think that their wealth will protect them, and the proles, for the most part, are too busy to care. But the time will come when we will have to face reality and learn to respect and fear Mother Nature again. I don’t see much evidence that anything meaningful will happen before that. However, We have to keep trying; there is no other option.
I do not know how the principles of sustainability and resource management can be written into economic practice, and the system we have redirected to first reduce, and then remove, harmful social and environmental activities.
This really is about how degrowth is achieved peacefully.
The profit motive really can be replaced by a form of sustainable resource management for both people and planet.
Both the theory and practice are already there, as are the supranational organisations capable of directing, overseeing and monitoring such de-growth.
De-growth can be managed, but the timescales are short and inertia and hegemony will almost certainly prevent that happening. Just as multilateral nuclear disarmament has utterly failed.
However, while the World Bank and International Monetary Fund exist, with their current corporatist mindsets, there really can be no effective redirection.
These are the dangerous forces of hegemony and inertia.
There will have to be a set of legal duties based on “first, do no harm” as a primary principle, with effective and enforceable sanctions. aka effective regulation. Fat chance.
While we still have the ‘laissez fairy’ seen as a desirable means of running the economy this cannot be achieved.
These environmentally destructive positions really do need to be junked.
I don’t believe that sustainability can be achieved by some green revolution either.
as the quote goes:-
“ The most radical revolutionary will become a conservative the day after the revolution”
and we need conservationists. not conservatives.
Authoritarian centralised states are no better, but planetary sustainability would certainly improve after total economic collapse and the fall of global industrial civilisation.
Man’s decline from 8 billion plus to a few hundred thousand widely dispersed people, would certainly remove our malign influences and practices.
“Men may come and men may go but Earth abides. ”
The inevitable outcome of continuance with the current form of consumer corporate capitalism is such collapse, and this is even seen as a highly desirable vision by the biocentrists.
Man virtually disappears, but the planet endures, and will ‘thrive’ without us.
Personally, I am horrified by this thinking which I consider to be as dangerous as consumer capitalism.
It is as nihilistic as current war mentalities.
Man’s collective inability to realise, let alone counter the extreme self interest of the power brokers of growth capitalism will be fatal for our current industrial civilisation.
Yet the opposing extreme of biocentrism, with adherents either wishing for a return to man as hunter/gatherer, or man as entirely vegan, will also result in the same type of collapse, though biocentrist groups regard this as desirable.
(I shall not repeat Murray Bookchin’s extensive rebuttals of biocentrism, anyone interested can easily find them in his essays.)
So we really are between a rock and a hard place.
It is short term profit or uncontrolled and unmanageable long term collapse.
We are firmly wedged in short term profit mode. Very firmly.
With very few exceptions, the current political class globally, and especially in the UK, are demonstrably unable to conceive of how practical sustainability might work, let alone deliver the kind of actions and society we need for survival, as they simply cannot change direction or divert from growth economics.
Reeves et al really are rabbits in the headlights.
I see no way through this mess as things stand, but retain enough optimism that it is still possible, but only just, to form a just transition.
The only thing Starmer has been right about, so far, is that it is all going to get worse before it gets better.
Neither he, nor his government, is capable of delivering the alternative.
When I have fears……………………
Mark Carney a few years back posed the question of why we only value an elephant when it is dead, turned into ivory – just a bit of the animal, or forest land when the forest is cut down.
That question has still not been answered even though you might have thought that the man who posed it might have made an impact.
What we have got instead is a climate/biosphere/diversity breakdown being turned into a gold rush – the new Klondyke is our dying planet and also us.
This is smash and grab time – open season on everything.
Hell’s version of the Christmas sales at Harrods.
And why? Because some people some where want to be king of the castle , want to be the last people standing, want to measure themselves against the rest of us and nature itself in the quest of ‘being different’ or ‘superior’.
I’ve begun reading about Samuel Beckett and those who influenced him – I do not believe in God but my main fault – perhaps – is that I look maybe for God like characteristics or wisdom in people here on earth. The ‘wisdom’ of the Bible is either overlooked or co-opted into evil ends – and there is nothing to be surprised about through the lens of Beckett at all as to where we find ourselves.
Absurdity is all around us. The constant denial of reality – whether over the source of money or the degradation of the planet, the need to consume to define oneself. Beckett’s is a hard view of human existence that is only relieved by what seems to be a willingness to live your life for and with others? So that seems to me to be the only choice we have unless you want to side with carbon, Neo-liberalism and god knows what else that ails us.
It is the ethical way forward to stand up for the planet, for humanity, for your children when dealing with failures like Sir Keir Starmer and his corrupt crew. Because he failed as soon as he was knighted.
Human beings maybe unique in that we have to live with our death as a reality. We just have to keep complaining and fighting all the way to the slaughterhouse I’m afraid, and who knows, we might just stop short of it if we do’t give up.
Perhaps the political party we need is the New Levellers.
Definitely not the New Seekers
The question that has occupied me for a number of decades is that we actually need degrowth. For me the urgency for this has increased rapidly…see The Great Acceleration.
Is this actually possible within a re-configured, MMT-focussed, economic paradigm?
I would think most definitely not. In theory only perhaps, but not in practice.
And I view ‘Green Growth’ as an oxymoron.
You think not
So what do you think might happen?
Totally agree that “green growth” is not possible, except as a very brief transitional phase between GDP growth and de-growth / steady state within planetary confines.
Degrowth as a term is a little like MMT – somewhat misleading, and I don’t think people get what it involves from the name. However, I also find steady-state underwhelming.
I agree with the current blog discussion on MMT that the titling of the concept needs to be more accurate, and this applies to degrowth too.
Basically, degrowth just means living within our means, individually and collectively.
I suppose the household analogy might almost be valuable for living within planetary capacities, if expressed lucidly.
But we also know that GDP growth is horribly inaccurate, and is a pretty useless concept in practice.
It certainly does not represent progress.
The Genuine Progress Indicator (GPI) is on the right track, and we definitely do need a headline measure that folks can understand, and that economists can use.
I think MMT double entry type accounting is a much superior tool in terms of taking a resource analysis approach simply because it does recognise both inputs and outputs.
However, we need to arrange economies around the notions of sustainable throughputs of materials and resources, so the very processes of production.
The biggest problem is still that there is still little or no global political leadership accepting the problem and its causes.
They don’t understand the concept of overshoot or the urgency in decoupling from GDP growth.
I am entirely unsure academic positions within economic theorising offer a coherent way forward either. I too doubt this is possible in theory or practice.
Thanks
To muse on
I agree with your scepticism, and your statement of some of the problems. Generally I have no idea what people mean by “degrowth” as a real functional proposition, rather than airing glossily glib assertions. We have experience of recessions and even of depresssion (nothing good); but we have no real idea how to manage “degrowth”, or any real understanding of the consequences.
That is our problem
Ulrich Brand (prof at Vienna) has the problem summed up in a (not wholly original) phrase: The Imperial Mode of Living.
The title of a book, of course.
It defines the current human mindset of dominion and extraction, in the western developed nations but also amongst so many more in the elite, middle and aspirational classes worldwide.
(Worth reading, though for academic references unfortunately a lot are in German.)
I think Kate Raworths Doughnut Economics model has a lot going for it when considering how to live within our means on this planet while maintaining a decent standard of living for all.
https://www.kateraworth.com/doughnut/
I agree GDP has to go. It oversimplifies things too much and dominates political thinking across the globe. Even one of its creators, Simon Kuznetz, said, “The welfare of a nation can scarcely be inferred from a measurement of national income”. I prefer the Genuine Progress Indicator as a replacement.
To stay within our planetary boundaries or below our carbon budget, an element of Degrowth (some prefer the term Post Growth to avoid the negative associations of the ‘De’) is, I would say, essential. Prof Kevin Anderson also argues that wealthier nations need to pursue an economic degrowth strategy to beep below the two degrees Celsius limit.
https://kevinanderson.info/blog/avoiding-dangerous-climate-change-demands-de-growth-strategies-from-wealthier-nations/
Our avaricious consumerism is a major problem which is being force-fed by an advertising-dominated internet (the new opium). We need to slow down our consumption; one way of doing that would be to make Sundays special again and reverse the changes that have tried to make it one more weekday. These changes generally affect those on lower pay as well, losing their weekend to work, often at the same rate as a weekday now. An antidote to Black Fridays and a day to do and celebrate all the good things in life.
to add or remark on an earlier comment, but I don’t believe you’ll see movement from the top down. And this is why I harp on communities taking up the discipline of self-sufficiency and grappling with the concept of being able to provide all the basics, food, water, energy for clothing, housing, and the tools necessary to do that from their own territory.
I don’t expect everyone can manage 100% but the exercises important to take. Because extreme weather tears apart global and national supply chains, with increasing frequency, magnitude, and scale. Just think of the people in the US south who will not see road service power water restored for many months at the very least. They must figure out how to make do.
Self sufficiency would necessarily mean independence from national global supply chains so no fuel no cars no materials from the outside and that’s a pretty strong set of requirements, but it is useful to explore that space to come to terms with what is possible.
The energy intensity of modernity is intimately tied to land use. Agriculture is a big hog of hydrocarbons, as are car centric towns, and cities. 25 years after construction, the infrastructure of a car centric urban area needs maintenance. That’s plenty expensive. In the US, it’s causing municipal insolvency. The suburban experiment is proven financially insolvent. Its economic activity is too thin and spread out, with high maintenance cost, which can only be papered over with eternal expansion, which eventually becomes impossible to sustain one way or another. That should sound familiar. It is also the definition of a Ponzi scheme.
So rather than looking to renewables to sort of magically put lipstick on that energy intensive pig, a very different fundamental transformation much must take place.
Small is beautiful. Local is beautiful. And much needs to be done to build new financial and legal structures to promote small and local global in national conglomerates.
I have never been convinced this will happen. But I may be wrong.