Unsustainable

Greetings good citizen,

Occasionally one will stumble upon something that is truly worthy of the word ‘profound’, such as this little sharp-shooting paragraph from yesterday’s Some Assembly Required

I am an ardent reader of Mr. Michaelson and deeply appreciate his worldview (which is, admittedly, far ‘mellower’ than my own.)

For your edification, good citizen:

Saturday, April 21, 2012
SAR #12112

There are many truths, but only one reality.

Inertia: A lot of attention being paid to income inequality in the US, as though that were the problem. It is not. Our income inequality is a symptom; the disease is the control of the government and the political process by the rich. It is unrealistic to think that politicians bought and owned by the rich, by Wall Street, and by the corporations would turn on them. It's not going to happen. There is no democratic way to reverse the conditions that now prevail. There probably is no peaceful way, either.

The ‘poetry’ of the above statement is elegant beyond compare…and note, he did it all without using a single exclamation point!

Had it been me, there would be at least a half dozen (and two thirds of the passage would have been bolded.)

But then there is the content itself, which is exquisite!

It perfectly illustrates what I have been saying for quite some time…that we are trapped and there is no (peaceful) way out.

Which may make today’s primary story appear somewhat superfluous.

The environmental movement, and indeed the progressive movement as a whole, is at a critical crossroads. Defending past accomplishments and continuing to strive for stronger environmental laws and regulations are obviously important and necessary. However, the challenge now is greater. As James Gustave Speth, a leading environmentalist and former adviser to two presidents puts it: “For the most part, we have worked within this current system of political economy, but working within the system will not succeed in the end when what is needed is transformative change in the system itself.”

What Speth and countless others have come to realize is that the world simply cannot wait for the increasingly remote possibility that somehow “business as usual” will generate a politics that can alter the deteriorating trends. A new economic system of environmental stewardship must be built from the ground up, community by community, state by state, region by region in the coming period.

Just such a “new economy” movement is, in fact, quietly building up momentum just beneath the surface of media attention—paradoxically, in large part because the failure of national and international strategies produces more and more economic and ecological devastation. Citizens in all parts of the country have been taking the lead in constructing new economic models and institutions that not only promote democratized economic opportunity, but also, ecological sustainability.

Um, what a bunch of hogwash! Yes there are people, er, ‘attempting’ to establish a ‘green-for profit’ infrastructure out there but it’s NEVER going to work because of the ‘profit’ part of the picture.

Let me explain:

The ‘world of capitalism’ (which we all live in) is awash in debt. Much of this debt is ‘unsustainable’ because it is ‘unreasonable’. (in case you don’t understand what I’m getting at, I’ll cut to the chase and say it, I’m pointing at the huge ‘rent seeking’ portion of the economy.

No irony should be lost on the fact that our entire financial system is based on this ‘rent seeking’. Something that is currently exemplified by Benjamin Franklin’s (now) exceeding foolish remarks about passbook interest! Because he was unable to conceive of a world where a quadrillion dollars would be chasing that five percent…)

Understand that the world of capitalism was based on ‘perpetual’ five percent interest for regular savings accounts. So called ‘riskier’ loans commanded higher levels and, wouldn’t you know it, once the ‘Credit Genie’ got loose from the bottle, it took interest rates in excess of 20 percent to put it back in!

Now passbook interest is some fraction of a single percent and banks are (still) going broke trying to pay it.

So how are we going to achieve a ‘sustainable economy’ if we can’t/don’t fix our financial system?

And, the next thing you need to understand is the crowd who ripped the rest of us off wants things to remain precisely as they are.

They’ve got theirs, fuck you!

You aren’t going to see ‘renewable energy’ at anything resembling affordability because the already wealthy don’t care how much it costs (er, you.)

Worse, good citizen is where this kind of ‘myopia’ leads…it leads to a world of shortages.

The thing you need to wake up to it the EXACT NATURE of situation, those with plenty of (funny) money WILL NOT be the ones suffering from a shortage of anything, it will be the REST OF US, clawing one another TO DEATH over the crumbs that remain.

Now I am just as capable of writing without, er, emphasis as Mr. Michaelson is.

But I prefer to use emphasis to illustrate the points I make…(as clownish as it might sometimes seem.)

Our styles may differ but I believe our overall goals are, er, ‘similar’. (Feel free to slap me upside the head if this notion is in error, CK!)

Thanks for letting me inside your head,

Gegner

If we are to survive as a species, we must remake our entire social model…and A Simple Plan does just that!

Fear Factor

Greetings good citizen,

I am hesitant to raise the subject because Blogger’s stats tracking are, er, ‘spotty’ at best but yesterday my little window on our civilization experienced a ‘personal best’.

Attention/curiosity has been growing in recent weeks (so yesterday’s ‘spike’ isn’t totally out of character.)

Anyway, thanks for sharing this site (and my decidedly twisted observations) with your friends.

That said, let us proceed with the ‘business’ of these humble pages, which are intended to provide you with something to think about rather than the much simpler objective of telling you what to think.

While there is no shortage of people complaining about the path our civilization is on, it is somewhat futile to point out we’ve been here before (many times.)

It is even more futile to point out that the only thing that has been done about the deeply entrenched crap, crud and corrosion is the hitting of the reset switch, followed by a hearty rendition of ‘meet the new boss, same as the old boss!’.

And after a couple of decades of things ‘appearing’ to get better, we find ourselves right back where we started (again.)

The ‘true’ purpose of this site is to promote a sustainable alternative to the ‘perpetual expansion’ of predatory capitalism.

And, as we have witnessed ourselves (repeatedly,) if capitalism stops expanding, it immediately ‘collapses’.

Which is where we’re at today.

No irony should be lost on the fact that the only thing preventing our collapse into barbarism is socialism, the much despised ‘alternative’ to (more for me) capitalism.

Yet the corporate owned media continues to pretend that capitalism is alive, well and holding up the sinking ship of humanity.

Which is to ask ‘how much horse-shit are you willing to shovel before you realize there IS no pony under the pile?’

Speaking of ‘horse-pucky’ we have this insightful piece that sheds some light on a decidedly twisted philosophy we have come to know as ‘Libertarianism’:

From the fertile source of marginal utility value calculus the Austrians thus constructed a pristine moral and metaphysical system. But in doing so – like all metaphysicians – they allowed their imaginations to run away with them. They never noticed the point at which they crossed that fateful line; that line that separates our attempts to represent the world accurately and dispassionately to ourselves from our attempts to create a fantasy world in which we can live. The Austrians had, at first, attempted to use their imaginations to explain the world around them and, in doing so, had fallen into a dream world of their own creation.

And so the foundations of the political cult we call libertarianism were firmly in place. It is an ingenious creation which even came to include what CG Jung and other mythologists might call a central ‘archetypal’ or mythic figure. Even more specifically, what the Austrians have done is insert into their narrative what the great American mythologist Joseph Campbell called the ‘monomyth’. The monomyth is a recurrent theme in mythologies from all over the world. It is essentially a ‘hero myth’ and, as Campbell argues, can be located in most major religious narratives (Christ, Buddha etc.). In this the Austrians provided the libertarian religion with their very own version of the monomyth.

That most libertarians are ignorant of the source of their beliefs – just as most of them are not very conversant with economic theory generally, their protestations to the contrary notwithstanding – only adds a sociological dimension to their cult. Their cult forms a hierarchy where those who are closer to the Grand Truth are supposed to know more than those who are less conversant. Those who are less conversant then scrutinize the Great Texts – which are largely taken to be Holy Writ – until they can advance up the priestly ranks.

If you want to go fishing in Yves’s Archives you will find a rather shocking article describing the foundations of ‘Libertarian paradise’ (better know to you as Hell of Earth.)

Why bother kicking ‘fringe’ Libertarians in the shins?

Because the Libertarians have taken over the Republican Party, good citizen. That’s why they have suddenly become so ‘radical’.

Some of you are too young to remember but ‘back in the day’ you could find ‘common ground’ with an ‘old-time conservative’. Today this is not possible because Libertarians view non-libertarians as an ‘inferior species’.

Maybe it’s just me but once you start down that road it becomes pretty obvious that YOU are the one who is a few fries shy of a Happy Meal!

Libertarianism, like its ‘soul-mate’ Capitalism is centered on ‘private property’.

A Simple Plan is centered on individual sovereignty, that we all have an equal right to the bounty of this planet. (something that can't be achieved if the so-called 'owner' refuses to part with your share...or wants/commands more than it's worth!)

Bizarrely, Libertarians equate property ownership with self-ownership. They can own property BECAUSE they ‘own’ themselves.

This involves a certain degree of mental gymnastics, but that is always the case when it comes to justifying bullshit.

Tell the homeless that they ‘own’ themselves and they’ll respond with the most famous of observations ’nothing from nothing leaves nothing’…an equation the Libertarians choose to blame on the victim.

Native Americans didn’t believe in property ownership (and their civilization thrived for a hundred thousand years!)

Conversely, capitalism’s personal best is Rome’s 400 year stretch…(and the price in blood was horrendous just to get that far!)

Looks to me like the property-less native Americans were on to something.

So don’t ‘fear’ A Simple plan because it hasn’t been tried (in recent memory.)

It is a proven successful concept that flourished for a lot longer than predatory capitalism has been around!

Thanks for letting me inside your head,

Gegner

Growth isn't Possible...

Greetings good citizen,

Once again we are going to poke around in that dusty attic of yours to see what kind of nonsense has been deposited up there.

Anyone who has been paying attention knows the Fed/Government has been trying to ‘re-inflate’ the economy in an attempt to ‘re-start’ the engine. Sadly, what passed for the engine of our (the world’s) economy seized solid once the value of credit default swaps exceeded that of all the money there ever was. (Making it apparent that most of these securities weren’t worth the paper they were written on…)

Anyway, the point being is that the powers that be are working under the insane ‘assumption’ that if they can get the economy ‘growing’ again, everything will work itself out.

This naturally brings us full circle to the unfortunate fact that nature is incapable of expanding eternally. We only have so much planet to work with here and we have yet to unlock the secret of ‘transfiguration’ or the ability to turn whatever’s on hand into whatever is needed at the moment.

Of course, by the time we master that talent we will have access to all of the planets we can use. Until then it would be wise to learn how to live within our means.

Unfortunately, economists don’t think this way. The universe (or the planet for that matter) failing expand ‘on demand’ is dismissed as ‘meaningless.’ It is always ‘assumed’ that it will do what is required of it.

And you know what happens when you ‘assume’, don’t you? You make an ass out of ‘u’ and ‘me’…

So we proceed with tonight’s offering

Published Jan 25 2010 by New Economics Foundation, Archived Jan 26 2010

Growth Isn’t Possible (report excerpt)
by Andrew Simms, Victoria Johnson and Peter Chowla

From the nef website:

As economist Herman Daly once commented, he would accept the possibility of infinite growth in the economy on the day that one of his economist colleagues could demonstrate that Earth itself could grow at a commensurate rate.

Whether or not the stumbling international negotiations on climate change improve, our findings make clear that much more will be needed than simply more ambitious reductions in greenhouse gas emissions. This report concludes that a new macro economic model is needed, one that allows the human population as a whole to thrive without having to relying on ultimately impossible, endless increases in consumption. [Like it or not good citizen, that is the current model we are left to work with. Why does it ‘always’ have to expand? That’s the only way it can generate ‘profits’. Bizarrely, if there is no profit, then there is no point…]

From the Introduction:

...In January 2006, nef (the new economics foundation) published the report Growth isn’t working.9 It highlighted a flaw at the heart of the economic strategy that relies overwhelmingly upon economic growth to reduce poverty. The distribution of costs and benefits from global economic growth, it demonstrated, are highly unbalanced. The share of benefits reaching those on the lowest incomes was shrinking. In this system, paradoxically, in order to generate ever smaller benefits for the poorest, it requires those who are already rich and ‘over-consuming’ to consume ever more. [Gee, guess who is ‘falling down on the job!’.]

The unavoidable result, the report points out, is that, with business as usual in the global economy, long before any general and meaningful reduction in poverty has been won, the very life-support systems we all rely on are likely to have been fundamentally compromised.

Four years on from Growth isn’t working, Growth isn’t possible goes one step further and tests that thesis in detail in the context of climate change and energy. It argues that indefinite global economic growth is unsustainable. Just as the laws of thermodynamics constrain the maximum efficiency of a heat engine, economic growth is constrained by the finite nature of our planet’s natural resources (biocapacity). As Daly once commented, he would accept the possibility of infinite growth in the economy on the day that one of his economist colleagues could demonstrate that Earth itself could grow at a commensurate rate.

The most recent data on human use of biocapacity sends a number of unfortunate signals for believers in the possibility of unrestrained growth. Our global ecological footprint is growing, further overshooting what the biosphere can provide and absorb, and in the process, like two trains heading in opposite directions, we appear to be actually shrinking the available biocapacity on which we depend. [Big surprise, huh?]

Globally we are consuming nature’s services – using resources and creating carbon emissions – 44 per cent faster than nature can regenerate and reabsorb what we consume and the waste we produce. In other words, it takes the Earth almost 18 months to produce the ecological services that humanity uses in one year. The UK’s footprint has grown such that if the whole world wished to consume at the same rate it would require 3.4 planets like Earth. [Okay, the whole planet can’t consume the way Western civilizations do…but I’ll tell you right now the West is not going to quietly stand aside and let the ‘developing world’ have their turn…that isn’t going to happen.]

Growth forever, as conventionally defined (see Box 1), within fixed, though flexible, limits isn’t possible. Sooner or later we will hit the biosphere’s buffers. This happens for one of two reasons. Either a natural resource becomes over-exploited to the point of exhaustion, or because more waste is dumped into an ecosystem than can be safely absorbed, leading to dysfunction or collapse. Science now seems to be telling us that both are happening, and sooner, rather than later.

Yet, for decades, it has been a heresy punishable by career suicide for economists (or politicians) to question orthodox economic growth. As the British MP Colin Challen quipped in 2006, ‘We are imprisoned by our political Hippocratic oath: we will deliver unto the electorate more goodies than anyone else.’12

...Why do economies grow?

We should ask the simple question, why do economies grow? And, why do people worry that it will be a disaster if they stop? The answers can be put reasonably simply.

For most countries in much of human history, having more stuff has given human beings more comfortable lives. Also, as populations have grown, so have the economies that housed, fed, clothed and kept them.

Yet, there has long been an understanding in the quiet corners of economics, as well as louder protests in other disciplines, that growth cannot and need not continue indefinitely. As John Stuart Mill put it in 1848, ‘the increase of wealth is not boundless: that at the end of what they term the progressive state lies the stationary state.’20

The reasons for growth not being ‘boundless’ too, have been long known. Even if the modern reader has to make allowances for the time in which Mill wrote, his meaning remains clear: ‘It is only in the backward countries of the world that increased production is still an important object: in those most advanced, what is economically needed is a better distribution.’21

...Why growth isn’t working

Between 1990 and 2001, for every $100 worth of growth in the world’s income per person, just $0.60, down from $2.20 the previous decade, found its target and contributed to reducing poverty below the $1-a-day line.38 A single dollar of poverty reduction took $166 of additional global production and consumption, with all its associated environmental impacts. It created the paradox that ever smaller amounts of poverty reduction amongst the poorest people of the world required ever larger amounts of conspicuous consumption by the rich. [Stop! What’s wrong with this picture? If the rich can’t spend fast enough is that it, is that all that can be done? Not by a long shot! The impoverished circumstances can be a relieved directly!]

Growth wasn’t (and still isn’t) working.41 Yet, so deeply engrained is the commitment to growth, that to question it is treated as a challenge to the whole exercise of economics. Nothing could be further from the truth. This report is a companion volume to nef’s earlier and ongoing research. It is written in the hope that we can begin to look at the fascinating opportunities for economics that lie beyond the doctrine –it could be called dogma – of growth.

One of the few modern economists to have imagined such possibilities in any depth is Herman Daly. 42 The kind of approach called for in a world constrained by fuzzy but fundamental limits to its biocapacity is one, according to Daly, that is: ‘a subtle and complex economics of maintenance, qualitative improvements, sharing frugality, and adaptation to natural limits. It is an economics of better, not bigger’. 43 [snip…it gets a little ‘geeky’ for a while so I cut it out.]

Peak Oil

Although increasingly warning of production capacity constraints, the IEA makes no detailed mention of the possible physical limits to continuing exploitation of fossil fuels to drive the global economy.

That is, with the single exception in one media interview, when Fatih Birol, the IEA’s chief economist, said, ‘In terms of the global picture, assuming that OPEC will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau.’ 207 In other words, a peak and long-term decline in the global production of oil. Evidence is presented later in this report on the likely onset of Peak Oil.

Projections for oil and gas production were obtained from Colin Campbell and the Association for the Study of Peak Oil (ASPO).208 Given the constraints in building and developing alternative sources of energy, such as nuclear or hydroelectric power stations, we have assumed that the energy requirements left unfilled because of the shortage of oil and gas will be filled by replacing those fuels with coal – a phenomenon that appears to be occurring already. This has significant effects on the carbon intensity of energy. While the rate of supply side efficiency improvements to the energy intensity of the economy are also dependent on the fuel mix, this substitution serves as a first order estimate of the effects of Peak Oil on anthropogenic greenhouse gas emissions. [Thus it could explain the massive indifference to social considerations as the economy ‘shrinks’ to fit ‘the new normal’.]

As CCS is still an immature technology, yet to be proven at scale, we do not assume that it plays a role in reducing the carbon intensity of the economy.210 The future role of CCS is discussed in more detail later in this report. [One could assume ‘CCS’ refers to Clean Coal]

We have also erred on the side of caution by not factoring in the declining net energy gains from fossil fuel extraction as more marginal stocks of oil, gas and coal are exploited. Increasing amounts of energy must be used to exploit heavy oils and tar sands which would have deleterious effects on the energy intensity ratio. 211 But without a very comprehensive and detailed global energy model, predicting such effects would be difficult. Additionally, using coal that is higher in moisture or otherwise less efficient for electricity production would have similar negative effects on the energy intensity ratio that we have not modeled here for lack of data.

Results

As shown in Figure 6, the scenarios developed by the IEA would lead to extremely high concentrations of atmospheric CO2, with the RS breaching the upper limit of our most generous target range in 2047. Even the optimistic AP scenario, would lead to atmospheric concentrations of CO2 of 487 ppm by 2050. [Unless the number of ‘end users’ is radically reduced…not by millions but by billions.]

The results of a possible emissions scenario that would seek to stabilize atmospheric CO2 concentration at 500 ppm after 2050 is shown in Figure 7. Given the pre-2050 emissions pathway of the alternative policy scenario, it is impossible to prevent an overshoot of the target. The changes in emissions levels needed to even bring about stabilization after an overshoot are quite dramatic. As Figure 7 shows, if the alternative policy scenario is followed until 2050, immediately thereafter carbon emissions would still have to be curtailed by roughly 1.1 per cent annually to even stabilize atmospheric CO2 below 550 ppm. This does not account for the impact of carbon-cycle feed backs, however.

If we take into account the effects of carbon-cycle feedback mechanisms, the atmospheric concentrations of CO2 corresponding to a given level of emissions increases over time. As climate models disagree about the magnitude of the feedback effect, we have demonstrated the range of possible CO2 concentrations in Figure 8. Data on the potential carbon-cycle feed backs were take from the C4MIP Model Intercomparison.212 In the worst-case scenario, the atmospheric concentration of CO2 is about 10 per cent larger than previously modeled.

The situation becomes much worse when the Peak Oil projections are combined with the possible efficiency improvements described in the IEA scenarios (see Figure 9). In the AP scenario, resulting emissions from the projected change in the fuel mix would be nearly 17 per cent higher than the IEA projections. This would bring projected atmospheric CO2 concentration to 501 ppm in 2050. Peak Oil, therefore implies that proceeding with every proposed improvement to energy intensity and adoption of cleaner fuels will not be sufficient to prevent a breach of even the most generous target and thus potentially disastrous climate change.

From Chapter 3: Peak Oil, Gas

Supplying the world with all the crude oil and natural gas it wants is about to become much harder, if not impossible. For oil, the horizon of the global peak and decline of production appears close and that for gas not much further behind. When demand exceeds production rates, the rivalry for what remains is likely to result in dramatic economic and geopolitical events that could make the financial chaos of 2008 in Europe and the USA seem light-hearted. Ultimately, it may become impossible for even a single major nation to sustain an industrial model as we have known it during the twentieth century.220 [Again the chilling subtext here is a sustainable model MAY be possible if enough ‘end users’ are, er, ‘neutralized’.]

Counter-intuitively, the imminent global onset globally of the peak, plateau and decline of the key fossil fuels, oil and gas, will not help arrest climate change. If anything, it could be a catalyst for worse emissions and accelerating warming. For example, in October 2009, the UK Energy Research Centre (UKERC) reviewed the current state of knowledge on oil depletion.221 The study argued as we advance through peak oil: there will be strong incentives to exploit high carbon non-conventional fuels. Converting one third of the world’s proved coal reserves into liquid fuels would result in emissions of more than 800 million tonnes of CO2, with less than half of these emissions being potentially avoidable through carbon capture and storage.

In other words, with the analyses by Meinshausen and Allen discussed earlier in this report in mind, without extensive investment in low carbon alternatives to conventional oil, and policies that encourage demand reduction, Peak Oil is likely to drive emissions further towards a threshold of dangerous climate change. [Left unsaid is this will be the least of our problems…]

Peak Oil and food production

Increased fossil energy prices will in turn cause the price of food to increase significantly. On average, 2.2 kilocalories of fossil fuel energy are needed to extract 1 kilocalorie of plant-based food.222 In the case of meat, the average amount of kcal fossil energy used per kcal of meat is much greater, with an input/output ratio of 25.223 [The footnotes make these passages difficult to navigate…]

In early 2008, the UN World Food Program had to reassess its agreed budget for the year after identifying a $500 million shortfall. It found that the $2.1 billion originally allocated to food aid for 73 million people in 78 countries would prove to be inadequate because of the rising costs of food. Higher oil and gas prices have contributed to this by increasing the costs of using farm vehicles and machinery, transporting food and manufacturing fossil-fuel-dependent input such as fertilizer. The move to grow biofuel crops has also exerted upward pressure on food prices by leaving less productive land available to grow crops.

The global economy is still well over 80 per cent dependent on fossil fuels. Oil remains the world’s most important fuel largely because of its role in transport and agriculture and the ease with which it can be moved around. The historical pattern has been for industrial societies to move from low-quality fuels (coal contains around 14–32.5MJ per kg) to higher quality fuels. 41.9 MJ/kg for oil and 53.6 MJ per kg and from a solid fuel easily transported and therefore well-suited to a system of global trade in energy resources. 224

Almost all aspects of our economy are dependent on a constant and growing supply of cheap oil, from transport to farming, to manufacturing and trade. In the majority world, where too many people live close to, or below the breadline, the long tail of green revolution agriculture depends on pesticides and fertilizers that need large amounts of fossil fuels. The implication of any interruption to that supply, either in terms of price or simple availability, means a significant shock to the global economy. Everyone will be affected, but some more than others.

From the last chapter: If not the economics of global growth, then what? Getting an economy the right size for the planet

The stationary state

The lineage of the notion of ‘one planet living’ can be traced at least as far back as the early nineteenth century. Philosopher and political economist John Stuart Mill was shaped by the human and environmental havoc of the voracious Industrial Revolution.

In reaction to it, he argued that, once certain conditions had been met, the economy should aspire to exist in a ‘stationary state’. It was a hugely radical notion for the time. Mill thought that an intelligent application of technology, family planning, equal rights, and a dynamic combination of a progressive workers movement with the growth of consumer cooperatives could tame the worst excesses of capitalism and liberate society from the motivation of conspicuous consumption. [Can you see his ‘mis-calculation’?]

He prefigured Kropotkin’s analysis that economics could learn from the success of cooperation, or ‘mutual aid’ as he coined it, in ecological systems, itself a riposte to the fashionable misappropriation of Darwinism to social and economic problems.406 The latter economic folk wisdom remains nevertheless strong. And even today, the Anglo Saxon economic model is commonly defended with similar misappropriations of Darwin that emphasise the ‘law of the jungle’ and ‘survival of the fittest.’ This view suggests that competition in economics, as in nature, should be the natural, dominant mode of operation. Yet, actual evolutionary biology has moved far beyond this caricature, identifying a wide range of different and equally successful strategies in evolution alongside competition.407

These include symbiosis (an example of which is the bacteria which fix nitrogen in plant roots consequently making life possible), collaboration (as was the case with primeval slime mould), co-evolution (the pollinating honey bee responsible for about one in three mouthfuls of the food we eat), and even reason (as with problem solving animals – like elephants, dogs, cats, rats, sperm whales and, sometimes, humans). Optimal diversity too is considered a key condition – nature’s insurance policy against disaster – suggesting that economic systems which allow clone towns to be dominated by massive global chain stores, are probably a bad idea.

Mill also prefigured Keynes’s hope, and similar faith in technology, that once the ‘economic problem’ was solved, we would all be able to turn to more satisfying pursuits, and put our feet up more. He also prepared the ground for the emergence of ecological economics.

The Steady state

In a fairly direct line of intellectual descent, economist Herman Daly has done perhaps more than anyone to popularize the notion of what he calls ‘steady state’ economics. His comprehensive critique, worked-up over decades, decries the absence of any notion of optimal scale in macro-economics. And the persistent, more general refusal of the economics profession to accept that it, too, like the rest of life on the planet, is bound by the laws of physics (see Introduction).

As he wrote in Beyond Growth: ‘Since the earth itself is developing without growing, it follows that a subsystem of the earth (the economy) must eventually conform to the same behavioral mode of development without growth.’ 408

Of course the big question concerns when, precisely, the ‘eventually’ moment comes. Daly borrows a public safety analogy from the shipping industry to demonstrate what is needed ecologically at the planetary level.

The introduction of the ‘Plimsoll line’ was, so to speak, a watershed to do with a watermark. When a boat is too full, rather obviously it is more likely to sink. The problem used to be that, without any clear warning that a safe maximum carrying capacity had been reached, there was always an economic incentive to err on the incautious side by overfilling. The Plimsoll line solved the problem with elegant simplicity: a mark painted on the outside of the hull that indicates a maximum load once level with the water.

Daly’s challenge to economics is to adopt or design an equivalent, ‘To keep the weight, the absolute scale, of the economy from sinking our biospheric ark’.409 But Daly is not a crude environmental determinist; for any model to work he insists that alongside optimal scale, equally important is a mechanism for optimal distribution based on equity and sufficiency.

To date, the nearest, in fact, only, leading contender to provide the environmental Plimsoll line is the Ecological Footprint. Before the Contraction and Convergence model, which is designed to manage safely greenhouse gas emissions, was ever thought of, Daly identified its basic mechanism as the way to manage the global environmental commons. First, he said, you need to identify the limit of whichever aspect of our natural resources and biocapacity concerns you, then within that, allocate equitable entitlements and, in order to allow flexibility, make them tradable. Such an approach could be applied to the management of the world’s forests and oceans as much as CO2. Daly credits the innovative American architect and polymath Richard Buckminster Fuller for first suggesting the approach. At a fundamental level, this is the primary mechanism to avoid the tragedy of the commons. [Has anyone else spotted the ‘flaw’ in this idea? It’s the same flaw market suffer from and it’s based on an ‘assumption’.]

In addition, an indicator such as the Happy Planet Index410 which incorporates the Ecological Footprint helps to reveal the degree of efficiency with which precious natural resources are converted into the meaningful human outcomes of long and happy lives. [We’ve seen the flaws with this mechanism exploited to advance inequality too.]

At the ‘eventually’ moment, or rather well before, these other ways of organizing and measuring the economy become vital. In one sense it has already passed. According to the Ecological Footprint, the world has been over-burdening its biocapacity – consuming too many natural resources and producing more waste than can be safely absorbed – since the mid-1980s. We’ve been living beyond our ecological means. But, at what point does the damage become irreversible? This will be different for different ecosystems. But, where climate change is concerned, we have drawn a line in the atmospheric sand at the end of 2016. Based on current trends and several conservative assumptions, at that point, greenhouse gas concentrations will begin to push a new, more perilous phase of global warming. 411 [Um, considering the ‘alternative’, warming isn’t such a bad thing…if we were to reverse course and enter another ice age, we’d be well and truly…]

Dynamic equilibrium

‘Stationary’, ‘steady’, up to a point these words communicate the message that, logically, a subset of a system (the economy) cannot outgrow the system itself (the planet), and the need exists to establish a balance. Why suggest yet another term for an essential characteristic of true sustainability?

Yet, the terms ‘stationary’, and ‘steady’, are unattractive for our purposes. They fail to capture sufficiently the dynamism of the interactions between human society, the economy and the biosphere. They wrongly appear to suggest for economics, what was once famously, and with epic error announced for history, namely its end. [Yeah, as far as economists are concerned a ‘static’ economy is a dead economy but that’s due to having the wrong ‘incentives’ in place.]

But, on the contrary, writes Daly, it is just that a very different economics is needed, one that is; ‘a subtle and complex economics of maintenance, qualitative improvements, sharing frugality, and adaptation to natural limits, It is an economics of better, not bigger’.412

‘Dynamic equilibrium’, is both a more accurate description of the condition we have to find and manage, and a more attractive term. Found typically in discussions of population biology and forest ecology, it captures a mirror of nature for society, in which, within ecosystem limits, there is constant change, shifting balances and, evolution. ‘Dynamic’ in the sense that little is steady or stationary, but ‘equilibrium’ in that the vibrant, chaotic kerfuffle of life, economics and society must organize its affairs within the parent-company boundaries of available biocapacity.

In his parting address from the World Bank, where he worked for six years, Daly left his colleagues with a formula for sustainability: stop counting the consumption of natural capital as income. Tax labor and income less, and resource extraction more; maximize the productivity of natural capital in the short run and invest in increasing its supply in the long run; and most contentiously, abandon the ideology of global economic integration through free trade, free capital mobility, and export-led growth. [All three lead to disaster!]

nef’s report, The Great Transition, explores how best to organize an economy that exists in a state of dynamic equilibrium with the biosphere. That and other research underway seeks to address all the usual questions such as ensuring livelihoods, security in youth and old age, maximizing well-being and social justice. The point of this report has been simply to establish the case, as far as possible beyond question, that such an economy is needed.

The challenge: How to create good lives and flourishing societies that do not rely on infinite orthodox growth

This report set out to examine the physical and environmental constraints to unlimited global economic growth as measured by GDP. Taking climate change and fossil fuel use as a particular focus, we find that these constraints at the global level are real and immediate. This means, that in order to allow economic growth in low per capita income countries where, for example, rising income has a strong relationship to greater life expectancy. There will need to be less growth in those high-income countries where the relationship to increasing life expectancy and satisfaction has already broken down.

From the sublime to the ridiculous, Why would Blackrock buy up a 5% interest in 1,800 NYSE listed firms?

Follow the link to learn more

An overly long post full of ‘techno-babble’, not necessarily as ‘entertaining’ as we could hope but certainly ‘food for thought’.

I’ll detain you no longer good citizen,

Thanks for letting me inside your head,

Gegner

Perception management

Greetings good citizen,

In an ‘I’m not sure how to interpret this’ moment, it is rather perplexing to see all of the wailing and screaming over the ‘much anticipated’ stock market bounce come to naught…

My last post was on how unemployment numbers were affecting the stock market and it seems to have been the ‘banner du jour’ of yesterday’s blogosphere commentary.

BUT, what most people were expecting to happen, DIDN’T happen…beyond a tiny surge at the end of trading on Friday, the markets remained fairly flat.

This is not to discount the fact that the markets tacked on 190 points over the course of the past week; and it is not unreasonable to assume that this was mostly in ‘anticipation’ of ‘better than expected’ unemployment figures…which sorta didn’t happen.

So, did it happen or didn’t it? I’d be inclined to say the weasels pulled off another ‘fast one’ right under the public’s unsuspecting nose.

The ‘owners’ of equities succeeded in ‘enriching’ themselves at the public’s expense for absolutely no good reason other than that they could. Isn’t zero percent interest fabulous (for fat cat bankers?)

Some of you have questioned why I go berserk over our obviously ‘massaged’ unemployment figures. After all, isn’t a ‘certain amount’ of unemployment ‘natural’?

Think about that for a minute because the answer is obvious…No, it’s not natural at all! Worse is claiming that the current rate of unemployment is 10% and then admitting that we have 83 million working aged citizens who are NOT unemployed…but are instead ‘Not in the workforce’…I mean WTF, just how badly does capitalism have to be broken for it to be scrapped?

Sadly, we all know the answer to that one. It doesn’t matter how badly broken capitalism is; so long as it benefits the elite, it’s not going anywhere.

So we proceed with tonight’s offering

[Purloined from: The Automatic Earth]

January 9 2010: Drowning by numbers

Ilargi: No doubt there are people who see this week's BLS Non-Farm Payroll survey as "not good, but not all that bad either". They can point for instance to the fact that the 85,000 jobs lost according to the report is much better than the 800,000 jobs lost back in March 2009. The Wall Street Journal puts it like this: ”Even though the payroll number was worse than expected, the data reflects an improvement in the jobs market.”.

But unfortunately, this is all smoke, mirrors, bias and outright falsehood. The Household part of the monthly BLS survey mentions 465,000 lost jobs. 647,000 full time jobs left the building. But that's not even remotely where the true problem lies.

The reason why unemployment, as per the Household survey, stayed at 10% and "only" 85,000 jobs are reported MIA in the Payroll survey can be found in the labor force numbers. From November to December 2009, the "persons not in the labor force" category went up by 843,000 (over 1 million when not seasonally adjusted), and now stands at 83,865,000. The vast majority of those signing off, i.e. not actively looking for work, are people who can't see any jobs anywhere in their environment. The worse the economy gets, the fewer people are counted as unemployed. It’s a lovely invention, but it's also am awfully perverted one.

That is also true for seasonal adjustments in other categories. It’s estimated that the actual initial claims numbers may be double what's reported, simply because the models used are too rigid to take into account present economic conditions. A similar idea is true for continuing claims. Michael Widner at Stifel, Nicolaus says:

”We could conceivably have nearly 11 million people collecting unemployment and see the data reported as a 3.something million figure."


U6 unemployment is up. Average and median unemployment duration is up on all counts. The amount of people without a job for more than half a year is soaring and these people now form 40% (6.1 million) of the total unemployed. The employment to population ratio fell to 58.2%, the lowest in at least 27 years. The national payroll level went from 130.8 million in 2000 to 130.9 million today. [ 100,000 jobs added for the 13 million people who were added to the "available" labor pool. In other words, 13 million unemployed were added.

Extended benefits and Emergency Unemployment Compensation, the two programs set up for the long-time jobless, are bursting through their seams. A slight decrease in initial and continuing jobless claims may seem to indicate something positive, but the reality is that people don't leave these programs because they find jobs, but because they've exhausted their benefits and are forced into extended and emergency programs. There are strong suggestions that the latter grew by some 43% in just the past month.

And though we've seen no mention of it this week, we haven't forgotten that the BLS "owes" us the 824,000 jobs they "forgot" to count till March 2009.

No matter where you stand, no matter what you see the economy doing in 2010, it should be clear to everyone who can read by now that reporting on unemployment in the US is a god-forsaken mess, strongly biased towards what pleases Washington, i.e. numbers much lower than the real ones. That said, while many citizens may still be fooled by the official data, you can bet that Washington knows perfectly well what the real numbers are, and many hours of backroom meetings are dedicated to the topic. How much of that reflects genuine care for constituencies, and how much mere worry about election numbers, we’ll leave up to you to ponder.

The same mentality that leads to the severely distorted jobs numbers speaks loudly from the AIG files, that increasingly question Tim Geithner role in the $100+ billion handed to Goldman Sachs et al as 100% compensation for lost credit default swaps wagers. And that, predictably, leads to calls for the resignation of Geithner.

But we've seen similar calls for Ben Bernanke and Larry Summers to resign. And they're still there. Moreover, what difference would it make to remove one of them and leave the others be where they are? If you don't clean up for real, why bother? It becomes just another silly game that way, doesn't it?

Reminds me of a man named Travis Bickle, who said some 35 years ago:

"All the animals come out at night - whores, skunk pussies, buggers, queens, fairies, dopers, junkies, sick, venal. Someday a real rain will come and wash all this scum off the streets."

Um, I’ve never heard of Travis, which isn’t necessarily a bad thing. I’m sure Ilargi included that quote with the best of intentions and purest of meanings; that someday in the uncharted and murky future, people will rise up and clean the, er, ‘scum infested’ halls of power.

Being the left wing ‘nut’ that I am, I’d propose a more certain option…tear the halls of power down! That will not only clean them out but it will also keep them clean!

Besides, if we are to ever put a stop to humans using their fellow humans as barnyard animals, we have to put ‘power’ beyond the reach of those who would abuse it for personal gain.

It can and must be done if mankind is to survive.

Thanks for letting me inside your head,

Gegner

Eradicate Poverty

Greetings good citizen,

tonight’s offering sparked a short-lived rally in today’s markets as investors once again took heart in ‘less bad’ news.

I’m currently reading a rather scathing review of the IMF and its reckless variety of ‘economic analysis’ penned by Nobel laureate Joe Stiglitz.

Bizarrely, the IMF’s ‘mission’ is to ‘eradicate poverty’ via the ‘free and unfettered markets’.

While Mr. Stiglitz hasn’t yet addressed or commented on this topic, I find myself wondering what the IMF thinks the ‘cause’ of poverty is?

Because there isn’t an economy on this planet that doesn’t have ‘free markets’…even today’s ‘communist’ nations have abandoned the concept of publicly owned enterprise for the ‘efficiency’ of private enterprise.

Which is and always has been the ‘source’ of poverty. Naturally, there will be more on this topic after the article.

I.M.F. Upgrades Its Outlook for Economy in 2010

By REUTERS
Published: July 8, 2009

WASHINGTON (Reuters) — The global economy is starting to pull out of recession but recovery will be sluggish and government policies need to remain supportive, the International Monetary Fund said on Wednesday.

In an update of its World Economic Outlook, the monetary fund said the global economy would probably contract 1.4 percent this year, a touch steeper than the 1.3 percent decline it expected in April.

It now sees world economic growth of 2.5 percent in 2010, however, compared to an April projection of 1.9 percent. [So they are saying the global economy will ‘contract’ but then it is going to expand more than it contracts…how the hell do you work that out?]

“Financial conditions have improved more than expected, owing mainly to public bailous intervention, and recent data suggest that the rate of decline in economic activity is moderating, although to varying degrees among regions,” the monetary fund said.

The monetary fund said policies should remain supportive until growth resumes and deflationary risks dissipate. Where there is room, it said, central banks should explore cutting interest rates further and signal that they intend to keep them low until a durable recovery is under way. [Which begs the question of where a ‘durable recovery’ is going to come from, not to mention how many will be ‘frozen out’ of a recovery, making its ‘durability’ questionable.]

It said concerns about rising government debt levels, as a result of higher government spending to shore up economies, highlight the need for stronger medium-term fiscal policy frameworks.

“Although fiscal policy should stay supportive through 2010, plans should be made for rebuilding fiscal balances and ensuring sustainable debt paths after growth is firmly re-established,” the monetary fund said.

You don’t suppose they are being deliberately ‘vague’, do you?

What the hell does “plans should be made for rebuilding fiscal balances and ensuring sustainable debt paths after growth is firmly re-established,” mean?

Talk about ‘clueless’, don’t they know we’re in this mess BECAUSE of excessive debt?

Or is the word ‘sustainable’ supposed to mean that we are supposed to engineer a recovery that leaves vast swaths of the global population destitute?

Because that’s what the ‘shorthand’ here says, since the wealthy are the only ones that can ‘afford’ credit, the rest of the world will have to live without it.

Welcome to the ‘New Serfdom’ good citizen because in the future it will be impossible to improve your lot in life if you are not born ‘creditworthy’.

Then there is the ‘growth’ nonsense. Understand that the reason the economy needs to perpetually ‘grow’ is so it can keep up with ‘rent’ payments to the ‘owners’ of the world.

There isn’t an economist out there that advocates the ‘sustainability’ we desperately need, every one of them ‘promotes’ growth, not for the sake of our growing population but to keep up the payments on the incredible mountain of debt that is being piled on us by the ‘owners’.

As I was ‘pontificating’ on earlier, the primary source of poverty is the removal of your ability to fend for yourself. ‘Free Markets’ don’t exist if you can indeed obtain what is being marketed for free.

In a bizarre contradiction of terms, ‘free markets’ are predicated on the ‘protection of private property’…which if you don’t have any, well, tough.

Simply put, the first step to creating a ‘market system’ is separating the customer from their free access to the product on offer.

If you have read the ‘Grapes of Wrath’ you know farmers that couldn’t fetch a good price for their produce burned or otherwise destroyed it to prevent prices from falling further…while millions starved!

The primary difference between ‘liberals’ and ‘conservatives’ is whether or not you think this was a good thing.

Not only have you been, er, ‘denied access’ to the bounty of nature, you have also been denied access to a place to hang your hat. The ‘need’ to live indoors and eat regularly is the ‘motivation’ for you to continue to labor to make someone else rich while digging the hole for yourself deeper in the process.

Worse is the failure to recognize who the ‘cost of living’ is ‘manipulated’ to keep prevailing wages at ‘sustenance’ levels. It’s not about you ‘getting ahead, it’s about profits for the owners.

So we arrive once again at my favorite issue, the Human Anti-exploitation law.

Poverty cannot be eradicated until we banish private income streams to the trash heap of history.

Where does money come from? It is produced by ‘labor’ with the creation of useful goods or services. The ‘seller’ (typically) produces neither the goods nor the services, as most modern products are a combination of inputs produced by multiple workers whose labor the ‘seller’ has purchased, invariably at a fraction of its true value.

Worse, not only does the seller fail to pay labor fully for what it produces they multiply their cost for labor into the price of the product.

Let’s suppose for a moment that we were to cut out the ‘middleman’ here and pay labor directly for their produce.

Prices would fall dramatically. Why? Because labor and inputs are both FREE. Better yet, the same thing would happen with ‘Real Estate’.

Nobody needs to ‘own’ a house; they merely need the ‘use’ of one. The buying and selling bullshit only generates profits for the ultimate holder of all property, the banks.

If this sounds sensible that’s because it is!

Sadly, those who control what passes for our legal system think ‘property rights’ are the way to go.
As long as there is property, there will be poverty.

I say it is long past time to set humanity ‘free’.

Thanks for letting me inside your head,

Gegner