May 052015
 May 5, 2015  Posted by at 7:32 am Finance Tagged with: , , , , , , ,

I very rarely read back any of the essays I write. But maybe that’s not always a good thing. Especially when they deal with larger underlying issues beneath the problems we find ourselves in, why these problems exist in the first place, and what we can and will do to deal with them. Not all of these things can and perhaps should be re-written time and again. Commentary on daily events calls for new articles, but attempts to define the more in-depth human behavior behind these events should, if they are executed well, be more timeless.

Not that I would want to judge my own work, I’ll leave that to others, but I can still re-read something and think: that’s something I would like to read if someone else had written it. Since a friend yesterday sent me an email that referenced the essay below, I did go through it again and thought it’s worth republishing here. It’s from New Year’s Day 2013, or almost 2.5 years old, which should be a long enough time gap that many present day readers of The Automatic Earth haven’t read it yet, and long enough for those who have to ‘enjoy’ it all over again.

I am not very optimistic about the fate of mankind as it is, and that has a lot to do with what I cite here, that while our problems tend to evolve in exponential ways, our attempts at solving them move in linear fashion. That is true as much for the problems we ourselves create as it is for those that – seem to – ‘simply happen’. I think it would be very beneficial for us if we were to admit to our limits when it comes to solving large scale issues, because that might change the behavior we exhibit when creating these issues.

In that sense, the distinction made by Dennis Meadows below between ‘universal problems’ and ‘global problems’ may be very useful. The former concerns issues we all face, but can -try to – solve at a more local level, the latter deals with those issues that need planet-wide responses – and hardly ever get solved if at all. The human capacity for denial and deceit plays a formidable role in this.

I know that this is not a generally accepted paradigm, but that I put down to the same denial and deceit. We like to see ourselves as mighty smart demi-gods capable of solving any problem. But that is precisely, I think, the no. 1 factor in preventing us from solving them. And I don’t see that changing: we’re simply not smart enough to acknowledge our own limitations. Therefore, as Meadows says: “we are going to evolve through crisis, not through proactive change.” Here’s from January 1 2013:

Ilargi: I came upon this quote a few weeks ago in an interview that Der Spiegel had with Dennis Meadows, co-author of the Limits to Growth report published by the Club of Rome 40 years ago. Yes, the report that has been much maligned and later largely rehabilitated. But that’s not my topic here, and neither is Meadows himself. It’s the quote, and it pretty much hasn’t left me alone since I read it.

Here’s the short version:

[..] … we are going to evolve through crisis, not through proactive change.

And here it is in its context:

‘Limits to Growth’ Author Dennis Meadows ‘Humanity Is Still on the Way to Destroying Itself’

SPIEGEL ONLINE: Professor Meadows, 40 years ago you published “The Limits to Growth” together with your wife and colleagues, a book that made you the intellectual father of the environmental movement. The core message of the book remains valid today: Humanity is ruthlessly exploiting global resources and is on the way to destroying itself. Do you believe that the ultimate collapse of our economic system can still be avoided?

Meadows: The problem that faces our societies is that we have developed industries and policies that were appropriate at a certain moment, but now start to reduce human welfare, like for example the oil and car industry. Their political and financial power is so great and they can prevent change. It is my expectation that they will succeed. This means that we are going to evolve through crisis, not through proactive change.

I don’t really think that Dennis Meadows understands how true that is. I may be wrong, but I think he’s talking about a specific case here . While what he makes me ponder is that perhaps this is all we have, and always, that it’s a universal truth. That we can never solve our real big problems through proactive change. That we can only get to a next step by letting the main problems we face grow into full-blown crises, and that our only answer is to let that happen.

And then we come out on the other side, or we don’t, but it’s not because we find the answer to the problem itself, we simply adapt to what there is at the other side of the full-blown crisis we were once again unable to halt in its tracks. Adapt like rats do, and crocodiles, cockroaches, no more and no less.

This offers a nearly completely ignored insight into the way we deal with problems. We don’t change course in order to prevent ourselves from hitting boundaries. We hit the wall face first, and only then do we pick up the pieces and take it from there.

Jacques Cousteau was once quite blunt about it:

The road to the future leads us smack into the wall. We simply ricochet off the alternatives that destiny offers: a demographic explosion that triggers social chaos and spreads death, nuclear delirium and the quasi-annihilation of the species… Our survival is no more than a question of 25, 50 or perhaps 100 years.

Without getting into specific predictions the way Cousteau did: If that is as true as I suspect it is, the one thing it means is that we fool ourselves a whole lot. The entire picture we have created about ourselves, consciously, sub-consciously, un-consciously, you name it, is abjectly false. At least the one I think we have. Which is that we see ourselves as capable of engineering proactive changes in order to prevent crises from blowing up.

That erroneous self-image leads us to one thing only: the phantom prospect of a techno-fix becomes an excuse for not acting. In that regard, it may be good to remember that one of the basic tenets of the Limits to Growth report was that variables like world population, industrialization and resource depletion grow exponentially, while the (techno) answer to them grows only linearly.

First, I should perhaps define what sorts of problems I’m talking about. Sure, people build dams and dikes to keep water from flooding their lands. And we did almost eradicate smallpox. But there will always be another flood coming, or a storm, and there will always be another disease popping up (viruses and bacteria adapt faster than we do).

In a broader sense, we have gotten rid of some diseases, but gotten some new ones in return. And yes, average life expectancy has gone up, but it’s dependent entirely on the affordability and availability of lots of drugs, which in turn depend on oil being available.

And if I can be not PC for a moment, this all leads to another double problem. 1) A gigantic population explosion with a lot of members that 2) are, if not weaklings, certainly on average much weaker physically than their ancestors. Which is perhaps sort of fine as long as those drugs are there, but not when they’re not.

It’s quite simple, isn’t it? Increasing wealth makes us destroy ancient multi-generational family structures (re: the nuclear family, re: old-age homes), societal community structures (who knows their neighbors, and engages in meaningful activity with them?), and the very planet that has provided the means for increasing our wealth (and our population!).

And in our drive towards what we think are more riches, we are incapable of seeing these consequences. Let alone doing something about them. We have become so dependent, as modern western men and women, on the blessings of our energy surplus and technology that 9 out of 10 of us wouldn’t survive if we had to do without them.

Nice efforts, in other words, but no radical solutions. And yes, we did fly to the moon, too, but not flying to the moon wasn’t a problem to start with.

Maybe the universal truth I suspect there is in Meadows’ quote applies “specifically” to a “specific” kind of problem: The ones we create ourselves.

We can’t reasonably expect to control nature, and we shouldn’t feel stupid if we can’t (not exactly a general view to begin with, I know). And while one approach to storms and epidemics is undoubtedly better than another, both will come to back to haunt us no matter what we do. So as far as natural threats go, it’s a given that when the big one hits we can only evolve through crisis. We can mitigate. At best.

However: we can create problems ourselves too. And not just that. We can create problems that we can’t solve. Where the problem evolves at an exponential rate, and our understanding of it only grows linearly. That’s what that quote is about for me, and that’s what I think is sorely missing from our picture of ourselves.

In order to solve problems we ourselves create, we need to understand these problems. And since we are the ones who create them, we need to first understand ourselves to understand our problems.

Moreover, we will never be able to either understand or solve our crises if we don’t acknowledge how we – tend to – deal with them. That is, we don’t avoid or circumvent them, we walk right into them and, if we’re lucky, come out at the other end.

Point in case: we’re not solving any of our current problems, and what’s more: as societies, we’re not even seriously trying, we’re merely paying lip service. To a large extent this is because our interests are too different. To a lesser extent (or is it?) this is because we – inadvertently – allow the more psychopathic among us to play an outsize role in our societies.

Of course there are lots of people who do great things individually or in small groups, for themselves and their immediate surroundings, but far too many of us draw the conclusion from this that such great things can be extended to any larger scale we can think of. And that is a problem in itself: it’s hard for us to realize that many things don’t scale up well. A case in point, though hardly anyone seems to realize it, is that solving problems itself doesn’t scale up well.

Now, it is hard enough for individuals to know themselves, but it’s something altogether different, more complex and far more challenging for the individuals in a society, to sufficiently know that society in order to correctly identify its problems, find solutions, and successfully implement them. In general, the larger the scale of the group, the society, the harder this is.

Meadows makes a perhaps somewhat confusing distinction between universal and global problems, but it does work:

You see, there are two kinds of big problems. One I call universal problems, the other I call global problems. They both affect everybody. The difference is: Universal problems can be solved by small groups of people because they don’t have to wait for others. You can clean up the air in Hanover without having to wait for Beijing or Mexico City to do the same.

Global problems, however, cannot be solved in a single place. There’s no way Hanover can solve climate change or stop the spread of nuclear weapons. For that to happen, people in China, the US and Russia must also do something. But on the global problems, we will make no progress.

So how do we deal with problems that are global? It’s deceptively simple: We don’t.

All we need to do is look at the three big problems – if not already outright crises – we have right now. And see how are we doing. I’ll leave aside No More War and No More Hunger for now, though they could serve as good examples of why we fail.

There is a more or less general recognition that we face three global problems/crises. Finance, energy and climate change. Climate change should really be seen as part of the larger overall pollution problem. As such, it is closely linked to the energy problem in that both problems are direct consequences of the 2nd law of thermodynamics. If you use energy, you produce waste; use more energy and you produce more waste. And there is a point where you can use too much, and not be able to survive in the waste you yourself have produced.

Erwin Schrödinger described it this way, as quoted by Herman Daly:

Erwin Schrodinger [..] has described life as a system in steady-state thermodynamic disequilibrium that maintains its constant distance from equilibrium (death) by feeding on low entropy from its environment — that is, by exchanging high-entropy outputs for low-entropy inputs. The same statement would hold verbatim as a physical description of our economic process. A corollary of this statement is an organism cannot live in a medium of its own waste products.

The energy crisis flows seamlessly into the climate/pollution crisis. If properly defined, that is. But it hardly ever is. Our answer to our energy problems is to first of all find more and after that maybe mitigate the worst by finding a source that’s less polluting.

So we change a lightbulb and get a hybrid car. That’s perhaps an answer to the universal problem, and only perhaps, but it in no way answers the global one. With a growing population and a growing average per capita consumption, both energy demand and pollution keep rising inexorably. And the best we can do is pay lip service. Sure, we sign up for less CO2 and less waste of energy, but we draw the line at losing global competitiveness.

The bottom line is that we may have good intentions, but we utterly fail when it comes to solutions. And if we fail with regards to energy, we fail when it comes to the climate and our broader living environment, also known as the earth.

We can only solve our climate/pollution problem if we use a whole lot less energy resources. Not just individually, but as a world population. Since that population is growing, those of us that use most energy will need to shrink our consumption more every passing day. And every day we don’t do that leads to more poisoned rivers, empty seas and oceans, barren and infertile soil. But we refuse to even properly define the problem, let alone – even try to – solve it.

Anyway, so our energy problem needs to be much better defined than it presently is. It’s not that we’re running out, but that we use too much of it and kill the medium we live in, and thereby ourselves, in the process. But how much are we willing to give up? And even if we are, won’t someone else simply use up anyway what we decided not to? Global problems blow real time.

The more we look at this, the more we find we look just like the reindeer on Matthew Island, the bacteria in the petri dish, and the yeast in the wine vat. We burn through all surplus energy as fast as we can find ways to burn it. The main difference, the one that makes us tragic, is that we can see ourselves do it, not that we can stop ourselves from doing it.

Nope, we’ll burn through it all if we can (but we can’t ’cause we’ll suffocate in our own waste first). And if we’re lucky (though that’s a point of contention) we’ll be left alive to be picking up the pieces when we’re done.

Our third big global problem is finance slash money slash economy. It not only has the shortest timeframe, it also invokes the highest level of denial and delusion, and the combination may not be entirely coincidental. The only thing our “leaders” do is try and keep the baby going at our expense, and we let them. We’ve created a zombie and all we’re trying to do is keep it walking so everyone including ourselves will believe it’s still alive. That way the zombie can eat us from within.

We’re like a deer in a pair of headlights, standing still as can be and putting our faith in whoever it is we put in the driver’s seat. And too, what is it, stubborn, thick headed?, to consider the option that maybe the driver likes deer meat.

Our debt levels, in the US, Europe and Japan, just about all of them and from whatever angle you look, are higher than they’ve been at any point in human history, and all we’ve done now for five years plus running is trust a band of bankers and shady officials to fix it all for us, just because we’re scared stiff and we think we’re too stupid to know what’s going on anyway. You know, they should know because they have the degrees and/or the money to show for it. That those can also be used for something 180 degrees removed from the greater good doesn’t seem to register.

We are incapable of solving our home made problems and crises for a whole series of reasons. We’re not just bad at it, we can’t do it at all. We’re incapable of solving the big problems, the global ones.

We evolve the way Stephen Jay Gould described evolution: through punctuated equilibrium. That is, we pass through bottlenecks, forced upon us by the circumstances of nature, only in the case of the present global issues we are nature itself. And there’s nothing we can do about it. If we don’t manage to understand this dynamic, and very soon, those bottlenecks will become awfully narrow passages, with room for ever fewer of us to pass through.

As individuals we need to drastically reduce our dependence on the runaway big systems, banking, the grid, transport etc., that we ourselves built like so many sorcerers apprentices, because as societies we can’t fix the runaway problems with those systems, and they are certain to drag us down with them if we let them.

Home Forums Quote Of The Year. And The Next. And the One After

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    I very rarely read back any of the essays I write. But maybe that’s not always a good thing. Especially when they deal with larger underlying issues b
    [See the full post at: Quote Of The Year. And The Next. And the One After]


    Such a good essay and so so true. When you said “this is because we – inadvertently – allow the more psychopathic among us to play an outsize role in our societies” it made me think how the old fashioned word that the word “psychopath” replaced was a much better description of such people. The condition used to be called “moral insanity”.

    V. Arnold

    I see no, zero, nada reason for optimism. Optimism is an infantile failure to recognize the reality of day to day life on planet earth. Infantilism is the curriculum of modern education; the end product of 12 years of forced education.
    Being a hearing human who also can read makes it doubly difficult to fight off the onslaught of lies designed to keep “us” in the system. And pliant subservience as well.
    See it or don’t; it no longer matters, except on an individual/personal basis…



    I HOPE you are wrong, but I FEAR you are right. This is not going to end well.

    John Day

    “Punctuated Equilibrium” is the evolutionary model where resources feed an expansion and mixing of genetic traits in “good times”, then select the most successful combinations in “bad times” of 90% die off, and so on.
    It’s harsh. It’s easier to die quickly. Accepting the hard assignment before it is assigned, and with foreknowledge of the implications, probably contributes to survival of linked subsets of the gene pool, like families with foresightful grandparents.


    Looked at from a perspective of geologic time, the few seconds that are the realm of man on this dirt ball, pale in comparison to the grand scheme of things.

    As the planet “evolves” from a period when most species could not have existed in the harsh early environments, through the brief period we are in now, where conditions are perfect for biological entities, it will continue it’s progress for some billions of years after man is extinct.

    During this short sojourn, Homo S. will either eat himself out of house and home, pull the nuclear trigger or manage to stick it out until Mother Earth simply shakes him off her back like so many fleas. Maybe a population thinning plague will come along and slow the inevitable process, who knows.


    Asking organized governments to solve all our problems is not advisable. For the most part, the apointed, anointed leaders of these organizations simply fail at the task by default, (since it was they and their predecessors that created most of the trouble?) and instigate bloody wars to cover their tracks.

    As hard as it is for most “social” animals to accept, we really are on our own. We are, each of us, the world’s smallest minority, individuals. Each of us acting in our own best interest, but not really able to force others to comply with our own preconceived opinion of how the world should be. A good thing?

    Collectively, though, like any mob, we find that “strength in numbers” grant us power. Caesar, Atilla, Alexander, Stalin, Adolf et al had that figured out, as do the anointed of Capital Hill, The Kremlin, Ten Downing and other “Departments of Public Safety” the inmates have constructed for themselves, only to force “others” to toe the line, mind you.

    Change that? To what?

    Rule of Law no longer gets it because it has been watered down to irrelevancy, by,,,wait for it,,,too many laws!

    So, until further notice, the chaos will continue. Utopia is nowhere in sight. There would need to be too many Utopias to please everyone anyway. No one can know the future, and the past is gone, so I guess the now is all that we have.

    So, until The Mighty Quinn’s arrival,

    May the governments and mobs that pillage and govern best, pillage and govern least.


    Another good article that describes the unwelcome reality that is looming up in front of us. In Overshoot: The Ecological Basis of Revolutionary Change, by William R Catton, Jr., he describes our predicament in these terms. We have effectively created a phantom carrying capacity that enabled the human population to grow beyond the earth’s long term permanent carrying capacity. This phantom carrying capacity was based on “anywhere” ghost acreages, in other words current acreage not within a nation’s boundary that can provide the additional food it cannot produce for itself. The other ghost acreage was “anywhen” fossil acreage that represents prehistoric acreage that produced the biomass that became fossil fuel, because the 20th century green agricultural revolution was based on the use of increasing amounts of fossil fuel, such that today from plough to plate we use on average ~10 calories of fossil fuel energy to provide ~1 calorie of food. As the dominant species living on the earth we are rapidly changing our environment in ways that will undermine our dominance, by changing our environment and reducing its suitability for continuation of our dominance. This situation arises from the principle of ecological succession based on seral stages. In our case, the excessive production of pollutants by our industrial global society that have the potential to reduce the earths long term carrying capacity for ourselves and most other species, in this instant climate change caused by CO2 produced from burning our finite fossil fuel resources as our primary energy source.

    Further, as “Will Humanity Be Left Home Alone?” by John Gray, ( ) agricultural overproduction and habitat destruction for supplying food to feed an exponentially growing human population, applies a competitive pressure on other species capable of driving them to extinction. This loss of species diversity reduces the resilience of habitats rendering them vulnerable to sudden changes such as climate and the emergence of novel pests as this extract explains:

    “The lush natural world in which humans evolved is being rapidly transformed into a largely prosthetic environment. Crucially, in any time span that is humanly relevant, this loss of biodiversity is irreversible. True, life on earth recovered its richness after the last great extinction; but only after about 10 million years had passed. Unless something occurs to disrupt the trends under way, all future generations of human beings will live in a world that is more impoverished biologically than it has been for aeons.”


    Ilargi – great essay! “…all we’ve done now for five years plus running is trust a band of bankers and shady officials to fix it all for us…That those [the degrees and/or the money] can also be used for something 180 degrees removed from the greater good doesn’t seem to register.”

    No, it doesn’t register because most people – most – are not conniving and manipulative. Most people go about their business, raise their families, and don’t cause too much chaos. The petty/lesser criminal types might want to take something that’s not their’s to take, but they usually don’t think it through or act compulsively, and then get caught. Whoops! But there is another type, the methodical/planned/scheming thief, who is often brighter, yet lacks empathy and has a severely undeveloped conscience.

    If someone could magically give them a conscience/empathy, even just for a few minutes, it would blow their minds. They live the way they’ve lived their whole lives, doing exactly the same thing, creating so much chaos. Really, the world would be so much better without any of these people. But don’t look for them to “off” themselves anytime soon because only people who are not self-centered tend to do that.

    Zero Hedge had a good article on the Baltimore Police Force. To get their numbers down, in order to make the new mayor (who had higher political aspirations) look good, they fudged the numbers. The police officers, wanting promotions and more pay, arrested as many as they could, got double-time for going to court, etc. Same thing there: too many incentives for bad behavior.

    “The sad part is we aren’t even trying to change the incentive structure of status quo criminality. This is because the current generation of power players were trained and molded by the same types before them. This is all they know. Money and power are their gods. Crime is their religion. We have no choice but to stop them. […]

    So much of what was said there characterizes the perverted culture in Washington D.C. and on Wall Street. People are financially incentivized to commit fraud, crime and deceive customers. Those people are then promoted and train the next class. And the beat goes on…”

    Psychopaths training budding new psychopaths.


    Psychopaths make it their business to know how you think, what makes you tick. They put themselves forward as being much more knowledgeable than you are (only they have the answers and know best). Most people aren’t going to argue because, although their instincts tell them to step up, they feel they just don’t know enough. They know this about people. They know if they just make themselves out to be the authority, most people will back down and defer to them. They’ve got the language skills, good use of terminology (the more difficult, the better, so no one understands what they’re talking about), and they’ll convince you that black is white because lying is what they do well. Their whole lives have been a lie. They are empty inside, yet they don’t even know it. The laugh is really on them!

    The common person just does not see them because they cannot for one second imagine something so evil.


    I would like to respond to this statement in the article:

    Without getting into specific predictions the way Cousteau did: If that is as true as I suspect it is, the one thing it means is that we fool ourselves a whole lot. The entire picture we have created about ourselves, consciously, sub-consciously, un-consciously, you name it, is abjectly false. At least the one I think we have. Which is that we see ourselves as capable of engineering proactive changes in order to prevent crises from blowing up.

    That erroneous self-image leads us to one thing only: the phantom prospect of a techno-fix becomes an excuse for not acting. In that regard, it may be good to remember that one of the basic tenets of the Limits to Growth report was that variables like world population, industrialization and resource depletion grow exponentially, while the (techno) answer to them grows only linearly.

    Is the conclusion that technological growth invariably occurs linearly true? Hasn’t there been exponential growth in the IT and solar sectors? The same may be taking place in the field of nanotechnology. A number of technologists, among them Robert Zubrin, author of “Energy Victory: Winning the War on Terror by Breaking Free of Oil”, argue that Malthusian analyses of our energy quandary fail to account for viable alternatives that would allow for sustainable growth. Alcohol-based fuels dervied from agricultural waste and solar power could account for the vast bulk of our energy needs. What is lacking is the social and political resolve to implement them. The proven exponential potential of technological development is outlined in the work of Ray Kurzweil. In my opinion, a resort to fatalism (“Resilience”) isn’t called for…yet. The wall in front of us is looming, but there’s still time to pull back and switch to sustainable technologies to meet the needs of an advanced global civilization. To achieve this happy outcome will require the spread of a revolutionary spirit that conjoins the efforts of millions of determined people to halt and reverse the juggernaut of corporate greed. I am not arguing against the author’s point that human beings tend to blunder into avoidable crises, only that a “techno-fix” is an undisputed “phantom”.

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