Aug 182015
 
 August 18, 2015  Posted by at 2:32 pm Finance Tagged with: , , , , , , ,


Gustave Doré Dante and Virgil among the gluttons 1868

In case you missed it, we’re doing something a little different. Nicole wrote a very lenghty article and we decided to publish it in chapters. Over five days we are posting five different chapters of the article, one on each day, and then on day six the whole thing. Just so there’s no confusion: the article, all five chapters of it, was written by Nicole Foss. Not by Ilargi.

This is part 4. Part 1 is here:
Global Financial Crisis – Liquidity Crunch and Economic Depression,
Part 2 is here:
The Psychological Driver of Deflation and the Collapse of the Trust Horizon
and part 3 is here:
Declining Energy Profit Ratio and Socioeconomic Complexity


Blind Alleys and Techno-Fantasies

The majority of proposals made by those who acknowledge limits fail on at least one of the previous criteria, and often several, if not all of them. Solution space is smaller than we typically think. The most common approach is to insist on government policies intended to implement meaningful change by fiat. Even in the best of times, government policy is a blunt instrument which all too often achieves the opposite of its stated intention, and in contractionary times the likelihood of this increases enormously.

Governments are reactive – and slowly – not proactive. Policies typically reflect the realities of the past, not the future, and are therefore particularly maladaptive at times of large scale trend change, particularly when that change unfolds rapidly. Those focusing on government policy are mostly not thinking in terms of crisis, however, but of seamless proactive adjustment – the kind of which humanity is congenitally incapable.

There is a common perception that government policy and its effect on society depends critically on who holds the seat of power and what policies they impose. The assumption is that elected leaders do, in fact, wield the power to determine and implement their chosen policies, but this has become less and less the case over time. Elected leaders are the public face of a system which they do not control, and increasingly act merely as salesmen for policies determined behind the scenes, mostly at the behest of special interest groups with privileged political access.

It actually matters little who is the figure-head at any given time, as their actions are constrained by the system in which they are embedded. Even if leaders fully understood the situation we face, which is highly unlikely given the nature of the leadership selection process, they would be unable to change the direction of a system so much larger than themselves.

Where public pressure on elected governments develops around a specific issue, for whatever reason, the political response is generally to act in such a way as to appear to do something meaningful, while actually making no substantive change at all. Often the appearance of action is nothing more than vacuous political spin, assuaging public opinion while doing nothing to threaten the extractive interests driving the system in the same direction as always. We cannot expect truly adaptive initiatives to emerge from a system hostage to powerful vested interests and therefore locked into a given direction.

Public understanding of the issues agitated for or against tends, unfortunately, to be limited and one-dimensional, meaning that it is essentially impossible to create public pressure for truly informed policy changes, and it is relatively simple to claim that the appearance of action constitutes actual action. A short public attention span makes this even simpler. People are also extremely unlikely to vote for policies which, if they were to make a meaningful difference, would amount to depriving those same people of the outsized consumption habits to which they have become accustomed. The insurmountable obstacles to achieving change through government policy become obvious.

Planned degrowth assumes the possibility of a smooth progression towards a lower consumption future, but this is not how contractions unfold following the bursting of a bubble. What we can expect is a series of abrupt dislocations that are going to wreak havoc with our collective ability to plan anything at all for many years, by which time we will already be living in a lower consumption future arrived at chaotically. Effective planning for an epochal shift requires the capacity for top-down policy implementation at large scale, combined with social cohesion, the ability to maintain complexity, and the energy to maintain control over a myriad distinct aspects simultaneously. It is simply not going to happen in the manner that proponents envisage.

Similarly, a steady state economy is not a realistic construct in light of many non-negotiable realities. Human history, and in fact the non-human evolution which preceded it, is a dynamic history of boom and bust, of niches opening up, being exploited, being over-exploited and collapsing. It is a history of opportunism and the consequences following from it. In the human experience, boom and bust in the form of the rise and fall of empire is an emergent property of civilizational scale. A steady state at this scale is prima facie impossible.

An approximation of steady state can exist under certain circumstances, where a population well below ecological carrying capacity, and surrounded by abundance, is left in isolation for a very long period of time. The Australian aboriginal existence prior to the European invasion is probably the best example, having persisted for tens of thousands of years. The circumstances which permitted it were, however, diametrically opposite to those we currently face.

Proponents of the steady state economy do not seem to appreciate the extent to which we have long since transgressed the point of no return from the perspective of being able to maintain what we have built. Even if we were merely approaching limits, instead of having moved substantially into overshoot, we would not be able to hold society in stasis just below those limitations.

Populations grow and expansion proceeds with it. Intentionally preventing population growth globally is unrealistic. Even China, as a single country, has struggled with population control policies, and has had to take drastic and dictatorial measures in order to slow population growth. This clearly relies on strong top-down control, which is only barely possible at a national level and will never be possible at a global level.

In China we are also going to see that the outcome of population control has challenging consequences, and that a policy supposedly designed to foster stability can have the opposite effect. The desire for a male child has dangerously distorted the gender ratio in ways which will leave the country with a large excess of young men with no prospects for either work or marriage. That is a guarantee of trouble, either at home or abroad, or possibly both. There will also be far too few employed young people to look after a burgeoning elderly population, meaning a rapid die-off of the elderly cohort at some point.

Even then China is unlikely to have managed to get itself back below the carrying capacity it has done so much to destroy during its frantic dash for growth. The tremendous modernity drive China has engaged in essentially undone any benefit curbing population growth might have had, by increasing energy and resource consumption per capita by an enormous margin. It is population times consumption which determines impact, and in China the ecological impact has in many ways been catastrophic. That has to some extent been compensated for by obtaining access to a great deal of land in other countries, but economic colonialism has done nothing for global stability.

While it is possible to conceive, as some steady-state and degrowth proponents do, of a world in which civilization and large-scale urbanism have been dismantled in favour of autonomous, yet networked, village-scale settlements, that does not make it even remotely realistic. Humanity may, in the distant future, after the overshoot condition has been resolved by nature, as it will eventually be, find itself living in villages once again, but they would not be networked in the modern, technological sense, and the population they housed would be very smaller smaller than at present.

If it is below carrying capacity, then it will grow again, restarting the cycle of expansion and contraction rather than settling for a steady-state. Reaching for the stars again would not be possible however, as the necessary energy and resources have already been consumed or dissipated.

People are often inclined to think that a different trajectory is a matter of choice – for instance that we must collectively choose to live differently in order to prevent an ecological catastrophe. In fact it is not a matter of choice at all. There is no basis for top-down control capable of delivering meaningful change, nor would humanity ever collectively choose to scale back its consumption pattern, although individuals can and do. Given opportunities as a species, we take them, as evolution has shaped us to do.

Groups which made a habit of forgoing opportunities in the past would quickly have been out-competed by those who did not. We are the descendants of a long long line of opportunists, selected over millennia for our flexibility in turning an incredibly wide range of circumstances to our advantage. But, in this instance we will have no choice – the shift to lower consumption will be imposed on us by circumstance. The element of choice will be only in how we choose to face that which we cannot change.

Another class of ideas for ways forward is grounded in techno-optimism, suggesting that because human beings are clever and creative, and have tended to push back apparent limits before, that we will be able to do so indefinitely. The notion is that changing our trajectory is unnecessary because limits can always be circumvented. Needless to say, such a view is not grounded in physical reality. These ‘solutions’ are entrepreneurial rather than policy-driven, although they may expect to be facilitated through policy.

Ideas in this category would include such things as smart renewables-based power grids, high-performance electric cars, high-tech energy storage systems, thorium reactors, fusion reactors, biofuels, genetically modified (pseudo)foodstuffs, geoengineering, enhanced automation, high-tech carbon sequestration, global carbon trading platforms, electronic crypto-currencies, clean-tech, vertical farming skyscrapers and many other notions.

Notice that all of these presume the ready availability of cheap energy and resources, along with large quantities of capital, and all assume that technological complexity can be maintained or even increased. Options such as these also have a substantial dependence on the continuation of globalized trade in both goods and services in order to satisfy their complex supply chains. However, globalization depends on the ability to operate at large scale in extremely complex ways, it depends on cheap energy, it depends on maintaining trust in trading partners, and it depends on the ability to travel without facing unacceptable levels of physical risk from piracy or conflict.

Trade does very poorly in times of financial and economic contraction. In the Great Depression of the 1930s, trade fell by 66% in two years. Trust collapses, and with it the contractual ability to agree on risk-sharing arrangements. Letters of credit become impossible to obtain in a credit crunch, and without them goods do not move.

Many goods will in any case have no market, as there will be little purchasing power for anything but essentials, and possibly not even sufficient for those. As we move from the peak of globalized trade, there will be an enormous excess of transport capacity, which will drive prices down relentlessly to the point where transporting goods becomes uneconomic. Much transport capacity will be scrapped. Without credit to oil the wheels of trade, our highly leveraged economic system will grind to a halt.

It is natural that we regard our current situation as being normal, and take for granted that the march of technological progress – the only reality most of us have known – will continue. Few question very deeply the foundations of our societies, and even those who do recognize that change must occur rarely realize the extent to which that change will inevitably strike at the fundamental basis of modern existence. Globalization has peaked and will shortly be moving into reverse. The world will be a very different place as a result.

This is part 4. Part 1 is here:
Global Financial Crisis – Liquidity Crunch and Economic Depression,
Part 2 is here:
The Psychological Driver of Deflation and the Collapse of the Trust Horizon
and part 3 is here:
Declining Energy Profit Ratio and Socioeconomic Complexity

Tune back in tomorrow for part 5: Solution Space

Home Forums The Boundaries and Future of Solution Space – Part 4

This topic contains 7 replies, has 7 voices, and was last updated by  SteveB 4 years, 2 months ago.

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  • #23284

    Gustave Doré Dante and Virgil among the gluttons 1868 In case you missed it, we’re doing something a little different. Nicole wrote a very lenghty art
    [See the full post at: The Boundaries and Future of Solution Space – Part 4]

    #23285

    SteveB
    Participant

    I’m looking forward to Part 5, though I have a general idea of what it will include, based on past readings and viewings of Nicole’s thinking.

    The subject of this analysis is not civilization but exchange-based civilization. Trust in trading partners, for example, only matters when trade and trust are concepts in turn based on the concept of exchange. Ignoring or overlooking the fact that human expansion didn’t happen in a vacuum, but rather in a society (unique among species) which, through that belief, ubiquitously and perpetually encouraged not only consumption but overconsumption, closes the analysis to possibilities within the solution space. While one might argue (or simply believe) that humans can’t or won’t end the current dominant-cultural belief in the concept of exchange that has fueled our expansion, it can’t be known. Therefore, absent clear indications that exploring that option (preferably in tandem with obviously necessary localization efforts, based on a permaculture design approach, as I’m sure Nicole will continue to advocate) would make matters worse, people would deprive themselves the possibility of a less-stressful and less-painful future by dismissing it out of hand.

    #23286

    mixte
    Participant

    The techno-fantasists annoy me more than those who remain completely ignorant.

    After 4 parts, it appears the “solution space” is going to be quite small.

    I wonder how quickly we will lose access to high tech medical procedures. I have very bad eyesight and I am at high risk for retinal tears. Scary but generally fixable at the moment. Also wonder about basic things like cataract surgery. 5 more years? 15? I can’t even stock up on contact lenses because they expire after a year or two. I plan to buy 5 or 6 pairs of glasses and hope for the best.

    I’ve done many of the things you suggest in your video that will be made into a documentary, including no debt (except child support), no house/mortgage, no car. I have also been building relationships in the community with a local non-profit farm and other community-based food and local production projects. But I do wonder how much advantage these actions really give you when everything goes south. They can’t repossess every house or car, can they? The only advantage I see may be a slight psychological edge–I won’t consider some of these losses so much as deprivations since they will already be my normal state. But if there is no food, or no job, what good is commuting by bicycle going to do for me? Of course my greatest concern is I worry about the life my 6 year old boy will have, especially because I am an older dad.

    #23287

    casamurphy
    Participant

    Maybe we’ll be lucky and not even notice a relatively quick die-off.

    How many people personally known to you died this year? Most people answer 0 or 1 or rarely 2 to that question. If you answered 2, would your experience of life have changed dramatically if that number was 16 instead of 2? Probably not, especially if those who died were elderly or deemed diseased. Some level of normalcy could continue, and over time more frequent deaths due to disease and conditions of old age that used to be medically treated, would become the new normal. If annual worldwide deaths increased 8 fold, most people would eventually take that increase in stride. Even people living in higher than “normal” death rate areas who would feel a more significant impact would adapt and over a short time horizon not see things as catastrophic, but simply moving towards a new, lower level of stability.

    An 8 fold increase in the number of people dying every year would create a net population decreasing of about 3% per year even if current birthrates continued unabated. At a 3% rate of decrease, world population would shrink from 7.4 billion to 1 billion in about 65 years.

    Within 3 short generations society could be back to living an early-industrial, if not pre-industrial life-style.

    Continued resource scarcity and unwinding of complexity could easily bring a tipping point towards significant population reduction over a relatively short period of time; while ironically, at the same time, allowing most people a somewhat normal life not not characterized by constant war or famine; but instead simply defined by higher general mortality rates which are perceived as a new normal.

    #23290

    sangell51
    Participant

    I really don’t see why a managed decline in population cannot be achieved, particularly in advanced nations. Already 25% of the Japanese population is over 65 and their population is falling by about 500,000 per year. The same is starting to happen in Europe though they are about to swamped with the surplus population of the Middle East and Africa if nothing is done to stop it.

    California, e.g. had just 3 million people living there 100 years ago and there is no reason it could not shrink back to that population over the next 100 years. It wasn’t hell on earth back then. It fact it was truly the Golden State with a sophisticated San Francisco and plenty of water available for the orchards and farms of that era.

    Even automobiles are possible if the US kept its population to that the 100 million we had 100 years ago and lived as we did then. A family had one car right up until 1960 or so. Gasoline was expensive- relatively. 100 gallons cost about 1 ounce of gold which would be around $6 per gallon per day! Electricity wasn’t cheap either 100 years ago… for those who had it and not everyone did. I really don’t see a problem for a world of just over 2 billion people, which was the global population 100 years ago maintaining a decent standard of living though some regions, for other reasons, may have trouble providing even a 1920 standard of living for their population that have nothing to do with resource constraints.

    #23291

    Hotrod
    Participant

    Nicole,

    You’re hitting on all 8 cylinders, as the old timers used to say.

    Do not look to the government for any help, solutions, answers, or accountability. It will react as any and all bureaucracies always react: circle the wagons and protect itself-at all costs. As my now departed next door neighbor said about his WWII experience, “Your life ain’t worth a plug nickel to the higher-ups”. Advice well worth listening to.

    #23304

    John Day
    Participant

    The easiest thing is to be an “early adopter” in the wave of population reduction.
    I think I have a lot of work to do for the first wave.
    Maybe I’ll get to be in the second wave.

    #23306

    SteveB
    Participant

    sangell51, there’s the solution space, and there’s the wishful thinking space. Your comment clearly occupies the latter. That’s why you “really don’t see”.

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