Category: Business

Doing nothing is not an option

Part Three of The Sufficiency Economy

A recent item on Naked Capitalism under their links section, deserves being highlighted. It was a reference to a recent report on OilPrice under the heading of Why Current Methods to Combat Climate Change Don’t Work Let me offer a taster:

World leaders seem to have their minds made up regarding what will fix world CO2 emissions problems. Their list includes taxes on gasoline consumption, more general carbon taxes, cap and trade programs, increased efficiency in automobiles, greater focus on renewables, and more natural gas usage.

Unfortunately, we live in a world economy with constrained oil supply. Because of this, the chosen approaches have a tendency to backfire if some countries fail to adopt them. But even if everyone adopted them, it is not at all clear that they would provide the promised benefits.

The Kyoto Protocol was adopted in 1997. If emissions had risen at the average rate that they did during the 1987 to 1997 period (about 1% per year), emissions in 2011 would be 18% lower than they actually were. While there were many other things going on at the same time, the much higher rise in emissions in recent years is not an encouraging sign.

The standard fixes don’t work for several reasons ….

Not going any further because the author, Gail Tverberg has given me permission to reproduce her article and I shall be doing that next Monday. If you can’t wait until then the article may be read on Gail’s website.

So yesterday, Dr. Alexander set out a series of aspects that showed just how challenging is the present global predicament. The fundamental argument being that growth is now utterly inappropriate for where mankind now is at the end of 2012. Part three of the essay examines how, whether we like it or not, change is on its way.

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THE SUFFICIENCY ECONOMY
ENVISIONING A PROSPEROUS WAY DOWN
Samuel Alexander
Simplicity Institute Report 12s, 2012

Dr Samuel Alexander is co-director of the Simplicity Institute and a lecturer with the Office for Environmental Programs, University of Melbourne.

3. Embracing Life After Growth (Before it Embraces Us)

Earlier I mentioned that eventually we are likely to have a sufficiency economy whether we choose it or not. It should now be clearer why this is so. The growth paradigm has reached, more or less, the ‘limits to growth,’ and this means that we must move away from growth-based economies if we are to avoid exacerbating existing ecological crises to the point of catastrophe. Billions of lives are at stake, as are the biodiversity and climatic balance of our planet. But even if we do not choose to give up on growth, energy and resource constraints are in the process of bringing growth to an end all the same, and no amount of ‘quantitative easing’ or technological advances are going to provide an escape from this biophysical reality. When, in the foreseeable future, the world reaches the ‘end of growth,’ we will have a form of ‘sufficiency economy’ imposed upon us, in the sense at least that we will have to make do, as best we can, without further growth. This may well imply radically reduced consumption, compared to levels prevalent in consumer societies today, because when growth-based economies do not grow, debts cannot be repaid, and economic contraction, not merely stagnation, tends to ensue. If this situation is not well managed – for example, if we persist blindly with expectations of limitless growth and continue to structure our economies accordingly – then this phase in history is probably going to mark the beginning of civilisational collapse, although it is impossible to be sure whether this would be a rapid breakdown of the existing order (Korowics, 2012) or a slow deterioration over many decades (Greer, 2008).

Nevertheless, the fact that there are biophysical limits to growth from which we cannot escape sometimes obscures the fact that living within those limits is something that we should want to do, simply to be good stewards of Earth. It is obviously in our self-interest to preserve the life-support systems upon which all life depends, a point that is too often overlooked. Furthermore, the social and psychological evidence noted immediately above implies that ‘the good life’ does not actually consist in the consumption of material things, contrary to the promises of advertisements, and this means that denying ourselves consumer lifestyles need not be considered a hardship, as the ‘voluntary simplicity’ movement, for example, already understands (Alexander and Ussher, 2012). Certainly, consumer culture must not be accepted as the peak of civilisation. We must explore alternative ways to flourish without relying on material abundance, and I will argue that embracing a sufficiency economy is one means of doing so, and probably a necessary means. I will now briefly elaborate on some of the values underlying the sufficiency economy then proceed to unpack their practical implications in some detail.

3.1. The Principle of Sufficiency – ‘Enough, for Everyone, Forever’

The fundamental aim of a sufficiency economy, as I define it, is to create an economy that provides ‘enough, for everyone, forever.’ In other words, economies should seek to universalise a material standard of living that is sufficient for a good life but which is ecologically sustainable into the deep future. Once that is achieved, further growth in material wealth would not be an economic priority. As noted above, for individuals and economies that are already overconsuming, the attainment of sufficiency implies not merely resisting further growth, but first entering a phase of planned economic contraction. Once sustainable sufficiency has been attained, prosperity should be sought in various low-impact, non-materialistic forms of well being, such as enjoying social relationships, experiencing connection with nature, engaging in meaningful work or spiritual practice, or exploring various forms of peaceful, creative activity. There are no limits to the scale or diversity of qualitative improvement of life in a sufficiency economy, but to achieve sustainability in a world of seven billion people (and counting), material standards of living must not aim for consumer affluence but only for what is minimally sufficient for a good life. The basic economic reasoning here is that once basic material needs are met, human beings are not so strictly bound by materialistic concerns and are thus free to dedicate more of their energy and attention to things other than increasing material living standards. ‘As wealth increases,’ John Hicks (1959: xiii) once wrote, ‘wealth itself becomes (or should become) less important,’ a dynamic that Hicks mischievously called ‘the diminishing marginal significance of economics.’

These broad comments obviously require (and will receive below) more concrete expression, but they nevertheless provide a normative starting point that contrasts sharply with the materialistic ‘more is better’ ethos underpinning existing growth economies. The sufficiency economy is based on an alternative economic perspective that accepts that ‘just enough is plenty,’ and this alternative perspective implies that producing more than is sufficient is not required for an individual or society to flourish. In the words of Henry Thoreau (1982: 568): ‘Superfluous wealth can buy superfluities only.’ Furthermore, we have already seen that the growth paradigm has produced high-impact economic systems that are grossly unsustainable and certainly not universalisable, so the sufficiency economy treats consumer lifestyles, and the growth economies that are required to support them, as neither desirable nor sustainable.

Determining exactly what level of material provision is ‘sufficient’ cannot be defined with any analytical precision, and will always be context and culturally specific (Sen, 1998). But material sufficiency can be broadly understood to include meeting basic biophysical needs for food and water, shelter, and clothing, as well as having access to basic medical services and some minimal level of social education. Access to extra energy supplies for heating will also be required in certain climates, and since energy is required to sustain any level of social complexity, some indeterminate level of energy supply, beyond food, fire, and labour, should also be considered a basic requirement for a full, human life. (Only those anarcho-primitivists, I presume, who think hunter-gathering is the only acceptable form of social organisation, would object to there being a basic need for energy beyond food, fire, and labour.) Sustainability may not necessarily mean living like the Amish – I am sure people will creatively salvage the wastes of industrial civilisation to live in ways that lie beyond the Amish lifestyles for some time. But using the Amish as a rough touchstone or benchmark may not be so far from the truth. At least this evokes a serious image of what low-consumption ‘simple living’ could look like in an energy descent context, a scenario that is entirely absent from mainstream sustainability discourse (perhaps because such simplicity of life is politically unpalatable). The most important point to understand is that nothing much resembling consumer lifestyles today are sustainable or universalisable.

Although these comments on sufficiency remain highly indeterminate – especially with respect to the amount of energy required – my position is that the concept of sufficiency is so important to sustainability discourse that its indeterminacy must not be a reason to reject it. I contend that universal sufficiency, like justice, is a fuzzy goal towards which humanity should be moving, and the most important thing is that there is a debate over the meaning of sufficiency and an attempt to practice our theory as best we can (Princen, 2005). Currently, in the developed nations, at least, sufficiency does not enter our economic or political vocabulary, which is why so few are asking the question, ‘How much is enough?’, and why fewer still are trying to answer it.

In an age that has done so much to link ‘the good life’ with material abundance, some will think the pursuit of sufficiency means giving up happy and fulfilling lives, but such an objection is based on a particular conception of human beings that the sufficiency perspective I am outlining rejects (Alexander, 2012d). If it were true that happiness and fulfilment consisted in the consumption and accumulation of ever more material things, then, admittedly, a sufficiency economy would seem to be inconsistent with ‘the good life.’ But that is far too narrow a conception of the good life and it is based on a misunderstanding of human beings. It may be that affluence can produce well being, but that does not prove that well being depends on affluence. Indeed, the conception of human beings upon which the sufficiency economy is based is one in which there are an infinite variety of fulfilling lives that can be lived while consuming no more than an equitable share of nature. Put more directly, the sufficiency economy is based on the premise that ‘a simple life’ can be ‘a good life,’ a truth that is obscured only to those who have not sufficiently explored their imaginations. Since consumerist conceptions of ‘the good life’ are causing devastating social and ecological problems, it follows that our economies should promote conceptions of the good life based on far lower resource and energy consumption, and that is the defining characteristic of the sufficiency economy.

3.2. The Macro-Economic and Lifestyle Implications of Energy Descent

The necessity of highly reduced energy consumption is perhaps the critical issue (Odum and Odum, 2001). Such a reduction will arise whether it is enforced by declining oil supplies or voluntarily embraced as a response to climate change. However, even the most progressive ecological economists who argue for decarbonising the economy do not seem to realise quite how revolutionary this proposal is – which is not to say the proposal is misconceived (Hansen et al, 2008), only that its economic implications may be misunderstood. If the global economy managed to wean itself off fossil fuels over the next few decades in response to climate change, then a ‘steady state’ economy would be impossible, if a steady state is meant to imply maintaining anything like existing levels of affluence. It would be impossible because fossil fuels currently make up around 80% of global energy supply (IEA, 2010b: 6), and given the close relationship between energy and economics, nothing like existing production or distribution could be maintained when we are talking about that level of energy reduction. Without fossil fuels, the world just would not have the energy supply to maintain a steady state of economic output; the economy would have to contract significantly. This is not a consequence many people seem to understand or dare to acknowledge, but it is a reality that we must not shy away from if a post-carbon world is indeed what we seek.

The implications of drastically reduced energy consumption primarily means two things for economies. First, it means significantly reduced production and consumption, commensurate with the available energy supply. In order to meet basic needs for all, this will require much more efficient use of energy and a radical reassessment of how best to use what limited energy is available (Alexander 2012b). Secondly, energy descent will mean an inevitable transition to highly localised forms of economic activity, for the reason that trade over large distances would be simply too energy-intensive and costly to afford, especially in an era of stagnating or declining oil supplies and rising prices (Rubin, 2009).

In short, a sufficiency economy is an economy that has low energy and resource requirements (relative to developed economies) but which sufficiently provides for mostly local needs using mostly local resources. These defining features of a sufficiency economy may receive some vague support in certain areas of the ‘deep green’ literature on sustainability, but to date almost no attention has been given to describing in any detail what economic life would be like if such an economy were ever to arise (but see Morris, 2004; Trainer, 2010; Burch, 2012a). Accordingly, the remainder of this essay is dedicated to providing some of those details, in the hope of advancing the debate on what real sustainability actually means for daily life. Until we have some clearer vision of the alternative society, it is very difficult to work effectively and prosperously toward its realisation.

(The full set of references will be included in the concluding Part Five to be published on Friday.)

Part Four – Envisioning a Prosperous Way Down will be published on Learning from Dogs tomorrow.

The simpler life

Part Two of The Sufficiency Economy.

I do hope that you read Part One of The Sufficiency Economy published yesterday on Learning from Dogs. There Dr. Alexander of the Simplicity Institute set out the obvious, well obvious if one reflects for even a few moments, as this small extract demonstrates:

…. precisely what consumer capitalism lacks – a purpose, a reason for existence. It is a means without an end, like a tool without a task. What makes this state of affairs all the more challenging is that the era of growth economics appears to be coming to a close, due to various financial, ecological, and energy constraints, and this is leaving growth-based economies without the very capacity for growth which defined them historically.

Before moving to part two, the global predicament, more about the Simplicity Institute, an organisation of which I had been unaware prior to a few days ago. The Institute’s opening web page reads thus:

Given that the essential factor in our global predicament is overconsumption, the most obvious principle for a sustainable society is that those who are over-consuming must move to far more materially ‘simple’ lifestyles. This does not mean deprivation or hardship. It means focusing on what is sufficient to live well. Most of our basic needs can be met in quite simple and low-impact ways, while maintaining a high quality of life.

The Simplicity Institute seeks to facilitate the rapid transition away from growth-based, consumer societies toward sustainable and more rewarding societies based on material sufficiency. We seek to understand what a society would look like if it were based on this ‘simpler’ way of living and how we might get there.

We are also developing networks of active collaboration between existing participants in the Simplicity Movement, in the hope of providing educational tools and resources to help mainstream the idea that ‘simpler lifestyles’ provide a high quality alternative to consumer capitalist society.

I would also encourage you to read about Their Mission and their Publications, one of which is the subject of this week’s postings. Finally, do offer your own experiences by completing their Simple Living Survey.

So on to Part Two where Dr. Alexander examines the global predicament facing all of us.

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THE SUFFICIENCY ECONOMY
ENVISIONING A PROSPEROUS WAY DOWN
Samuel Alexander
Simplicity Institute Report 12s, 2012

Dr Samuel Alexander is co-director of the Simplicity Institute and a lecturer with the Office for Environmental Programs, University of Melbourne.

2. The Global Predicament

If a path to the better there be, it begins with a full look at the worst. –Thomas Hardy

Below I outline various social, ecological, economic, and energy-related problems, which together provide the background against which the sufficiency economy should be understood. Most people, including many environmentalists, seem to believe that Western-style lifestyles, and the growth economies that support them, can be sustained and even globalised, provided the world transitions to systems of renewable energy and produces commodities more cleanly and efficiently. This assumption is reflected especially clearly in international political discourse on environmental issues (e.g. UNDP, 2007/8), which consistently pushes the message that we can decouple economic growth from ecological impact, or even that we need more economic growth in order to fund environmental protection initiatives or otherwise save the planet (Beckerman, 2002). The following review casts considerable doubt on the possibility of any technological ‘fix’ to existing problems. Each of the problems, on their own, provides ground for radically rethinking the nature of existing economic structures and goals. When considered together, I believe the case for fundamental change is compelling.

2.1. Ecological Overshoot and the Limits of Technology

The ecological footprint of the global economy now exceeds the sustainable carrying capacity of the planet by 50%, and overall things continue to get worse (Global Footprint Network, 2012). Old growth forests continue to be cut down at alarming rates; fresh water is getting scarcer; fish stocks and biodiversity more generally continue to decline; top-soil continues to erode; the climate continues to change and become less stable; and overall the pollution and wastes from human economic activity continue to degrade the ecosystems upon which all life depends (see generally, Brown, 2011). While this is hardly news, the full implications of our predicament are typically grossly under-estimated. The mainstream view on how to achieve sustainability is to exploit science and technology in order to produce more cleanly and efficiently, thereby decoupling economic activity from its destructive environmental impacts. But despite decades of extraordinary technological advance, the overall impacts of economic activity continue to increase (Jackson, 2009: Ch 4). To be sure, human beings are getting better at producing commodities more cleanly and efficiently, but we are also producing more commodities, and it turns out that those production increases outweigh the efficiency gains in production, leading to an overall increase in the impacts of economic activity, not a decrease. Efficiency without sufficiency is lost. We must always remember that technology is a two-edged sword, in the sense that it provides us with tools both to protect and destroy the natural environment, and human beings are exploiting both forms enthusiastically, especially the latter. Technology might give us solar panels and electric cars, for example, but it also gives us the ability to cut down rainforests easily, empty the oceans, and drill for oil in thousands of feet of water in the Gulf of Mexico.

Granted, technology never ceases to amaze, but the very awe it evokes seduces many into faithfully investing it with limitless powers. When we actually do the math, however, the impossibility of a technological fix to environmental problems becomes perfectly clear. If the developed nations were to grow their economies at a modest 2% over coming decades and by 2050 the poorest nations had caught up – which more or less seems to be the goal of ‘development’ – then by that stage the global economy, which is already in ecological overshoot, would be almost 15 times larger than it is today (Jackson, 2009: 81). This means, for example, that if we are to meet the moderate emissions targets of the IPCC (2007) then the carbon intensity of global economic output must be 130 times lower than it is today, requiring 11% reductions every year. Even with the unprecedented technological advances of recent decades, the efficiency improvements over the period 1990-2007 were merely 0.7% per year (Jackson, 2009: 79). These hard numbers ought to shatter the faith of techno-optimists. They show that it is delusional to think that technology alone is going to be able to solve the ecological crises we face, because the extent of absolute decoupling required is simply too great (Trainer, 2012a). Humanity must exploit appropriate technologies at every opportunity, of course, but first and foremost what is needed is a new mode of economy, one that recognises and accepts that growth-based, energy-intensive consumer societies are grossly unsustainable and certainly not universalisable.

2.2. Poverty amidst Plenty

The fact that the global economy is already in ecological overshoot is even more challenging when we bear in mind that in the poorest parts of the world today great multitudes are living lives oppressed by extreme poverty (World Bank, 2009). The global challenge, therefore, in terms of humanitarian justice and ecological sustainability, can be stated as follows: The human community must find a way to raise the material standards of living of the world’s poorest people – who surely have a right to develop their economic capacities in some form – while at the same time reducing humanity’s overall ecological footprint (Meadows et al, 2004: p. xv). What is clear is that the current ‘trickle down’ approach to poverty alleviation is neither working nor ecologically sustainable, as evidenced by a report from the New Economics Foundation (Woodard and Simms, 2006). This study shows that between 1990 and 2001, for every $100 of growth in the world’s average income per capita, merely $0.60 contributed to reducing poverty below the ‘$1 per day’ line. This means that to achieve $1 of poverty reduction at that ratio, an extra $166 of global production and consumption is required. Not only do these figures expose global growth as an extremely inefficient means of reducing poverty, it also implies that the amount of growth needed to alleviate poverty would be, without question, environmentally unsupportable. Accordingly, we must find a new path to poverty alleviation beyond the conventional ‘development’ agenda, one based on equitable distribution and new structures, not limitless growth.

2.3. Overpopulation

What exacerbates the ecological and humanitarian crises outlined above is the fact that, according to the United Nations, global human population is expected to exceed nine billion by mid-century and reach ten billion toward the end of the century (UNDSEA, 2011). Obviously, this will intensify greatly the already intense competition over access to the world’s limited natural resources and it will put even more pressure on Earth’s fragile ecosystems. It is of the utmost importance that population stabilises as soon as possible and is significantly reduced in some equitable manner. But we have known about the ‘population bomb’ for many decades and still it continues to explode, albeit at a slowing pace. We need either new strategies here or much greater commitment to existing strategies (and probably both). But even if humanity somehow managed to stabilise population at once and thereby avoid the expected increases, the global economy would nevertheless remain in gross ecological overshoot. The primary task, therefore – given we have the population we have – must be to reduce the ecological impact of our economic activity, partly by exploiting all appropriate technologies, and partly by stabilising and reducing population over time, but mainly by reimagining ‘the good life’ beyond consumer culture and learning how to step more lightly on the planet (Alexander, 2011a; 2009). This means giving up the destructive dream of ‘consumer affluence.’ The developed nations certainly cannot lecture the developing nations about how expanding populations are putting immense strain on Earth’s ecosystems while at the same time indulging in ever-higher levels of consumption. Accordingly, if the developed nations are serious about reducing global impact on the environment, as they claim they are, then before looking overseas they must first show the world that they are prepared to step more lightly themselves. Overpopulation is too easily used as a scapegoat to deflect attention away from the more fundamental problem of overconsumption.

2.4. The Fantasy of Limitless Economic Growth

Despite the fact that the global economy is already in dangerous ecological overshoot, every nation on the planet still aims to grow its economy, without apparent limit. Economic development of some form is still obviously required in the poorest parts of the world, as noted, simply in order to provide for basic needs. But if the poorest nations are to have any ‘ecological room’ to do so – especially when population growth is taken into account – it follows by force of logic that the overdeveloped rich nations should not continue growing their own economies. Indeed, sustainability demands that the richest nations initiate a process of planned economic contraction, or ‘degrowth’ (Alexander, 2012a), with the aim of eventually arriving at some ‘steady-state’ economy within ecological limits. This confronting logic has proven easy enough for the rich nations to ignore, but it is impossible to escape. Not only must the growth paradigm inevitably collide with biophysical reality, it is in fact in the process of doing so (Meadows et al, 2004).

Needless to say, however, there are no signs that the richest nations are prepared to give up the pursuit of growth, certainly not for reasons of global equity or ecological conservation. The great obstacle that lies in the way of a macroeconomics ‘beyond growth’ is the dominant ideology of growth economics that quite explicitly treats growth in GDP as the best measure of national progress and politico-economic competency (Purdey, 2010). In fact, the growth paradigm is so deeply entrenched in mainstream political discourse in the developed nations (and increasingly elsewhere) that it is hard to imagine any of the major political parties, whether on the Left or the Right, daring to pursue or even seriously contemplate a post-growth alternative. This arguably gives rise to an acute and disturbing contradiction: We must give up the pursuit of growth, but cannot.

Empire thus marches on.

2.5. Expensive Oil and other Energy Issues

Even if the world never chooses to question the growth paradigm – which seems the most likely scenario – the peaking of crude oil suggests that the era of global growth is coming to an end nevertheless (Heinberg, 2011; Rubin, 2012). While there is still debate about the exact timing of peak oil, it is now widely accepted that crude oil production, if it has not already peaked, will peak sometime in the foreseeable future, and then, after a corrugated plateau, enter terminal decline. Since oil demand is expected to keep on rising, however, the reduction of oil supply will inevitably lead to sharply increasing oil prices (Hirsch et al, 2010). This dynamic is already well underway, with the price of oil multiplying several times during the last decade or so. There are of course vast reserves of non-conventional oil still available in the tar sands of Canada and Venezuela, and in the shale oil deposits in the United States and elsewhere, but these non-conventional reserves have a far lower energy return on investment (Murphy and Hall, 2011), making them much more expensive and slower to produce. Accordingly, the issue is not that human beings will ever run out of oil; the issue is that we have already run out of cheap oil.

This is hugely significant because oil is not just another commodity – it is the lifeblood of industrial civilisation. This is evidenced by the fact that the world currently consumes around 90 million barrels every day (IEA, 2010a). When the costs of oil increase significantly, this adds extra costs to transport, mechanised labour, plastics, and industrial food production, among many other things, and this pricing dynamic sucks discretionary expenditure and investment away from the rest of the economy, causing debt defaults, economic stagnation, recessions, or even longer-term depressions. That seems to be what we are seeing around the world today, with the risk of worse things to come (Tverberg, 2012a).

Moreover, as Ted Trainer (2012b) and others have argued, renewable energy, even if it were embraced whole-heartedly and on a global scale, would never be able to sustain the expansion of complex, energy-intensive consumer societies, especially with the global population growing. If this diagnosis is basically correct, it provides further grounds for thinking that the growth paradigm has no future. I hasten to add that this is not an argument against renewable energy. The climate science is very clear that we must abandon fossil fuels as far as possible and as soon as possible (e.g. Hansen et al, 2008). But the limitations of renewable energy do suggest that we cannot respond to climate change by embracing renewables and have a growth-based economy.

Furthermore, nuclear energy’s potential to provide the energy required to maintain growth economies is fiercely debated. What is beyond debate, however, is that nuclear energy also has a long list of limitations, time lags, dangers, and huge financial costs, and ever since Fukushima the prospects of a nuclear renaissance have looked very slim indeed. At best nuclear energy would only assist in decarbonising the economy to some extent, but it would not solve the myriad other ecological and social problems inherent to the growth paradigm, and could well exacerbate some of them. Accordingly, nuclear provides no escape from the limits to growth. What is needed is a transition to renewable energy systems, but this implies a civilisation with much lower social complexity, and with very different structures and non-affluent lifestyles. We cannot run an industrial civilisation on renewables, and an industrial civilisation powered by nuclear (if that is even feasible) remains unsustainable due its underlying growth imperative.

Whether the transition beyond growth occurs voluntarily or is imposed by force of biophysical limits remains to be seen. It scarcely needs remarking that a planned, voluntary transition would be the desired path (see Alexander, 2012b).

2.6. Economic Instability

Closely linked to the rising price of oil, but with some independent issues too, is the economic instability that has been plaguing the world economy in recent years. In the prosperous decades after World War II, developed nations especially became accustomed to consistently high levels of economic growth, and this gave them and their governments and inhabitants a false confidence that they could borrow vast amounts of money and rely on future growth to pay those debts back. In other words, the enormous national and private debts that have been taken on in recent decades were based on the assumption that future growth would be similar to growth in recent decades. But because there is such a close relationship between energy and economic growth, expensive oil is suffocating the debt-ridden global economy, just as it is trying to recover. Without systemic change or some debt ‘jubilee,’ the trillions of dollars of outstanding debt essentially ‘locks’ the world into continued growth. But as Michael Hudson (2012) states, ‘debts that can’t be repaid, won’t be,’ and the consequences of widespread debt defaults will not be good news.

Unfortunately, mainstream economists, including those in government, seem oblivious to the close relationship between energy, debt, and economy, and this means they are unable to see that expensive oil is one of the primary underlying causes of today’s economic instability. Consequently, they craft their intended solutions (e.g. stimulus packages, quantitative easing, low interest rates to encourage borrowing, etc) based on flawed, growth-based thinking, not recognising that the new economics of energy (Alexander, 2012c) means that the growth model, which assumes cheap energy inputs, is now dangerously out-dated. When growth-based economies do not grow, household, firms, and nations struggle to repay their debts, and quickly things begin to unravel in undesirable ways.

2.7 Consumer Malaise

Finally, what makes the problems outlined above all the more troubling is the fact that high consumption lifestyles, so often held up as the peak of human development, are in many cases engendering an unexpected discontent or malaise among those who live them (Lane, 2000; Pickett and Wilkinson, 2010). There is in fact a mounting body of sociological and psychological evidence (Kasser, 2002; Alexander, 2012d) indicating that lives orientated around achieving high levels of consumption often result in such things as time poverty, stress, physical and mental illness, wasteful status competition, loss of community, disconnection from nature, unhappiness, and even a sense of meaninglessness or alienation in life – to say nothing of the ecological impacts associated with consumer lifestyles.

This evidence, however, troubling though it is, arguably provides something of a silver lining to the admittedly grim situation outlined above (Jackson, 2005; Brown and Kasser, 2005). If high consumption lifestyles are not even a trustworthy path to personal well being, this raises the tantalising possibility that members of the global consumer class could live more fulfilling and meaningful lives by reducing their consumption, perhaps in exchange for more time, while at the same time reducing their ecological footprint, reducing their dependence on oil, and leaving more resources for those in greater need. Indeed, when considering the problems outlined above – especially when considering them together and their interrelatedness – it would seem that any effective response to our global predicament depends to a large extent on those overconsuming moving to far more materially ‘simple’ ways of life, with far lower energy requirements. This implies not merely huge lifestyle changes, but fundamental systemic change. Understandably, perhaps, this is not a message many people seem to want to hear, but I contend that the strength of the line of reasoning makes embracing some form of ‘sufficiency economy’ the most coherent response to the global predicament.

(The full set of references will be included in the concluding Part Five to be published on Friday.)

Part Three – Embracing Life After Growth (Before it Embraces Us) will be published on Learning from Dogs tomorrow.

Where less is so much more.

The Sufficiency Economy – Envisioning a Prosperous Way Down

For some time now I have been subscribing to the news feed from The Permaculture Research Institute of Australia. It originally caught my eye because Jean and I want to adopt some of the techniques of permaculture here in Oregon. However, the ‘news’ from the PRI ranges across such a broad range of topics that rarely is their regular email not worthy of detailed reading.

No less so than on the 24th, just a couple of days ago, when I saw the essay by Dr. Samuel Alexander of the Simplicity Institute under the heading of The Sufficiency Economy – Envisioning a Prosperous Way Down. I started to read the essay and very quickly realised that I was reading something of profound importance, not just to me and Jeannie, but to millions of other people right across the planet. I sent an email to both Dr. Alexander of the Simplicity Institute and Craig Mackintosh, Editor of the Permaculture News asking if I might have permission to republish. Dr. Alexander quickly replied in the affirmative and also approved my suggestion of breaking the essay down into separate chapters.

So, in a radical departure from my normal pattern of different topics each day, this week is going to be devoted entirely to Dr. Alexander’s essay. Tomorrow, I will include information on the Simplicity Institute, an organisation that I hadn’t heard of before, but one that deserves the broadest promotion.

Please, please, dear reader, stay with the topic all week if you possibly can. I guarantee that it will change your outlook and offer real hope that mankind can turn away from the suicidal path we presently seem to be on. Indeed, I can do no better that introduce Part One using the opening words written in Permaculture News by Craig Mackintosh.

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I would exhort readers to ignore the potentially off-putting length of this piece, to instead step into, and allow yourself to be absorbed by, this important and worthy attempt at future-visualising. Readers who have been following my own work over the last several years will recognise and appreciate the themes covered. From my own perspective, what follows is a highly pragmatic view on the potential near-future of civilisation, and I truly feel that the speed and shape of progression (i.e. objectively and cooperatively planned and peacefully implemented), or, regression (i.e. unplanned, reactive, desperate, monopolistic and individualistic), and ultimate form of that future will largely depend on how many people are objectively considering these themes and adjusting their lives, and their influence, accordingly.

THE SUFFICIENCY ECONOMY
ENVISIONING A PROSPEROUS WAY DOWN
Samuel Alexander
Simplicity Institute Report 12s, 2012

Dr Samuel Alexander is co-director of the Simplicity Institute and a lecturer with the Office for Environmental Programs, University of Melbourne.

When [we have] obtained those things necessary to life, there is another alternative than to obtain superfluities; and that is, to adventure on life now, [our] vacation from humbler toil having commenced. – Henry David Thoreau

1. Introduction

If a society does not have some vision of where it wants to be or what it wants to become, it cannot know whether it is heading in the right direction – it cannot even know whether it is lost. This is the confused position of consumer capitalism today, which has a fetish for economic growth but no answer to the question of what that growth is supposed to be for. It is simply assumed that growth is good for its own sake, but of course economic activity is merely a means, not an end. It can only ever be justified by some goal beyond itself, but that is precisely what consumer capitalism lacks – a purpose, a reason for existence. It is a means without an end, like a tool without a task. What makes this state of affairs all the more challenging is that the era of growth economics appears to be coming to a close, due to various financial, ecological, and energy constraints, and this is leaving growth-based economies without the very capacity for growth which defined them historically. Before long this will render consumer capitalism an obsolete system with neither a means nor an end, a situation that is in fact materialising before our very eyes. It seems that today we are living in the twilight of growth globally, which implies that the dawn of a new age is almost upon us – is perhaps already upon us. But as we turn this momentous page in history we find that humanity is without a narrative in which to lay down new roots. We are the generation in between stories, desperately clinging to yesterday’s story but uncertain of tomorrow’s. Then again, perhaps the new words we need are already with us; perhaps we just need to live them into existence.

It is not the purpose of this essay to offer another critique of growth economics, the details of which have been laid down comprehensively many times before (Schumacher, 1973; Meadows et al, 2004; Jackson, 2009; Latouche, 2009). Instead, after briefly summarising the critique, this essay will attempt to describe in some detail an alternative economic system, which I will call ‘the sufficiency economy.’ This term is typically applied to so-called ‘developing economies,’ which either have not yet industrialised or are still in the early phases of industrialisation (see e.g. Suwankitti and Pongquan, 2011). These economies are sometimes called sufficiency economies because they do not or cannot produce material abundance, or do not seek material abundance. Instead, sufficiency economies are focused on meeting mostly local needs with mostly local resources, without the society being relentlessly driven to expand by the growth-focused ethics of profit-maximisation. My point of differentiation in this essay will be to consider the notion of a sufficiency economy within the context of the most highly developed regions of the world – where an economics of sufficiency is most desperately needed – and to explore what such an economy would look like, how it might function, and how the transition to such an economy might transpire. I address this subject having been convinced that the growth paradigm has no future and that some alternative vision is therefore needed as humanity begins its inevitable transition to a world beyond growth. I put forward the sufficiency economy as the most promising alternative model, although it is one that I believe may ultimately be imposed upon us whether we want it or not, for reasons that will be explained. We can go the easier way or the harder way, so to speak, depending on our attitudes and actions.

Defined and defended in more detail below, a sufficiency economy can be understood in direct contrast to the dominant macro-economic paradigm based on limitless growth. Whereas existing economies in our increasingly globalised world are predicated on the assumption that ‘more production and consumption is always better,’ the sufficiency economy described below is shaped by an acceptance that ‘just enough is plenty.’ As will be seen, the implications of this alternative economic perspective are nothing short of revolutionary. Rather than progress being seen as a movement toward ever-increasing material affluence, the sufficiency economy aims for a world in which everyone’s basic needs are modestly but sufficiently met, in an ecologically sustainable, highly localised, and socially equitable manner. When material sufficiency is achieved in these ways, further growth would not continue to be a priority. Instead, human beings would realise that they were free from the demands of continuous economic activity and could therefore dedicate more of their energies to non-materialistic pursuits, such as enjoying social relationships, connecting with nature, exploring the mysteries of the universe, or engaging in peaceful, creative activity of various sorts. How to spend this ‘freedom from want’ is the exhilarating and perhaps terrifying question all human beings would face in a well-established sufficiency economy, so defined.

Such an economy recognises that there are fundamental limits to growth (Meadows et al, 2004), and in this it obviously shares some conceptual ground with the notion of a steady-state economy developed by ecological economists in recent decades (e.g. Daly, 1996). But to date the steady-state economy has remained largely at the level of theoretical abstraction, and this has made it difficult to envision the alternative society it vaguely implies. Unfortunately, this has hurt the movement for change, because if people cannot picture the alternative society, it is very difficult to desire it; and if we do not desire it, no social or political movement will arise to bring it into existence. Many have been persuaded, as I have been, by the insight that economies are a subset of the natural environment, not the other way round, as neoclassical economists assume. Very little attention, however, has been given to describing in detail what economic life would be like if an ecologically sustainable economy actually emerged. How would we feed ourselves? What clothes would we wear? What forms of transport and technology would we use? How much and what types of energy would we require? And what material standard of living would we have if we were to successfully decarbonise the economy? Most importantly, perhaps, what would the quality of daily life be like? These are some of the concrete questions to which this essay will offer some tentative answers, acknowledging all the while that the nature of the sufficiency economy described, like any economy, must ultimately be shaped and understood in context-specific ways. (1)

The analysis begins in the next section by briefly outlining the multi-faceted problems the world finds itself facing, not for the purpose of providing a thorough review of the global situation but simply to contextualise the discussion that follows. Unless one understands the magnitude of the overlapping problems we face, the relevance, importance, or even the necessity of the sufficiency economy may not be immediately apparent. Once the global predicament is outlined, the analysis proceeds to define in more detail the principles that underpin the sufficiency economy, although again this will be more a matter of exposition than comprehensive defence. The main part of the analysis then explores in some detail what economic life might be like if developed nations gave up the pursuit of growth and transitioned to some form of highly localised ‘sufficiency economy’ based on far lower resource and energy consumption. It is hoped that this analysis might provide some guidance on what it will actually take to transition to a just and sustainable society, as well as provide some deeper insight into what life might be like if we were ever to succeed.

————–

Notes:

In forming the following views I have been influenced and inspired by many people, the most significant of whom I would like to acknowledge. With respect to material simplicity and ‘the good life,’ Henry Thoreau (1982) has by far been the greatest influence on my world view, followed by William Morris (2004) and the Greek and Roman Stoics (e.g. Seneca, 2004). I am also greatly indebted to my colleagues and fellow authors at the Simplicity Institute – Ted Trainer, Mark Burch, David Holmgren, and Simon Ussher – all of whom, in their own way, have deeply influenced the following discussion (see Simplicity Institute, 2012). The work of Ernst Schumacher (1973) and the Club of Rome (Meadows et al, 2004) first introduced me to the ‘limits to growth’ analysis, and Serge Latouche (2003; 2009) introduced me to the insight that degrowth, not merely zero-growth, is what is needed to achieve sustainability in overdeveloped nations. With respect to energy, Howard and Elisabeth Odum (2001) and Joseph Tainter (1988) have been my biggest influences, showing me how central energy is to the world we live in. I must also mention and thank Rob Hopkins (2008) and the Transition Movement, for providing what I consider to be the most promising framework for bringing about a just and sustainable, post-carbon world.

(The full set of references will be included in the concluding Part Five to be published on Friday.)

Part Two – The Global Predicament will be published on Learning from Dogs tomorrow.

Sandy’s legacy perhaps?

Will history show in a few years that Hurricane Sandy was a turning point?

Not available to watch in the USA, there’s been a programme on BBC TV under the heading of Sandy: Analysis of a Hurricane. I am told by those who have watched it that it is chilling in a very frightening way. It shows the power, both literally and metaphorically, of the effects of much warmer seas off the US eastern seaboard.

Yesterday was the concluding part of Ellen Cantarow’s essay. If you missed it and want to read it, Part One is here and Part Two here. In that second part, I included a video showing graphically, in a very creative way, the effect of New York City addeding 54 million metric tons of carbon dioxide (equivalent) to the atmosphere in 2010. I saw that video in a recent post by Christine of 350orbust fame.

Christine has very kindly given me written permission to republish that post. I have left out the video as that was included on Learning from Dogs yesterday, as just mentioned.

Our Carbon Pollution: Is It Different From Raw Sewage?

In a very short time – years or at most decades – humans will look back at our spewing of carbon pollution into the atmosphere with the same disgust and disbelief that we now look back on people in the middle ages in Europe who dumped their raw sewage into the streets. Here’s a recent video that makes tangible the carbon emissions that New York City spews out every day.

The good news is that Hurricane Sandy may have started a new discussion in the U.S. on climate change in general, and pricing carbon pollution in particular (sadly, in Canada we are lagging far behind. Our current federal government is intent on dragging us back into the 20th Century):

Speaking to Bloomberg News, oil and gas giant Exxon reiterated its support for a carbon tax yesterday. A spokeswoman for the company said that the tool could “play a significant role in addressing the challenge of rising emissions.” Click here to read full article.

The right wing American Enterprise Institute recently held a day-long conference on pricing carbon: Yesterday, the American Enterprise Institute hosted a conference to talk about anything and everything related to the economics of carbon taxes. Normally, a full-day conference with more than a dozen speakers on a tax issue in DC will be lucky to get more than a few dozen attendees, even with a free lunch. Carbon taxes, though, are different. The enthusiasm for this issue is such that there were over 200 attendees, many of whom stood for half the day.

What makes carbon taxes different? Simply put, people across the political spectrum now know that putting a price on carbon is an indispensable tool for dealing with our climate and budget problems, and that a carbon tax is the most politically viable path forward. This dynamic has created an exciting amount of momentum that now needs to be turned into policy. Read more on ThinkProgress.

This week, in an open letter, a coalition of the world’s largest investors (responsible for managing $22.5 trillion in assets) called on governments on Tuesday to ramp up action on climate change and boost clean-energy investment or risk trillions of dollars in investments and disruption to economies. They said rapidly growing greenhouse gas emissions and more extreme weather were increasing investment risks globally.

The World Bank – now headed by a scientist, for the first time ever – released a report this week calling for urgent action on climate change. “Turn Down the Heat: Why a 4°C Warmer World Must be Avoided,” warns we’re on track for a 4°C warmer world marked by extreme heat-waves, declining global food stocks, loss of ecosystems and biodiversity, and life-threatening sea level rise.

On the good news front – the Tesla Model S won the 2013 Car of The Year award, the first electric car to win in the 60 year history of the award! Read more. Also under the heading of “good news”, Harvard Students have voted to support their university’s divestment from the fossil fuel industry (read more).

It feels like we’re on the edge of a paradigm shift. What do you think?

For all our sakes, I do hope Christine is correct in her judgment.

No signs of intelligent life!

Sometimes one just has to scratch one’s head and wonder about life!

I can’t recall when and where I first heard the muse as to why Planet Earth has not been visited by aliens, but I recall the answer: “Because alien passers-by have not found any signs of intelligent life!”

The reason that this comes to mind is that the damage that we are doing to our planet, nay to life on our planet, if we don’t embrace the reality of climate change is truly ‘gob-smacking’!

The evidence for this statement is over-powering. Just last Friday, I republished a recent essay from Tom Engelhardt under the title of ‘The more it changes, the more it’s the same thing.” Tom’s essay focused on the lack of any change that came out of the recent Presidential election. That essay closed, thus:

But stop waiting for change, “big” or otherwise, to come from Washington. It won’t. Don’t misunderstand me: as the residents of the Midwestern drought zone and the Jersey shore now know all too well, change is coming, like it or not. If, however, you want this country to be something other than its instigator and its victim, if you want the U.S. to engage a world of danger (and also of opportunity), you’d better call yourself and your friends and neighbors to the colors. Don’t wait for a Washington focused on its own well-being in 2014 or 2016. Mobilize yourself. It’s time to occupy this country before it’s blown away in a storm.

An inciteful comment from reader Jules was this:

“Don’t count on anyone doing the obvious: launching the sort of Apollo-style R&D program that once got us to the moon and might speed the U.S. and the planet toward an alternative energy economy, or investing real money in the sort of mitigation projects for the new weather paradigm that might prevent a coastal city like New York — or even Washington – from turning into an uninhabitable disaster zone in some not so distant future.”

A pity. Americans can do some things very well, the kind of stuff that merits some of the hyperbole of being the greatest nation, the ability to mobilise a nation and lead the world being one of them. We need heroes maybe it’s time for you lot to don that cape and be one.

Americans have such a potential for positive change – I just can’t imagine why this Nation isn’t leading the world to a more Earth-friendly environment.

This then came into my ‘in-box’ on Friday: Could NDAA be the Death of Biofuels in America? The article opened thus:

The US military is one of the most important developers of new technologies leading them to a point where they can be released onto the market for public and private use. Currently the Department of Defense, led by the Navy, is attempting to reduce its dependence on oil by as much as 50% by 2020, by producing US-made biofuels.

and the author concluded:

Nicole Lederer, the co-founder of E2, despaired that, “the military often leads major economic transitions in our country. Yet right now in Washington, some shortsighted lawmakers are poised to block a potentially major transformation of our national energy supply – and also hold back the significant economic growth and job gains that would come with it.”

Russ Teal, founder of the biorefinery builder Biodico, warned that, “the military is the biggest driver of the biofuels industry right now. If Congress stops the military from doing what the military knows is best, Congress also could threaten the growth of the Made-in-America biofuels industry.”

By. Joao Peixe of Oilprice.com

Then more or less the same time as I read the piece above, in came the latest from 350.org, an essay by Naomi Klein.

Naomi Klein: Do The Math, The Fossil Fuel Industry Is Destroying Our Future

Naomi Klein was out in the shattered neighbourhood of Rockaway Park Queens last weekend, participating in the Occupy relief efforts there. In this interview she underscores the importance of both increasing local resilience as a response to our changing climate and addressing the fossil fuel industry’s business model directly. As 350.org’s Do The Math campaign makes clear, the fossil fuel industry’s business plan will destroy the planet. Bill McKibben reminded the “Do The Math”audience in Seattle this month that the global warming math is quite simple: we can burn 565 more gigatons of carbon dioxide and stay below 2 degrees of warming. Anything more than that risks catastrophe for life on earth. The only problem? Fossil fuel corporations now have 2,795 gigatons in their reserves, 5Xs the safe amount. And they are planning to burn it all, unless we rise up & stop them.

So is there any hope? So easy to think not. But in terms of hope the answer is “Yes, yes and yes!” Because the decent peoples of the world are way ahead of their politicians. Take the transition movement. I used to live in the village of Harberton, just 3 miles from the town of Totnes, Devon, in the South-West of England.

Totnes was the site of the world’s first transition movement: Transition Town Totnes. But as the Transition US website reveals, there are now:

126 official US initiatives
437 official initiatives worldwide
33 US states
34 countries
13 languages

One of the latest has just been formed in the city where Jean and I were living until just a few weeks ago, namely Payson, Arizona. Here’s a reflection from John Hurlburt in Payson, one of a group of committed citizens who, like so many millions of others around the world, just can’t wait for governments to ‘lead’ and was one of the founding members of Transition Town Payson.

Keep it Simple

We share a living planet as a living species. Corporate finance fuels political hate and denial. The divisiveness of global and national politics reflects an unprecedented escalating global crisis. We live in a world of constant sorrow.

Our stubborn ignorance is the greatest threat to the objectives of peace and well-being. We have become so entrenched in the ‘ruts’ of our conditioned opinions that any semblance of balanced responsibility is immediately numbed by the deliberate stupidity of well-paid spin-doctors across a global electronic media.

The recovery process is truly simple. Surrender to the scientific facts of our inclusive reality, clean house, and have compassion for each other. The good news is that a basic natural instinct of all life forms is to survive through adaptation.

John Hurlburt

So, on reflection, I was wrong to open with the degree of irony in my ‘voice’ that I had. This is now a world of wonderful and amazing communication channels, many of them directly ‘person to person’. The views of the world’s peoples are now so much louder than in previous times. I am confident that right, rather than might, will prevail.

More Bird and Fortune

The power of humour in reflecting life back at us!

It was such fun revisiting John Bird and John Fortune back in July, see That sub-prime crisis, that I found another one for your enjoyment. On the proposal for the privatisation of British Air Traffic Control. Goes back to 1996, I think, but clearly from Rory Bremner: Who else!

Change in action

There is real hope for us all!

Hopefully, you were able to watch the Amory Lovins talk in yesterday’s post? If not, then do find time to watch how Professor Lovins sets out the powerful argument that the USA could soon, relatively speaking, be energy self-sufficient.

So on top of the Lovins presentation, I wanted to draw your attention to an item on Climate Crocks last October 5th.

One of the great stories untold in the American media is the ongoing revolution in one of the world’s most advanced economies – as Germany undertakes a bold and serious transition from powering a great engine of prosperity on fossil fuels, to plentiful and inexhaustible renewable energy.

Listening to Mitt Romney double and triple down on the bogus Fox/Fossil narrative about “clean coal” and failed renewables, it might be well to consider how one of our toughest manufacturing competitors is going all-in on the high stakes renewable energy revolution of the new century.

The article is a detailed analysis of how Germany is powering ahead, pardon the pun, in the provision of non carbon-based power, as this reference illustrates,

German use of coal to generate electricity has declined steadily from 1990 to 2011, according to readily available statistics on the German electricity system. The percentage of coal-fired electricity in German electricity generation has fallen from 56.7% in 1990 to 43.5% last year–a decrease of more than 10% despite a increase in total electricity generation during the same period of about 10%. At the same time the share of renewable energy in the electricity mix has increased from 3.6% to 19.9%, mostly due to the rapid development of wind energy and biomass.

Do go across and read the article.

Then thanks to a comment left on a recent post by Martin Lack another very positive story came to light (yet another pun – read on!),

Comment from Jules,

Here is one for you- http://www.solarroadways.com/intro.shtml – the idea is totally leftfield, but it fulfils certain issues such as distribution, decentralisation of power and offers a recharge network for electric cars and it has received a big chunk of government funding. It is so out there that I wonder if it could possibly be the answer but you never know.

Very quickly one finds that Solar Roadways are involved in something VERY interesting, namely,

Years ago, when the phrase “Global Warming” began gaining popularity, we started batting around the idea of replacing asphalt and concrete surfaces with solar panels that could be driven upon. We thought of the “black box” on airplanes: We didn’t know what material that black box was made of, but it seemed to be able to protect sensitive electronics from the worst of airline crashes.

Suppose we made a section of road out of this material and housed solar cells to collect energy, which could pay for the cost of the panel, thereby creating a road that would pay for itself over time. What if we added LEDs to “paint” the road lines from beneath, lighting up the road for safer night time driving? What if we added a heating element in the surface (like the defrosting wire in the rear window of our cars) to prevent snow/ice accumulation in northern climates? The ideas and possibilities just continued to roll in and the Solar Roadway project was born.

Now watch this!

and then watch this, as nearly 1.5 million others have!

The Solar Roadways project is working to pave roads with solar panels that you can drive on. Co-founder Scott Brusaw has made some major steps forward since our first visit back in 2007, so we visited him again for an exclusive update on the project, including the first ever video recorded of the Solar Roadways prototype! For more information visit http://www.solarroadways.com . This Solar Roadway project is highlighted as one of many planet-friendly solutions in the feature film by YERT – Your Environmental Road Trip. To learn more about YERT, visit http://yert.com .

Flattr this video here: https://flattr.com/thing/407726/YERT-video-about-Solar-Roadways-The-Prototype

And you can become a fan of YERT on Facebook here:http://www.facebook.com/home.php#!/pages/YERT-Your-Environmental-Road-Trip/12…

So nothing ever stays the same!

The death of the USA?

The reports of my death are greatly exaggerated! Mark Twain.

Origin

Mark Twain quotation after hearing that his obituary had been published in the New York Journal.

Mistaken publications of obituaries aren’t as rare as you might expect. A recent example is of Dave Swarbrick, the British folk/rock violinist, who was killed off mistakenly by the Daily Telegraph in April 1999 when they reported that his visit to hospital in Coventry had resulted in his death. He did at least get the opportunity to read a rather favourable account of his life, not something we all get to do, and to deliver the gag “It’s not the first time I have died in Coventry”.

So why have I opened with this quote from Mark Twain? Read on and I hope all will be clear.

Integrity is always about getting to the truth!

A little under a week ago I published a couple of posts that proposed that the United States of America is an empire in decline. The first was What goes up? and the second Might just come down! As a Brit I well know that aspect of British history!

However a recent conversation with a friend of many years back in England, who has also been a shrewd and wise entrepreneur for longer than I care to remember, argued that the evidence for the ‘end of the USA’ could be challenged.

He cited five reasons why he thought the USA would remain, more or less, in its dominant position. They were:

Spirit of innovation
Relaxed labour laws
The importance of Mexico
The uncertainty of China in terms of the next ’empire’
The likely energy self-sufficiency for the USA in the near-term.

So let me expand on each of those points.

Spirit of innovation

Let me quote from an article in TIME Magazine of the 5th June, 2011,

Innovation is as American as apple pie. It seems to accord with so many elements of our national character — ingenuity, freedom, flexibility, the willingness to question conventional wisdom and defy authority. But politicians are pinning their hopes on innovation for more urgent reasons. America’s future growth will have to come from new industries that create new products and processes. Older industries are under tremendous pressure. Technological change is making factories and offices far more efficient. The rise of low-wage manufacturing in China and low-wage services in India is moving jobs overseas. The only durable strength we have — the only one that can withstand these gale winds — is innovation.

Now there are plenty to argue both ways in terms of the future innovation potential for the USA, as a recent article in The Atlantic does, see American Innovation: It’s the Best of Times and the Worst of Times. But the spirit of innovation will be a powerful economic potential for the USA for many years to come.

Relaxed labour laws.

Definitely an area that I have little knowledge of except for the subjective notion that compared to many other nations, the laws in the USA are much less of a restraint on economic productivity than elsewhere.

The importance of Mexico.

Importance in the context of providing the USA with a source of cheaper manufacturing facilities. My English friend thought that this was a significant competitive advantage for the USA. Now, as it happens, we had a couple staying with us over the week-end of the 6th/7th October. The husband is a senior manager of Horst Engineering, an American firm based in Guaymas, Sonora County, Mexico. Here’s a picture from their website,

We are a contract manufacturer of precision machined components and assemblies for aerospace, medical, and other high technology industries. Our core processes include Swiss screw machining, turning, milling, thread rolling, centerless grinding, and assembly. Our extensive supply chain offers our customers a full service logistics solution for managing their precision product requirements. We are ISO9001:2008 and AS9100 registered and proud of our 66 year, three-generation legacy of quality and performance.

I was told that many American and British firms were using Mexico rather than China for a number of reasons. Not least because Chinese suppliers require full payment before shipment. Plus that taking into account that financial aspect together with shipping costs and other logistical issues, China wasn’t as ‘cheap’ over all. Here’s a recent announcement from Rolls Royce,

Rolls-Royce plans new Sonora hub

The burgeoning aerospace industry in Guaymas had its efforts validated recently when the venerable Rolls-Royce chose it as the site for its newest global purchasing office.

Surrounded by several of its aerospace manufacturing suppliers, London-based Rolls-Royce will move into a Guaymas industrial park owned by Tucson-based The Offshore Group to develop a supply hub for commercial jets and military aircraft around the globe.

“Rolls-Royce has very robust booking orders for the next 10 years,” said Joel Reuter, director of communications for Rolls-Royce in North America. “We need to double our production.”

Because a number of Rolls-Royce suppliers already operate in Guaymas, the city was a logical choice, Reuter said.

The uncertainty of China in terms of the next ’empire’

The point made in terms of China taking over ’empire’ status from the USA, as Simon Johnson argues over at Baseline Scenario, is countered by the fact that politically China is an unknown quantity. Until China endorses some form of democratic process, that unknowingness is not going to disappear.

The likely energy self-sufficiency for the USA in the near-term.

I can’t do better than to ask you to watch this video! Just 27-minutes long, it is a very interesting review of the energy future of the USA.

As the TED website suggests in terms of why you should listen to Amory Lovins,

Amory Lovins was worried (and writing) about energy long before global warming was making the front — or even back — page of newspapers. Since studying at Harvard and Oxford in the 1960s, he’s written dozens of books, and initiated ambitious projects — cofounding the influential, environment-focused Rocky Mountain Institute; prototyping the ultra-efficient Hypercar — to focus the world’s attention on alternative approaches to energy and transportation.

His critical thinking has driven people around the globe — from world leaders to the average Joe — to think differently about energy and its role in some of our biggest problems: climate change, oil dependency, national security, economic health, and depletion of natural resources.

More on Reinventing Fire may be found here.

So, don’t know about you, but I found those five points deeply convincing. How about you? Are the reports of the death of the USA greatly exaggerated? Do leave a comment.

Creativity, John Cleese style

The art and magic of being creative.

I can’t recall who it was that mentioned this TED video which is a great shame as I really should pay credit to a wonderful examination of the business of being creative.

“Telling people how to be creative is easy – being creative is difficult.” John Marwood Cleese (born 27 October 1939) is an English actor, comedian, writer and film producer. He achieved success at the Edinburgh Festival Fringe and as a scriptwriter and performer on The Frost Report.

In the late 1960s he became a member of Monty Python, the comedy troupe responsible for the sketch show Monty Python’s Flying Circus and the four Monty Python films: And Now for Something Completely Different, The Holy Grail, Life of Brian and The Meaning of Life. In the mid 1970s, Cleese and his first wife, Connie Booth, co-wrote and starred in the British sitcom Fawlty Towers. Later, he co-starred with Kevin Kline, Jamie Lee Curtis and former Python colleague Michael Palin in A Fish Called Wanda and Fierce Creatures.

He also starred in Clockwise, and has appeared in many other films, including two James Bond films as Q, two Harry Potter films, and three Shrek films. With Yes Minister writer Antony Jay he co-founded Video Arts, a production company making entertaining training films. It was founded in 1972 by John Cleese, Sir Antony Jay, and a group of other television professionals. The videos feature well known British actors, and humorously explain business concepts. Productions include Meetings, Bloody Meetings and More Bloody Meetings, and have featured Cleese, Dawn French, Prunella Scales, Hugh Laurie, and Robert Hardy.

In December 1977, Cleese appeared as a guest star on The Muppet Show. Cleese was a fan of the show, and co-wrote much of the episode. He appears in a “Pigs in Space” segment as a pirate trying to hijack the spaceship Swinetrek, and also helps Gonzo restore his arms to “normal” size after Gonzo’s cannonball catching act goes wrong. During the show’s closing number, Cleese refuses to sing the famous show tune from Man of La Mancha, “The Impossible Dream”. Kermit the Frog apologises and the curtain re-opens with Cleese now costumed as a Viking trying some Wagnerian opera as part of a duet with Sweetums. Once again, Cleese protests to Kermit, and gives the frog one more chance. This time, he is costumed as a Mexican maraca soloist. He has finally had enough and protests that he is leaving the show, saying “You were supposed to be my host. How can you do this to me? Kermit — I am your guest!”. The cast joins in with their parody of “The Impossible Dream”, singing “This is your guest, to follow that star…”. During the crowd’s applause that follows the song, he pretends to strangle Kermit until he realises the crowd loves him and accepts the accolades. During the show’s finale, as Kermit thanks him, he shows up with a fictional album, his own new vocal record John Cleese: A Man & His Music, and encourages everyone to buy a copy. This would not be Cleese’s final appearance with the Muppets. In their 1981 film The Great Muppet Caper, Cleese does a cameo appearance as Neville, a local homeowner. As part of the appearance, Miss Piggy borrows his house as a way to impress Kermit the Frog. Cleese won the TV Times award for Funniest Man On TV — 1978-79.

Many people think you are either born with creativity or you aren’t. But John Cleese explains how to become creative and in the video, he talks about such thing as the unconscious mind.

John Cleese has his own website here.

What goes up?

Civilizations die from suicide, not by murder. Arnold J Toynbee

I’m not sure where to start but as a result of finishing a particular book, plus a recent essay on Tom Dispatch, then another recent essay from Simon Johnson of Baseline Scenario fame, there were so many thoughts bumping around this aged brain that I had no alternative than to offer them to you, dear reader. You should also be warned that this is going to be two posts, covering today and tomorrow.

So let’s start with the book: The United States of Fear by Tom Engelhardt. To be brutally honest, I purchased the book more as a gesture of support to Tom who has been very supportive of Learning from Dogs, in particular allowing me permission to reproduce any essays that were published on TomDispatch, as a number have so been. What an error of judgment! Tom’s book provided another one of those rare but inspirational occasions where you know the world will never look quite the same again!

The back cover page of the book sets out the theme, thus,

Published 2011

In 2008, when the US National Intelligence Council issued its latest report meant for the administration of newly elected President Barack Obama, it predicted that the planet’s “sole superpower” would suffer a modest decline and a soft landing fifteen years hence. In his new book The United States of Fear, Tom Engelhardt makes clear that Americans should don their crash helmets and buckle their seat belts, because the United States is on the path to a major decline at a startling speed. Engelhardt offers a savage anatomy of how successive administrations in Washington took the “Soviet path”—pouring American treasure into the military, war, and national security—and so helped drive their country off the nearest cliff.This is the startling tale of how fear was profitably shot into the national bloodstream, how the country—gripped by terror fantasies—was locked down, and how a brain-dead Washington elite fiddled (and profited) while America quietly burned.

Think of it as the story of how the Cold War really ended, with the triumphalist “sole superpower” of 1991 heading slowly for the same exit through which the Soviet Union left the stage twenty years earlier.

One of the fascinating aspects of the book is that it was put together from 32 essays previously published online by Tom; the complete list with titles and dates is on pps. 205 & 206. So giving you a real feel for the book is easy! I’m going to do that by linking to one of those essays available in the archives of TomDispatch here. That essay was called Washington’s Echo Chamber and appears in the book starting on page 170 under the sub-heading of Five Ways to Be Tone Deaf in Washington. Let me quote you a little,

So much of what Washington did imagine in these last years proved laughable, even before this moment swept it away. Just take any old phrase from the Bush years. How about “You’re either with us or against us”? What’s striking is how little it means today. Looking back on Washington’s desperately mistaken assumptions about how our globe works, this might seem like the perfect moment to show some humility in the face of what nobody could have predicted.

It would seem like a good moment for Washington — which, since September 12, 2001, has been remarkably clueless about real developments on this planet and repeatedly miscalculated the nature of global power — to step back and recalibrate.

As it happens, there’s no evidence it’s doing so. In fact, that may be beyond Washington’s present capabilities, no matter how many billions of dollars it pours into “intelligence.” And by “Washington,” I mean not just the Obama administration, or the Pentagon, or our military commanders, or the vast intelligence bureaucracy, but all those pundits and think-tankers who swarm the capital, and the media that reports on them all. It’s as if the cast of characters that makes up “Washington” now lives in some kind of echo chamber in which it can only hear itself talking.

As a result, Washington still seems remarkably determined to play out the string on an era that is all too swiftly passing into the history books. While many have noticed the Obama administration’s hapless struggle to catch up to events in the Middle East, even as it clings to a familiar coterie of grim autocrats and oil sheiks, let me illustrate this point in another area entirely — the largely forgotten war in Afghanistan. After all, hardly noticed, buried beneath 24/7 news from Egypt, Bahrain, Libya, and elsewhere in the Middle East, that war continues on its destructive, costly course with nary a blink.

That was published by Tom a little over 18 months ago! Seems as relevant today as then! Let me stay with perspectives from 2011.

On the 24th August 2011 Noam Chomsky wrote an essay entitled American Decline: Causes and Consequences. Chomsky, as Wikipedia relates, is Professor (Emeritus) in the Department of Linguistics & Philosophy at MIT, where he has worked for over 50 years. Here is how that essay opens,

In the 2011 summer issue of the journal of the American Academy of Political Science, we read that it is “a common theme” that the United States, which “only a few years ago was hailed to stride the world as a colossus with unparalleled power and unmatched appeal — is in decline, ominously facing the prospect of its final decay.” It is indeed a common theme, widely believed, and with some reason. But an appraisal of US foreign policy and influence abroad and the strength of its domestic economy and political institutions at home suggests that a number of qualifications are in order. To begin with, the decline has in fact been proceeding since the high point of US power shortly after World War II, and the remarkable rhetoric of the several years of triumphalism in the 1990s was mostly self-delusion. Furthermore, the commonly drawn corollary — that power will shift to China and India — is highly dubious. They are poor countries with severe internal problems. The world is surely becoming more diverse, but despite America’s decline, in the foreseeable future there is no competitor for global hegemonic power.

So, according to Chomsky, it’s not as ‘black and white’ as Engelhardt sets out. But do read the full essay.

Nevertheless, the idea that the USA is ‘fiddling while Rome burns’ is supported in an essay published by Mattea Kramer on TomDispatch on the last day of September. I’m going to end Part One by republishing the essay in full. (Note that this is being published here after the first ‘debate’ had taken place.)

oooOOOooo

Tough Talk for America

A Guide to the Presidential Debates You Won’t Hear
By Mattea Kramer

Five big things will decide what this country looks like next year and in the 20 years to follow, but here’s a guarantee for you: you’re not going to hear about them in the upcoming presidential debates. Yes, there will be questions and answers focused on deficits, taxes, Medicare, the Pentagon, and education, to which you already more or less know the responses each candidate will offer. What you won’t get from either Mitt Romney or Barack Obama is a little genuine tough talk about the actual state of reality in these United States of ours. And yet, on those five subjects, a little reality would go a long way, while too little reality (as in the debates to come) is a surefire recipe for American decline.

So here’s a brief guide to what you won’t hear this Wednesday or in the other presidential and vice-presidential debates later in the month. Think of these as five hard truths that will determine the future of this country.

1. Immediate deficit reduction will wipe out any hope of economic recovery: These days, it’s fashionable for any candidate to talk about how quickly he’ll reduce the federal budget deficit, which will total around $1.2 trillion in fiscal 2012. And you’re going to hear talk about the Simpson-Bowles deficit reduction plan and more like it on Wednesday. But the hard truth of the matter is that deep deficit reduction anytime soon will be a genuine disaster. Think of it this way: If you woke up tomorrow and learned that Washington had solved the deficit crisis and you’d lost your job, would you celebrate? Of course not. And yet, any move to immediately reduce the deficit does increase the likelihood that you will lose your job.

When the government cuts spending, it lays off workers and cancels orders for all sorts of goods and services that would generate income for companies in the private sector. Those companies, in turn, lay off workers, and the negative effects ripple through the economy. This isn’t atomic science. It’s pretty basic stuff, even if it’s evidently not suitable material for a presidential debate. The nonpartisan Congressional Research Service predicted in a September report, for example, that any significant spending cuts in the near-term would contribute to an economic contraction. In other words, slashing deficits right now will send us ever deeper into the Great Recession from which, at best, we’ve scarcely emerged.

Champions of immediate deficit reduction are likely to point out that unsustainable deficits aren’t good for the economy. And that’s true — in the long run. Washington must indeed plan for smaller deficits in the future. That will, however, be a lot easier to accomplish when the economy is healthier, since government spending declines when fewer people qualify for assistance, and tax revenues expand when the jobless go back to work. So it makes sense to fix the economy first. The necessity for near-term recovery spending paired with long-term deficit reduction gets drowned out when candidates pack punchy slogans into flashes of primetime TV.

2. Taxes are at their lowest point in more than half a century, preventing investment in and the maintenance of America’s most basic resources: Hard to believe? It’s nonetheless a fact. By now, it’s a tradition for candidates to compete on just how much further they’d lower taxes and whether they’ll lower them for everyone or just everyone but the richest of the rich. That’s a super debate to listen to, if you’re into fairy tales. It’s not as thrilling if you consider that Americans now enjoy the lightest tax burden in more than five decades, and it happens to come with a hefty price tag on an item labeled “the future.” There is no way the U.S. can maintain a world-class infrastructure — we’re talking levees, highways, bridges, you name it — and a public education system that used to be the envy of the world, plus many other key domestic priorities, on the taxes we’re now paying.

Anti-tax advocates insist that we should cut taxes even more to boost a flagging economy — an argument that hits the news cycle nearly every hour and that will shape the coming TV “debate.” As the New York Times recently noted, however, tax cuts might have been effective in giving the economy a lift decades ago when tax rates were above 70%. (And no, that’s not a typo, that’s what your parents and grandparents paid without much grumbling.) With effective tax rates around 14% for Mitt Romney and many others, further cuts won’t hasten job creation, just the hollowing out of public investment in everything from infrastructure to education. Right now, the negative effects of tax increases on the most well-off would be small — read: not a disaster for “job creators” — and those higher rates would bring in desperately-needed revenue. Tax increases for middle-class Americans should arrive when the economy is stronger.

Right now, the situation is clear: we’re simply not paying enough to fund the basic ingredients of prosperity from highways and higher education to medical research and food safety. Without those funds, this country’s future won’t be pretty.

3. Neither the status quo nor a voucher system will protect Medicare (or any other kind of health care) in the long run: When it comes to Medicare, Mitt Romney has proposed a premium-support program that would allow seniors the option of buying private insurance. President Obama wants to keep Medicare more or less as it is for retirees. Meanwhile, the ceaseless rise in health-care costs is eating up the wages of regular Americans and the federal budget. Health care now accounts for a staggering 24% of all federal spending, up from 7% less than 40 years ago. Governor Romney’s plan would shift more of those costs onto retirees, according to David Cutler, a health economist at Harvard, while President Obama says the federal government will continue to pick up the tab. Neither of them addresses the underlying problem.

Here’s reality: Medicare could be significantly protected by cutting out waste. Our health system is riddled with unnecessary tests and procedures, as well as poorly coordinated care for complex health problems. This country spent $2.6 trillion on health care in 2010, and some estimates suggest that a staggering 30% of that is wasted. Right now, our health system rewards quantity, not quality, but it doesn’t have to be that way. Instead of paying for each test and procedure, Medicare could pay for performance and give medical professionals a strong incentive to provide more efficient and coordinated care. President Obama’s health law actually pilot tests such an initiative. But that’s another taboo topic this election season, so he scarcely mentions it. Introducing such change into Medicare and the rest of our health system would save the federal government tens of billions of dollars annually. It would truly preserve Medicare for future generations, and it would improve the affordability of health coverage for everyone under 65 as well. Too bad it’s not even up for discussion.

4. The U.S. military is outrageously expensive and yet poorly tailored to the actual threats to U.S. national security: Candidates from both parties pledge to protect the Pentagon from cuts, or even, in the case of the Romney team, to increase the already staggering military budget. But in a country desperate for infrastructure, education, and other funding, funneling endless resources to the Pentagon actually weakens “national security.” Defense spending is already mind-numbingly large: if all U.S. military and security spending were its own country, it would have the 19th largest economy in the world, ahead of Saudi Arabia, Taiwan, and Switzerland. Whether you’re counting aircraft carriers, weapons systems, or total destructive power, it’s absurdly overmatched against the armed forces of the rest of the world, individually or in combination. A couple of years ago, then-Secretary of Defense Robert M. Gates gave a speech in which he detailed that overmatch. A highlight: “The U.S. operates 11 large carriers, all nuclear powered. In terms of size and striking power, no other country has even one comparable ship.” China recently acquired one carrier that won’t be fully functional for some time, if ever — while many elected officials in this country would gladly build a twelfth.

But you’ll hear none of this in the presidential debates. Perhaps the candidates will mention that obsolete, ineffective, and wildly expensive weapons systems could be cut, but that’s a no-brainer. The problem is: it wouldn’t put a real dent in national defense spending. Currently almost one-fifth of every dollar spent by the federal government goes to the military. On average, Americans, when polled, say that they would like to see military funding cut by 18%.

Instead, most elected officials vow to pour limitless resources into more weapons systems of questionable efficacy, and of which the U.S. already owns more than the rest of the world combined. Count on one thing: military spending will not go down as long as the U.S. is building up a massive force in the Persian Gulf, sending Marines to Darwin, Australia, and special ops units to Africa and the Middle East, running drones out of the Seychelles Islands, and “pivoting” to Asia. If the U.S. global mission doesn’t downsize, neither will the Pentagon budget — and that’s a hit on America’s future that no debate will take up this month.

5. The U.S. education system is what made this country prosperous in the twentieth century — but no longer: Perhaps no issue is more urgent than this, yet for all the talk of teacher’s unions and testing, real education programs, ideas that will matter, are nonexistent this election season. During the last century, the best education system in the world allowed this country to grow briskly and lift standards of living. Now, from kindergarten to college, public education is chronically underfunded. Scarcely 2% of the federal budget goes to education, and dwindling public investment means students pay higher tuitions and fall ever deeper into debt. Total student debt surpassed $1 trillion this year and it’s growing by the month, with the average debt burden for a college graduate over $24,000. That will leave many of those graduates on a treadmill of loan repayment for most or all of their adult lives.

Renewed public investment in education — from pre-kindergarten to university — would pay handsome dividends for generations. But you aren’t going to hear either candidate or their vice-presidential running mates proposing the equivalent of a GI Bill for the rest of us or even significant new investment in education. And yet that’s a recipe for and a guarantee of American decline.

Ironically, those in Washington arguing for urgent deficit reduction claim that we’ve got to do it “for the kids,” that we must stop saddling our grandchildren with mountains of federal debt. But if your child turns 18 and finds her government running a balanced budget in an America that’s hollowed out, an America where she has no chance of paying for a college education, will she celebrate? You don’t need an economist to answer that one.

Mattea Kramer is senior research analyst at National Priorities Project and a TomDispatch regular. She is lead author of the new book A People’s Guide to the Federal Budget.

oooOOOooo

Let me close with another quote from Arnold J. Toynbee:

Of the twenty-two civilizations that have appeared in history, nineteen of them collapsed

when they reached the moral state the United States is in now.

Part Two continues tomorrow.

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Tough Talk for America

A Guide to the Presidential Debates You Won’t Hear By Mattea Kramer

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A Guide to the Presidential Debates You Won’t Hear
By Mattea Kramer