Some Right Things Done in All the Wrong Ways for All the Wrong Reasons

Free Trade, Fair Trade, Tariffs, Trade Wars, and all such matters reflect a complex of political-economic issues that will soon become mostly irrelevant. Yet pundits persistently pontificate on their putative principles and pitfalls – within the bubble of business-as-usual.

The problem is that all the parties disputing matters of international trade envision the future as an ideal version of the already fading present. They wallow in utopian dreams of a world that cannot be. They argue over the arrangement of secular deck chairs on the Titanic of endless-growth economics, ignoring the iceberg of Earth-systems transformation just ahead.

Utopian dreams continue in an increasingly dystopian world. “Increase our speed! The Titanic must make headlines when we reach port.” Headlines indeed! There is no port in the emerging geological era of the Anthropocene for grand-scale corporate international trade or today’s global industrial consumerism

container-ship-emissions

Fossil-fueled International Trade

International trade is a very complex system of exchange founded in conditions that no longer exist and assumptions that conflict with the new reality so widely denied or ignored. Corporate utopian dreams promote never-ending economic expansion of the global industrial-consumer economy in a finite world.

We have already exceeded natural limits. Yet economists and politicians continue to routinely deny or ignore them. They try to hold onto the only system they have ever known, as it continues to destabilize the living Earth systems from which it draws its power.

Earth Systems Transformed

The current global system of neo-liberal economic growth at any cost must grow, but it cannot. Like a cancer, it grows until it kills its host, and then must die itself. Neither the dwindling supply of raw materials nor the growing instability of climate and ecological systems can sustain the technosphere much longer. ALL forms of life on the planet, including global political-economic elites, depend on living Earth systems for survival. Yet, we have destroyed the stability of these systems. They remained constant for most of the 11,000 years of the Holocene, allowing humans to “inherit the Earth.” Yet the global industrial system has broken Earth-system stability. The Holocene is over. The Great Acceleration since World War II has rapidly destabilized the entire Earth System.

Anthropocene-GreatAccelerationSocioEconomicTrends-1750-2010From the perspective of mainstream (neoliberal) economics, Trump’s arbitrary imposition of tariffs on European allies and Chinese trading partners is rather stupid. It may very well stifle growth and foment a full on global trade war. International capital has begun to run scared. That makes sense from within the assumptions of that system, but that system becomes increasingly unstable as its foundations crumble. So, the establishment critics are right within their bubble, but wrong in the context of global, or I should say, planetary conditions. The very system within which the argument rages is unsustainable.

Trump is wrong to say that starting and winning a trade war is easy. Well, it’s not hard to start if you ignore allies and “competitors” alike. But win or lose, if international trade continues to contribute massive amounts of carbon into the already destabilizing biosphere, then neither trade alliances nor trade wars will matter.

Anthropocene Rising

Clive Hamilton put it clearly in his book, Defiant Earth: The Fate of Humans in the Anthropocene. The continuation of the global consumer-industrial system beyond natural limits led humanity to cause a deep rupture in the geological evolution of the entire Earth System. Our actions have now propelled the planet into a new geologic era, the Anthropocene, which has already transformed Earth’s living systems and its climate in ways that will intensify for centuries, and likely persist for thousands of years.

Going forward, life on planet Earth will change radically, regardless of the human response to human-caused Earth’s destabilization. We cannot stop the planetary forces we have set in motion. However, we can mitigate the effects of continuing down the path of destruction so many still deny.

To reduce superfluous international trade – even by Trumpist blundering into trade wars that constrict imports and exports – would significantly reduce total planetary carbon emissions. International trade is a major contributor to global warming. Only by transforming the ways humanity relates to living Earth systems – by radically reducing the disruption of ecosystems and climate – can we minimize the damage and perhaps find ways to adapt to the new harsh conditions we now face in the Anthropocene. Doing all the right things, especially for all the right reasons, will be very difficult to achieve.

Over the Ultimate City: To Live or Die in L.A.

It is always unnerving yet comfortably familiar to fly into LAX. I will need to do so again in a month or so. The vast urban landscape from Palm Springs westward to the Pacific shore is amazing to behold, if you really look at it. For about 125 miles, the mostly low-lying “built environment” stretches the entire way. It takes 2 or 3 hours…or more… to drive via the freeways, “depending on traffic.” Asphalt and concrete everywhere separates apartment complexes, commercial buildings, strip malls, mega-shopping centers, suburban neighborhoods, and elite “gated communities.” It has been over six months since my last visit. Still, it is never any less strange and prosaic despite my having lived and worked there for nearly four decades — until I retired over a dozen yeas ago.

Last time I had a window seat aft of the wings. I can never resist watching the mega-city go by below. But I’ve seen it all many times, both as an airline passenger and as a private pilot. I learned to fly in 1976 over this same urban desert. The complexity even back then sure gave me a sense of the importance of the instructor’s official admonition to “stay well clear” of any nearby aircraft. It also instilled an appreciation of the complexity of the air traffic control system as a blend of highly skilled living beings interacting with sphisticated information technology that is always in need of an upgrade.

LA Sectional

LA Terminal Area Chart – LAX at west shoreline.

Whether as pilot or passenger, I experience both the air traffic control system and city below it as marvels of human ingenuity and collective coordination. Yet they seem ever more vulnerable to chaos and ultimate collapse. Sometimes around dusk, I used to fly my little Piper PA-161 from Compton Airport out to the north east below the LAX final approach path under visual flight rules, then west along the Santa Monica Freeway, passing downtown LA to my north, heading toward the Santa Monica shoreline.

That way I could take the coastal route north saving time by not having to file an instrument flight plan. It was quicker that way when controllers were so busy with “rush hour” airline and business-jet traffic and hardly had time to issue another clearance. The city lights of downtown LA, the sunset, the many other aircraft in all quadrants with their nav. lights and landing lights so easy to see threading their way through the geometrically parsed airspace as daylight receded were all so beautiful, yet so delicately tentative and dangerous.

On disembarking into the LAX terminal on my last trip, I faced a mass of humanity flowing haphazardly in all directions in the very large multi-gate concourse. A virtual sea of diversity was lining up at a Southwest gate to board the next flight. I had a sudden sense of the quantitatively unimaginable scale of worldwide over-population rarely mentioned among environmentalists or politicians these days as the consumption of resources and energy by the people of the industrial nations reaches truly crisis scale.

Even as Los Angeles still works, more or less, it is difficult to imagine how such intensity can continue much longer as so much fossil-fuel energy and so many resources reach their extractive tipping points. LA, with its 13.1 million people in the metro area, seems the epitome of the extent to which humanity can appear to overcome nature, then approach a dead end. Big changes lie ahead. Meanwhile, can we learn anything about our future from this glorious megalopolis that may soon die of thirst?

Malthus, Mistakes, and Missing the Obvious

I’ve been reading a very interesting book lately. It is all about scientific ideas or theories that the authors of its many small chapters believe are impeding scientific progress in a wide variety of specialties. The book is called, This Idea Must Die: Scientific Theories That Are Blocking Progress (New York: Harper Perennial, 2015). Edited by John Brockman, the theme is based on the famous quote by theoretical physicist Max Plank (1858-1947) to the effect that a new scientific truth triumphs not by convincing its opponents, but because opponents eventually die off. Opponents of new ideas are usually older than those who come up with them and are usually “believers” in the dominant paradigm of the time. They resist changing their beliefs.

Yes, scientists can hold on to their notions of truth in the face of new evidence or ideas just as vehemently as the rest of us. The idea of inevitable progress is one such idea. We must make our progress, despite the claims of “rational optimists.” We must make progress by facing reality and dealing with it; progress won’t happen just by believing it so. That is what hopeful realism is about.

Most of the several dozen chapters that I have read out of the 285 or so in Brockman’s book are quite thought provoking if not downright enlightening. The chapters range from one to three pages long, ideal for a quick perusal in anyone’s reading room. I began reading way over my head when I was a child; I was fascinated by the graphic illustrations in The Scientific American. I tried to get the general idea, just reading right past complex formulae about which I didn’t have a clue. Well, I was only twelve. Some of the chapters in Brockman’s book gave me a similar feeling: way over my head in any technical sense. But even reading the chapters on topics related to the ephemeral unified “theory of everything” or the “singularity” in theoretical physics, or the idea of infinity and the extent of our universe, I could get the general idea. Anyway, it is all good intellectual exercise.

Of course, I am much more familiar with some of the topics discussed, such as economic growth, about which I have written a number of posts here. IQ is a topic that has always been controversial for me as a social psychologist. Issues around the confusion of correlation with causation have always intrigued me as a problem in research methodology, as has the question of anecdotal versus experimental evidence, and the issue of timing in causal analysis. So, I have enjoyed reading these diverse discussions of controversial ideas in various sciences.

Misreading Malthus

But when I read Matt Ridley’s chapter on Malthusianism, I was flatly annoyed. I had been annoyed similarly many years ago on reading Julian Simon’s claims that extensive economic growth should not raise concerns over resource depletion because it involves improved productivity and that population growth contributes to prosperity, not resource depletion. Ridley, a self-proclaimed “rational optimist,” dismisses the Club of Rome’s “Malthusian tract,” The Limits to Growth, despite the fact that its forecasts have been right on target over the decades since its publication. It has always been amazing to me how some writers can preach their “theories” in the face of mounting and even incontrovertible evidence – e.g., the climate deniers whose outlook on the petro-industrial system is quite similar to that of Mr. Ridley.

But the essence of my irritation is really quite simple. Timing is everything. Ridley obtusely exploits the short-term burst of industrial growth in the West to claim validity to the absurd idea that endless economic growth is somehow sustainable on a finite planet. He conveniently ignores the fact that western prosperity has been achieved on the backs of indigenous peoples across the globe, ever since the first European “explorers” began pillaging their lands and enslaving them. That is more than annoying. The “ingenuity” that turned material resources into capital was and remains grounded in violence perpetrated against diverse peoples and environments almost everywhere.

In predicting a quasi-Malthusian population crisis, Paul Ehrlich had been premature in his book, The Population Bomb, back in 1970, but he was not wrong. Technology did delay the clash of population growth with resource depletion, in large part because economic growth has been mainly confined to the Western industrial nations that have plundered resources from every continent. Population growth has had much less impact on the environment in the “developing” world, despite having been faster than in the West. That is because poor people living under oppressive regimes backed by the western industrial nations, consume very little energy or other resources. Poverty in the third world has been more extreme in part because of the imperial resource extraction from the “underdeveloped” nations that allowed techno-industrial growth in the West. But if the rest of the world had the same rates of consumption as the U.S. and Europe, global resources would have been depleted already. So, technology did facilitate growth in productivity, allowing the West to sustain a short-term prosperity through the latter half of the 20th century. That pattern cannot be sustained and is already showing major signs of impending collapse.

Irrational Optimism

Enter climate disruption, about which Ridley has nothing to say in this short chapter. However, his dismissal in his book, The Rational Optimist, of the not so optimistic forecasts resulting from massive and diverse data sets processed by hundreds of climate scientists worldwide disqualifies him as a “science writer.” Rather, he acts as a propagandist for the naïve optimism that dominates the extractive industrial culture that he so vehemently defends against any evidence that it has problems. His blind faith, not science or evidence, drive his foolish arguments that we have nothing to worry about. If the dominance of favorable ratings by other optimists on Goodreads and Amazon is any indicator, one thing we do have to worry about is the persistence of this a priori optimism in the face of an observed reality we must face if we are to retain any hope of achieving human survival in the next half century.

The mistakes about population growth are not Malthusian as Ridley claims. They are found instead in his myopic “Simonist” ideology of endless economic growth that simply denies the environmental and human impact of profligate extractive capital. The complexities of global demographics today have been given far too little attention. Ridley’s quasi-religious faith in human ingenuity is part of the technophilia that continues to culturally prop up the global capital-growth project. If the destructive trajectory of industrial “civilization” is allowed to continue just a little longer, the forecasts of Thomas Robert Malthus will soon seem understated. They will be mistaken only in the details of the collapse of a global techno-industrial system of plunder that he could not have predicted.

Making Money and Losing It

Ever wonder why you just can’t “get ahead”? Well, it’s all part of the larger scheme of things. Oh, I know, some folks do get ahead in one way or another and to one extent or another. But only the very few – the less than one percent – really make money and keep it or even accumulate enough wealth to leave a sizable inheritance to their children. The number of Americans literally living from hand to mouth has grown astoundingly high, especially since the ascendancy of the new financial elites with the deregulation of financial markets. To understand it all we have to step outside of our ordinary ways of thinking about money, value, and our lives.

In a moral economy, things would be different. But that’s not where we live. Our economic system has devolved from open competition of individual entrepreneurs in wide open environments, to a closed system of centralized economic growth in denial of limits. The perpetual-growth economy is controlled by giant investment banks and hedge funds and runs on debt-based money. That means money is created by debt itself.

On first thought that doesn’t make much sense; money is supposed to represent value, not debt. But that is not how it has been set up ever since the private central banks were given control, indeed ownership, of the creation of money. Instead, money is a product of the strange relationship between the nation and its private bankers. The Federal Reserve System was established as the “lender of last resort.” in 1913. This was meant in part to respond to fiscal crises such as the financial panic of 1907. The other part was a quiet takeover of the money system by the big private investment banks.

Making Money by Indebting a Nation
Some argue that the creation of the Fed as an independent agency was in fact a takeover of the function of a national central bank by the private bankers of the time. That view has significant historical validity. Though chartered by the U.S. Congress, the Federal Reserve System consists of twelve tax-exempt regional Federal Reserve Banks organized and operated as private corporations. Most importantly, the Fed was given control over the creation and lending of money.

Absurd as it sounds – and ever so costly –the national currency is not created by the Treasury. The Treasury only acts as a printing shop for the Fed. In effect, the Fed is a private banking cartel that lends to the government and to member banks the money it creates by generating public debt. So, to conduct its operations, the government has to “borrow” money from the Fed, which sells Federal Notes and Bonds to represent that debt. The U.S. Treasury can only offset that debt by collection of income taxes and other revenue. A lot of technicalities in this process obscure the basic fact that the right of the nation to produce its own money was high jacked by the biggest banks – “members” of the Fed – back in 1913. That has cost us all dearly ever since.

The Federal Reserve issues Federal Reserve Notes and Bonds. These draw interest for the buyer and charge the government, in whose name the Fed issues these debt instruments. So, the money the government ‘spends’ is owed to those institutions which ‘buy’ from the Fed the bonds and notes that signify the debt. One might say that the Fed is a “free rider” middleman. This process indebts the government – that is, the people – for all the currency, whether paper or electronic, that the Fed issues as part of its monetary policy.

Perpetuating Public and Personal Debt for Fun and Profit
The government becomes indebted in its turn to the ‘creditor’ institution or nation that bought the bond, for its face value plus any interest that accrues over time. The Fed is owned by its member private Big Banks, which have a sweet deal we’d all love to get a piece of but never will. The Fed issues credit to the Big Banks, say a billion dollars, and the Big Banks in turn loan out many multiples of the billions it ‘borrows’ from the Fed. Since the crash of 2008, the deal has been especially sweet, since the Fed charges a near zero interest rate. The Big Banks get to charge market rates for multiples of the funds borrowed for next to nothing. Huge profits beget huge bonuses for bank executives, not to reward some kind of executive performance, but for their just ‘being there.’

We should all be so lucky. But we are not. The average person, small business, or even not-so-well connected corporation has to borrow from the institutions run by the financial elite – the Big Banks – in order to initiate a major project of whatever kind. That borrowing had to be paid back with interest, so that whatever is done with the money has to “earn” more money than was borrowed in order to pay back the loan. That is often not easy. Just paying a mortgage seems to take forever. Even at a “reasonable” interest rate for a thirty year mortgage, most folks “pay back” more than double what we originally borrowed.

But in any case, what most people don’t understand is that the result of all this is that more money is always owed than is “out there.” If every loan requires repayment plus interest, where does the interest come from? Well, from “profit” or from wages, if the borrower is lucky. But that profit or wage comes from money already in circulation; that money in circulation was also created as debt. So, the only way for all money owed to be paid back is for more debt to be created, releasing more dollars into the money supply, paying off prior debt.

Reaching the End Game
Sound like a Ponzy scheme? If it does, that means you are paying attention. It is essentially no different than a Ponzy scheme. The whole house of cards stands on a perpetual expansion of debt that enables previous debt to be paid and the system to continue. That is only one of the reasons why the debt based economics of endless growth cannot ultimately be sustained. Debt cannot be expanded indefinitely.

There is another reason the debt-based growth economy cannot continue indefinitely. As with any exponential scheme of expansion, the limits of its environment eventually constrain it from continuing. That is where we are today with reference to “capitalism as we know it” and the material limits of the planet earth.

If you know anything about population growth, you recognize that a seemingly small percentage rate of growth after a few generations results in a very large number of people. From our current world population of around seven billion, growing at a moderate rate, we will soon have a population that by anyone’s measure cannot be sustained on one planet. One additional fact is important. A relatively small proportion of world population participates in the industrial growth economy but everyone else – of course – wants to. That is why more and more people everywhere find it increasingly difficult to “get ahead.” The game is almost over; it has reached its limits. Current world financial instabilities are symptoms. Economies with social purpose must replace mindless growth for the purpose of concentrating wealth in fewer and fewer hands.

Another way is possible and necessary. Money is inherently a public good. It is an inherent right of the nation itself to maintain sovereignty over its monetary system. The central banking system should be nationalized and subjected to public policy rather than be driven by private profit for financial elites in opposition to the public interest. Then, money could be based on credit, properly invested in the public interest, and thereby eliminate most of the false public debt it has caused by having been privatized.