[R-G] [BillTottenWeblog] This is What Denial Does

[Bill Totten]

The economic crisis is petty by comparison to the nature crunch. But
they have the same cause.

by George Monbiot

Published in the Guardian {October 14 2008)


This is nothing. Well, nothing by comparison to what's coming. The
financial crisis for which we must now pay so heavily prefigures the
real collapse, when humanity bumps against its ecological limits.

As we goggle at the fluttering financial figures, a different set of
numbers passes us by. On Friday, Pavan Sukhdev, the Deutsche Bank
economist leading a European study on ecosystems, reported that we are
losing natural capital worth between $2 trillion and $5 trillion every
year, as a result of deforestation alone {1}. The losses incurred so far
by the financial sector amount to between $1 trillion and $1.5 trillion.
Sukhdev arrived at his figure by estimating the value of the services -
such as locking up carbon and providing freshwater - that forests
perform, and calculating the cost of either replacing them or living
without them. The credit crunch is petty when compared to the nature crunch.

The two crises have the same cause. In both cases, those who exploit the
resource have demanded impossible rates of return and invoked debts that
can never be repaid. In both cases we denied the likely consequences. I
used to believe that collective denial was peculiar to climate change.
Now I know that it's the first response to every impending dislocation.

Gordon Brown, for example, was as much in denial about financial
realities as any toxic debt trader. In June last year, during his
Mansion House speech, he boasted that forty per cent of the world's
foreign equities are now traded here. "I congratulate you Lord Mayor and
the City of London on these remarkable achievements, an era that history
will record as the beginning of a new golden age for the City of London"
{2}. The financial sector's success had come about, he said, partly
because the government had taken "a risk-based regulatory approach". In
the same hall three years before, he pledged that "in budget after
budget I want us to do even more to encourage the risk takers" {3}. Can
anyone, surveying this mess, now doubt the value of the precautionary
principle?

Ecology and economy are both derived from the Greek word oikos - a house
or dwelling. Our survival depends upon the rational management of this
home: the space in which life can be sustained. The rules are the same
in both cases. If you extract resources at a rate beyond the level of
replenishment, your stock will collapse. That's another noun which
reminds us of the connection. The Oxford English Dictionary gives 69
definitions of stock. When it means a fund or store, the word evokes the
trunk - or stock - of a tree, "from which the gains are an outgrowth"
{4}. Collapse occurs when you prune the tree so heavily that it dies.
Ecology is the stock from which all wealth grows.

The two crises feed each other. As a result of Iceland's financial
collapse, it is now contemplating joining the European Union, which
means surrendering its fishing grounds to the Common Fisheries Policy.
Already the prime minister Geir Haarde has suggested that his countrymen
concentrate on exploiting the ocean {5}. The economic disaster will
cause an ecological disaster.

Normally it's the other way around. In his book Collapse, Jared Diamond
shows how ecological crisis is often the prelude to social catatrosphe
{6}. The obvious example is Easter Island, where society disintegrated
soon after the population reached its highest historical numbers, the
last trees were cut down and the construction of stone monuments peaked.
The island chiefs had competed to erect ever bigger statues. These
required wood and rope (made from bark) for transport and extra food for
the labourers. As the trees and soils on which the islanders depended
disappeared, the population crashed and the survivors turned to
cannibalism. (Let's hope Iceland doesn't go the same way.) Diamond
wonders what the Easter islander who cut down the last palm tree might
have thought. "Like modern loggers, did he shout 'Jobs, not trees!'? Or:
'Technology will solve our problems, never fear, we'll find a substitute
for wood'? Or: 'We don't have proof that there aren't palms somewhere
else on Easter ... your proposed ban on logging is premature and driven
by fear-mongering'?" {7}.

Ecological collapse, Diamond shows, is as likely to be the result of
economic success as of economic failure. The Maya of Central America,
for example, were among the most advanced and successful people of their
time. But a combination of population growth, extravagant construction
projects and poor land management wiped out between ninety and 99% of
the population. The Mayan collapse was accelerated by "the competition
among kings and nobles that led to a chronic emphasis on war and
erecting monuments rather than on solving underlying problems" {8}. Does
any of this sound familiar?

Again, the largest monuments were erected just before the ecosystem
crashed. Again, this extravagance was partly responsible for the
collapse: trees were used for making plaster with which to decorate
their temples. The plaster became thicker and thicker as the kings
sought to outdo each other's conspicuous consumption.

Here are some of the reasons why people fail to prevent ecological
collapse. Their resources appear at first to be inexhaustible; a
long-term trend of depletion is concealed by short-term fluctuations;
small numbers of powerful people advance their interests by damaging
those of everyone else; short-term profits trump long-term survival. The
same, in all cases, can be said of the collapse of financial systems. Is
this how human beings are destined to behave? If we cannot act until
stocks - of either kind - start sliding towards oblivion, we're knackered.

But one of the benefits of modernity is our ability to spot trends and
predict results. If fish in a depleted ecosystem grow by five per cent a
year and the catch expands by ten per cent a year, the fishery will
collapse. If the global economy keeps growing at three per cent a year
{or 1700 per cent a century} it too will hit the wall.

I'm not going to suggest, as some scoundrel who shares a name with me
did on these pages last year {9}, that we should welcome a recession.
But the financial crisis provides us with an opportunity to rethink this
trajectory; an opportunity which is not available during periods of
economic success. Governments restructuring their economies should read
Herman Daly's book Steady-State Economics {10}.

As usual I haven't left enough space to discuss this, so the details
will have to wait for another column. Or you can read the summary
published by the Sustainable Development Commission {11}. But what Daly
suggests is that nations which are already rich should replace growth
("more of the same stuff") with development ("the same amount of better
stuff"). A steady state economy has a constant stock of capital
maintained by a rate of throughput no higher than the ecosystem can
absorb. The use of resources is capped and the right to exploit them is
auctioned. Poverty is addressed through the redistribution of wealth.
The banks can lend only as much money as they possess.

Alternatively, we can persist in the magical thinking whose results have
just come crashing home. The financial crisis shows what happens when we
try to make the facts fit our desires. Now we must learn to live in the
real world.

www.monbiot.com

References:

1. Richard Black, 10th October 2008. Nature loss 'dwarfs bank crisis'.
BBC Online. http://news.bbc.co.uk/1/hi/sci/tech/7662565.stm

2. Gordon Brown, 20th June 2007. Speech to Mansion House.
http://www.hm-treasury.gov.uk/2014.htm

3. Gordon Brown, 16th June 2004. Speech to Mansion House.
http://www.hm-treasury.gov.uk/1534.htm

4. Oxford English Dictionary, 1989. Second Edition.

5. Niklas Magnusson, 10th October 2008. Iceland Premier Tells Nation to
Go Fishing After Banks Implode.
http://www.bloomberg.com/apps/news?pid=20601087&sid=azZ189JG.1S8&refer=home

6. Jared Diamond, 2005. Collapse: how societies choose to survive or
fail. Allen Lane, London.

7. Page 114.

8. Page 160.

9. George Monbiot, 9th October 2007. Bring on the Recession. The Guardian.
http://www.monbiot.com/archives/2007/10/09/bring-on-the-recession/

10. Herman E Daly, 1991. Steady-State Economics - 2nd Edition. Island
Press, Washington DC.

11. Herman E Daly, 24th April 2008. A Steady-State Economy. Sustainable
Development Commission.
http://www.sd-commission.org.uk/publications/downloads/Herman_Daly_thinkpiece.pdf

Copyright (c) 2006 Monbiot.com

http://www.monbiot.com/archives/2008/10/14/this-is-what-denial-does/


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