[R-G] [BillTottenWeblog] A Guide for the Perplexed

[Bill Totten]

by John Michael Greer

The Archdruid Report (May 27 2009)

Druid perspectives on nature, culture, and the future of industrial society


An irony endured, and occasionally relished, by those of us whose
concerns about peak oil have found their way into print is the awkward
fact that it's difficult to talk publicly about using less fossil fuel
energy without using more of it. The networks of transportation and
communication left to us by the collective decisions of the recent past
demand a great deal of energy input, and social habits evolved during
the heyday of cheap energy amplify that, making long-distance trips a
practical necessity for the working writer. These days, that usually
means air travel.

A passage in Theodore Roszak's Where the Wasteland Ends (1972) explores
the chasm between the old romantic dreams of human flight and the
utterly unromantic reality that replaced them. More than once, after a
few hours packed like sardines in a metal can breathing the same stale
air a hundred times over, it's occurred to me that the crabby oldsters
who insisted that humanity was not meant to fly may have had more of a
point than most of us suspect. The one consolation I've found is that
the hours of enforced inactivity on planes and in airports provide some
of the few chances an increasingly busy schedule allows me for sustained
reading. And that, dear reader, is how I ended up sitting in a tacky
restaurant in the even more tacky Dallas-Fort Worth airport a few weeks
back, killing time between one flight and the next, with a copy of E F
Schumacher's book Small Is Beautiful (1973) in my hands.

This was by no means my first encounter with Schumacher. Back in the
1970s, when I first began studying the ways that energy, ecology, and
history were weaving our future, his name was one to conjure with
throughout the environmental and appropriate-tech movements; you could
expect to see Small is Beautiful on any bookshelf that also held The
Whole Earth Catalog (1968-1998), say, or The Book of the New Alchemists
(1977). Still, by the time I stuffed a copy in my carry-on bag and
headed to the airport, close to thirty years had passed since the last
time I'd opened it. I suspect many other people have neglected it to at
least the same degree.

This is unfortunate, because Schumacher's insights have not lost any of
their force with the passing years. Quite the contrary; he was decades
ahead of his time in recognizing the imminence of peak oil and sketching
the outlines of an economics that could make sense of a world facing the
twilight of the age of cheap abundant energy. It's fair to say that in
many ways, the peak oil scene has not yet caught up with him. For this
reason among others, a review of the man and his ideas may be timely
just now.

Ernst Friedrich Schumacher was born in Bonn in 1911 and attended
universities there and in Berlin before going to Oxford in 1930 as a
Rhodes Scholar, and then to Columbia University in New York, where he
graduated with a doctorate in economics. When the Second World War broke
out he was living in Britain, and was interned for a time as an enemy
alien, until fellow economist John Maynard Keynes arranged for his
release. After the war, he worked for the British Control Commission,
helping to rebuild the West German economy, and then began a twenty-year
stint as chief economist and head of planning for the British National
Coal Board, at the time one of the world's largest energy firms.

He also served as an economic adviser to the governments of India,
Burma, and Zambia, and these experiences turned his attention to the
economic challenges of development in the Third World. Recognizing that
attempts to import the industrial model into nonindustrial countries
usually failed due to shortages of infrastructure and resources, he
pioneered the concept of intermediate technology - an approach to
development that focuses on finding and using the technology best suited
to the resources available - and founded the Intermediate Technology
Development Group in 1966. His interest in resource issues also led to
an involvement in the organic agriculture movement, and he served for
many years as a director of the Soil Association, Britain's largest
organic farming group.

I suspect it was precisely these practical involvements that predisposed
him to see past the haze of unrecognized ideology that makes so much
contemporary economic thought so useless when applied to the real world.
Economics as an academic field is notoriously forgiving of even the most
embarrassingly inaccurate predictions, and a professor of economics can
still count on being taken seriously even when every public statement he
has made about future economic conditions has been flatly disconfirmed
by events. This is much less true in the business world, where
predictions can have results measured in quarterly profits or losses.
Working in a setting where consistently failed predictions would have
cost him his job, Schumacher was not at liberty to put ideology ahead of
evidence, and the conflict between what standard economic theory said,
then as now, and the realities Schumacher observed all around him must
have had a role in making him the foremost economic heretic of his time.

His economic ideas cover a great deal of ground, not all of it relevant
to the project of this blog; readers interested in the overall shape of
his ideas should certainly pick up a copy of Small Is Beautiful and find
them there. Four of his propositions, however, struck me as core assets
in any attempt to make sense of the economic dimensions of the end of
the industrial age.

First, Schumacher drew a hard distinction between primary goods and
secondary goods. The latter of these includes everything dealt with by
conventional economics: the goods and services produced by human labor
and exchanged among human beings. The former includes all those things
necessary for human life and economic activity that are produced not by
human beings, but by nature. Schumacher pointed out that primary goods,
as the phrase implies, need to come first in any economic analysis
because they supply the preconditions for the production of secondary
goods. Renewable resources, he proposed, form the equivalent of income
in the primary economy, while nonrenewable resources are the equivalent
of capital; to insist that an economic system is sound when it is
burning through nonrenewable resources at a rate that will lead to rapid
depletion is thus as silly as claiming that a business is breaking even
if it's covering up huge losses by drawing down its bank accounts.

Second, Schumacher stressed the central role of energy among primary
goods. He argued that energy cannot be treated as one commodity among
many; rather, it is the gateway resource that allows all other resources
to be accessed. Given enough energy, shortages of any other resource can
be made good one way or another; if energy runs short, though, abundant
supplies of other resources won't make up the difference, because energy
is needed to bring those resources into the realm of secondary goods and
make them available for human needs. Thus the amount of energy available
per person puts an upper limit on the level of economic development
possible in a society, though other forms of development - social,
intellectual, spiritual - can still be pursued in a setting where hard
limits on energy restrict economic life.

Third, Schumacher stressed the importance of a variable left out of most
economic analyses - the cost per worker of establishing and maintaining
a workplace. Only the abundant capital, ample energy supplies, and
established infrastructure of the world's industrial nations, he argued,
made it functional for businesses in those nations to concentrate on
replacing human labor with technology. In the nonindustrial world, where
the most urgent economic task was not the production of specialty goods
for global markets but the provision of paid employment and basic
necessities to the local population, attempts at industrialization far
more often than not proved to be costly mistakes. Schumacher's
involvement in intermediate technology unfolded from this realization;
he pointed out that in a great many situations, a relatively simple
technology that relied on human hands and minds to meet local needs with
local resources was the most viable response to the economic needs of
nonindustrial nations. Since the end of the age of cheap abundant energy
bids fair to place the world's industrial nations on something like a
par with today's Third World, struggling to feed large populations with
sharply limited resources and disintegrating infrastructures, the same
logic will much more likely than not apply to our own future as well.

Finally, and most centrally, Schumacher pointed out that the failures of
contemporary economics could not be solved by improved mathematical
models or more detailed statistics, because they were hardwired into the
assumptions underlying economics itself. Every way of thinking about the
world rests ultimately on presuppositions that are, strictly speaking,
metaphysical in nature: that is, they deal with fundamental questions
about what exists and what has value. Trying to ignore the metaphysical
dimension does not make it go away, but rather simply insures that those
who make this attempt will be blindsided whenever the real world fails
to behave according to their unexamined assumptions. Contemporary
economics fails so consistently to predict the behavior of the economy
because it has lost the capacity, or the willingness, to criticize its
own underlying metaphysics, and thus a hard look at those basic
assumptions is an unavoidable part of straightening out the mess into
which current economic ideas have helped land us.

All of these four points deserve more development than Schumacher, in
the course of a busy and active life, was able to give them. All four
also can be applied constructively to the specific economic questions
surrounding the end of the age of cheap energy and the coming of
deindustrial society. Over the weeks and months to come, subject to the
usual interruptions, I want to explore this latter task in some detail,
and propose a few potential lines of approach toward the former. As last
week's post pointed out, the economic dimension is perhaps the least
understood aspect of the crisis of industrial civilization, and a good
part of that lack of understanding can be traced to the chasm that has
opened up between current ideas and economic reality. Anything that can
help bridge that gap could be crucial in navigating the challenging
future ahead of us.

_____

John Michael Greer has been active in the alternative spirituality
movement for more than 25 years, and is the author of a dozen books,
including The Druidry Handbook (2006) and The Long Descent (2008). He
lives in Ashland, Oregon.

http://thearchdruidreport.blogspot.com/2009/05/guide-for-perplexed.html


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