This guest post from Veritas Curat (”the truth cures”) merits reading … As currently structured, economics tell us that “the Earth’s not worth saving.
“Socialism collapsed because it did not allow prices to tell the economic truth. Capitalism may collapse because it does not allow prices to tell the ecological truth.” – Oystein Dahle, former Vice President, Exxon, Norway
A question to ask: Is Dahle too optimistic, is it only Capitalism at risk of collapse?
I’m wondering these days what an economy is for. I always assumed that it had a purpose somehow associated with human happiness. But lately I’ve been wondering if our economy is a machine that is being driven by fools into a future of great misery and suffering.
The word “economy” has Greek roots: “oikos” and “nemein”
The oikos was the most basic and fundamental unit of classical Greek civilization; a civilization which arose gradually from the dark ages following the fall of Mycenae. An oikos was a human survival unit consisting of a small landholding (often in the ballpark of 10 acres or so) worked by the family living on it and one or more slaves they may have possessed. “Nemein” means “appropriating” or “distributing” (or even “feeding”).
“Oikonomos” is then the process of production and distribution of the resources of a family farm among all the participants.
This has become much more complicated in modern times. Wikipedia says
An economy consists of the economic system of a country or other area, the labor, capital and land resources, and the economic agents that socially participate in the production, exchange, distribution, and consumption of goods and services of that area.
And in today’s global economy that “area” is basically the entire planet.
If you take the biologically productive land and sea areas of the earth and divide them by the human population you get 1.8 hectares – about 4.5 acres – per person. But this is if the entire earth were a human family farm – no wilderness whatsoever and no place for species that aren’t of use to humans. I think, therefore, it would probably be a good idea to have some biologically productive land and sea set aside for the other millions of species that aren’t consumed by humans.
Some would disagree. But, for even those whose Eden is a global human family farm with no value assigned to species we can’t consume, we are screwing up. Humanity is presently using the earth’s “ecological services” faster than they can be renewed; our farm is failing. Any farmer knows that if you take more out of the soil than you put back in you will soon have barren land.
Back in the time of the oikos a family farm didn’t stand a chance unless it was part of a polis. A polis was a city/state consisting of a large number of family farms organized around a town or city and, most often, ruled by an aristocratic oligarchy. (Aristocracy – aristos “excellent,” cratos “power” or “rule of the best.” Oligarchy – oligos “few” archo “rule.”) This oligarchy was a small group of leading families who, because of chance vagaries of population history and migration, happened to end up with the largest amount of productive land and thus the largest amount of wealth, power and influence. They did everything they could possibly do to keep their positions of wealth, power and influence.
Greek oligarchies were able to organize units of family farmers - from those who were wealthy enough to buy armor, a hoplon (large wooden/metal shield) and a spear - into powerful fighting units: the hoplite phalanx. It was these units that provided the necessary defense to protect the polis and surrounding family farms from the attacks of other ruling oligarchies.
What these attacks were all about were over something we call “resources.”
Wikipedia has a wonderfully direct definition of “resource”
A resource is any physical or virtual entity of limited availability that needs to be consumed to obtain a benefit from it.
So an ancient hoplite farmer may have found himself on a prime piece of riverfront farmland able to grow wheat. This meant many of those around him who had fewer resources were anxious for the chance to push him off his land and take over. Oligarchs had the wherewithal not only to protect such valuable properties but to gain control over new ones since they could amass a hoplite phalanx or two and take what they wanted.
Most of the constant and frequent wars in classical Greece were fought over land – mainly at the boundaries between the holdings of two adjacent city/states. And they were fought by phalanges of hoplite farmers. The farmers willingly participated in this system because they knew that their oligarchy could amass phalanges in their defense if they ever needed it.
The system was not terribly kind. The origins of Athenian democracy probably arose from a severe and chronic crisis in debt servitude. If you weren’t a hoplite farmer and were just scraping by on your oikos and you had a bad year you could borrow from other more successful farmers or the oligarchs. If you couldn’t repay your debts you lost your farm. If that didn’t suffice you sold your children first and then, finally, yourself as a slave to work someone else’s farm.
This had reached crisis proportions when the Athenian oligarchy finally decided to appoint from among themselves Solon as sole archon, in about 600 BC. Solon, it turns out, had democratic tendencies and his laws eventually lead (through a long tortuous process) to Athenian democracy under Pericles. Athenian democracy was not the favored form among Classical Greeks; it was under constant assault from aristocratic families. It lasted for almost two hundred years before it was beaten by the Spartan oligarchy (which lasted for more than 400 years) in the Peloponnesian War and an oligarchy was established in its place.
This was all about controlling resources. The only heat source they had was wood and their technology was based upon physical work done by animals or slaves. All their pottery, armor, tools, etc. required a heat source to manufacture. They cut down trees. Lots of trees. In fact, one of the most reputable theories for the cause of the Athenian debt crisis and the failure of large numbers of family farms was due to ecological changes caused by this massive deforestation
This was deeply annoying to Socrates (as reported by Plato),
There is an explanation that is put in the language of the mysteries, that we men are in a kind of prison, and that one must not free oneself or run away…Only the body and its desires cause war, civil discord and battles, for all wars are due to the desire to acquire wealth, and it is the body and the care of it, to which we are enslaved, which compel us to acquire wealth, and all this makes us too busy to practice philosophy… (Phaedo)
So “the body and the care of it” was the root of all the aggravating squabbling over resources. And producing and distributing resources for the collective care of all the bodies in a polis was what the economy was all about. And this system required, in a most fundamental and necessary way, some kind of force of arms.
Now I want to look at this from the modern perspective of Nate Lewis:
It’s easy to prove, thinking 100 years out, on a risk-adjusted net-present-value basis, that the earth is simply not worth saving. It’s a fully depreciated, four-billion-year-old asset.
If you look at the land areas of the Old World, one constant is the absence of what were historically vast forests. Bialoweiza is a tiny remnant of thousands of square miles of primeval forest that were cut down for heating human civilization.
And this was when human civilization was a tiny percentage of what it is now. It’s ironic that the discovery and use of fossil fuels may have saved the last remaining forests on the planet. In the time of the oikos Attica had, maybe, a population of 200,000 people and they precipitated an ecological crisis by cutting most of their trees. Today the prefecture of Attica has around 4 million inhabitants. If they were wood-based they would no longer possess any trees whatsoever. Without fossil fuels they would have to rely on animal and human dung-based heat, if they survived at all.
This is, however, a symbiotic relationship. Fossil fuel use and human population growth are inextricably linked. And, of course, fossil fuel is just really old trees (and other plants).
We have somewhere around 2000 years of fossil fuel reserves – at 1998 consumption rates – left. Economically then, it makes perfect sense to continue using these low priced energy sources, well, for 2000 years.
Of course, as Dr. Lewis reminds us, this leaves out a big problem; without a doubt it is the biggest problem facing human civilization today. Here’s another graph:
This one takes some serious explaining. I would urge you to go to the video I linked to earlier for a good explanation, but since many will not I will give a bad explanation.
The heavy black line is a “business as usual” scenario from the IPCC that makes some radical not-“business as usual” assumptions about the continuous energy use of the earth’s population. The units are in terawatts – 1,000,000,000,000 watts – with the present world energy usage of 13 terawatts (defined by Dr. Lewis as the heat content of all the energy we consume divided by seconds in a year) and the red lines are the total carbon based energy use we need to be at to achieve those levels of C02 levels written on the line.
It becomes clear that business as usual both makes economic sense and, at the same time, will be totally disastrous in relation to life on earth. It’s really cheap to fry the planet. And, since economics is all about efficient price signals in a free market, this destruction makes economic sense. That’s what clearly matters to everyone who matters.
Economic business as usual is about the struggle to control and consume the earth’s resources as cheaply as possible. Nothing in there about saving the whales. Unless they prove to be a cost-effective resource for some sub-set of the economy.
It is still most cost-effective to burn fossilized plant material for heat. Burning these materials is the foundation of the economy and a growing economy is what provides jobs. So we need to burn more at ever increasing rates.
It makes economic sense.
What about CO2 levels of 2,000 ppm? Business as usual will get us there surely and certainly. We’re at 390 and climbing rapidly with no signs of changing course. We’ll keep doing it until it’s no longer cheap.
I wonder what things will look like when it finally gets too expensive.