Deflation and our ecological crisis

Posted October 18th, 2010 in Blog, Featured Comments Off on Deflation and our ecological crisis

Fostering Ecological Hope
Today from Margaret Swedish:

I want to put a couple of important trends together here. One we write about often – that the human species is living far beyond the Earth’s biocapacity.  This we already know, and the graphic right here shows exactly how dire this situation is – we are overshooting biocapacity by 50 percent, and that number is rising steadily.

Source: Global Footprint Network

The other is this: one of economists’ greatest fears for the US economy right now is the threat of deflation, a phenomenon in the dynamics of capitalism that can bring about years of stagnation. It means that prices start falling because consumers have cut way back on expenditures, meaning they have stopped buying stuff.  Businesses then stop hiring and goods sit on store shelves and everything bogs down. People wait to spend what they have, thinking prices will continue to fall. Rather than growth, anti-growth. The burden of debt also rises, and lenders tend to stop lending.

That is the enemy the Fed wants to address by buying up Treasury bonds to push down long-term interest rates and make the dollar cheaper, therefore supposedly also increasing exports, another job generator.

We need growth to recover. We need to start consuming again. We need to start buying stuff.

Which runs smack into the first trend. In order to get this economy moving again so that businesses will hire people, and the people will have money to buy stuff, we need to recover the consumer economy, what has been for decades now the so-called ‘engine’ of the global economy, and our own. Before September 2008, consumption amounted to about 2/3 of our GDP. And what helped bring about the 2008 financial collapse was that that consumption was being financed by massive debt – credit card debt, but also, and quite disastrously, debt from home equity loans and refinancing based on what turned out to be fictitious ever-escalating real estate values, which values were financed by fictitious financial instruments.

That may be a somewhat simplistic explanation of a very complex set of drivers, but it gives us the basic picture.

So, what this means is that, according to this economic model (which few are brave enough to challenge fundamentally), in order to ‘recover,’ which means to get the economy growing again, we have to extract even more, consume even more, of the planet’s biocapacity.

And what we extract and consume goes back to the Earth largely as waste, or into the atmosphere and biosphere as useless energy (the inescapable First & Second Laws of Thermodynamics). The Earth is already having grave problems absorbing our waste, our tens of thousands of new synthetic chemicals that never existed on the planet before, our greenhouse gas emissions, and our toxic wastes dumped into rivers and lakes, mountains valleys and soils.

In this project, we center our work around this critical point:

we are up against severe limits and we must scale-down the human project if we are to reverse these catastrophic trends.

And, folks, this is where we come to realize how woefully inadequate are all our political conversations, our election campaigns, our cable TV news programs with their largely vacuous pundits, and most of our mainstream economists. They do not have any meaningful alternatives to what they know; they are trying to do what Einstein said could not be done:

You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew.

And seeing the world anew is not what our ‘leaders’ have in mind. It is not what investors and corporations are structured to do, not what they would spend 5 minutes considering – because it means, actually, the end of them, or most of them anyway.

To say that we have to stop growing economies means for them consigning the world to a fall in prosperity, to greater suffering, to collapse and chaos.

Kayford WV mountaintop removal coalmining - Photo: Vivian Stockman

Why were those Chilean miners in that mine to begin with? Why, after all, do Massey and other coal companies continue to blow up mountains? Why has the government allowed fracking for natural gas despite the threat of contamination to everyone’s drinking water? Why are we upset about China’s retaliatory act against Japan by cutting off its access to rare earth minerals, needed for things like fiber optics and our hi-tech gadgets? Why has Hillary Clinton declared the pipeline from the Alberta oil tar sands fields to Superior WI a matter of national security?

Because we do not know how to do things differently to the scale required to still make it possible for people to eat and have housing and a job and pay taxes to support government services, like Social Security, Medicare, and public schools – AND reduce quickly and sharply our ecological footprint.

And, for that reason, we continue to take from the Earth more than it has to offer us as gift of life to our species and millions of others. Because we are so lacking in creative initiative to turn this around in a way that could still make it possible to live through this time when we must face these limits, because certain economic interests of wealth and power insist on maintaining or competing for their positions, we will face these limits by disaster rather than forethought – if we continue to operate with the old consciousness.

It doesn’t have to be this way. We could decide to “suck up” and face reality like grown-up adults who know the time of excess is over, that it is time to reinvent what it means to be human and to have value in other ways than what we consume and whether our wealth is growing or not. The longer we put this off, the harder it will be because we will have less vibrancy of the planet to support us in the transition.

Someday, humans will look back on this era and wonder that we thought cathedral ceilings and owning 2-3 homes and driving SUVs and playing with little hi-tech toys and staring at ever-shrinking screens were ever more important than sitting on a porch with your friends, taking long walks or riding bikes with the kids, watching the Milky Way on a clear night, or having conversations about the meaning of life and wonder and awe long into the evening.

Nothing like a good book. Photo by Mom

They may wonder that we ever thought it was worth opening deep wounds in the Earth, contaminating soils and water with toxic chemicals, exploiting workers in inhuman low-wage factories, and poisoning children in poor cities and villages around the world who take apart our toxic gadgets with their bare hands (also called recycling) so that we could each read a book on a fancy screen that we can change with our fingers rather than open a book and share it together, or constantly text our friends and be ever available for online communication.

I am not a Luddite (obviously, or I wouldn’t be posting this); but I know this is not working. I know this way of doing business must end. I know economies of growth have no future except in disaster and vast human suffering. I also know we can change this course – but it will not happen from those still benefiting from the old consciousness. It will come from below when those who are truly committed to changing the world begin to pull the foundation out from under the old economy by creating the new community and recovering what really matters in this world.

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