Paul Krugman, commenting on a Wall Street Journal article that invoked, then tried to dismiss, concerns about resource scarcity, defended Malthus:
Malthus was right about the whole of human history up until his own era.
Sumerian peasants in the 30th century BC lived on the edge of subsistence; so did French peasants in the 18th century AD. Throughout history population growth had always managed to cancel out any sustained gains in the standard of living, just as Malthus said.
It was only with the industrial revolution that we finally escaped from the trap (if we did — for all we know, 35th-century historians will view the period 1800-2020 or so as a temporary aberration).
Was Malthus just unlucky? No. The same forces that made the industrial revolution possible — above all, the spirit of inquiry and rationality — also led to the birth of analytical economics. There probably couldn’t have been a Malthus until the world was on the verge of becoming non-Malthusian.
Krugman’s 35th century comment indicates he thinks it’s quite possible that our respite from Malthusian constraints may be nigh.
But modern economics is a product of the Industrial Revolution. It will take a major reorientation to adapt its precepts to a world where growth is constrained by resource limits and the need to manage externalities, such as greenhouse gas emissions, garbage, and pollution.
Reader pls pointed to an article in the Asia Times by Joe Costello on, among other things, the limits to growth. He had reservations about the article, as do I. It’s long, rambling, somewhat unfocused (I’ve noticed this with Asia Times articles. They must give writers large word budgets that they flounder to fill). And he draws inferences that are inaccurate (he makes it sound as if Volcker was an active participant in bringing about the Reagan revolution. Yet Volcker was a Carter appointee, and even though Reagan gave him for a second term, he later ditched Volcker for the libertarian enthusiast Greenspan. While it is probably accurate to say that Volcker’s successful monetary experiment enhanced Milton Friedman’s reputation in the public’s eye, Volcker is a staunch believer in regulation and no fan of “free markets” as a rationale for curbing oversight).
Nevertheless, despite the considerable shortcomings of this article, it nevertheless makes some important observations, the biggest that the main branches of economic orthodoxy regard growth as their main objective and are likely to revert to denial about resource constraints. While Costello lacks serious economic credentials, Krugman also reminds us that:
One of the defining features of the last 8 years or so has been the way ideas go from crazy stuff that only DFHs believe to stuff everyone knows, without ever going through a stage in which the holders of conventional wisdom acknowledge that they were wrong. Oh, and the people who were right are still considered DFHs; you see, they were right too soon.
As someone who worked on Jerry Brown’s presidential campaign, Costello is a card-carrying DFH.
From the Asia Times:
However, we may very well be at a point of fundamental questions neither the New Deal or neo-liberalism care to ask. For in the end, New Deal and neo-liberal political economy are simply two sides of the same coin. They are a political and cultural school of thought that seeks one end, economic growth. Both ultimately depend on growth in the creation of jobs, growth in the production of goods, and growth in consumption each year.
They are a school of thought that depends on infinite resources from what every year becomes increasingly clear to the collective mind of humanity is a very finite planet. It is this fundamental contradiction that will increasingly move into the center of all debate on political economy and a question neither New Deal or neo-liberal economics has any answers….
The questioning of unlimited growth is not new to political economy, it has been around since almost the inception, beginning most famously, or as most of economic proselytizers of unlimited growth would say most infamously, with the thinking of Thomas Malthus….
Yet, Malthus became held in ill-repute nowhere more so than amongst the economic community. His idea of humanity as part of nature flew in the face of both burgeoning growth economics, the new industrial ethos which seemingly proved man’s control over nature, and of course the much older philosophical and theological conceits of humanity’s natural exceptionalism…..
If in fact the planet’s 6 billion people were to live like the United States several other planets would need to be available, and despite all efforts to date, we are still very much Earthlings. In the last few years, as a billion or so new people have embraced the philosophy of infinite economic growth, it is increasingly clear Malthus must once again be reckoned with…
If we are to alter and reform the two centuries old patterns of industrial society, we must also completely reevaluate our understanding of economics. We can begin to do this quite easily by first rejecting the notion of economics as a science and understand that economics is at its foundation a cultural system. In order to change our industrial society, we will need to change our culture and we can begin by putting the political back into the economy.
There are several fundamental pillars in reforming political economy:
1. Ending the idea of infinite linear production and consumption in the closed system that is Earth.
2. Moving away from a fossil fuel-based energy system.
3. Corporate and government reform.
Concentrating on these three interlinking subjects will allow a comprehensive though in no way exhaustive look at evolving political economy.
The first thing that must be changed is the linear production and consumption model. We must accept the fact that we live on a finite planet, which means the doctrine of infinite growth is an eventual doctrine of disaster. The first rule we must adopt is to bend the current linear production and consumption process into a circle, which means most importantly, we must realize on a closed system like the earth there is no such thing as waste or garbage. We must look at everything we produce as recyclable and if it presently isn’t, it must become so.
Secondly, we have to move people off the production and consumption hamster wheel. This is the wheel that requires people to work to produce ever more things so they can be rewarded with ever more consumption. An ethic must be developed of not wanting more, but simply wanting enough – the system as whole must embrace this ethic. People must be enabled to work less and have more time to do other things than just consume.
For breaking out of the linear production and consumption model, the robust evolution of information technologies is going to play a critical role. To this point, information technologies have simply been used to enhance the linear production and consumption model, that is to simply produce more stuff. However, the real value of information technology lies in design, that is, eventually creating more livable societies that use less stuff. Most of our economic institutions will need to be retooled so their most important element is not production, but design. We need to figure out how to design our economy to not produce the most stuff, but more elegantly produce enough. Design is measured not by quantity, but by quality.
The most important element of the modern economy that will need to be redesigned is energy. If there is one thing that can be said that separates the industrial age from all preceding it, it is the exponential rise in energy consumption….
The interesting thing about industrial society and energy is that energy has been so relatively cheap and plentiful, little thought and even less practice has been given to using it efficiently and conservatively. For example, the automobile, thousands of pounds of steel powered by the internal combustion engine can also be looked at as one of the most energy-inefficient methods to move around a 150-pound person…..
While over the course of industrial society, the cost of labor has been scrutinized extensively, in most processes, the cost of energy has been paid too little attention. The United States needs to redesign its energy economy, looking to how all its processes can become much more efficient. This includes food production, where Richard Manning in an article in Harpers Magazine writes, “In 1940 the average farm in the United States produced 2.3 calories of food energy for every calorie of fossil energy it used. By 1974 (the last year in which anyone looked closely at this issue), that ratio was 1:1.”
It also includes redesigning our conspicuous consumption transportation systems and the redesign of all our buildings and communities. It means redesigning every aspect of American economic life.
It is with the redesign of American energy economy where the conflict between the value system of industrial capitalism (infinite quantitative growth) and the value system of an information intensive society (qualitative design), becomes readily apparent. The American economy must be redesigned not to use the most energy possible but the least, and for this industrial society has no value.
In large part, it requires information to be released from the constraints of market valuation and to develop a cultural value more similar to the political value of the 1st Amendment and the Jefferson and Madison imperative of the distribution of information through education being the life blood of self-government, so it will be too for a society that values design…
In getting real value out of information, design must become an integral component to all aspects of society, and that means decision making must become a larger and more meaningful aspect of everyone’s life, whether it is individual decisions or those taken with association. This means our corporate and government institutions, which have symbiotically grown more centralized and powerful over the course of the 20th century, must be most simply broken-up and restructured. This means more power to localities, not as independent entities, but as nodes in a distributed network…
Today, after two centuries, government has both centralized and atrophied in Washington DC. Power needs to devolve from DC, not to the states, but to cities and counties, then connections must be made between the cities and counties. There’s no need for intercity policy having to be made in state capitals or DC. The cities can interact amongst themselves and develop appropriate actions.
Most importantly, the reformation of corporations and government will call for a revitalization and a necessary evolution of the role of citizen. It will call for people to take time previously given to the production and consumption cycle and devote it to what might best be defined as an expanded role of the citizen.
Considering today most Americans have at best a most limited role as citizen, making a joke of the very notion of modern self-government, expanding the role of the citizen will not be hard. But it means much more than people re-engaging in the traditional citizen affairs they have abandoned. It means creating new roles in information processing, valuing design, and distributed decision making.
Some will immediately attack the notion of a revived citizen as naive or romantic, but it is nothing of the sort. Culturally we must value these roles to as great a degree as we today value work in the production cycle, or as a responsibility as important as parenting. Citizenship must be stripped of the notion that it is voluntary and must be understood to be necessary. It must be looked at not as shining and exemplary, but more like work, much of the time simply an unavoidable drudgery, with the inescapable sad but nonetheless enlightening conclusion that the nirvana of democracy is meetings.
Thus we stand at an amazingly necessary cultural turning point in history. We must put the political back into the economy and in so doing we must evolve both. Some who have read this short essay will gripe it is too short on specific answers, but this is by design…
So much of the change we face is cultural, a revaluation of value, and history shows this is never easy. In many ways, the era we live in is most analogous to Europe right before the Reformation, where one doctrine held almost complete sway over life and was reinforced by centralized institutions speaking a vocabulary the vast majority couldn’t understand.
Yet the rot and insufficiencies became so great, the old doctrine proved untenable for a new era. If we are to provide change that is now so obviously necessary, we’ll have to have the fortitude of that little Augustinian monk and state, “Here I stand, I can do no other.”
Costello waxes idealistic, envisioning a renewed focus on local action and responsibility. This may not be as outlandish as it sounds, although a change of this magnitude will probably result from profound dissatisfaction with the status quo. Citizens may conclude the only way to make things better is to take more matters into their own hands, which can be done most effectively at a local level. That, however, points less to a networked society and more to a fragmented one.
Another consideration is, whether we are ready to accept it or not, the rest of the world is going to limit our profligate consumption. If we continue to debase the currency, our depressed purchasing power will serve as a constraint. If not, it simply will no longer be acceptable for a fallen empire with only 5% of the world’s population to hog scarce resources. The modern analogue to Smoot Hawley, which is already under way, is countries giving higher priority to resource self-sufficiency and thus curtailing exports.
Costello continues a too long tradition of trying to solve contemporary issues by insisting on the role of locality and citizen. Both, of course, are powerful ideas we need to revitalize. But revitalizing them are more likely to happen by expanding on the actively shared roles of employee/executive, consumer and investor than by attempting to cram more ‘work’ into already overly busy lives through ‘citizen action’.
If people in their roles of employees/executives acted to make sure their organizations — private, public and non-profit — served other people in their role of consumer/investor in a manner consistent with the golden rule (i.e. do unto others….), then we’d make more pragmatic progress toward insuring that every organization’s success contributed to the safety, sanity and sustainability of the planet.
But this is not what happens today. Instead, we have private sector organizations, lemming-like, pursuing idolatry of ‘free markets’ and shareholder value fundamentalism. Look at the earlier post of stock market drops for signing onto profit-generating conservation measures. We live in a world of ideology. Only ‘we’ can take responsibility for changing that.
But, first we must understand when we are a real ‘we’ capable of concerted, purposeful action.
That happens in the ‘we’s’ of organizations — not the ‘we’s’ of place/locality. And it happens mostly in our shared role of ’employee/executive’ as opposed to the shared idea of ‘citizen’.
The idealism in Costello’s prescriptions arise because he fails to account for our shared reality and how various ‘we’s’ can and must act in it. His objectives are spot on. His recomended means will not happen.
The greatest change in post WW2 America is the
creation of a vast infrastructure of workplaces,
homes and shopping centers separated by significant distances, and connected by roads and cars.
This infrastructure was built on $2 oil, over which the nominal owners (gulf states) exercised no control.
That infrastructure is what is becoming obsolete.
The older village, town and city model, which still exists alongside the more recent suburban form, will slowly have to grow as the latter shrinks. But at what a cost!
Not surprisingly, us DFHs are not beloved for pointing out the obvious, and then reminding people that “see, we were right!”
Criticize Costello for failing to edit his piece, but don’t criticize the concept. Peak Oil is not some wacky hippie theory.
The good news is that the younger generation appears to understand the interconnectiveness of everything. Witness the youthful enthusiasm for Obama. I wish them well. They’re going to need all the help they can get.
Being the jaded old cynic that I am, I am not as optimistic as Costello that this thing will play out as benignly as he predeicts. Large segments of the American population have thus far behaved pretty abominably. There’s already been one failed resource war, and all this anti-immigrant antipathy is indicative of a society in search of scapegoats. It could get very ugly.
Costello is absolutely right in that the changes that are needed are cultural. But there is nothing more rigid and unbending as culutre. As Richard Bernstein points out in “Dictatorship of Virtue,” culture is “powerfully conservative. Culture is what enforces obedience to authority, the authority of parents, of history, of custom, of superstiotion. Deep attachment to culture is one of the things that prevents different people from understanding one another. It is what pushes groups into compliance with practices that can be good or bad, depending on one’s point of view. Suttee (the practice, eradicated by British colonialism, in which Indian widows were burned alive on the funeral pyres of their husbands) and female circumcision, as well as the spirit of rational inquiry and a belief in the sanctity of each human life, are products of cultural attachments of different kinds. Those who practiced suttee, or who believe that women who commit adultery should be stoned to death, do not believe there is anything bad about these practices, any more than those who practice rational inquiry under conditions of freedom think there is anything wrong with that.”
We’re talking about taking core Western values, which at this very moment are rapidly being exported to the rest of the world, and turning them on their heads.
Just imagine the guy who takes the subway being held in higher esteem than the guy who tools around in his new Jaguar convertible coup, the guy who lives in a little 600 sq. ft. apartment having more prestige than the guy who rambles around in his 5000 sq. ft. McMansion, thermostats set at a perfect 70 degrees 365 days a year.
It just ain’t gonna happen without a tremendous amount of pain.
i have read most of richard manning’s books, his ideas on agriculture are very interesting.
from travelling around the western u.s. i too think and hope the current rate of growth is unsustainable. many small to medium size towns have a beautiful core that is now being surrounded by horribly ugly ‘suburbs’ of crap housing. Cheyenne, cedar city, billings, boise, helena, idaho falls, pueblo, to name just a few.
but then i am an old dfh, although i found it funny when we had to join a contractor’s organization their representative came by to welcome us and i got to tell him well you really don’t do much for us because i am not a republican nor do i play golf, he got the funniest look on his face as if the criminals were indeed running the asylum. he realized i was a dfh but we had nice offices and my dues were in part paying his salary.
Thank you for this lovely column.I am especially drawn to Costello’s understanding of our need for a paradigm shift from the notion of linearity.
Cribbing from somebody while Eastern the idea that Eastern (Hindu-Buddhist) notion that the world goes on in a circular repetitive fashion, Christianity sees us moving linearly to the unique event of the Apocalypse.
The American version of this
seems to have come into our ethos via Winthrop’s “City on the Hill” sermon on the Mayflower see here http://history.hanover.edu/texts/winthmod.html or interestingly here http://www.youtube.com/watch?v=vcfvI3oIFd4
Also Reagan’s awareness of Winthrop see http://www.reaganlibrary.com/reagan/speeches/farewell.asp
But unfortunately Reagan gave us supply-side economics. Whose results seem far from Wintrop’s ideal.
Yet it is a seductive idea You can do good by doing well. It is a “ziperless” method of Charity.
And we need some non-linear (in Costello’s usage) theory of Economics for our paradigm to shift to. Of course they have to have their shift first.
LOL…economists are always right up until their own era!
Thanks, Yves, for an important post. I do agree with Costello in the main. I also think he still has an unconscious attachment to the idea of growth, evident in his long, gushy section on how “information technology” will (somehow) create “new, better” ways of doing things. I think what needs to be critiqued is not just the idea of “infinite growth”, which is clearly irrational, but “progress”, which is much more deeply imbedded in modern Western culture. It wasn’t always the case. For a beautifully, albeit dense, history of the idea of “progress”, I recommend the late social historian Christopher Lasch’s brilliant book, “The True and Only Heaven,” which looks at the conflicted history of the idea of “progress’ in the American republic. A crisis like the current one is also, as the Chinese say, an opportunity–in these case, to examine some of our unconscious social and economic assumptions which are driving us to total disaster.
Pulled from “The Market Oracle” article by Chris Laird:
It can be claimed that Asia is seeing inflation on the order of 10%, and China and India have some real problems with this now. The food riots and such, as food prices rise 40 to 100%, put incredible pressure on Asia’s Achilles heel, their huge poor population. The fact is that their huge poor sector spends about half their daily income on food alone. IF food prices double, then what is left over?
Don’t be surprised. If you make $2 a day, and were formerly spending $1 a day on food, and then food doubles in price, you get to the point of not being able to eat enough. In the richer nations, food accounts for say 7 to 10% of cost of living, but in poor nations food is over 50% of living costs, so these food riots are fairly easy to explain. This applies to Egypt, India, China, the Philippines, and a total of 33 countries right now. Food inflation is not tolerable for these countries.
I saw a story about a woman in India whose husband is a day laborer, and they have two kids. As food prices rose, they first sent the kids away to more prosperous relatives. Then, finally, last week said they could only eat one meal a day… because they literally could not afford enough food. Now that is what I call a critical situation. Don’t think China and the other huge poor nations aren’t panicking about this.
Are systemic limits and natural limits necessarily identities or, thanks to the ideological role of neoclassic economics, has there been a conflation.
The limits to capital are less to do with environmental degradation than capital itself. Imagining real solutions to rise from the same set of social relations which generated the problems is likely a crude idealism.
‘Creative destruction’ was always asymmetric and has increasingly become destructive creation, no mere turn of phrase but the consequence of a progressively greater inability to overcome inherent limits, which must be understood as more than a greater contradiction between nature and artificial nature.