Saturday, April 18, 2009

Time to end the multigenerational Ponzi scheme

By Kim Stanley Robinson


"Capitalism evolved out of feudalism. Although the basis of power has changed from land to money and the system has become more mobile, the distribution of power and wealth has not changed that much. It’s still a hierarchical power structure, it was not designed with ecological sustainability in mind, and it won’t achieve that as it is currently constituted.
The main reason I believe capitalism is not up to the challenge is that it improperly and systemically undervalues the future. I’ll give two illustrations of this. First, our commodities and our carbon burning are almost universally underpriced, so we charge less for them than they cost. When this is done deliberately to kill off an economic competitor, it’s called predatory dumping; you could say that the victims of our predation are the generations to come, which are at a decided disadvantage in any competition with the present.

Second, the promise of capitalism was always that of class mobility—the idea that a working-class family could bootstrap their children into the middle class. With the right policies, over time, the whole world could do the same. There’s a problem with this, though. For everyone on Earth to live at Western levels of consumption, we would need two or three Earths. Looking at it this way, capitalism has become a kind of multigenerational Ponzi scheme, in which future generations are left holding the empty bag.

You could say we are that moment now. Half of the world’s people live on less than $2 a day, and yet the depletion of resources and environmental degradation mean they can never hope to rise to the level of affluent Westerners, who consume about 30 times as much in resources as they do. So this is now a false promise. The poorest three billion on Earth are being cheated if we pretend that the promise is still possible. The global population therefore exists in a kind of pyramid structure, with a horizontal line marking an adequate standard of living that is set about halfway down the pyramid.

The goal of world civilization should be the creation of something more like an oval on its side, resting on the line of adequacy. This may seem to be veering the discussion away from questions of climate to questions of social justice, but it is not; the two are intimately related. It turns out that the top and bottom ends of our global social pyramid are the two sectors that are by far the most carbon intensive and environmentally destructive, the poorest by way of deforestation and topsoil loss, the richest by way of hyperconsumption. The oval resting sideways on the line of adequacy is the best social shape for the climate.

This doubling of benefits when justice and sustainability are both considered is not unique. Another example: world population growth, which stands at about 75 million people a year, needs to slow down. What stabilizes population growth best? The full exercise of women’s rights. There is a direct correlation between population stabilization in nations and the degree to which women enjoy full human rights. So here is another area in which justice becomes a kind of climate change technology. Whenever we discuss climate change, these social and economic paradigm shifts must be part of the discussion.
Given this analysis, what are my suggestions?
• Believe in science.
• Believe in government, remembering always that it is of the people, by the people, and for the people, and crucial in the current situation.
• Support a really strong follow-up to the Kyoto Protocol.
• Institute carbon cap-and-trade systems.
• Impose a carbon tax designed to charge for the real costs of burning carbon.
• Follow the full “Green New Deal” program now coming together in discussions by the Obama administration.
• Structure global economic policy to reward rapid transitions from carbon-burning to carbon-neutral technologies.
• Support the full slate of human rights everywhere, even in countries that claim such justice is not part of their tradition.
• Support global universal education as part of human-rights advocacy.
• Dispense with all magical, talismanic phrases such as “free markets” and promote a larger systems analysis that is more empirical, without fundamentalist biases.
• Encourage all business schools to include foundational classes in ecology, environmental economics, biology, and history.
• Start programs at these same schools in postcapitalist studies.

Does the word postcapitalism look odd to you? It should, because you hardly ever see it. We have a blank spot in our vision of the future. Perhaps we think that history has somehow gone away. In fact, history is with us now more than ever, because we are at a crux in the human story. Choosing not to study a successor system to capitalism is an example of another kind of denial, an ostrich failure on the part of the field of economics and of business schools, I think, but it’s really all of us together, a social aporia or fear. We have persistently ignored and devalued the future—as if our actions are not creating that future for our children, as if things never change. But everything evolves. With a catastrophe bearing down on us, we need to evolve at nearly revolutionary speed. So some study of what could improve and replace our society’s current structure and systems is in order. If we don’t take such steps, the consequences will be intolerable. On the other hand, successfully dealing with this situation could lead to a sustainable civilization that would be truly exciting in its human potential."

My sense is that this is very thoughtful.

I have no problems with capitalism as way to link resources and human ingenuity to produce good and services. Consider the expansion of knowledge and technology that has led to great advances in medicine. The reason we are in deep trouble today is because of the way we choose to measure outcomes of good and services. We should depart from GDP and consider using Net Domestic Product (NDP). So this way we account for the deterioration of ecosystem services such as clean air, fertile soils, clean water, and biodiversity. We must now begin to grapple with measuring the real demand of domestic growth and expansion of the so called wellbeing on national and global ecological resources. We must get the accounting right or we will destroy irretrievably, the production base.

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