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Potential New Allies in the Effort to Achieve a Sustainable True Cost Economy

by Brent Blackwelder

BlackwelderThose who want a true cost, steady state economy need some new, powerful allies. We need allies that stretch across the political spectrum, from liberal to conservative. We need allies that can speak from a values perspective to bring moral considerations to bear on the discussion.

Neither the environmental movement nor the progressive movement possesses enough political strength to overcome the most powerful economic interests in the world. These potent interests include the oil and coal industries, banks, agribusiness, mining and chemical companies, Wall Street, etc. Congress will not act on big economic changes because too many members depend on election money from these very same economic interests.

Faith-based communities could play an important role because they can reach across the conservative-liberal spectrum, have member congregations that convene on a weekly basis, and can speak with a moral voice that moves people to action. Such an approach may work well with the growing number focused on serious environmental problems because the root cause of many of such problems is the system of cheater economics that dominates today’s economy.

During the 1970s and 1980s, some of us worked with churches on various environmental concerns. These efforts have been expanding and today, the environment is a common topic among the faithful. For example, consider the mission statement of Interfaith Power & Light, established over a decade ago by Reverend Sally Bingham:

The very existence of life–life that religious people are called to protect–is jeopardized by our continued dependency on fossil fuels for energy. Every major religion has a mandate to care for Creation. We were given natural resources to sustain us, but we were also given the responsibility to act as good stewards and preserve life for future generations.

Interfaith Power & Light has engaged hundreds of congregations, has affiliates in 38 states, educated thousands of people of faith about the moral mandate to address global warming, and helped pass California’s landmark climate and clean energy laws. Christian environmentalists such as Matthew and Nancy Sleeth have formed an educational group, Blessed Earth, to equip faith-based communities to become better stewards of the earth and have written books about the duty of caring for creation, including Almost Amish; The Gospel According to the Earth; and Go Green, Save Green. To illustrate this point, I present a sample of five defects in today’s unsustainable economy, followed by the kind of response faith-based communities could make.

  • Defect: Assigning future generations close to zero value and obsessively focusing on the quarterly return. Rapacious commercial logging, for instance, can wipe out forests that are needed to sustain future generations with water, fuel, fish, and wildlife.

    Moral Response: We care about future generations and have a responsibility to care for the environment and not leave a polluted earth for our children and grandchildren.

  • Defect: Pushing for massive expansion of the consumer economy. Today’s economy is involved in a relentless drive to sell a never-ending array of consumer goods.

    Moral Response: Most denominations preach against excessive materialism. (“Lay not up for yourselves treasures on earth where moss and rust doth corrupt and where thieves break through and steal.” Matthew 6:19)

  • Mt Top Removal - James Holloway

    Faith-based communities can become powerful allies in the fight to stop growth at all costs, including the once forested Kentucky mountains. Photo Credit: James Holloway

    Defect: Offering economic justifications for extraordinary environmental destruction, such as mountain-top coal removal mining.

    Moral Response: Such practices are an attack on the earth and cause serious harm to local residents–their health, their water supply, and their homes, leaving the once biologically forested mountains of West Virginia with a Martian landscape.

  • Defect: Permitting enormous pollution externalities to be shoved off on fellow competitors and on the public. Today’s economy tolerates cheater economics in which products do not reflect the real ecological costs of their manufacture and usage.

    Moral Response: We are charged with loving our neighbors, not poisoning them. Prices of consumer goods should reflect the damages being done to obtain the raw materials and energy used in their production and in their usage or consumption.

  • Defect: Counting population growth as an asset when in most places it is a liability that pushes localities as well as states to exceed the carrying capacity of their environment. None of the great challenges to the health of the earth’s life-support systems are made easier by having more people. World population today exceeds 7 billion and is headed to between 9 and 11 billion by 2050. The tax code in many places encourages more population growth and the global economy depends on a growing supply of cheap labor.

    Moral Response: While there is a large rift among religious denominations over the question of abortion, the population question is directly addressed in Chapter 1 of Genesis. The blessing “be fruitful and multiply” is first given to every kind of animal, including crawling things, then to humans. Thus, humans must take their blessing in the context of the previous blessings by God and live so that the earth is flourishing with many kinds of life.

In summary, those who seek a true cost, steady state economy should work with faith-based communities to discuss how the crucial linkage between serious problems like climate disruption and new economic policies to achieve a sustainable economy fit into their work.

By raising objections to cheater economics, to pollution externalities, and to phony benefit-cost analyses used to justify grotesque environmental practices (such as tar sands oil and mountain top removal), faith-based communities will make a difference. These coummunities can speak with moral authority about caring for future generations, about caring for God’s creation, and about loving one’s neighbors–not polluting them.

Note: Brent Blackwelder received a Ph.D. in moral philosophy from the University of Maryland in 1975 and was awarded an honorary doctorate from the Virginia Theological Seminary in May of 2014.

New Evidence for Changing the Nature of the Global Economy

by Brent Blackwelder

Billion-dollar weather catastrophes this year, along with the latest figures on Chinese consumption, emphasize the urgency of a shift in economic thinking.

The National Oceanic and Atmospheric Administration cites 10 massive weather disasters in the U.S. this year, each exceeding a billion dollars. The nine months of unprecedented weather extremes include these estimates of death and damage:

  • Hurricane Irene: 50 deaths and $7 billion;
  • Upper Midwest flooding along the Missouri River: $2 billion;
  • Mississippi River flooding in spring and summer: $4 billion;
  • Drought and heat waves in Texas and Oklahoma: $5 billion;
  • Tornadoes in the Midwest and Southeast in May: 177 deaths and $7 billion;
  • Tornadoes in the Ohio Valley and Southeast in April: 32 deaths and $9 billion;
  • Tornadoes in Oklahoma and Pennsylvania in April: $2 billion;
  • Tornadoes in the Northeast and Midwest April 8-11: $2.2 billion;
  • Tornadoes in central and southern states April 4-5: $2.3 billion;
  • Blizzard in January from Chicago to the Northeast: 36 deaths and $2 billion.

Although we cannot conclude that any particular event was caused by global warming, climate models predict growing frequency and intensity of storms. The tragic weather events of 2011 could well be due to the accumulation of dangerous levels of greenhouse gases in our atmosphere.

This year’s disasters are sending a powerful signal that the time has arrived for a new economic framework. The current structure of markets puts the wrong prices on goods and services, because it neglects the ecological costs of producing them. This market failure is especially critical in the energy sector, where overconsumption of fossil fuels is driving climate destabilization.

How long can governments keep spending huge amounts to deal with catastrophe after catastrophe? Weather disasters undermine governance in two ways: first, they require large amounts of money and human resources for emergency relief, cleanup and rehabilitation. Second, they impair the ability of governments to provide ongoing public services by diverting revenue and personnel.

At the beginning of summer, New York Times columnist Thomas Friedman pointed to alarming evidence that the human race is consuming at a rate that requires one and a half planet earths to maintain. Friedman describes the consumer-driven growth model as broken and suggests a transition to a “happiness-driven growth model, based on people working less and owning less.” Many of us have been making these very points for some time, but it is noteworthy that a major growth advocate has had a change of thinking. And now there is new data on consumption in China that reinforces our concerns.

In a recent article entitled “Learning from China: Why the Existing Economic Model Will Fail,” Lester Brown provides some sobering statistics. When compared to the U.S., China consumes twice as much meat, three times as much coal, and four times as much steel. The per capita consumption of the 1.2 billion people in China is far below that in the U.S., but it is moving upward and is on track to equal ours in 25 years, Brown notes.

What does such growth in consumption mean if the Chinese embrace the same spending habits as U.S. consumers? Take a look at two factors: paper and automobiles. If the projected 1.4 billion people in China in 2035 consume paper at the American rate, then China itself would consume a quantity equal to four fifths of today’s paper usage. The world’s forests, already under intense pressure, would suffer under this additional onslaught.

Lester Brown considers what would happen if Chinese car ownership in 2035 matched that of the U.S., which currently has three cars for every four people. China would have 1.1 billion cars. Today the world has roughly one billion automobiles. Brown estimates that such a fleet of vehicles would necessitate so many new roads and parking areas, that an area two thirds the size of the acreage now growing rice in China would have to be paved. All these new vehicles would consume about the same volume of gasoline that the entire world auto fleet currently uses each day.

Why are the Obama Administration and Congress so focused on the debt panel when there are such pressing problems with the economy at home and around the world? They are missing the big picture and failing to enact changes that are called for in these perilous times. Now is the time to write letters to the editor about real economic solutions. We don’t need to be slashing government programs; we need to be making progress toward the transition to a steady state economy.

Geo-engineering or Cosmic Protectionism?

by Herman Daly

“We are capable of shutting off the sun and the stars because they do not pay a dividend.” — John Maynard Keynes, 1933

Herman DalyFrederic Bastiat’s classic satire, “Petition of the Candlemakers Against the Sun“, has been given new relevance. Written in 1845 in defense of free trade and against national protectionism in France, it can now be applied quite literally to the cosmic protectionists who want to protect the global fossil fuel-based growth economy against “unfair” competition from sunlight — a free good. The free flow of solar radiation that powers life on earth should be diminished, suggest some, including American Enterprise Institute’s S. Thernstrom (Washington Post 6/13/09, p. A15), because it threatens the growth of our candle-making economy that requires filling the atmosphere with heat-trapping gasses. The protectionist “solution” of partially turning off the sun (by albedo-increasing particulate pollution of the atmosphere) will indeed make thermal room for more carbon-burning candles. Although this will likely increase GDP and employment, it is attended by the inconvenient fact that all life is pre-adapted by millions of years of evolution to the existing flow of solar energy. Reducing that flow cancels these adaptations wholesale — just as global warming cancels myriad existing adaptations to temperature. Artificially reducing our most basic and abundant source of low entropy (the solar flux) in order to more rapidly burn up our scarcer terrestrial source (fossil fuels), is contrary to the interests both of our species and of life in general. Add to that the fact that “candles”, and many other components of GDP, are at the margin increasingly unneeded and expensive, requiring aggressive advertising and Ponzi-style debt financing in order to be sold, and one must conclude that “geo-engineering” the world for more candles and less sunlight is an even worse idea than credit default swaps.

Why then do some important and intelligent people advocate geo-engineering? As the lesser evil compared to absolutely catastrophic and imminent climate disaster, they say. If the American Enterprise Institute has now stopped offering scientists money to write papers disputing global warming, and in fact has come around to the view that climate change is bad, then why have they not advocated carbon taxes or cap-auction-trade limits? Because they think the technical geo-fix is cheap and will allow us to buy time and growth to better solve the problem in the future. One more double whiskey to help us get our courage up enough to really face our growth addiction! Probably we are irrevocably committed to serious climate change and will have to bear the costs, adapt, and hasten our transition to a steady state economy at a sustainable (smaller) scale. Panicky protectionist interventions by arrogant geo-engineers to save growth for one more round will just make things worse.

At the earthly level I am no free trader, and neither was Keynes, but “shutting off the sun and the stars” to protect the fossil fuel economy is carrying protectionism to cosmic extremes. Reality has overtaken satire.

The Full Seas Act and the College of the 21st Century

by Brian Czech

Brian Czech PhotoIf we aren’t living in an “educable moment,” then we must be dumber than a doggone boot.  Financial collapse, fiscal crisis, skyrocketing gas prices, global warming, revolutions in crowded countries, unemployment all around… let’s graduate from the College of the 21st Century and recognize the old kindergarten lessons about limits to growth were right after all.  All that stuff they handed us later about perpetually growing the “information economy” was like a loosy-goosy high school course conceived by some ideological school board.  Sometimes it takes a hard-core college course to get back to reality, and now we’re all enrolled whether we like it or not.

We just can’t have a perpetually growing population, perpetually growing consumption, or perpetually growing economy.  To think there is no limit to growth on a finite planet (Earth comes to mind) is equivalent to thinking we could have a stabilized economy on a perpetually diminishing planet.  In other words, we could gradually squish the $70 trillion global economy into one continent, then one nation, then one city… you get the picture.  It’s becoming an “information economy,” right?  So eventually we could squish it into your blackberry, leaving the rest of the planet as a designated wilderness area!

Have you ever heard anything so ludicrous?  Yet it’s precisely, mathematically as ludicrous as thinking we could have a perpetually growing economy on Earth.

All this means we can’t have perpetually growing employment, either.  In fact, to strive for perpetually more jobs on a finite planet is to ensure growing unemployment.  (At least it can’t be “perpetually” growing unemployment, because it can’t get higher than 100%.)

So let’s get down to the brass tacks of amending the Full Employment Act before we flunk Sustainability 101.

The Employment Act of 1946 was amended as the Full Employment and Balanced Growth Act of 1978.   The original and amended versions are commonly referred to as the “Full Employment Act.”  Among other things, the Full Employment Act calls for “full employment and production,” “increased real income,” and “balanced growth.”  By “balanced,” Congress was calling for economic growth under conditions of general equilibrium.  This means an economy growing in concert; an efficiently allocating, circular flow of money with no big eddies of unemployment.

Now let’s look at the assumptions used to underwrite the Full Employment Act.  One obvious assumption post-World War II would have been population growth.  With a growing population, full employment requires economic growth (growing GDP).  Given the assumption of population growth, then, the goal of the Full Employment Act can be interpreted as a policy for full employment and economic growth.

Of course the other highlight (or lowlight) of the historical context was the Great Depression, during which unemployment not only devastated society, but shocked the pants off neoclassical economists.  Pursuant to an arcane theory called “Say’s Law,” they thought the production of goods would be automatically met with the consumption thereof, so they didn’t believe in a sustained or lengthy period of unemployment.  They didn’t believe in macroeconomic tinkering, either.  Then John Maynard Keynes the Brit changed all that with his General Theory of Employment, Interest, and Money.  They called it the “Keynesian revolution” and that’s how we got into deficit spending to “stimulate the economy.”

Fast-forward to our educable moment of financial collapse, fiscal crisis, skyrocketing gas prices, global warming, endangered species, revolutions in crowded countries, unemployment all around, and we see that we need another kind of economic revolution.  We need a steady state revolution to move from the old, unsustainable goal of economic growth to the new, sustainable goal of a steady state economy.  We need to heed the steady state economics of Herman Daly like we heeded the general theory of Keynes.

It took 32 years for the original Employment Act to take on the unsustainable baggage of the Full Employment and Balanced Growth Act.  It’s been 32 years since then; time again to retool.  We need to draw up a Full and Sustainable Employment Act, which will have the advantage of a useful acronym, “Full SEA.”  Soon enough it will be known as the “Full Seas Act” to remind us that the “rising tide lifts all boats” metaphor is officially defunct.  There’s no more water to rise the tide, and only so many boats can fit.

The Full Seas Act will clarify that there is a limit to population and economic growth, and therefore a limit to employment.  Within the act, “increased real income” will be amended to “sustainable real income.”  “Balanced growth” will be replaced by “sectoral balance” or “efficient allocation of resources.”  Language will be added to describe that the goal of sustainable, full employment requires stabilization of population and per capita production and consumption.  Pursuant to the goal, the Full Seas Act will establish some commonsense educational programs toward stabilizing population and the ecological footprint of the economy.

The Full Seas Act will also call for an annual Report to the President on Population, Production, Consumption, and Capacity (RPPCC) to help monitor how unsustainable our economy is getting.  With population data from the Census Bureau and production data from the Bureau of Economic Analysis, our slim new Bureau of Population and Consumption (BPC) will be calculating our ecological footprint to determine how sustainable our GDP is.  The President will help us matriculate from the College of the 21st Century by summarizing the RPPCC in the annual state of the union address.

Now some might say, “What planet are you on??”  They think a BPC, an RPPCC, and the Full Seas Act are figments of a futuristic imagination.  Well I’m right here on a finite planet called Earth, feet firmly on the ground and living in an educable moment of financial collapse, fiscal crisis, skyrocketing gas prices, global warming, revolutions in crowded countries, and unemployment all around.

What planet are you on?

Are People Smarter Than Chipmunks?

by Rob Dietz

A curious thing happened recently when I was driving home from a weekend camping trip with my daughter in the Cascade Mountains. We came around a tight curve and the road opened into a long straightaway. Far up ahead, I could see a small animal perched right on top of the double yellow line that divides the lanes. As we got a bit closer, I recognized it as a chipmunk and asked my daughter if she could see it (spotting animals is a favorite pastime on car and bike rides).

As our vehicle was bearing down on the little critter, it looked up and started to head toward the left shoulder of the road. But, obeying some muddled directive from its brain, it spun around and started heading to the right. Not content with that change of direction, it went back left again. I honked the horn to make sure it knew we were getting close. The chipmunk then proceeded to do an erratic dance, leaning left then right then left again. Finally, it just sat back down in the middle of the road atop the double yellow line. The wheels of our car whizzed by its delicate body at a speed that the chipmunk couldn’t grasp.

Care to guess which one’s the smartest?

Checking the rear-view mirror, I saw it saunter to the side of the road and stroll into the woods, looking completely unfazed by its brush with disaster. After witnessing this eccentric behavior, I began wondering why the chipmunk would behave so illogically. It didn’t take too long to realize that it simply doesn’t possess the right equipment to understand the threat posed by a car. A chipmunk’s brain and the behavior produced by it are the result of ages of natural selection – a process that took place in the absence of roads and cars. The mind of a chipmunk, therefore, is incapable of properly interpreting the data coming its way, especially when it’s coming at 60 miles per hour.

The chipmunk’s maladaptive behavior has some prominent parallels with our own predicament. The data are approaching us at a fast and furious clip. We have ample and disturbing evidence about climate destabilization, dwindling energy resources, social breakdowns, and a host of environmental maladies. We know that the economy is a subsystem of the finite planet, and that increasing the scale of the economy impinges on the earth’s ecosystems. In an age of biodiversity die-offs and political buy-offs, however, we don’t seem to possess the wherewithal to interpret the data correctly.

A few years ago, Harvard psychologist Daniel Gilbert wrote a fascinating opinion piece in the Los Angeles Times (July 2, 2006). In the article, he brilliantly summarizes some shortcomings of the human brain when it comes to interpreting the danger posed by global warming. He notes that the human brain evolved to respond to threats with four features, features that the threat of global warming lacks:

  1. We respond to threats with a human face. To quote Gilbert: “If climate change had been visited on us by a brutal dictator or an evil empire, the war on warming would be this nation’s top priority.”
  2. We respond to threats that outrage our moral sensibilities and that produce a sense of repulsion or disgust in us. Gilbert: “The fact is that if climate change were caused by… the practice of eating kittens, millions of protesters would be massing in the streets.”
  3. We respond to immediate threats that are right in front of us. “We haven’t quite gotten the knack of treating the future like the present it will soon become because we’ve only been practicing for a few million years. If global warming took out an eye every now and then, OSHA would regulate it into nonexistence.”
  4. We respond to threatening changes around us that happen rapidly. “Because we barely notice changes that happen gradually, we accept gradual changes that we would reject if they happened abruptly.”

For most of us, economic growth is an even tougher threat to interpret and take seriously than global warming (even though the former is a root cause of the latter). As Bill McKibben highlighted in his book Deep Economy, bigger and better used to go hand in hand, economically speaking. But over generations, the consequences of exponential economic growth have outstripped the benefits. What used to be a boon is now a bane, and the threat is upon us; overgrown economies are undermining the life-support systems of the planet, but we simply aren’t sensing it and responding appropriately.

It’s no simple feat to determine when an economy has reached its optimal size – the inflection point when it should transition from growth to a steady state. An individual organism (e.g., a chipmunk or a person) has an unconscious and almost magical ability to do this, to stop growing and become a grownup. Human economies don’t possess the same unconscious when-to-stop mechanism. The people who make up the economy must collectively decide to reach maturity consciously.

The question now is how much longer humanity will choose to sit on the double yellow line as the consequences of runaway growth scream down the road at us doing a zillion miles per hour. Or to paraphrase, are people smarter than chipmunks?