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War and Peace and the Steady-State Economy

by Herman Daly

DalyMy parents were children during WW I, the so-called “war to end all wars.” I was a child in WW II, an adolescent in the Korean War, and except for a physical disability would likely have been drafted to fight in the Vietnam War. Then came Afghanistan, Iraq, the continuous Arab-Israeli conflict, ISIS, Ukraine, Syria, etc. Now as a senior citizen, I see that war has metastasized into terrorism. It is hard to conceive of a country at war, or threatened by terrorism, moving to a steady state economy.

Peace is necessary for real progress, including progress toward a steady state economy. While peace should be our priority, might it nevertheless be the case that working toward a steady state economy would further the goal of peace? Might growth be a major cause of war, and the steady state a necessity for eliminating that cause? I think this is so.

More people require more space (lebensraum) and more resources. More things per person also require more space and more resources. Recently I learned that the word “rival” derives from the same root as “river.” People who get their water from the same river are rivals–at least when there are too many of them each drawing too much.

War and Peace - Jayel Aheram

Contrary to popular belief, growth in a finite and full world is not the path to peace, but to further conflict. Photo Credit: Jayel Aheram

For a while, the resource demands of growth can be met from within national borders. Then there is pressure to exploit or appropriate the global commons. Then comes the peaceful penetration of other nations’ ecological space by trade. The uneven geographic distribution of resources (petroleum, fertile soil, water) causes specialization among nations and interdependence along with trade. Are interdependent nations more or less likely to go to war? That has been argued both ways, but when one growing nation has what another thinks it absolutely needs for its growth, conflict easily displaces trade. As interdependence becomes more acute, then trade becomes less voluntary–more like an offer you can’t refuse. Unless trade is voluntary, it is not likely to be mutually beneficial. Top down global economic integration replaces trade among separate interdependent national economies. We have been told on highest authority that because the American way of life requires foreign oil, we will have it one way or another.

International “free trade pacts” (NAFTA, TPP, TAFTA) are supposed to increase global GDP, thereby making us all richer and effectively expanding the size of the earth and easing conflict. But growth in the full world has become uneconomic–increasing costs faster than benefits. It now makes us poorer, not richer. These secretly negotiated agreements among the elites are designed to benefit private global corporations, often at the expense of the public good of nations. Some think that strengthening global corporations by erasing national boundaries will reduce the likelihood of war. More likely we will just shift to feudal corporate wars in a post-national global commons, with corporate fiefdoms effectively buying national governments and their armies, supplemented by already existing private mercenaries.

It is hard to imagine a steady state economy without peace; it is hard to imagine peace in a full world without a steady state economy. Those who work for peace are promoting the steady state, and those who work for a steady state are promoting peace. This implicit alliance needs to be made explicit. Contrary to popular belief, growth in a finite and full world is not the path to peace, but to further conflict. It is an illusion to think that we can buy peace with growth. The growth economy and warfare are now natural allies. It is time for peacemakers and steady staters to recognize their natural alliance.

It would be naïve, however, to think that growth in the face of environmental limits is the only cause of war. Evil ideologies, religious conflict, and “clash of civilizations” also cause wars. National defense is necessary, but uneconomic growth does not make our country stronger. The secular west has a hard time understanding that religious conviction can motivate people to both to kill and die for their beliefs. Modern devotion to the Secular God of Growth, who promises heaven on earth, has itself become a fanatical religion that inspires violence as much as any ancient Moloch. The Second Commandment, forbidding the worship of false gods (idolatry) is not outdated. Our modern idols are new versions of Mammon and Mars.

Iraq and the Military-Industrial Complex versus a True Cost Economy

by Brent Blackwelder

BlackwelderIraq has been in the news again as civil war looms. President Obama has sent several hundred military advisers to Iraq, perhaps in preparation for Iraq War III. George W. Bush proclaimed victory in Iraq War II and told the American Legion “Slowly but surely, we are helping to transform the broader Middle East from an arc of instability into an arc of freedom.” But the grim fact today is that US actions have achieved the very opposite of what was officially described to the American public as the objective.

A true cost or steady state economy can never be reached in a society consumed with perpetual war, especially warfare over oil. A steady state economy must have its energy supply based on renewable sources like solar and wind. To reach a true cost, steady state economy, the resources currently devoted to waging war must be transformed, and the use of natural resources like oil that are causing wars must be shifted.

Recent developments in Iraq highlight the decades of failure to put in place renewable energy that would have minimized the use of oil in the transportation sector. Trillions of dollars have now been spent on the Iraq II war, where more civilians than soldiers have been killed and billions more will need to be spent caring for severely wounded veterans from these ongoing wars.

A look at news coverage of the situation in Iraq shows what has been really driving the situation. In a June 3, 2013 New York Times article “China is Reaping Biggest Benefits of Iraq Oil Boom,” Michael Makovsky, former Defense Department official under the Bush administration, complained that “We lost out. The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it, and our Fifth Fleet and air forces are helping to assure their supply.”

One year later, the New York Times featured a story about all this “progress” being put in jeopardy with the intense military offensive by extremist insurgents. The president of the oil service company Mediterranean International told the Times “The collapse of Iraq would bring an international oil crisis.”

Solar Panels

An important step towards escaping perpetual warfare over oil. Photo Credit: Michael Mazengarb

To escape from perpetual warfare over oil, I propose that the biggest category of funding in all the world’s military budgets should be for installing rooftop solar energy and wind turbines. These renewable resources are widely available, they do not require large central generating facilities for electricity or refineries and pipelines for oil and natural gas usage, they are tension reducers rather than enhancers, they are essentially waterless technologies, and they do not produce the serious pollution and climate disruption caused by fossil fuels.

The younger generation does not realize that Iraq War I in 1991 caused the largest oil spills in history: on the land, in the sea, and in the air. Massive clouds of oily pollution carried as far away as India. Did stability come as a result? Rather than stability, resentments worsened over the US behavior. Osama bin Laden cited the actions of the United States and transnational oil companies as the reason for his launching the terrorist bombing on 9/11.

While some strong efforts are being made to transform energy economies into a more environmentally sustainable form, particularly in some European nations, vast sums continue to be provided to support wars in Iraq and Afghanistan. The sums that could have been used for a solar revolution have fundamentally been undermining the movement for renewables.

But there is good news on the solar front. In one month this year, Germany got more than 70% of its electricity from renewable energy. Germany, with 36,000 megawatts (MW) in solar capacity, leads the world. But in 2013, China added at least 11,300 MW, making it second to Germany with 18,300 MW in overall capacity.

Solar power is starting to take off in the United States with about 4,800 MW added in 2013, increasing our total photovoltaic capacity by 65 percent to 12,000 MW–still far behind Germany, which is about the size of Montana.

President Obama supports legislation to deal with global climate disruption and has made some significant gains in transportation fuel economy, but the US is not a leader in bringing electric vehicles run by solar power into widespread use.

The price of rooftop solar has dropped 75 percent in the last five years and flat roofs are available throughout metropolitan areas, so the opportunity for Obama to do a lot more is present, but oil wars in the 20th Century have continued under his administration, even as many top military people worldwide are calling attention to environmentally driven conflicts as being top security threats.

Before launching a war against any country, the United States should take the vegetable test: would we be on the attack if that country’s leading export were carrots or green beans?

The key step to reaching a true cost, steady state economy is to keep the emerging solar revolution going full speed ahead. It is the underpinning of stability–the kind of stability needed for an environmentally sustainable economy.

Growth and Laissez-faire

by Herman Daly

Herman DalyHow do you envision a successful economy without continuous growth?

It helps to consider a prior question: how do you envision a successful planet earth without continuous growth? That is easy to envision because it exists! The earth as a whole does not grow in physical dimensions. Yet it changes qualitatively, it evolves and develops. Total matter on earth cycles, but does not grow. Energy from the sun flows through the earth coming in as a radiant low-entropy energy and exiting as high-entropy heat. But the solar flow is not growing. Nearly all life is powered by this entropic throughput of solar energy. There is birth and death, production and depreciation. New things evolve; old things go extinct. There is continual change. There is qualitative development. But the earth is not growing!

The economy is a subsystem of the earth. Imagine that the economy grows physically to encompass the entire earth. Then the economy would have to conform to the behavior mode of the earth because the two would be identical. The economy could no longer grow, and would have to live on a virtually constant solar flow with closed material cycles, approximating a steady state — an exceedingly large steady state to be sure. The economy would have taken over the management of the entire ecosystem — every amoeba, every molecule, and every photon would be allocated according to human purposes and priced accordingly. All “externalities” would be internalized as required by efficient markets, and nothing could any longer be external to the all-encompassing economy. The information and management problem would be astronomical — central planning raised to the thousandth power! Long before such a total takeover of the ecosystem, the human economy and the civilization it supports would have collapsed under the weight of God-like information requirements and managerial complexity.

Submarine

Democracy doesn’t exactly bubble to the surface at the limit of carrying capacity.

Growth all the way to the very limit of carrying capacity has an unrecognized political cost as well. Excess carrying capacity is a necessary condition for freedom and democracy. Living close to the limit of carrying capacity, as on a submarine or spaceship, requires very strict discipline. On submarines we have a captain with absolute authority, not a democracy. If we want democracy, we better not grow up to the limit of carrying capacity — better to leave some slack, some margin for tolerance of the disagreements and errors that freedom entails.

The more obvious political cost of growth is war for access to rival resources — minerals, water, agricultural land, and the remaining commons. The hope that economic growth would mean ever more things for ever more people, and would therefore keep the hounds of war at bay, may have been temporarily credible in yesterday’s empty world, but not in today’s full world.

To arrive at a vision that promises success we must discard some dead-end dreams — not only the “American Dream” of consumerism, but also the mainstream economist’s dream of internalizing all ecological relationships into the monetary accounts of the economy. It is a fantasy to believe that we can devise a rigged market system in which “corrected” prices would tell the whole truth about the opportunity costs of everything in the world, and automatically optimize the scale of the economy relative to the ecosystem, as well as the allocation of resources within the economy. In T. S. Eliot’s words, this is “dreaming of a system so perfect that no one needs to be good.”

To be good includes keeping the economy from overwhelming the containing ecosystem with massive depletion and pollution. The way to do that is to leave most of the ecosphere alone, to limit our absorption of it into the economic subsystem — to keep a large part of the earth ecosystem in natura — as a future source for low-entropy matter/energy inputs and sink for high-entropy waste, and as a provider of life-support services and habitat for other species.

Laissez-faire takes on a new meaning — it is the ecosystem, not the economy that must be “left alone” to manage itself and evolve by its own rules. Of course the ecosystem cannot really be “left alone” because we absolutely depend on it to support life and production. But our rate of use must be confined within the regenerative and absorptive capacities of the ecosystem. The metabolic throughput from and back to nature cannot keep growing without eventually destroying ecosystem services faster than it produces production benefits, thereby becoming uneconomic growth. When the value of costs external to the market overwhelms the value of benefits internal to the market, then it is past time to transfer the privileges of “laissez-faire” from the economy to the ecosystem.

Once the economy is constrained in aggregate scale to stay within the limits imposed by the ecosystem, we could then fine-tune its allocative efficiency by internalizing remaining external costs into market prices. But it is critical to understand that even a perfectly efficient economy with optimal pricing can grow too big for the finite ecosystem to sustain, and once it is too big then improving allocative efficiency within the too-big economy is like rearranging deck chairs on the Titanic.