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Why the Unraveling Will Accelerate
Why the Unraveling Will Accelerate
Sclerotic, hidebound institutions optimized for linear stability and permanent growth are simply not designed to adapt to non-linear change and disruption of permanent growth.
Since the first news of pandemic in late January, I’ve been discussing potential accelerants to the unraveling of our fragile financial system: second-order effects (initial travel restrictions and layoffs were first-order effects, new waves of layoffs are second-order effects) and the shift from linear dynamics (add 1 to inputs, that changes output by 1) to non-linear: (add 1 to inputs, that changes output by 10).
The system appears stable until a catalyst pushes it off the cliff. Catalysts come in a variety of forms, from the apparently modest “straw that breaks the came’s back” to a broad awakening that the status quo simply isn’t capable of adapting successfully to new realities.
Financial catalysts tend to result in sudden, cataclysmic collapses in liquidity, solvency and sentiment. While the Federal Reserve can “fix” liquidity crises by creating currency out of thin air, that doesn’t make bankrupt firms solvent or make employers hire employees. Once complacent confidence slides into cautious fear, massive liquidity injections to keep the system from crashing are understood as last-ditch desperation.
Social-political catalysts are slower but much more difficult to reverse. While the media’s attention has been focused on the protests stemming from long-standing institutional bias, As Mark, Jesse and I discuss in Salon #14: Jobageddon and the Coming Education Revolts, two other social-political catalysts are gathering momentum:
1. The failure of our education complex to provide workable childcare/learning solutions
2. The hope of a V-shaped recovery in employment collapses.
…click on the above link to read the rest of the article…
Why a Great Reset Based on Green Energy Isn’t Possible
Why a Great Reset Based on Green Energy Isn’t Possible
It seems like a reset of an economy should work like a reset of your computer: Turn it off and turn it back on again; most problems should be fixed. However, it doesn’t really work that way. Let’s look at a few of the misunderstandings that lead people to believe that the world economy can move to a Green Energy future.
[1] The economy isn’t really like a computer that can be switched on and off; it is more comparable to a human body that is dead, once it is switched off.
A computer is something that is made by humans. There is a beginning and an end to the process of making it. The computer works because energy in the form of electrical current flows through it. We can turn the electricity off and back on again. Somehow, almost like magic, software issues are resolved, and the system works better after the reset than before.
Even though the economy looks like something made by humans, it really is extremely different. In physics terms, it is a “dissipative structure.” It is able to “grow” only because of energy consumption, such as oil to power trucks and electricity to power machines.
The system is self-organizing in the sense that new businesses are formed based on the resources available and the apparent market for products made using these resources. Old businesses disappear when their products are no longer needed. Customers make decisions regarding what to buy based on their incomes, the amount of debt available to them, and the choice of goods available in the marketplace.
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Green economic growth is an article of ‘faith’ devoid of scientific evidence
Green economic growth is an article of ‘faith’ devoid of scientific evidence
Crack team that advised UN Global Sustainable Development Report settle a longstanding debate with hard empirical data
For years, financial institutions and governments have been focused on the idea of ‘decoupling’ GDP growth from resource use. This has been driven by the recognition that to stay within the ‘safe limit’ of 2 degrees Celsius, we have to dramatically reduce our material consumption.
The goal is to keep our economies growing to sustain prosperity while reducing our actual resource use and material footprint. The bottom line is that without reducing our overall use of planetary resources, we are bound to cross the line into a dangerous climate. But is doing so consistent with the continued increase in economic growth?
The conventional belief has been most recently articulated in a recent book, More From Less, by Andrew McAfee, principal research scientist the MIT Sloan School of Management. Financial and other data, McAfee argued, shows we can actually easily reduce our material footprint while continuing to grow our economies in a win-win scenario.
But new scientific analysis by a group of systems scientists and economists proves that this contention is completely groundless. Far from being based on hard evidence, this sort of claim is instead derived from egregious selective readings of statistical data.
Decades of research on material flows confirm that there are “no realistic scenarios” for such decoupling going forward.
Combing through 179 of the best studies of this issue from 1990 to 2019 further reveals “no evidence” that any meaningful decoupling has ever taken place.
…click on the above link to read the rest of the article…
We Can’t Grow Our Way Out of Poverty
WE CAN’T GROW OUR WAY OUT OF POVERTY
For more than half a century, economists and policymakers have focused fanatically on growth as the only feasible way to end global poverty and improve people’s lives. But in an era of planet-wide ecological breakdown, that comfortable conventional wisdom is crashing to an end. Jason Hickel lays it on the line.
Everything is about to change in the field of international development.
In 2018, the UN’s Intergovernmental Panel on Climate Change (IPCC) grabbed the world’s attention with its report stating that to avert dangerous climate breakdown we need to cut global emissions in half by 2030 and reach zero by 2050. It would be difficult to overstate how dramatic this trajectory is; the challenge is staggering in its scale.
We know it’s possible to accomplish rapid emissions reductions with co-ordinated government policy action, ratcheting down fossil fuels and rolling out renewable energy infrastructure. But there’s a problem. IPCC scientists have made it clear that it’s not feasible to transition quickly enough to stay within the carbon budget if we continue to grow the global economy at existing rates.
More growth means more energy demand, and more energy demand makes it all the more difficult to create enough renewable capacity to meet it.
Think about it this way. With business-as-usual growth, the global economy is set to roughly triple in size by the middle of the century – that’s three times more extraction, production and consumption than at present, all of which will suck up nearly three times as much energy. It will be unimaginably difficult for us to decarbonize the existing global economy; impossible to do it three times over in the short time we have left.
…click on the above link to read the rest of the article…
Nuclear powered airplanes, cars, and tanks
Nuclear powered airplanes, cars, and tanks
Preface. After all the research I’ve done on rebuildable, not renewable wind and solar, hydrogen, batteries, and other Green dreams of an endless future of growth based on them, I’ve come to see them as just as likely as nuclear airplanes and cars. Not going to happen.
***
Nuclear Airplanes
Fuels made from biomass are a lot like the nuclear powered airplanes the Air Force tried to build from 1946 to 1961, for billions of dollars. They never got off the ground. The idea was interesting – atomic jets could fly for months without refueling. But the lead shielding to protect the crew and several months of food and water was too heavy for the plane to take off. The weight problem, the ease of shooting this behemoth down, and the consequences of a crash landing were so obvious, it’s amazing the project was ever funded, let alone kept going for 15 years (Wiki 2020).
Although shielding a plane enough to keep the radiation from killing the crew was impossible, some engineers proposed hiring elderly Air Force crews to pilot nuclear planes, because they would die before radiation exposure gave them fatal cancers. Also, the reactor would have to be small enough to fit onto an aircraft, which would release far more heat than a standard one. The heat could risk melting the reactor—and the plane along with it, sending a radioactive hunk of liquid metal careening toward Earth (Ruhl 2019).
Nuclear powered Cars
In 1958, Ford came up with a nuclear-powered concept, the Nucleon car that would be powered by a nuclear reactor in the trunk.
In the 1950s and 1960s, there was huge hype around nuclear energy. Many believed it would replace oil and deliver clean power.
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Recovery or Renewal? Time for an economic rethink
Recovery or Renewal? Time for an economic rethink
A recent study of long-term fluctuations in economic growth published in Nature Scientific Reports suggests both danger and opportunity in the emerging debate about post Covid-19 economic recovery. In this blog, Craig D. Rye and Tim Jackson outline their findings.
The International Monetary Fund (IMF) expects the global economy to contract by 5% this year alone, making it the largest downturn since the Great Depression in the 1930s. Advanced economies are likely to see a 10% decline in output and even the emerging economies of south-east Asia are unlikely to escape a recession.
Unprecedented though this is in the modern era, its real impact lies in the wider tapestry within which this uncomfortable economic portrait is drawn. Rates of economic growth across the OECD have been in decline since the 1970s, a phenomenon known as ‘secular stagnation’. The average growth in GDP per capita across the rich economies fell from over 4% in the mid-1960s to little more than 1% in the pre-pandemic years. The decline is related to an underlying stagnation in labour productivity growth.
In a recent study, published in Nature Scientific Reports, we’ve been exploring an even longer story about the ups and downs of economic growth and recession. Critical Slowing Down (CSD) theory is most commonly used to understand the oscillations (waves) in physical systems. In our study, we used the same techniques to analyse long-term trends in the gross domestic product (GDP) in datasets from as far back as the 1820s.
Imagine a pendulum or swing which is held in its equilibrium position by gravity. A push or a shove in one direction or another will shift the pendulum away from the central position or a random gust of wind might move the swing, but gravity pulls it back again.
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Food for Thought – US Population, Employment, Debt, NIRP, Monetization
Food for Thought – US Population, Employment, Debt, NIRP, Monetization
In 2019, US population growth fell to +1.55m or +0.5%…this was due to a trifecta of declining births, lower immigration, and higher deaths than anticipated. However, as with everything “2020”, all three trends are only intensifying to blow away 2019. Births are falling faster and further, deaths moving higher with Corona-virus and drug related overdoses, and immigration nearly non-existent. Thus, US population growth will likely dip below 1 million or +0.3% this year. And while I anticipate (or think it feasible) that immigration could return to 2019 levels eventually, births will almost surely continue falling and deaths rising more than anticipated. The simple outcome of this is an ongoing collapse in US population growth which is far larger in scope than the current Corona-virus pandemic.Census Population Estimates…Wildly Overstating GrowthThe chart below shows the 2008, 2014, and 2017 Census US total population projections through 2050. Some quick math shows that in 9 years time from ’08 to ’17, the Census downgraded US population growth through 2050 by 50 million persons. But due to the factors mentioned above, the 2020 Census projection through 2050 will need another massive downgrade…I’d suggest something on the order of another 29 million person downgrade.
The most significant contributor to decelerating population growth is declining births. This is true among the native population and true among immigrants. On average, they are all having significantly fewer children than anticipated. As the Census estimates from ’00, ’08, ’12, ’14, and ’17 show…the Census models just can’t fathom the fast declining births taking place in the US. But each Census estimate is still far too high, and perhaps in ’20 the Census will “fix” their models and portray reality (ok, not likely)…but I offer a more realistic picture below.
However, the downgrades in population are specifically among the younger populations. Obviously, declining births and immigration means declining young. The about face from ’08 to ’20 is stunning in the suggestion that the US truly is far more Japanese than immune to depopulation.
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New Zealand Deprioritizes Growth, Improves Health and Wellbeing
New Zealand Deprioritizes Growth, Improves Health and Wellbeing
Last May, New Zealand Prime Minister Jacinda Ardern released a budget to improve the “wellbeing” of its citizens rather than focusing on productivity and GDP growth. And not so coincidentally, New Zealand has one of the best coronavirus outcomes of any democracy in the world. Perhaps this provides a model for the world to make economic health cohere with health for all life.
To improve wellbeing, Ardern emphasized goals that focus on care for people and planet. Goals included community and cultural connection as well as intergenerational equity. Under the policy, new spending had to focus on one of five priorities: improving mental health, reducing child poverty, addressing inequalities of Indigenous peoples, thriving in a digital age, and transitioning to a low-emission economy.
While New Zealand isn’t the only country to float the idea of wellbeing over income, it is the first country to make it a reality. Guided by this philosophy, New Zealand is not in a rush to open its economy even as headlines swirl decrying a “stock market crash,” or a “recession worse than 2008-09.” Is Ardern’s example wise? Can we build upon it to further improve life after COVID?
New Zealand’s Prime Minister, Jacinda Ardern, has deprioritized “growth” as an economic goal in favour of improving wellbeing. Her compatriots seem to like it: her personal approval rating is 65%. Source: Wikimedia Commons.
Health and the economy
In the postwar capitalist framework, economic “health” became equated to income growth, price stability and full employment. There are increasingly serious pitfalls to thinking of “health” as a capitalist metaphor rather than a desirable end goal. Using GDP and stock market values as measures of overall economic health made sense in the postwar era, when growth was necessary to improve human wellbeing by raising material living standards.
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False Solutions to Climate Change: Real Solutions
False Solutions to Climate Change: Real Solutions
Editorial Note: This is Part 6 of Mary Wildfire’s series on false solutions to climate change. You can read Part 1 on Electricity here, Part 2 on Transportation here, Part 3 on Agriculture here, Part 4 on Buildings here. and Part 5 on Geoengineering here.
It’s become increasingly clear that climate change is not only real but beginning to bite. Now that much of the population is finally feeling the urgency—and during a time when COVID19 has much of our frenetic commerce on hold, giving us a space for thinking and discussion–what can we do to protect the only planet we’ve got? Unfortunately a good many of the solutions on offer seem designed to quiet the increasing concern, the impetus to do something, without challenging the status quo.
Can we get real solutions and still maintain economic growth, population growth, and the growth of inequality? Are we entitled to an ever-rising standard of living? I believe the answer is no; we need some profound transformations if we are to leave our grandchildren a planet that resembles the one we grew up on, rather than a dystopian Hell world. This is the basic theme of the controversial Michael Moore produced film Planet of the Humans. I see that film as seriously flawed, but agree with its basic message—that it’s time for humanity to grow up and accept limits, get over what I call human exceptionalism, or androtheism—the notion that man is God.
A veritable cornucopia of false solutions is being pushed these days, not only by corporations and think tanks but by the UN’s IPCC, the international body responsible for research and action on climate. We could have made a gentle transition if we had begun when we first became aware of this problem decades ago, but for various reasons we did not.
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The most accurate model-based prediction of all times
The most accurate model-based prediction of all times
The “base case” scenario from the 1972 edition of “The Limits to Growth.” This scenario described the trajectory of the world’s economy on the basis of the data and assumptions that were judged to be the most reliable ones. This run might turn out to have been amazingly accurate some fifty years after it was proposed.
One of the most remarkable features of the story of the “Limits to Growth” study of 1972 is how effectively it was possible to convince almost everyone that it was completely wrong. Amazingly, though, the most vituperated model-based prediction in history may turn out to have been perhaps the most accurate one.
Note how the scenario above, the “base case” scenario, saw the start of the decline around 2010 and the start of the collapse maybe a decade afterward, that is now. If the oil collapse generated by the coronavirus takes the whole economy with it, as it may well happen, then this scenario turns out to have been unbelievably accurate. And that for a prediction made 50 years ago. Truly amazing!
Now, of course, this story has to be taken with some caution, predictions can be right even by mere chance. But, in this case, there is a certain logic in this result: the base case scenario had been already noted by Graham Turner to have been following the real-world data. But that was true for the growth side of the diagram: even standard economic models had been predicting economic growth. The crucial test for the model was to be the sharp change in slope expected to take place around 2010-2020.
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The Recent History of GDP Growth, CO2 Emissions, and Climate Policy Paralysis, All in One Table-Runner
The Recent History of GDP Growth, CO2 Emissions, and Climate Policy Paralysis, All in One Table-Runner
Note: I began designing this table-runner just before the COVID-19 pandemic blew up in the United States. In the time I have been embroidering it, rates of death and misery have soared while wealth generation and carbon emissions (the two subjects of this work) have ended their decades-long rise and have plummeted. A deadly virus is a terrible means of slowing greenhouse warming. Whenever we come out the other side of the pandemic, we must pursue a rapid, humane, ecologically sound, and guaranteed-effective course of action to drive greenhouse emissions down to zero. Here’s how. — P.G.C.
The color of money is the color of calamity
This table-runner illustrates, from left to right, the increase in atmospheric carbon dioxide concentration from 1946 to the present. Each year is represented by two adjacent stripes: one in gradually deepening shades of green representing that year’s U.S. gross domestic product (adjusted for inflation) and one in increasingly intense shades of yellow-orange-red, representing CO2 concentration.
There are nine shades for GDP and eleven for CO2, with shades indicating roughly equal intervals of increase in each. The shades of both types of stripes darken as the years go by, in accordance with the increases that occurred in both GDP and CO2. (For hi-res, zoomed-in images of the table-runner, see here.)
The shades of yellow-orange-red in the table-runner darken more and more rapidly as the years pass, illustrating how emissions of CO2 accelerated as industrial output and fossil-fuel use rose more rapidly throughout the world. The concentration of CO2 rose at an annual rate of about 0.8 ppm from 1945 to 1980; 1.5 ppm from 1980 to 1995; and 2.1 ppm from 1995 to 2019. (The United States accounted for almost 20 percent of the rise in atmospheric CO2 during those years.)
…click on the above link to read the rest of the article…
Pandenomics: a story of life versus growth
Pandenomics: a story of life versus growth
The clash between business-as-usual economics and the pandemic shows what we really need from our economy.
I’ve been thinking a lot about breathing, recently: how our organisms take life-supporting oxygen from Earth’s clement atmosphere, and exhale waste carbon dioxide back out. I’ve been thinking about how pleasant and normal each breath is, and about the victims of COVID-19, now dying at the rate of thousands every day, their lungs destroyed, gasping desperately for their share of breath. Breath denied.
My research is on the social science side of climate change: trying to understand how we can live better lives using less energy and natural resources. How to protect ourselves and our life support systems at the same time – and what kind of economics would allow us to do this. There are many lessons that translate to the current pandemic-induced economic crisis. Welcome to my crash course in pandenomics: the economics we need in a time of pandemic. Rather fortunately, the lessons also apply to our larger time of climate crisis – this is a revolution we must win now, but from which we will reap benefits far into the future.
Our time of need
The clash between business-as-usual economics and the pandemic demonstrates what we really need from our economy. As businesses and leisure activities grind to a halt, specific categories of jobs are protected. Work and workers we once took for granted now appear clearly as the titans underpinning our daily lives: nurses, doctors, healthcare workers in general, hospital cleaners, grocery store cashiers, stackers and delivery drivers. Somehow, stockbrokers and airline magnates failed to make the list.
…click on the above link to read the rest of the article…
Now is the time to end the climate emergency
Now is the time to end the climate emergency
Reading “The Green New Deal and beyond” in the middle of a global crisis
In The Green New Deal and Beyond: Ending the Climate Emergency While We Still Can, Stan Cox has a message for all who were counting on the Green New Deal to help save us from ecological and economic collapse: this legislation will not go far enough. Cox’s book comes at a sobering time, when the only two U.S. presidential candidates he mentions as being in favor of the Green New Deal—Bernie Sanders and Elizabeth Warren—have fallen behind a ‘more electable’ candidate who has not expressed such enthusiastic support for GND policies. In light of such developments, and in light of the global health crisis now facing the world, a manuscript devoted to many of the GND’s shortcomings might seem untimely. Yet Cox provides important insights into how our intersecting crises—ecological, economic, and epidemiological—could lead to a positive restructuring of the economy, if we can push such legislation to meet them. To do so, Cox argues, requires expanding the GND’s restorative approach to environmental justice, a willingness to reinvent the economy at a scale not seen since World War II, and the prioritizing of people and the planet above economic growth.
There are a few assumptions of the Green New Deal with which Cox takes issue, given how far we have advanced on the climate clock. These include the legislation’s vision to build up ‘green’ energy capacity and its promise to maintain and even accelerate economic growth. First, Cox addresses the common assumption that clean energy will push out old, dirty energy, by showing that there is so far no evidence to support that this will happen.
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Let’s Be Less Productive
Let’s Be Less Productive
HAS the pursuit of labor productivity reached its limit?
Productivity — the amount of output delivered per hour of work in the economy — is often viewed as the engine of progress in modern capitalist economies. Output is everything. Time is money. The quest for increased productivity occupies reams of academic literature and haunts the waking hours of C.E.O.’s and finance ministers. Perhaps forgivably so: our ability to generate more output with fewer people has lifted our lives out of drudgery and delivered us a cornucopia of material wealth.
But the relentless drive for productivity may also have some natural limits. Ever-increasing productivity means that if our economies don’t continue to expand, we risk putting people out of work. If more is possible each passing year with each working hour, then either output has to increase or else there is less work to go around. Like it or not, we find ourselves hooked on growth.
What, then, should happen when, for one reason or another, growth just isn’t to be had anymore? Maybe it’s a financial crisis. Or rising prices for resources like oil. Or the need to rein in growth for the damage it’s inflicting on the planet: climate change, deforestation, the loss of biodiversity. Maybe it’s any of the reasons growth can no longer be safely and easily assumed in any of today’s economies. The result is the same. Increasing productivity threatens full employment.
One solution would be to accept the productivity increases, shorten the workweek and share the available work. Such proposals — familiar since the 1930s — are now enjoying something of a revival in the face of continuing recession. The New Economics Foundation, a British think tank, proposes a 21-hour workweek. It may not be the workaholic’s choice. But it’s certainly a strategy worth thinking about.
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Between a Rock and a Hard Place: Pandemic and Growth
Between a Rock and a Hard Place: Pandemic and Growth
There is no way authorities can limit the coronavirus and restore global growth and debt expansion to December 2019 levels.
Authorities around the world are between a rock and a hard place: they need policies that both limit the spread of the coronavirus and allow their economies to “open for business.” The two demands are inherently incompatible, and so neither one can be fulfilled.
The problem is the intrinsic natures of the virus and the global economy. This virus is highly contagious during its asymptomatic phase, which is long (5 to 20 days), and therefore impossible to control with the conventional tools of identifying people with symptoms and isolating them, and tracking their contacts with others.
While there is much we do not know for certainty about Covid-19, what’s clear (and not well-reported) is that its lethality is not exactly like a normal flu. The number of otherwise healthy people under the age of 60 who die of a regular flu is near-zero. The number of otherwise healthy people under the age of 60 who die of Covid-19 is not large as a percentage of cases but it is worryingly above zero. A great many otherwise healthy people under the age of 60 have died of Covid-19.
Yes, the vast majority of those who die are elderly and suffering from chronic health issues, but the number of younger, healthier people who are dying makes this virus consequentially different from a typical flu.
Everyone looking at total deaths (currently much lower than the fatalities in a typical flu season) is missing the semi-random lethality of Covid-19 in younger, healthier people, or at least certain strains of the virus in certain conditions (air pollution, viral load, etc.) and in not yet fully understood sub-populations.
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