This is nothing. Well, nothing by comparison to what’s coming. The financial crisis for which we must now pay so heavily prefigures the real collapse, when humanity bumps against its ecological limits.
As we goggle at the fluttering financial figures, a different set of numbers passes us by. Last Friday, Pavan Sukhdev, the Deutsche Bank economist leading a European study on ecosystems, reported that we are losing natural capital worth between US$2 trillion and US$5 trillion every year as a result of deforestation alone. The losses incurred so far by the financial sector amount to between US$1 trillion and US$1.5 trillion. Sukhdev arrived at his figure by estimating the value of the services — such as locking up carbon and providing fresh water — that forests perform, and calculating the cost of either replacing them or living without them. The credit crunch is petty when compared to the nature crunch.
The two crises have the same cause. In both cases, those who exploit the resource have demanded impossible rates of return and invoked debts that can never be repaid. In both cases we denied the likely consequences. I used to believe that collective denial was peculiar to climate change. Now I know that it’s the first response to every impending dislocation.
ILLUSTRATION: MOUNTAIN PEOPLE
British Prime Minister Gordon Brown, for instance, was as much in denial about financial realities as any toxic debt trader. In June last year, during his Mansion House speech (the British prime minister’s big annual set-piece speech on the economy), he boasted that 40 percent of the world’s foreign equities were now traded here. The financial sector’s success had come about, he said, partly because the government had taken “a risk-based regulatory approach.”
In the same hall three years before, he pledged that “in budget after budget I want us to do even more to encourage the risk takers.” Can anyone, surveying this mess, now doubt the value of the precautionary principle?
Ecology and economy are both derived from the Greek word oikos — a house or dwelling. Our survival depends on the rational management of this home: the space in which life can be sustained. The rules are the same in both cases. If you extract resources at a rate beyond the level of replenishment, your stock will collapse. That’s another noun which reminds us of the connection. The Oxford English Dictionary gives 69 definitions of “stock.” When it means a fund or store, the word evokes the trunk — or stock — of a tree, “from which the gains are an outgrowth.” Collapse occurs when you prune the tree so heavily that it dies. Ecology is the stock from which all wealth grows.
The two crises feed each other. As a result of Iceland’s financial collapse, it is now contemplating joining the EU, which means surrendering its fishing grounds to the common fisheries policy. Already Iceland Prime Minister Geir Haarde has suggested that his countrymen concentrate on exploiting the ocean. The economic disaster will cause an ecological disaster.
Normally it’s the other way around. In his book Collapse: How Societies Choose to Fail or Succeed, Jared Diamond shows how ecological crisis is often the prelude to social catastrophe. The obvious example is Easter Island, where society disintegrated soon after the population reached its highest historical numbers, the last trees were cut down and the construction of stone monuments peaked.
The island chiefs had competed to erect ever bigger statues. These required wood and rope (made from bark) for transport, and extra food for the laborers. As the trees and soils on which the islanders depended disappeared, the population crashed and the survivors turned to cannibalism. Diamond wonders what the Easter islander who cut down the last palm tree might have thought.
“Like modern loggers, did he shout ‘Jobs, not trees!’? Or: ‘Technology will solve our problems, never fear, we’ll find a substitute for wood.’? Or: ‘We don’t have proof that there aren’t palms somewhere else on Easter ... your proposed ban on logging is premature and driven by fear-mongering’?”
Ecological collapse, Diamond shows, is as likely to be the result of economic success as of economic failure. The Maya of Central America, for instance, were among the most advanced and successful people of their time. But a combination of population growth, extravagant construction projects and poor land management wiped out between 90 percent and 99 percent of the population.
The Mayan collapse was accelerated by “the competition among kings and nobles that led to a chronic emphasis on war and erecting monuments rather than on solving underlying problems.” (Does any of this sound familiar?)
Again, the largest monuments were erected just before the ecosystem crashed. Again, this extravagance was partly responsible for the collapse: Trees were used for making plaster with which to decorate their temples. The plaster became thicker and thicker as the kings sought to outdo each other’s conspicuous consumption.
Here are some of the reasons why people fail to prevent ecological collapse. Their resources appear at first to be inexhaustible; a long-term trend of depletion is concealed by short-term fluctuations; small numbers of powerful people advance their interests by damaging those of everyone else; short-term profits trump long-term survival. The same, in all cases, can be said of the collapse of financial systems. Is this how human beings are destined to behave? If we cannot act until stocks — of either kind — start sliding towards oblivion, we’re knackered.
But one of the benefits of modernity is our ability to spot trends and predict results. If fish in a depleted ecosystem grow by 5 percent a year and the catch expands by 10 percent a year, the fishery will collapse. If the global economy keeps growing at 3 percent a year (or 1,700 percent a century), it too will hit the wall.
I am not going to suggest, as some scoundrel who shares a name with me did on these pages last year, that we should welcome a recession. But the financial crisis provides us with an opportunity to rethink this trajectory; an opportunity that is not available during periods of economic success. Governments restructuring their economies should read Herman Daly’s book Steady-State Economics.
As usual I haven’t left enough space to discuss this, so the details will have to wait. Or you can read the summary published by the Sustainable Development Commission (all references are on my Web site). But what Daly suggests is that nations which are already rich should replace growth — “more of the same stuff” — with development — “the same amount of better stuff.” A steady-state economy has a constant stock of capital that is maintained by a rate of throughput no higher than the ecosystem can absorb. The use of resources is capped and the right to exploit them is auctioned. Poverty is addressed through the redistribution of wealth. The banks can lend only as much money as they possess.
Alternatively, we can persist in the magical thinking whose results have just come crashing home. The financial crisis shows what happens when we try to make the facts fit our desires. Now we must learn to live in the real world.
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under