Wednesday, August 13, 2008

Rational Stewardship: A Way Forward?

I wrote in my last essay on some of the philosophical problems at the foundation of the modern environmentalist movement. Specifically, that Nature is currently defined as something opposed to Man and his Civilization, and that this dualism is counterproductive to the goals of environmentalism and not an accurate way to describe the world around us. In this essay, I will offer an alternative, albeit incomplete and in development: Rational Stewardship.

Infinite Capitalism

The market economy is the most efficient social system the human world has ever witnessed. It allows resources to be allocated quickly with a minimum bureaucracy to maintain the money supply and curb abuses. The system, however, has a built-in problem that if left untreated, will lead to the system’s collapse.

Most people believe that for the market economy to remain healthy, it must grow. There are two ways for the economy to grow: to produce more, or to produce the same amount with greater efficiency. However, greater efficiency in one area usually ends up freeing capital and labor to go produce more somewhere else. In the end, a growing economy means more consumption.

This would all be fine and dandy if there were an infinite (or at least ever-growing) number of resources to be turned into consumable goods. The problem is that there isn’t. Oil, coal, natural gas, and the other hydrocarbon fuel sources take millions of years to produce, and are definitely a non-replaceable resource on the scale of time on which human Civilization operates.

Our renewable resources, our food, forests, fish stocks, and fresh water, are only renewable to an extent. A 2002 study by the U.S. National Academy for the Sciences estimated that world consumption exceeded Earth’s replenishment capacity of renewable resources around 1980.

One of the elements of the market economy that makes it so efficient is that many of society’s wants and wishes are reflected in it. Instead of a political leader guessing what people want and assigning resources to produce said item, the market provides products and sets the price based on supply and demand. Producers can then react accordingly to produce what society “wants.” Though this is horribly simplified telling, this remains the core appeal of the market economy and it is a tool that any would-be reformer ignores at her peril.

However, the only costs reflected in an items price are those directly relating to its production and distribution. Environmental costs, health hazards, wars fought to preserve access to resources – these represent untold costs that the market economy fails to incorporate into the cost of its products. In the case of a car and the gasoline it takes to run it, some hidden costs include environmental damage caused by mining, health problems associated with obesity, respiratory illness caused by smog, and dealing with natural disasters due to carbon-induced climate change. In the United States, non-drivers subsidize the costs to drivers by paying taxes for roads and other infrastructure that they rarely use and to pay police officers to patrol the roads.

The problem is not just for us as citizens. As businessmen, only a very short-sighted view allows for continuing our present course. History has shown that the most successful businesses are those that look to the long term, recognize lasting trends, and change accordingly.

Consider if a mining company knew that at their current rate of production, their mineral reserves will become depleted in 75 years. No new mines are likely to be found or become available. The company’s board of directors have many choices. One director proposes that the company invest current income in increased production, which will increase efficiency and income. When the minerals run out, the company can simply sell off its equipment and close up shop. This option, the director says, should result in a higher stock price (“Mr. Market can’t see more than 3 feet in front of him,” the director quips) and make them all substantially richer, enough to pay off the second vacation house and leave some money to their kids.

Another director, an older gentleman who helped found the company, disagrees with his younger colleague’s assessment. Why cash in now, he asks, when millions more could be made if we take a longer term view. I already have more money than I need, and my children have careers of their own. If we enact this plan, the stock that I hope to leave to my grandchildren won’t be worth as much, for surely in 10 or 20 years investors will see the impending collapse of our company on the horizon. Instead of investing in more mining capacity, we should diversify. We already have drilling and digging equipment, and employ several geologists have been looking particularly bored recently. Why don’t we research geothermal electricity? If there are adequate sources below our mines, we would have already done much of the work necessary to develop these resources.

This is the sort of choice we currently face. If we want our great Civilization to continue, we must honestly consider the long-term view in everything we do – even if it means less profit over the next hundred years.

Rational Stewardship

To become rational stewards, we must “be present in the brutality of truth.” (This is a phrase I have shamelessly co-opted from my friend Ben Colahan). “Truth” is a concept with which I have had a rocky relationship, as I have written about before. To be present in the brutality of truth means that we accept our understanding of the truth for all it is, not just what we like about it. It also means staying informed, being curious, and investigating the world to reveal more of its truths, whether they be good, bad, or just plain strange.

Not everyone need be an expert in everything – the division of labor is still a vital part of rational stewardship. But being present in the brutality of truth means learning to trust expert opinion while trying to maintain a healthy skepticism. Experts might not always be right, and they will almost never agree 100% on any given issue. But to ignore their opinion because it does not fit preconceived notions or wishful thinking is not rational, and it is certainly not being present in the brutality of truth.

Here is just one cogent example of NOT being present in the brutality of truth. According to the International Energy Agency, as well as the U.S. Department of Energy, world oil consumption stood at about 85 million barrels a day in 2006. Both agencies project that consumption will reach about 120 million barrels by 2030. With the recent spike in oil prices, it seems reasonable to assume that the demand for 120 million barrels a day will be a reality in 2030, if you assume that we can produce 120 million barrels a day.

The problem with this projection is that there is no indication that such a production level is possible. Many experts are skeptical that we will be able to maintain current levels of production, let alone add to capacity. The problem is that there is no evidence that we can increase production. There are few wells under development, and almost no large oil fields have been found in the past 30 years. At the same time, oil production in mature wells, such as those in the United States, continue to decrease.

For these reasons, I do not consider our government’s estimate merely optimistic (one who is standing in the brutality of truth can and hopefully will remain optimistic), but negligently and wrong.

I consider the “rational” part of rational stewardship to be closely linked with this idea of bring present in the brutality of truth. Rationality has many aspects to it and I will not try and fix a firm definition to the word, if only because to be rationality is in part practicality. An important part of being practical is being adaptive. Being rational is not being fatalistic, but to try and enact some sort of control over the given situation. On the flip side, rational people should be reflective, and always recognize their limits of influence. The rational steward should have a firm moral foundation, though the frame built on top should have enough give so as not to crumble in an earthquake.

Stewardship means promoting sustainable life. Though humans will naturally place sustainable life for humans as a higher priority, I believe that what is best for a long-lasting Civilization is good for the rest of life on earth. This means clean water, large forests, and a stable and healthy atmosphere.

There are rules of the physical world that all rational stewards must keep in mind. The most important of these is that there is a constant, but limited supply of energy available on our planet. We cannot continue to use more than this amount indefinitely without crashing.

Some argue that some wonderful new technology will dig us out of the whole we’re in. One of the most popular of these fantasies in the last few years has been cellulose-based ethanol. While this technology is worth strongly pursuing, we should not expect it or rely upon it to save our car culture. To allow a possible future technology to drive our government and social policy is not rational, but speculative and akin to gambling. Some small technological advances can be relied upon, and it is possible some wonderful technology might save us, but for now the smartest thing to do is to proceed with the technology we have as we invest responsibly in future technological advancements. To do so otherwise is unnecessarily risky.

Humanity has basically three resources to deal with. The first is the physical elements on and in the Earth’s crust. Some, like iron, are limited in supply but may be recycled. Other, rarer elements such as helium are extremely limited in supply and cannot be easily recycled. In the long term, we will almost assuredly run out of these elements.

Another key supply is water. Like iron, we are unlikely to run out of water. However, fresh and clean water is a bit tougher to come by. Lakes and streams can only be filled as fast as the rain can fall, and underground reserves take hundreds of years to replenish once depleted.

The second basic resource is the energy provided by the Sun. In terms of human time, this source may be considered steady and unending. The Sun’s energy is captured by plants, which use it to fix atmospheric CO2 into the plant matter that we consume for food directly or indirectly through animals. A very small amount of the sun’s energy is also harnessed in the forms of wind, hydroelectric, and solar power.

The third resource we have is the energy contained in the bonds of weak nuclear force, currently provided to us by nuclear fission. Because fusion reactors require rare heavy metals such as uranium to operate, they cannot be considered unending like the Sun, though for now it doesn’t seem like we’ll run out in the near future. Though they are a real and possibly useful energy source, they are expensive and produce deadly waste that takes thousands of years to decompose. I believe that nuclear power should not be ignored, but nor should it be relied upon as an “easy” solution. Another theoretical source of energy is nuclear fusion, which also takes advantage of the huge amount of energy stored at the atomic level. The ITER Fusion Reactor, an international effort to create a model for a viable fusion reactor, is currently at the very beginning stages of construction and is not planning to enter operation until 2018, which is optimistic given the track record of large-scale, international science projects.

The word “sustainability,” like “green,” has become a buzzword in the past few years, a decentralized effort to brand the environmental movement. This branding is incredibly important for bringing rational stewardship into minds of consumers, voters, and policy makers. However, these words faces a constant threat of dilution from companies that adopt them to brand products that are assuredly not green or sustainable.

As a step toward solving this problem, I propose a definition of “sustainable” that can be used to evaluate whether or not the branding is appropriate. A sustainable product or service is one that consumes materials and energy at a rate equal or less than the replenishment rate for those materials and energy sources. That means, of course, that a sustainable Civilization will be free of hydrocarbon and nuclear sources of energy. This doesn’t mean that these energy sources should be discontinued immediately, but knowledge of their future status can help us determine how to make the best long-term investments we can.

I have tried to keep this definition simple so that it can be applicable to a variety of situations. The industrial mindset has achieved much for human Civilization, and still remains useful. Its mechanistic approach tacks us toward homogenization and one-size-fits-all approaches. Achieving Civilization sustainability, however, will require flexibility and regional solutions. Development and transportation plans that mold themselves to local geography, localized food sources, and building low-consumption buildings are just some examples.

For a long time environmentalists have reminded us how an ever-rising global population is a threat to the Earth and its environment. However, the measurement of population alone is fairly useless when considering how to build a sustainable Civilization. Following Professor of Geology Jared Diamond, author of Guns, Germs, and Steel and Collapse, the statistic policy makers should focus on is the population multiplied by consumption per person. This kind of analysis shows that, even if population growth could be magically halted, sustainability is threatened as populations with high consumption rates try to maintain their high standard of living while poorer populations play catch-up.

I hope that research is soon done on what levels of population and standard of living are possible with current technologies and sustainable supplies. While this kind of research will be politically fraught and will assuredly be open for debate, even ball park figures will be useful to estimate what economic activity is sustainable and what is not.

Sustainability should be a goal for every rational steward.

Science in Rational Stewardship

The scientific method is an essential tool for rational stewardship. Technology, without which we would have no hope of maintaining humanity’s current position, is tied to the hip with science. Scientific studies tell us how the planet’s biological and weather systems work, and help us make informed decisions about how best to be rational stewards.

In order to use science most effectively, we first need to understand the distinction between strategic and tactical decision making. Generally speaking, strategic decisions relate to how overall objectives are decided. Should maintain a large troop presence in Iraq? Would it be best to keep the ship maintenance division of our company, or sell it off and concentrate on constructing cranes? Do I want to have children? Strategic questions are the bigger, longer-term decisions that drive future actions. When answering strategic questions, it is important to consider what we value most, and what we consider to be morally correct.

Tactical decisions answer the question, “How do we accomplish X?” where X is the strategic decision that has been decided upon. This basic question will produce many more tactical questions, as well as more strategic questions. Lets say our strategic goal is to bring oil independence (defined as producing all oil requirements domestically) to the United States. “How do we become energy independent?” is the basic tactical question. Suppose we decide this can by accomplished in two ways: reducing demand and increasing domestic production. Some sub-strategic questions could then be posed: “Should we allow off-shore drilling? Drilling in Alaska’s nature reserves? Should we force people to drive less? Should the government increase its tax on gasoline?”

In order to achieve a strategic objective, the rational steward should ask many of these how questions and evaluate as many different angles are reasonable. Quality, scientifically gathered data should play an important role in considering these questions. Accurate information is of the utmost importance when trying to make educated and informed decisions.

However, there is one thing that science should not do. Science, that is the reports and collections of data collected by scientists and others, should not be used to pose the answer to a strategic question. Scientific data can be used as evidence to support one opinion, but the answer for a strategic question should be based in values and moral outlook. We should strive to keep the scientific data separate from our values and moral outlook.

This effort will never be pure, simple, or 100% successful for the simple reason that all scientific theories and collections of data are effected by pre-determined value systems. Quantum mechanics provides the clearest, physical proof of this phenomenon that reaches into every branch of the sciences. Quantum mechanics states that the position and velocity of an electron (or any particle for that matter) is most accurately stated as a probability, a range of possible positions. Depending on what method of observation we use, the electron’s position will be ‘fixed’ differently. There is no definite physical reality outside of our observations. In biological or medical studies, our definitions for specific concepts, the questions asked, and the methods used can all have a profound effect on the conclusions reached.

If scientific data is already laden with human value, then why try and keep it separate? When unconsciously mixed, it becomes harder to see the value-laden judgments and how they effect scientific research. Analysis leads to answers that do not necessarily reflect the state of the natural world, but reflect instead the state of the researcher’s mind. This is why I am suspicious of any answer to a strategic question that includes the reason, “Because science says so.”

Rational stewards need to be open and honest with themselves and others about where their values lie. Otherwise the best results will not be reached. That said, there are plenty of unscrupulous people who will misrepresent their true feelings and lie about yours. We should not sink to their level, but fight back with ever greater effort.


The Ishmaelists are losing. I do not believe their innate moral system exists or is actually innate in the world. The problem is that this line of thinking and defining the terms of the discourse still has tremendous sway within the environmentally-minded community, even among people who might also take issue with the Ishmaelite approach.

In the case of invasive species I mentioned last week, many are harmful not only to our environment but to human life. One source estimated that they cause $137 billion of damage to the U.S. economy every year, though that estimate seems a bit high to me. On the other hand, most crops in the world are invasive species, and I don’t think it would be very wise to be rid of them.

Why are environmentalists always trying to “save the planet?” This enforces the dualism between the “Natural” planet and humans. We are not independent of our planet, but reliant on it. We shouldn’t be trying to save the planet as it once was, but mold it to promote life in general, which will in turn promotes our own livelihood. We shouldn’t be saving the planet – we should be saving ourselves, and have the wisdom to recognize that to do so means preserving Earth as a place that is fertile to life.

In the end, we are a species competing for resources just like any other. Our greed, tenancies toward conflict – everything the Ismaelites hate – are short-term evolutionary competitive advantages. To maintain our position, however, we must evolve. I do not expect a revolution in the classical sense, but a swift repositioning of our greatest assets – our educational system, our creativity, our rule of law, our reason, our kindness, our love. Humanity must use its most important competitive advantages – cooperation, communication, and problem solving abilities – to bring rational stewardship to our most valuable resources – our land, water, and air.


M. Simon said...

Well no.

We have the resources of the solar system to deal with. The fossil fuels are our starter battery.

Fusion Report 13 June 008

We ought to mine for what we need until it is cheaper to extract metals from the ocean. If we don't get to the asteroid belt first.

The sooner we get all the people of the earth up to first world standards the sooner population will begin to decline.

You Malthusians have been trying to sell this stuff for 200+ years. You are still wrong.

BTW metals are recycled.

Mark said...

M. Simon -

Point #1: Mining metals from the ocean? The asteroid belt? I don't have a problem with these concepts in theory. My question is: Is this a likely possibility? When might it happen? The last I checked (and please, correct me if I'm wrong), we haven't even developed a decent plan to get us to Mars and back - let alone travel to the asteroid belt (a further destination), extract enough useful minerals to make the trip worthwhile, and return to Earth in one piece. I have the same question about ocean mining.

Mining "what we need," on the assumption that such technology will be developed, is unnecessarily risky and foolish. What if the technology takes too long? What if it just isn't feasible? What if our "starter battery" runs out first?

This is the same reasoning put forth by some American Pentecostals and other Christian fundamentalists. They argue that we can should be able to use up all the resources we want because the end-of-days is near, so future generations won't have any need for earth anyways. In my opinion, your proposed scenario is far more likely, but the flaw is the same: You use an imaginary future scenario, with no road-map to get from here to there, to justify present action.

We have the technology NOW to enact policies that will lead to a sustainable future. Why wait?

From reading your blog, I'm going to go out on a limb and guess that you believe science research (especially "grass-roots" research), is under-funded and that with proper funding, your visions will come to fruition. I am not arguing that we should cut all funding for fusion energy or space exploration or any other technology. But these technologies need to be considered as part of the bigger picture, and their future development should not be relied upon.

Point #2- I'm not sure where you got the idea I am a Malthusian (I had never heard of him before now). As I wrote in the post, I think population is a horribly misleading statistic to look at. The average standard of living and consumption per capita is much better. For example, even if we cut Earth's population in half, many more resources would be consumed if we reached current "first world" standards.

In theory, I have no problem with Earth maintaining a high population. By itself, population is almost irrelevant.

Point #3 - I didn't think it was necessary to point out that metals (and other resources) can be recycled, because I figured anyone reading this blog would be aware of that fact.

If recycling were the answer to everything, we wouldn't need to mine anymore. Increasing demand requires mining, even recycling was 100% efficient.

There is also the issue that recycling isn't usually cost efficient (compared to mining), and for some resources, particularly trace minerals, it isn't really possible at all.

Lets take a look at an element that will most likely be the key to any fusion project or space mining: Helium. Helium is used in its liquid form to cool the superconducting magnets that contain the fusion reaction. They are a key component of ITER, and though the fusion report you linked didn't contain many details, it did imply that superconducting magnets would be required if the project was to be scaled up. Helium is also a key component for current space travel.

Helium is a trace element on earth.
Helium on earth was produced by the breakdown of radioactive elements such as uranium. Once released, helium collected in natural gas mines, and is now collected as a by-product in some places where natural is extracted. Once helium is used, it floats out of the atmosphere and into outer space Helium's concentration in the atmosphere is about 0.0005%. Even helium-rich natural gas mines only contain about 0.3% helium.

So our supply of helium is tied to our supply of natural gas - a finite resource. I have yet to see a proposal of how a commercial-scale fusion reactor might work without helium. So, without a plan for conservation of helium, fusion power becomes even more of pipe dream.

And yes, while helium would be a by-product of a fusion reactor, it wouldn't be produced in quantities large enough to operate the reactor.

(FYI - I'm not just slapping this superconductor-related research together. I was an assistant editor and writer atSuperconductor Week for a year and know quite a bit about the industry.)

Daniel said...

Interesting essay. I'm sorry that it took me so long to get around to reading it. It provoked a lot of (perhaps unrelated) thoughts, so my comments may seem scattered (because they are).

I think a dangerously inconsistent triad has developed: growth through dramatically increased efficiency, growing population, and American capitalist values. The first two being stratight-forward, I will explain the third and the reason for the inconsistency. American capitalist values (which are infecting the entire globe) encourage a person to work many hours each day and to take minimum vacation time (even/especially in high-paying jobs) in order to afford one the opportunity to maintain a(n excessively-) high standard of living/purchasing power. As firms increase the efficiency of their operations, less labor is required. However, rather than using this increased efficiency as an opportunity for employees to take more time off or work fewer hours a day (by sharing work among many employees), good business practices encourage training and maintaining fewer workers to increase profit (and, in the case of upper management, keeping all the responsibilities managed by a single person rather than many). Thus, with increased efficiency, a stable or increasing population, and these values, there are more people that are unemployed (i.e., more people that cannot contribute [and thereby earn what they need to survive] without growth as the result of increased production). (Since, as we know, ever-increasing growth in terms of production is unsustainable) these three factors jointly result in an unsustainable conclusion.
Furthermore, to discuss these values a bit further, the American capitalist values have altered the nature of pleasure and pleasure time in a way that perpetuates these negative values. Old ways of enjoying time spent outside of the office (walking, writing, reading, exercising, conversation, etc.) have been replaced by activities that perpetuate the capitalist structures by encouraging increased consumption (television, shopping malls...).
I feel that so long as we remain in a capitalist system, the values that drive businesses will continue to encourage these personal values and vice versa. So, should the stable or increasing population be the one to go. How do we convince a population to decline when people are living longer and longer. Note: DECLINE, NOT remain stable. Is government intervention necessary? Who will be permitted to have children and who will not?

This brings me to a different line of thought that was sparked by reading your essay. I agree that: "Stewardship means promoting sustainable life. Though humans will naturally place sustainable life for humans as a higher priority, I believe that what is best for a long-lasting Civilization is good for the rest of life on earth. This means clean water, large forests, and a stable and healthy atmosphere."
But, suppose for the moment (as I do all the time) that current population levels are (far) beyond what the Earth can withstand in terms of sustainability with our current technology (and even any technology that we may hope is on the horizon). How do we reduce the human population to something sustainable? How do we do it quickly and efficiently? Sterilization? Who decides who can breed? Can we finally use the same forces of selective breeding on ourselves as we've been using on animals for millenia? Do we need a strong totalitarian socialist government to meet these challenges? To tell people who is allowed to breed. To tell people how much they are allowed to consume.

I endorse the basic idea of Rational Stewardship, but I fear that we may have already dug ourselves too deep a hole.

Mark said...

I, too, apologize for taking awhile to respond. My blog has gotten the shaft over the last month as I move around, stay in strange places where its hard to find a peaceful place to think, etc. We are anticipating moving into an apartment soon (in Providence, RI), however, and hopefully I will then be able to resume regular writings.

I agree with two of the three parts of your triad. Continual growth of material production is unsustainable. Disagreeing with this would be like disagreeing with gravity.

Capitalist values: I agree in general, though I think it is very important to delineate what is meant by the term, since so much might be included. I think "consumer capitalism" is a bit more precise, though not fully adequate. Basically, I want to distinguish between the consumption is good ethos and the useful mechanisms of a free market. I think what you describe is the consumption is good ethos with a helping of protestant work ethic. I support working to change those habits. However, I want, if at all possible, to preserve concepts such as competition, markets as a determiner of price - basically some of what is normally thought of as "free market" capitalism. However, I do not believe "free market" capitalism meaning no government is good. We need a strong referee to maintain competition. To maintain a strong currency with low inflation. I think the recent financial events should effectively end the myth of a free market for any rational observer. What we need is a government that isn't afraid to pursue more "regulation" (i.e. enforce the rules that make free markets work effectively), that isn't afraid to break up banks before they become "too big to fail." What we have had the last 10 (20? More?) years is crony capitalism a la the bad guys in Atlas Shrugged, not free-market capitalism. (Mini-rant over)

Population growth, I think population levels are mis-leading and not as be-all end-all important as you present them. Population levels are only important in so far as how they relate to consumption levels. If we could somehow create a society where everyone lived on one meal a day, didn't buy much, conserved a lot, and worked as was needed, we could probably support a much larger population than we currently have. This scenario, of course, would require changing human nature as we have known it.

Working on changing attitudes toward the first two parts of your triad will go a long ways towards a workable solution.

In the end, I think any sort of strict population control that restricts who breeds, and to a lesser extent how much they breed (a la China) will be politically unacceptable in enough of the world that it would be useless in the parts that it might take hold. As far as dictatorship or totalitarianism in general, I have yet to see any evidence that this is a beneficial form of government.

If you truly believe we are nearing a point of no return, you might be able to justify it. Otherwise, its a lazy attempt at a shortcut when a lasting solution will take patience and time. The impulse to turn toward such forms of government, to me, seem to be rooted in the desire to personally effect everything. But that's not how the world works without war, and I don't think that will solve any of the problems we're talking about. Thinking of how we might do it patiently has consumed much of my free time for the past month or two.

Daniel said...

Well, for starters, I think that you need to be a bit more careful about how you use the term "free-market capitalism". The kind of regulation and the role of government as "referee" that you are espousing are most definitely in direct opposition to the principles of the free market. Competition and market determination of prices are neccessary but not sufficient to identify a free market at work. Also, I'd like to point out that it has been the relative freedom in the market that has allowed for the kinds of advertising campaigns that have helped to generated the championing of excessive consumption that you call "consumer capitalism". I think that to characterize what I have termed capitalist values as the pro-consumption ethos combined with the protestant work ethic is to unfairly overlook the complexity of the forces at work as well as the fundamental values driving the capitalist system. This is of course not to say that these factors have had no effect on these values, but rather that "consumer capitalism" is a by-product of capitalist values and that the continued strength of the protestant work ethic (which has been kept strong through its association with capitalism) is an oversimplification of the forces driving the development of our work force.
Furthermore, I would like to point out that government interference in the market had at least as much to with the current financial crisis as did the lack of regulation regarding sub-prime lending and Americans attempting to live beyond their means. Now, I'm not sure exactly what you meant by "I think the recent financial events should effectively end the myth of a free market for any rational observer," but it most certainly overturns any myth that a free market has been at work here in the US. However, based on the sentences that follow, I gather that you meant something more like: recent events demonstrate the dangers that free markets present for economies as large as ours. A huge contributor to the current economic crisis has been the generation of unrealistically cheap credit as the result of artificially low interest rates set by the Federal Reserve (in an attempt to maintain an unsustainably high level of economic growth). Thus, government regulation (in the form of the Federal Reserve) had a great deal to do with the economic crisis. Without the artificially cheap credit, morgage companies would not have been able to extend offers of credit on unsound loans and the average American would not have had access to this form of credit to attempt to live beyond his or her means. I will not deny that much of the blame lies on the CEOs of these banking institutions that accumulated unsafe amounts of these unsound investments, but none of these mistakes would have been possible without the mistakes of the Federal Reserve in its attempt to determine the money supply. Now, we are saddled not only with stagflation, but a weak dollar. Sweet.
I won't deny that there has been too much collusion between the public and private sectors (a la Atlas Shrugged), however, the solution may not be to grant government with increased powers to regulate the economy. These increased powers increase the incentives to abuse this power in collusive efforts with powerful corporate entities. Furthermore, while I will admit that there have certainly been many negative impacts of deregulation over the last 20 years or so, there have also been substantial negative impacts of government attempts to regulate the market. (I think that the characterization of "regulations" as "rules that make free markets work effectively" is either vague or self-contradictory; if we are actually talking about the effective functioning of free markets, then it is self contradictory, and if we are talking about markets working more effectively to promote some other value, then the phrase is vague.)
Now, concerning population, I think that your short brush-off of my concerns about population comes from a fundamental difference of opinion. Firstly, I’d like to point out that your proposed society that could support a greater population than we currently have with people that “lived on one meal a day, didn't buy much, conserved a lot, and worked as was needed” is (as I’m sure you intended it to be) an exaggeration of possibilities [in that it would require a totalitarian regime to institute the kind of changes necessary to alter human nature to so great an extent], but more importantly may prove to only be superficially plausible. We must recognize that the industrial food chain that supplies the vast majority of our food stuffs is insanely unsustainable. With the amount of fossil fuels employed to grow most of our food (synthetic fertilizers), harvest our food, process our food, and transport our food, the sustainability of our most basic food items becomes laughable. (Moreover, I find it hilarious that we use petroleum to fertilize, harvest, and process corn into ethanol to feed our engines, the end product of which provides our engines with less energy than the petroleum ingredients would have if processed directly into gasoline for our cars.) But ultimately, to switch from agribusiness to a more sustainable form of agriculture would require more labor and would (probably) produce smaller yields. (I just finished a book that you may or may not have read, but that I think that you would enjoy: The Omnivore’s Dilemma By Michael Pollan. I thought that it was going to be concerned with nutrition, but it is actually more about the ecology, economics, and politics of agriculture.) I think that it is naive to believe that the Earth can sustain more humans when the number that are already on it are putting such intense strains on natural systems that we are on the verge of collapse.
Which brings me to your final point concerning totalitarian government. I believe that we have likely already passed the point of no return and hold that an extremely powerful government would be a desperate attempt to pull us back from a ledge that we have already stepped off. With the degree to which we have fucked up the natural nitrogen, carbon, and water cycles, I’m not confident that anything but the most extreme actions have even a chance of bringing us back from the disaster that awaits us. I will not deny that I am sure that my beliefs are tinged with “the desire to personally effect everything,” but I feel like it also has much to do with what is at stake. If I thought that we could achieve the necessary changes to save our civilization with patience and moderation, I’d think that the things that I’m saying sound a bit absurd as well. (Moreover, with the increasing power of the government of the United States, I feel that we are entering an era of the new fascism anyway. What will ultimately decide matters will be who is permitted to lead in this new world.)
Well, I hope that your travels have been going well and that you are happily getting settled into your new place in Providence. I look forward to your next blog post.

Mark said...

On definitions: I was using the colloquial definition of “free-market capitalism” as I hear it used over and over to describe our current economic system. While there are disagreements aplenty, the basic idea I find is that “free-market capitalism” is an economic system where people are free to trade property (i.e. without coercion) in a market, allowing supply and demand to set the price. As far as I can tell, this is a sufficient definition in most things I read.

I’d be curious to know what other elements are necessary to have a free-market system. Based on your latter comments regarding the Fed and our prior discussions, I suspect one thing I left out is how money is created. Either way, it is obviously an important topic, and I agree with you that the Fed’s narrow minded economic policies helped get us into this mess. When I said that no rational observer could believe in the free market after what has happened, I did mean a free market in the United States.

However, I was not trying to say that “recent events demonstrate the dangers that free markets present for economies as large as ours.” I was being vague, so I will try to clarify. When I said this, I was thinking of the debate between stereotypical conservatives and liberals, the prior of which believes government needs to stay out of people’s business, while the latter believes in more regulation. This is how I’ve always heard the narrative, and I now see that I wrongly placed you within it.

The problem with this narrative is that liberals and nearly all conservatives are not actually arguing for or against regulation – they are arguing about what kind of regulation we need. While many argue over tax policy, environmental standards, zoning, etc., very few people (and even fewer of our elected officials) openly call for abolishing the Federal Reserve. Even Ron Paul’s plan implements the gold standard, which is just a more traditional form of regulation.

My point is that even though most conservatives call for less regulation (or did until a few weeks ago), they don’t really want to abolish all regulation. I was arguing is that, within our current political environment, we need to be honest with ourselves and start discussing what kind of regulation is best, not whether or not we want it.

If you want to discuss how to dismantle the federal reserve, what type of system would replace it, how that would work, etc., I’d love to. But that’s a different area of discourse than I was operating in when I wrote my prior response.

Thank you for pointing out that my use of "regulations" as "rules that make free markets work effectively" was both a contradictory and vague way of putting it. Let me see if I can clarify this as well. I believe that the mechanism of free markets (as outlined in the first paragraph of this response) is a tremendously useful system. However, I do not believe that it is perfect or necessarily leads to the best results, in my opinion, for our society.

A market where a monopoly reigns is, I believe, not a useful free market. The whole point of a free market as a useful component of society (again, as I outlined and not necessarily how you think of it) is to arrive at a fair price based on supply and demand. If one person or corporation controls the supply to such a degree that the price no longer correlates to demand, it is a broken system in need of repair.

Likewise, if a bank grows so large that its failure would lead to economic collapse, the advantages of having a free market (which of course doesn’t exist in banking anyways) become outweighed by the negative effects of the bank collapsing.

Now, in the current crisis, I’m still not fully convinced that letting Bear Sterns and some of the other banks crash and burn would have been such a bad idea from a long-term economic point of view. Given the levels of debt, the reckoning will have to come at some point. However, if I were fully convinced that a bank is “too big to collapse,” (meaning the short term economic damage is far worse than spreading the reckoning over a long period), I would support making sure they didn’t – either through regulation or takeover. Anyways, I’m going off the cuff again, but I hope this makes more clear my position on “regulating free markets.”

Re-reading my response to your concerns about population, I think I was pre-occupied with your possible totalitarian solutions and didn’t give your point the attention it deserves. Sorry for that.

I’ve been sitting here for the past half hour thinking about the problems surrounding agriculture and overpopulation. In regards to the topic, I have read Pollan’s book, a few articles online, and a large part of the Plan 3.0 book you sent me. Based on all this, you might be right that we need an extreme seeming reaction, an immediate reduction in population, or a dictated economy to fix the problem, or something. I’m not sure. We definitely have to act, but you’re correct that I am not sure we have stepped over the cliff.

Based on the statistics in Pollan’s book, the problem is more complex than just saying we have too many people. It seems that its not that we don’t have enough food, but that the food we have is going to the wrong places. If it were economically viable in our current economy to sell all our corn to East Africans in Sudan and Rwanada, we could. The problem, aside from things like crop subsidies and tariffs, is that that wealth disparity creates a situation where it is much better to feed the corn to cows and sell the meat to Americans. This leads to accelerated environmental decline in East Africa.

As far as the dependency on oil, Pollan was thoroughly convincing that this needs to change. In the worst case scenario, we hit global peak oil a few years ago. If we start now, this gives us about 10-15 years (my guestimation based on peak oil things I’ve read about – though I think I’m going to research this more now) to radically change our agricultural policy before things begin to reach catastrophic levels. However, if we couple these efforts with a reduction in oil consumption in other areas, that will give us more time. These are tough goals, but I think they can be reached without turning to authoritarianism.

This isn’t to say that we don’t need radical action. Radical action is required. However, I do believe radical change is possible in our democracy. Historical examples such as World War 2, the civil rights movement, and the current gay rights movement are just a few examples.

On ethanol, you’ll find no argument from me. I just hope that if Obama is elected, he’ll reverse his position on ethanol subsidies because it is terrible on so many different levels. If McCain somehow pulls it off, at least he’ll do something right.

Eliot said...

Given that we've just stepped over a cliff, what are the results if nothing fundamentally changes our direction? Massive starvation? War? Droughts? What can we expect in 25 years?
I'm interested in the Omnivore's Dilemma book but will probably have to wait until getting from Korea to get my hands on an English copy of it.
Luckily m. simon pointed out that we can just mine the ocean and the asteroids while we figure something else out. ;)
I don't want to really weigh in on the government issue yet, though I do wish we could have a leader who is capable of reprimanding the people and convincing them to change. It seems like we are electing those who can be least criticized by the people rather than those who can criticize the people best. This is something I need to think a lot more about, though.