The Cruel, Topsy-Turvy Economics of Collapse

Contrary to common sense, we could experience booming GDP and stock market valuations all the way to society’s imminent collapse.

As we reel from one natural disaster after another—hurricanes Harvey, Irma, Maria, wildfires in California—climate scientists explain how they’re not really “natural” at all. They’re the anticipated consequence of a breakdown in the world’s climate, one that will become far more extreme as global temperatures rise from the current 1° Celsius above historic norms to 1.5° (perhaps within ten years) and then 2° potentially as early as twenty years from now.

Damage from California wildfires
Devastation from California wildfires: perversely, this will have a positive impact on GDP ©George Rose | Getty Images

With headlines proclaiming the dire effects of these disasters on local economies, it might seem reasonable to believe that the power-brokers of our economic system—investors, CEOs, Federal Reserve policymakers—will eventually recognize the danger and wield their financial might to shift our civilization’s trajectory away from climate catastrophe.

That may turn out, however, to be wishful thinking. In the short term, these disasters do indeed cause harm to the economy, but after the initial shock they’re more likely to have a net positive impact on the country’s Gross Domestic Product (GDP). In the words of U.S. Treasury Secretary Steve Mnuchin, “There clearly is going to be an impact on GDP in the short run. We will make it up as we rebuild. That will help GDP.”

Welcome to the cruel, topsy-turvy economic logic of a civilization facing the risk of collapse. As millions of people increasingly suffer the devastation of climate breakdown, we can expect the economy—as measured by conventional benchmarks—to maintain and even strengthen itself right up to its breaking point.

The reason for this apparent disconnect between economics and society’s well-being arises from the use of GDP as the benchmark of economic success. GDP merely measures the rate at which our society is transforming nature and human activities into the monetary economy, regardless of the ensuing quality of life. Anything that causes economic activity of any kind, whether good or bad, adds to GDP.

That’s why hurricanes and firestorms, catastrophic as they may be to the people experiencing them, can be positive for the conventional economy. Devastated communities mean big profits for the companies supplying materials, technology, services, and finished goods for the rebuilding. The thousands of people in California at risk of long-term bronchial problems from smoke inhalation represent a boon for GDP, as their increased healthcare requirements only serve to boost economic activity.

This disconnect between GDP and the health of our society means that, even when things become more desperate for people as climate breakdown worsens, investors may keep enjoying high returns on their investments while neoliberal economists point to stock market valuations as proof that things are not as bad as they might otherwise seem.

This scenario has been predicted by Jorgen Randers, a member of the team that wrote the seminal Limits to Growth report back in 1972, and author of the more recent 2052: A Global Forecast for the Next Forty Years. Randers, who has spent a lifetime working through the nonlinear feedback effects of our global system, expects that we’ll be spending as much as 36% of global GDP in replacing infrastructure by mid-century. “These are huge hikes,” he writes, “and difficult to grasp, until one starts considering the cost of moving megacities and transporting infrastructure to safer grounds.”

However, this increase in GDP will only occur in countries that still have the infrastructure to rebuild what gets destroyed. For more vulnerable societies, one huge swath of destruction—from a hurricane, flood, or drought—could leave them so devastated that they find themselves permanently removed from the 21st century global technological economic matrix. That may be a real risk right now for Puerto Rico: with its electrical grid, water supply, and finances in ruins, its only hope for a return to normalcy will be through massive investment from the US mainland—something the Trump regime seems unlikely to support.

Is this what civilizational collapse may look like in the 21st century? Not one dramatic event that brings down the whole house of cards in a moment, but a gradual disintegration of regions that lack the wherewithal to recover from climatic disasters, while the more developed and affluent nations enjoy economic booms and soaring stock market valuations?

It’s not too late to turn around this terrifying trajectory, but as long as we measure a country’s success by its GDP, that’s going to mask the true destruction taking place in the quality of people’s lives. Recognizing this, forward-thinking economists have come up with more accurate measures of a country’s welfare. One of these, the Genuine Progress Indicator (GPI), incorporates negative factors such as income inequality, environmental pollution, and crime, as well as positives such as volunteer work and household work. It shows that, in contrast to GDP, which has been soaring for the past 70 years, GPI peaked worldwide in 1978 and has been falling ever since.

At this point, our society can still choose to invest in a future that builds genuine welfare rather than shoring up collapsing infrastructure. In an urgent but still hopeful report, 2020: The Climate Turning Point, members of the highly-respected Potsdam Institute show there is still time to turn things around. Just. And the profound irony is that we can do this by investing in the very things that create welfare for society. “This moment of history,” they declare, “is not a burden; it is a tremendous opportunity.” They estimate that worldwide investment in a sustainable future—one with cleaner air and water, fulfilling livelihoods, more livable cities, and regenerating ecosystems—could make the world $19 trillion wealthier by 2050.

What-If-Its-A-Hoax
Image: © Joel Pett/USA Today

An important step to move toward this more hopeful trajectory would be to substitute a true measure of society’s health such as GPI for the currently ubiquitously GDP. As long as our political and financial leaders are evaluated by the distorted measure of GDP, our civilization may well disintegrate from climate breakdown even while they get credit for a cruel, topsy-turvy economic boom.

 

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The Great Columbus Day Debate

There’s probably no more contentious Federal holiday than Columbus Day.

Increasingly, municipalities across the country are renaming it to Indigenous Peoples Day, to honor those who were decimated by the European conquest. Meanwhile, every year, apologists for the dominant neoliberal worldview publish op-ed pieces to defend the status quo. Their arguments, unfortunately, only demonstrate the moral vacuity of their position.

I’ve attempted to raise the level of conversation with this piece published today in Salon, which goes beyond the question of Columbus’s own character flaws, to investigate the mindset of the Europeans who followed him. Most importantly, the same mindset that—half a millennium later—now celebrates Columbus Day as a Federal holiday, is the one that is driving our civilization toward environmental catastrophe. This mindset is what we need to understand, and transform, is we’re to shift humanity’s trajectory toward one of sustainable flourishing.

What do you think? Please share in the Comments below.


What celebrating Columbus Day portends for our civilization

The mindset Columbus and his followers brought with them is the same one that is driving our global civilization toward environmental catastrophe.

[Originally published in Salon, October 9, 2017]

What does it tell us about our civilization that Columbus Day is celebrated as a federal holiday, with parades, barbecues, and football games, instead of a somber recognition of genocide, such as the International Holocaust Remembrance Day that commemorates the atrocities of the Nazis? The answer might offer a key to a sustainable future for our civilization.

When Christopher Columbus first made landfall with his crew on the island of Hispaniola in 1492, he was taken aback by the generosity and benevolence of the Taino people he encountered. He wrote in his journal how, if the Europeans asked them for something, they would freely share anything they owned “and show as much love as if they were giving their hearts.”

It didn’t take long, though, for his mind to wander off in a different direction. Columbus quickly realized how easily he could take advantage of them, writing to the King and Queen of Spain how the Taino were so naïve that they cut themselves out of ignorance when they held a sword. “Should your Majesties command it,” he wrote, “all the inhabitants could be taken away to Spain or made slaves on the island. With fifty men, we could subjugate them all and make them do whatever we want.”

Columbus arrival
Columbus’s reaction to the Taino quickly turned to thoughts of exploitation

Columbus was obsessed with recklessly exploiting whatever he discovered in the New World, regardless of the consequences. He wasn’t alone in this. In fact, the entire European conquest was based on the premise of ruthless exploitation in order to enrich the explorers and those who had financed them.

The result was the greatest genocidal catastrophe that has occurred yet in human history. In every region European explorers discovered, a decimation of the local population ensued of almost unimaginable proportions. The population of central Mexico was twenty million in 1500, four times greater than Britain. Within a century, there were fewer than one million people alive there. Similarly, the population of the Inca empire collapsed from eleven million in 1500 to less than a million in 1600. It’s been estimated that in the 16th century alone, close to one hundred million indigenous people died in the Americas through slaughter, starvation, or disease.

Many historians have pointed the finger to the new diseases the Europeans brought with them that ravaged the local populations, some even going so far as to suggest that this catastrophe was inadvertent: a sad but inevitable consequence of human progress. However, as historians such as David Stannard and Eduardo Galleano have excruciatingly documented, the Europeans approached the new territories with a systematic compulsion to exploit remorselessly every last resource—human and mineral—they could ransack from the land. The havoc caused by European diseases just made their job that much easier.

In fact, as I discovered in researching my book, The Patterning Instinct: A Cultural History of Humanity’s Search for Meaning, this obsession with exploiting resources without regard to consequences was unique to the European mindset—which has now become the predominant global mindset as a result of the European conquest of the rest of the world. Even though the facts of history make its direction seem inevitable, it didn’t have to be that way. Our modern world, and the values on which it’s founded, are the consequence of a particular way of thinking that arose only in Europe.

To understand this better, consider the example of Admiral Zheng, the Chinese commander who set sail in 1405—nearly a century before Columbus—with the greatest armada in history: twenty-seven thousand men in over three hundred ships, each about ten times the size of one of Columbus’s boats. Over nearly three decades, they dominated the Indian Ocean, from Sumatra to Sri Lanka, from Arabia to East Africa. But instead of using their power to enslave the indigenous people and plunder their raw materials, they used it to enhance the prestige of the Chinese emperor, setting up embassies in Nanjing with emissaries from Japan, Malaya, Vietnam, and Egypt.

Zheng He's fleet 1
Admiral Zheng’s fleet was overwhelmingly more powerful than any other force of its time—yet he didn’t enslave local populations

The reason for this astonishing contrast with Columbus was the value system Admiral Zheng brought with him. It would have been as unthinkable for Zheng to have conquered and enslaved the societies he visited with his armada, as it would have been for Columbus to have set up embassies with the indigenous people he encountered in the New World. In China, the predominant aim of political power was to sustain society’s equilibrium. Military might was seen as a force to use only when necessary to maintain stability.

The same held true for the Chinese view of their natural resources, much to the bemusement of early European missionaries. One of them, Jean-Baptiste Du Halde, mystified why the Chinese failed to mine all the gold and silver in nearby mountains, wrote how their exploitation was hindered by “political views” that “the publick Tranquillity might not be disturbed by the too great abundance of these Metals, which would make the People haughty and negligent of Agriculture.”

Is it any coincidence that Chinese civilization, with its focus on maintaining stability, is the oldest in world history, surviving intact for millennia while every other early civilization collapsed into ruins? Modern China, of course, has taken to extractive global capitalism as avidly as any other nation on the planet, but that was only after a century of humiliation by Western powers caused traditional values to seem impotent by contrast.

At this point in the early twenty-first century, we are beginning to encounter the disastrous consequences of the mindset that Columbus, and those who followed him, brought with their voyages of conquest. The rapacious approach to mineral wealth that caused the Spaniards to extract every last grain from the world’s richest silver mine at Potosí, Bolivia, is the same mindset that drives today’s fossil fuel companies to rape the earth through fracking and tar sands extraction even while carbon emissions threaten the future of civilization. The moral ease with which Europeans drove millions of enslaved Native Americans and Africans to their deaths is the same grotesque mentality that today permits the wealthiest six men in the world to own as much as half the world’s population.

And that’s why how we choose to celebrate Columbus Day is a portent of our civilization’s future. As long as our predominant way of thinking rewards those who exploit others recklessly, and who view the earth as no more than a resource to plunder, we’re headed for environmental catastrophe. Even if we somehow manage to survive the climate breakdown, there are a slew of other existential crises waiting in the wings: topsoil degeneration, freshwater depletion, the Sixth Extinction of species, disappearance of fisheries, deforestation… the list goes on.

There’s a lot we can learn from Admiral Zheng and the traditional Chinese values that launched his expedition. But we don’t have to look that far. The indigenous people who stewarded the Americas for thousands of years before the Columbus cataclysm are themselves manifesting the vision our entire world needs to survive. At Standing Rock, water protectors fought the poisoning of their homeland with prayer and ceremony, declaring their love and respect for the natural world and the overriding importance of its responsible stewardship for future generations.

In South America, indigenous tribes are organizing to prevent the wanton destruction of their habitat by oil and mining corporations. In Bolivia and Ecuador, the buen vivir movement fosters a value system based on community and deep connection with the earth as a counterpoint to the Western drive for exploitation and extraction.

AMAZON_WATCH_»_Toxic_Mega-Mine_Looms_Over_Belo_Monte_s_Affected_Communities
Indigenous people of the Amazon are fighting against destruction of their land by fossil fuel and mining mega-corporations

Many municipalities throughout the United States, recognizing the outrage of commemorating Columbus Day, have officially changed its name to Indigenous Peoples Day, using it as an opportunity to honor those who have been decimated and yet continue to offer a vision of hope for humanity’s future. Maybe on some future date, that change will be made at the national level, and we will have a federal Indigenous Peoples Day. Might that day, perhaps, be the very day on which our civilization begins to shift course away from annihilation and toward a flourishing future?