CVP Mad Magazine
They say you can’t have your cake and eat it too. Yet, that’s precisely what we’re trying to do when we base political and societal decisions only on financial considerations and outcomes.
In 2007, just one year before the economic collapse of 2008, Nassim Nicholas Taleb famously wrote a book called “The Black Swan.” The title refers to the fact that for hundreds of years, people in Europe “knew” that swans were always white. White and swans were synonymous. Until one day they saw a flock of black swans …and everything changed. The title is a metaphor for our inability to account for unforeseeable events: what Taleb called, “The impact of the highly improbable.”
Nassim’s fundamental thesis is that the future cannot be predicted because, in reality, it can only be based on past experience. And because of this, we always think that in the future everything will somehow just work out because it always has.
Until it doesn’t.
In the first part of this series, I wrote about what psychologists might call the “toxic co-dependency” that currently exists between public credit and equity markets, central bankers, and the financial health of government, public agencies, pension obligations, and the associated risks to middle-class taxpayers in an economy driven primarily by personal consumption.
In the second installment, I wrote about the increasingly precarious relationship between state-mandated, unsustainable growth, the resultant public and private indebtedness, and the risks of future financial burdens on us all.
Together, these two articles paint a picture of the financial morass we find ourselves heading into, the very same moment in history when we need massive amounts of capital to address an increasingly long list of socio-economic problems and inequities.
Equal access to healthcare, education, and jobs training are on that list. Any system that fails in those areas ends up paying many times the costs in lost productivity, crime, social support services, and much more. The need to reform government agencies and services and bring them into the 21st century, technologically, so they function more effectively is another major challenge. The grossly inefficient (and often illegal) use of taxpayer dollars by local, regional, state and the federal government, and the legacy of entitlements and pension/benefit largess they are adding, daily, only compound our problems.
And, of course, we need to address the mounting failures in providing basic public services, which go hand in hand with rebuilding our infrastructure: our roads, bridges, tunnels, power grids, water systems, sewage and waste treatment systems, railways, waterways, docks and ports, airports, and a long list of other fundamental systems, without which our society cannot continue to function.
Overall, our endgame is not looking good for the average and even above average earners, much less the poor and disadvantaged. This is exacerbated by unsustainable growth and the way we measure “success” or “failure,” using antiquated financial metrics, such as Gross Domestic Product.
Click on the charts in this article for full size images and to learn more
Consider these two charts.
Credit: WWF Living Planet Report: 2018
The obvious problem with our current way of measuring success, aside from its inability to factor in human suffering or differentiate between democratic systems and tyrannical ones, is that it is a self-feeding system… to the very moment it all collapses.
Now consider these other charts and note the similarity.
Credit: WWF Living Planet Report: 2018
These climate charts bear a striking resemblance to rises in population and economic growth, and that is the fundamental problem. They also closely resemble the left-hand side of the chart, below, of the NASDAQ stock market from 1996 to its parabolic apex in March of 2000, just before its devastating crash.
The parabolic acceleration of stock prices, just like the parabolic acceleration of growth, divorced from underlying fundamentals, inevitably reaches unsustainable heights, which then inevitably leads to a sudden collapse that was unthinkable only a short time before it begins.
Whereas the two previous articles discussed our society’s cumulative financial deficit spending, this article examines another kind of deficit spending that we’re even more deeply engaged in, which is also the result of our personal consumption-driven, throw away, growth-addicted economic system. These dwarf the deficits accruing in financial realm: one that exceeds those values by many tens of trillions of dollars.
This is our “ecological deficit spending:” our cumulative overdraft from our global life support account and the looming consequences.
The handwriting is on the wall… and the floor, and the ceiling, and…
Unsurprisingly, much like the debt and leverage charts from Part I, the charts of other environmental impacts are similar to the growth and population charts above. Energy consumption, the loss of forests and natural habitat, the increases in chemical and toxic pollution, and the loss of biological diversity and the extinction of species all show the same, steep upward curve.
Credit: WWF Living Planet Report: 2018
In one way or another, this is all the result of an over-simplified method of measuring success: a system that has “worked” since antiquity, so long as there was an endless frontier, somewhere, and we were incapable of measuring or prognosticating the long-term impacts of the interconnected and inter-related nature of the world's socio-economic support systems and our global ecosystems. But that’s no longer the case.
Under our present system of measurement of impacts, if Brazil wanted to achieve the highest GDP in the world—and therefore be judged as the most “prosperous” and “successful”--all it would have to do is put everyone to work clear-cutting the Amazon and selling off the lumber. They will be the darlings of Wall Street, right up until the day they run out of trees and collapse in a fatal, oxygen deprived heap… along with the rest of us.
In the long-run, and increasingly in the short-run, the impacts of our perverse measuring systems are working against the maintenance of our global life support systems, upon which our entire consumption-driven construct depends.
This is a map of which countries are driving the global consumption-driven economy the most. It’s no surprise that the U.S.A. (per capita) is right up there at the top.
Credit: WWF Living Planet Report: 2018
But it’s not just about climate change
“If we want thing to stay the way they are, things will have to change”
Giuseppi Di Lampedusa ~ The Leopard
What this quote means is if we want to deliver the richness of the natural world that we presently, enjoy to future generations, we cannot keep doing what we’re doing the way we’re doing it.
Climate change is certainly an extremely important issue. And there is no question that our reliance on fossil fuels and other non-renewable energy sources, combined with the hyperbolic-growth in energy use the world is now experiencing, must be addressed as quickly as possible. But listening to the news and politicians you would be lulled into believing that it is the only thing we have to address, and if we do, nothing else has to change. As if, all you have to do is buy an electric car, put some solar panels on your house, eat organic and everything will be okay.
I hate to burst that bubble, but that’s nonsense.
The fact is, we’ve been doing a pretty thorough job of decimating our global life support systems and making our planet uninhabitable, even if climate change wasn’t happening. The honest truth is that the things we have to correct to alter our self-destructive ways are, well, pretty much everything about our uncontrolled and unsustainable growth-addiction.
No doubt, growth is inevitable. But problem with the environmental endgame we’re currently flirting with is that all these charts of global, life-supporting ecosystems moves over a much longer timeline, making it much harder to appreciate the accumulation of impacts as they are unfolding in real time. One has to either be a scientist or simply live long enough before one starts to sense that all is not right: that things are different than when you were younger.
This unconsciousness is compounded by something biologist Randy Olson calls “shifting baselines.” He explains this by telling the story about how he grew up diving in Hawaii, on the reefs. And back then tourists would come and be treated to seeing thousands of colorful fish in the shallow waters around their boat. And the tourists would all say, “Look at all the fish!” But when you go back to the same spots today, there are hardly any fish at all: maybe a few dozen at most. Yet, the tourists still come on the tour boats and exclaim in wonder, “Look at all the fish!” because this is their only frame of reference.
But that's not even the worst part. If a person has never known how amazing the natural world can be, first hand, then the degraded world will be all they know. And, what they've never known will never be missed or valued or fought for, to protect.
And so goes the unstoppable tragedy of environmental degradation and the loss of biodiversity, everywhere.
The world’s life support systems are in trouble
The following is a vastly over-simplified, “short list” of the major life-support system destroying activities we are actively engaged in, in addition to those driving climate change.
Decimating our oceans
The acidification and chemical pollution of our oceans due to air pollution, inadequate sanitation and waste treatment, and toxic runoff from manufacturing, factory farm animal waste, intensive farming using artificial fertilizers is causing massive, oceanic dead zones around the world, depleted of oxygen, where no life of any kind can survive.
Credit: WWF Living Planet Report: 2018
Global map of coastal dead zones
Credit: GO2NE working group.
According to a recent report by The International Union for the Conservation of Nature,
“Oxygen in the oceans is being lost at an unprecedented rate, with “dead zones” proliferating and hundreds more areas showing oxygen dangerously depleted… with many vital ecosystems in danger of collapse. Dead zones have quadrupled in extent in the last half-century.”
Simultaneously, we are witnessing the depletion and collapse of many global fisheries due to over-fishing by massive, international commercial operations working to feed increasingly affluent populations demanding more animal protein.
The charts below show the global collapse of cod fisheries and sardine fish stocks around the world, in the past 70 years. Cod and sardine fisheries were once among of the largest on the planet. The losses are nothing short of catastrophic.
Pollution, garbage, and toxins
Closer to home, the pollution of our groundwater with antibiotics, heavy metals, pesticides, carcinogens of all kinds, and toxic chemicals and compounds found in technology waste and everyday personal products is a background health hazard that we've just begun to understand the impacts of. We are also seeing precipitous declines in fish and animal species that depend on these water resources.
Credits: NRDC.org; Protectourcoralsea.org
At the same time, plastics pollution has reached the point where, in its degraded form, micro-plastics are now found in the bodies of every species on earth, including us.
Credit – OurWorldInData.Org
Of particular concern is the increasing use of endocrine disrupters found in plastic bottles, metal food can linings, cosmetics, preservatives, emulsifiers, fabric softeners, detergents, medicines, flame retardants, toys, and pesticides, all of which can have profound, long term effects on the human reproduction. These artificial chemicals and organic compounds act like hormones and effect physiological, psychological, and sexual development.
Credit - National Health and Nutrition Examination Survey (NHANES)
We are currently experiencing an onslaught of chemicals and toxins, which essentially consider consumers Guinea pigs, due to unregulated commerce. Hundreds of new, untested chemicals are being introduced into our homes and everyday environment, every year. Many of them suspected of causing cancer, autism, depression and anxiety disorders, and developmental problems in children, and many are suspected carcinogens that we lather on as shampoos, lotions, moisturizers and cosmetics every year, just to achieve more pleasing colors and better shelf life for the products.
Similarly, the over-use and misuse of antibiotics has reached epidemic proportions, causing a surge antibiotic resistant diseases. And amazingly, according to the World Health Organization, 70% of all antibiotics in the U.S. are used on farm animals.
Dwindling fresh water supplies
Unsustainable population growth and expanding traditional farming methods are sucking the planet dry. The exhaustion of fresh water supplies from over-pumping from aquifers, including non-replenishable “fossil water” in our deepest, ancient aquifers around the world, is leading to terrestrial sinking and desertification. Deserts are expanding rapidly around the world, consuming millions of acres of land every year.
Credit: WWF Living Planet Report: 2018
Jay Famiglietti, Professor of Earth System Science at the University of California, Irvine, reports that
“Two billion people use aquifers as a primary drinking water source, and groundwater accounts for roughly one-third of the world’s water withdrawals. The highest rates of groundwater depletion are in the world’s largest food-growing regions: California’s Central Valley, the Ogallala Aquifer of the American Great Plains, the plains of northern China and northwest India, as well as the Tigris and Euphrates River Basin.”
It is reported that the Central Valley in California has sunk as much as 28 feet since the 1920’s due to excessive aquifer/groundwater pumping. At the same time, the exhaustion of fresh water supplies from global river systems has resulted in many of the world’s major rivers no longer reaching the sea.
Loss of land fertility
The aforementioned losses go hand in hand with the rapid loss of productive land and rapid declines in land fertility, around the world due to land mismanagement, urbanism, logging, resource extraction, agribusiness, and slash and burn farming. The majority of terrestrial life on the planet—flora and fauna--depends on a thin, 8 inch layer of organic matter: precious, nutrient-rich topsoil.
Credit – University of British Columbia
The importance of the earth’s arable soil is not something most people would ever think of as an environmental impact, but 95 percent of our food depends on having nutrient rich topsoil. As reported in the Guardian, the U.N. Food and Agricultural Organization notes that,
“Nearly half of the most productive soil has disappeared in the world in the last 150 years, threatening crop yields and contributing to nutrient pollution, dead zones and erosion. In the US alone, soil on cropland is eroding 10 times faster than it can be replenished. If we continue to degrade the soil at the rate we are now, the world could run out of topsoil in about 60 years.”
Habitat loss and species extinction
The loss of forests and wildlands habitat, worldwide, has increased to 30 million hectares per year. That’s twice the size of Greece or 5 times the size of Costa Rica, every year. In turn, from this and all the other accumulated environmental impacts noted above, the associated rate of species extinction we are witnessing matches collapses we’ve seen only 5 times in the past 600 million years. This includes both flora: plants, flowers, trees, and grasses, as well as fauna: mammals, birds, fish, and insects.
It is being called the 6th Mass Extinction or the Anthropocene Extinction. The Guardian reports that
“The study, published in the peer-reviewed journal Proceedings of the National Academy of Sciences, eschews the normally sober tone of scientific papers and calls the massive loss of wildlife a “biological annihilation” that represents a “frightening assault on the foundations of human civilization”.”
The relationship of this phenomenon to our global footprint is undeniable.
Credit: World Wildlife Fund
Some say that species extinction is a trivial outcome: the loss of some pretty birds and a few cute animals that add nothing to economic wealth. And after all, aren’t insects just pests? But, they fail to consider that one third of our food crops are dependent upon bees and other insect pollinators, and right now those insects are dying at an unprecedented rate largely because of known chemicals we are using such as neonicotinoid pesticides.
According to Yale Environmental360 Reporting,
“California’s almond orchards typically require 1.6 million domesticated bee colonies to pollinate the flowering trees and produce what has become the state’s largest overseas agricultural export.”
We talk a lot about invasive species, one of the consequences of our global economy and highly mobile world. But we have to look harder at the most important invasive species of all. Us. We’re the elephant in the room. And we have invented an economic systems that requires species extinction in order to succeed.
The Economics of Extinction
Consider the “market” for Blue Fin Tuna as a prime example of how this works.
Credit: Tsukiji Fish Market Japan
Tuna is highly prized for sushi. And anything consumers consider to be desirable is instantly commodified and results in fierce competition and unsustainable harvesting. This, in turn, drives up the price which starts a vicious cycle.
The increased value drives competition and the competition drives exploitation, which only exacerbates the scarcity and increases the value until the fish or animal, or whatever, is driven to extinction.
Credit: Environmental Media Fund
Although I’m a strong believer in markets, competition, and capitalism, I’m not a believer in unregulated markets, competition, or capitalism. The tuna trade is the dark side of capitalism and markets operating without restrictions or regulations.
For anything to have value it has to be scarce. Left to itself, unregulated markets create self-feeding, vicious cycles with inevitable outcomes.
The poisoning of the global food web
The cumulative consequence of all this is the poisoning of the planet—not to mention our bodies. Relentless global population and farming/grazing growth, increased resources extraction, chemical and toxics pollution are a direct consequence of our over-consumption and our throw-away culture.
The resultant poisoning and disruption of the global food web may constitute the greatest threat to mankind and all life on the planet. If the global food web is not functioning on the smallest level—the phytoplankton, zooplankton, and protozoa--then the food web is in danger of failing at higher levels upon which human life depends.
What science now tells us is that there is no “away” and there never was. It just seemed that way before we could measure the impacts of our actions. Everything we order online and have shipped to our doorstep the next day has far-reaching environmental consequences: in many cases impacts on habitat and species halfway around the world, which we never see.
As we used to say in the 60’s…
Business as usual?
The most recent U.N. Environmental Information Systems assessment rates our progress in the following areas, on a scale of good to poor, as very poor. Those areas where we get failing grades include eliminating harmful subsidies to destructive businesses, sustainable production and consumption, adhering to safe, ecological limits of resource extraction, preservation of critical habitat, preservation of fish stocks, and sustainable agricultural practices.
Credit – UN EIS Intergovernmental Science Policy Platform on Biodiversity and Ecosystems Services: IPBES SUMMARY FOR POLICYMAKERS REPORT.
The chart above is just a short list of some of the major damage we are doing by continuing to grow and “prosper” using our current way of doing things. And, again, the impacts of these are largely separate from the factors driving climate change.
So, in the face of all this, what is American culture, our economic policy, and mass marketing constantly telling us to do?
Image credits Forbes, USA Today, Hennessey, Wikipedia, Yacht News, Lamborghini
Can anyone tell me how this is supposed to work? Why the disconnect between what we know and what we do?
And what do we do now?
READ PART ONE - The Dow Jones, CalPERS, and Us
READ PART FOUR - What Now?
Bob Silvestri is a Mill Valley resident and the founder and president of Community Venture Partners, a 501(c)(3) nonprofit community organization funded only by individuals in Marin and the San Francisco Bay Area. Please consider DONATING TO CVP to enable us to continue to work on behalf of Marin residents.