Creating social change, Economic Resilience, Transition movement

Economic Solutions at Otis CollegeThis week marked the trimphant wrap-up of our Human Ecology class at Otis College of Art and Design.  It was a great group of students this semester, and their enthusiasm shone through in their final projects.

We celebrated with people from Transition Mar Vista/Venice as well as people from other departments at Otis.  As teacher Elektra Grant expained so well in her introduction, it seems approprate that the “Human Ecology” class has so many stakeholders. Continue Reading

Creating social change, Economic Resilience, Transition movement

The “new economy” demo

It’s all a matter of perspective.

In a previous post I argued that economic contraction is necessary and in fact underway.  Is this “Collapse” — that scary term that so many authors love to throw around?

I find the C word to be counterproductive.  Depending on where you are standing as the grand cascade of change ripples through, the ruthless C word might be how it all feels to you in the moment.  But the big scary C word disclaims all the brilliant aspects of the new, emerging economy.  It denies that there is anything positive going on.

Huh? Continue Reading

Economic Resilience, Transition movement

This post is in response to one by Rob Hopkins, which was in response to one byDavid Holmgren.  

In case I don’t use sufficiently ‘skillful means,’ please let me begin with stating: I am not advocating for intentionally creating an economic crash.

Rob says about economics “once it starts getting even vaguely complicated, leaves me rather puzzled.” I don’t shy away from complicated, although I do strive to simplify things as I explain them, so that more people can understand.  I have waded through tons of what many people lay out as possibilities for new economic alternatives, hunting for how to successfully unwind the terminally-flawed system we’ve got (success=relatively peacefully), and ideas for how to build a wiser parallel system. Continue Reading

Creating social change, Teaching powerdown, Transition movement

We’re caught in the squeeze right now.

Climate change is advancing at an incredible speed. We know we should do something, but we lack the political will to do what it takes to hold it to 2°C. UN committees are now being counseled to prepare for 4°C of warming. To keep it survivable, there’s got to be a powerdown — starting today.

Meanwhile green-tech enthusiasts cheer the rapid rate at which certain countries are installing renewable energy infrastructure. But reports are now surfacing of shortages in the rare earth ingredients needed to make that renewable infrastructure. We don’t have enough rare earth materials to replace the whole fossil infrastructure and continue on our current level of consumption. No one dares speak the little secret: Even with renewables, there’s got be a powerdown. Continue Reading

Creating social change, Economic Resilience, Transition movement

Sunflower at the Community Garden at Holy Nativity
Sunflower at the Community Garden at Holy Nativity

It’s a sign of a really good essay when bits of it linger with you for days after you’ve read it and it keeps popping up in your mind. Naomi Klein’s “Why Science is Telling All of Us to Revolt and Change Our Lives Before We Destroy the Planet” is one of those. Her theme? “Global capitalism has made the depletion of resources so rapid, convenient and barrier-free that ‘earth-human systems’ are becoming dangerously unstable in response.”

“Serious scientific gatherings don’t usually feature calls for mass political resistance, much less direct action and sabotage,” Klein writes. She describes UC San Diego geophysicist Brad Werner at a major scientific conference as “observing that mass uprisings of people — along the lines of the abolition movement, the civil rights movement or Occupy Wall Street — represent the likeliest source of ‘friction’ to slow down an economic machine that is careening out of control.”

The part that keeps itching at me, days after I read Klein’s article, is the presumption that “mass uprisings” are the only way out of this mess.  Continue Reading

Economic Resilience

“Understandably, everyone wants it to get “back to normal.” But here’s a disturbing thought: What if that is not possible? What if the goalposts have been moved, the rules rewritten, the game changed?”
–Richard Heinberg

Biocapacity and the limits to economic growth are already being painfully felt in some places, while in other places people might have the luxury cushion to go on pretending it isn’t so for several more years. Right now, people in some of the affluent social circles around me continue to carry on in denial. Discussions of the issues in this booklet seem absolutely absurd to them. After all, the newspapers have said “the economy is recovering.”

Yet we can’t pretend away the indicators all around us. The fact that we are severely overextended is showing up not just in our ecological systems, but in our human ones as well.
There are no Buffett fundamentals to support the notion of “economic recovery.” In fact the very substance that should be there is hollow.

It calls to mind the times when rats get into my grapefruit tree. They bore a small hole in one side of the fruit, then crawl inside and eat all the flesh. You’re left with an empty, hollowed-out rind dangling there on the tree.

Stoneleigh points out how our current economic “growth” figures include tons of transactions which are entirely built upon credit and financial instruments. There isn’t any substance to them.

The substance that supports many of our conventional economic transactions is rapidly depleting. Peak oil promises absolutely staggering economic implications. Already we’ve seen a doubling of retail gasoline prices over the past three or so years, and the ramifications of that are still playing out across the market. Fed Ex costs more, postage costs more, moving everything around the surface of the planet costs more. Food costs a lot more. And we’re just getting started.

Peak oil will mean the end of globalization as we have known it thus far. Right now we call it “normal” to harvest raw materials on one continent, to ship them to another continent for manufacture, and to still another continent for sale. This absurd extravagance — only possible with plentiful cheap oil – is at its end. So too is the globalized economy that was built around it.
Conventional wisdom says it takes about three years for an oil shock to play out across the financial markets. Three years out from $147 a barrel in July 2008 has seen “double dip recession.” In April 2011 prices climbed back over $113 for the second time; the repercussions have yet to be seen. As oil (and now potentially coal too) becomes more precious, this volatility will only exacerbate the existing market instabilities.

Further evidence of the empty, hollowed-out rind:

Government: Our government is in dire straights: our California and Los Angeles city budgets are completely upside down, forcing them to slash programs across the board. Our national debt just reached an all-time record high. As I write this, each citizen’s share of the national debt is $47,233. The decreased tax base due to other economic factors will only exacerbate the plight of our government in coming years.

Consumers: [section being rewritten. see news reports for the 99% – Occupy Wall Street[

Labor: We have an aging population demographic, with increasing numbers of retirement-age individuals, and social security sliding into permanent deficit. We have an obesity epidemic among our youth. These signal increasing “need” for oil intense medical care, which the failing system won’t be able to supply. And this all means decreasing numbers of able-bodied adults to perform post petroleum manual labor. Who will create that “more” for this supposedly growing economy?

Social: The rate of emotional depression in the U.S. has increased more than tenfold in the last fifty years. Some thinkers declare that Western society is in the grip of a “social recession.” Our population has a psychological and spiritual sense of “maxed out.”

James Gustave Speth quotes the United Nations Development Programme’s 1996 report — which, rather than being outdated, indicates how very long our society has been desperately off track. This report lists several ways that economic performance has gone sideways:

Jobless growth – where the overall economy grows but does not expand the opportunities for employment;
Ruthless growth – where the fruits of economic growth mostly benefit the rich;
Voiceless growth – where growth in the economy has not been accompanied by an extension of democracy or empowerment;
Rootless growth – where growth causes people’s cultural identity to wither;
Futureless growth – where the present generation squanders resources needed by future generations.

Our economy is indeed that empty, hollowed-out rind dangling on the tree, without substance, without the materials for “more”.

Every market is an accumulation of human emotions. From the tulip mania of 1637 to the Dow Jones of today, mass human enthusiasm drives market values higher; mass human distrust and fear pulls economic values down. (Robert Prechter has written entire books about this.)

When we look at the emotions of a market we see where we are. We all heard the “new paradigm” a few years back when media broadcast that things would only get better. That was right before the first plunge. In denial, we now desperately search for signs of “recovery.”
To which Stoneleigh declares with bright sarcasm: “Those green shoots of recovery? That would be gangrene!”

I don’t know about you, but around me there is lots of fear. We’re in a momentary time when people desperately hope that we’re “returning to normal,” yet their guts confirm the opposite. Since I released the original version of this booklet, the stock market has tumbled yet again. It’s clear where we are on the emotions-of-a-market chart.

And we can see what lies ahead.

Early Transition materials encouraged us to “listen to the elders.” Around here, members of the generation that experienced the Depression of the 1930s have been telling us hold on to your cash. It looks just like they saw before.

to index

The fundamental problems with the old economy
• Jerry Mander, “Barking up the Wrong Tree” — a (brutally) concise, one-page synopsis written by Jerry Mander of the International Forum on Globalization. Page 9 of this pdf: www.postcarbon.org/report/44377-searching-for-a-miracle
• Stoneleigh/Nicole Foss, “Century of Challenges” DVD http://theautomaticearth.blogspot.com/
• Stoneleigh/Nicole Foss, “Making sense of the financial crisis in the era of Peak Oil,” chilling, fast-paced audio talk. access via www.transitionus.org/blog/our-end-economy-moment
• Heinberg, Richard, “Who Killed Economic Growth?” animated You Tube 5:47 www.youtube.com/watch?v=EQqDS9wGsxQ
• Transition United States, “Economic Crisis” www.transitionus.org/why-transition/economic-crisis

to index

Economic Resilience

There are three ways in which North Americans have managed to live at five-planets-worth-of-consumption. I am indebted to Sophy Banks and Naresh Giangrande for an explanation in the Transition Training here in Los Angeles in 2008, which really broadened my understanding.

“Ghost acres” – taking from others. We have raped and pillaged the raw materials of other continents (leaving the people who live on those continents with far less than their fair share). We’ve consumed those goods here and persuaded each other that they were rightfully ours.

“Draw down” — taking from the future. As we desecrate ancient forests and deplete fisheries, we are consuming today that which should be our children’s inheritance.

“Ancient sunlight” – taking from the past. Fossil fuels – oil, gas, coal – are captured ancient sunlight. In the space of a mere 150 or so years out of the entire history of humanity, we are gobbling up the entire planetary supply.

We have an economic system that is entirely dependent upon taking from others, taking from the future, and taking from the ancient past. This economic system is built upon the presumption of everlasting growth. Thus in order to keep it going (keep it growing) we must take more from others, take more from the future, and take more from the ancient past.

Peak oil is the laws of physics telling us it is no longer possible to take more from the ancient past. Biocapacity is the laws of physics telling us it won’t be possible for much longer to take from the future. “War that will not end in our lifetimes” is a sign that taking from others has maxed out. No amount of “stimulus”, “green jobs” or changing political representatives is going to alter (or “fix”) this basic reality.

We are at the end of growth. We’re actually beyond the end of growth into the very beginning of economic contraction.

The task ahead is to manage that contraction so that it unfolds with as little Mad Max, civil unrest, and additional war as possible — as peacefully as possible.

Economic Resilience

debt diagram 400wWhen my kids were younger they used to play a game in which everything they said was turned opposite. Up was down, hot was cold, yes was no.

As we enter a contracting economy, virtually every assumption and expectation we have held about the grow-grow-grow economy is turned opposite. What was trending up is now down, investments that were hot are now cold. Advice that was good is now bad. “Yes, do it” has now become “no way.” The presumptions of leveraging and debt are similarly reversed. Debt is a concept which very much belongs to a growing economy. When you borrow money, you presume that in the future you will be earning enough to live on plus repay your debt plus interest. In a growing economy, this isn’t too tough to imagine. You are, in essence, borrowing from future plenty to consume part of that plenty now in leaner times. In a contracting economy, this idea is turned upside down. When you go to borrow from the future, that future now represents leaner times. Things in the present are relatively more abundant! Borrowing in a contracting economy means taking from leaner times to consume in times of relative plenty. In a contracting economy, if your income remains steady (i.e. not growing, but not decreasing either) your obligation to repay loan plus interest means you will have less cash flow to meet your usual expenses. If you weren’t saving before — weren’t experiencing some surplus each month — then you will find that debt service means you can no longer meet your same, ongoing expenses. If your income is rendered unsteady, or it begins to decrease, it’s bad news: suddenly you no longer have enough for your regular ongoing expenses AND you have loan to replay PLUS interest. Debt completely hastens the decline. It gets worse … If your typical monthly expenses are now increasing because peak oil is driving gas prices up, increased transportation costs are driving consumer goods up, climate issues plus petroleum costs are driving food costs up … you’re in a world of hurt. In a contracting economy, debt no longer makes sense. If you cannot meet expenses and you’re in a contracting economy, you simply have no alternative but to cut expenses. (How?) It’s important to view these statements within a historical perspective: our views of loans and debt weren’t always this way. Easy credit over the past 30-50 years of extreme growth has warped our perspective. Right now we expect that getting a loan will “help us out” and those in the business of lending perpetuate this myth. But prior to the 1940s they had a very different attitude about taking on debt. People saved up and bought large items for cash. Or they used (interest-free) layaway, which really was just a supervised savings program. If they did turn to a lender it was for very short term and rather low rates. None of the 15-20% we see in today’s credit cards. Many homes were bought outright. At most, home financing terms for those who did use them were more like 50% down and a 5 year mortgage. All of this is to say that the attitudes we have embraced in recent decades are the attitudes that fit with an economy which is in exponential growth mode. But we are no longer in such an economy (explanation) We are now in economic contraction and our views of debt, credit cards, car loans, college loans, mortgages, business lines of credit, venture capital, government assuming debt, government issuing school bonds, must evolve to match this changed landscape. In this new, contracting world, debt doesn’t make sense.