The Local
First – Everyone has to watch this video. That’s an order!
You know, it’s funny how things work. Last week I asked for a new paradigm, or at least I wanted to start thinking about how it might look, and bingo, there it was. Jeff Rubin, the former chief economist at CIBC, has outlined it – and it’s what a great many of us have been arguing about for a long time: the end of globalization and the re-localizing of the economy. The difference is that Mr. Rubin is a mainstream economist, so it’s harder to dismiss his analysis.
Perhaps the most important point he’s making is the time factor. This is not something that’s a decade out. He’s estimating triple digit oil prices about 15 months away, with luck. It is almost inconceivable that any significant changes can be made in that time, even if his analysis is believed by policy makers and the markets. As Rubin points out, if the gains of labour arbitrage are eclipsed by the costs of transport – “Distance is Money” – then the entire edifice of globalization collapses rapidly.
As I was saying in Obsolete Paradigms, we need to start acting as if the laws of physics are true, by which I meant full cost accounting (The definitions here can be confusing. I mean accounting that includes the true cost of all resources used, ecological footprint if you like) and the end of artificial externalities. Full cost accounting will force our current model of capitalism to adapt. Certainly the model we’ve used for the last quarter century is, quite literally, bankrupt. Western Europe and the US will have to re-localize at an unprecedented rate. I think he’s right, but my concern is whether or not these economies can adapt fast enough or go through a severe depression towards a new structure.
The western version of globalization, the service economy – or what he calls the barista economy – is obsolete. The entire range of skills of the blue collar world, you know, people making stuff, which most economists have written off, will have to come back. Did any of us really think we were going to run a world class economy on coffee shops and back rubs?
The problems we have with rapid re-localization was driven home to me by an article in the Evening Standard, January 21. Britain is building the world’s largest offshore wind farm, called the London Array, 20 km off the Essex coast in the Thames estuary. You would think it would be a great opportunity for British firms and engineers. Not so. The majority of the contracts to build the London Array are going overseas. Britain has neither the skills nor the manufacturing base to produce the turbines. The major contracts have gone to Dong Energy of Denmark, E.ON of Germany, and Masdar of Abu Dabhi. This is no criticism of those companies. I was in Denmark recently and what they’ve done with wind power in just a few years is extraordinary. It is, however, an appalling indictment of the government’s and British industry’s short sightedness. Britain is the windiest country in Europe and the need for alternate energy sources has been obvious for years. Now with oil prices set to rise to above $100 if Rubin is right, we find ourselves with an army of media studies graduates and baristas to build a new grid for the 21st century.
I said in Recrimination vs Innovation on Christmas day, we have a workforce, what we desperately lack is leadership. These young people need new skills, they need new opportunity, and they don’t need to be burdened with £20,000 for a degree in something they’ll never get a job doing. This is not impossible, but it’s not trivial either. Danny Stevens of the Environmental Industries Commission has called for the Government to establish a National Environmental Skills Academy. I couldn’t agree more, but I would argue it’s on too small a scale. We need to mobilize this generation on a scale that hasn’t been contemplated since WWII. Since the war, Britain has allowed its position as a world leader in science and technology to slip away, preferring to rely on wage arbitrage and cheap transport to support a version of globalization which has benefited a tiny minority, while leaving the economy as a whole in ruins. That flapping you hear is the vultures coming home to roost.
So I’d like to ask the government to immediately establish a British Environmental Engineering Corps, (being that this is Britain I wanted to make the acronym come out as BEER, but Regiment seemed a bit severe), which will train people, for free, forgive the student debts they already have, and go about building a new energy infrastructure, reconfiguring our cities so that they are sustainable and liveable, and making the transportation infrastructure as efficient as the Japanese. In 10 years. Get a move on.
Obsolete Paradigms
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Buckminster Fuller
A couple of friends have kindly pointed out that it might be possible to interpret my last post – Ghost Acreage and British Immigration – as suggesting that stopping immigration would effectively solve the population problem in Britain. Nothing could be further from the truth. It’s like that old adage; if you find yourself in a hole, the first thing to do is stop digging. The real task will be to get population down this century to manageable levels without chaos. Chaos is the real enemy. The point I was making is that when politicians talk about ecology in a country at twice carrying capacity, without mentioning immigration, it’s inherently hypocritical.
There is another version of ghost acreage that is actually much scarier. It’s sometimes called phantom acreage and means the extra energy provided by fossil fuels and its effect on population. We have relied on fossil fuels to change our environment so that it will support many times the historical world population. But now we are bumping up against hard limits in food supply, water, a host of critical metals and gases, fish stocks, and of course fossil fuels. So we’ve set ourselves up for overshoot. The issue in Britain, and for the rest of Europe, is how to manage population so that overshoot doesn’t cause a chaotic crash. To my knowledge no civilization, in the 69 odd empires so far, has managed it. They just collapsed. I have started to see some alarmed commentary on the ominous figure of 70 million UK population, so perhaps there’s hope that finally it’s sinking in.
Which brings me to my subject: Obsolete Paradigms.
I know that numbers of ecologically minded folk have started to run for the hills, or its equivalent, the transition movement. They argue that it’s already too late to avoid a crash for many parts of the world and it’s wisest to adapt our small towns, like Totnes, to a post fossil fuel community. Well…yes and no. There are two problems with this approach. One is that if things do really collapse, then Totnes isn’t going to be some safe haven. That is unless the good folk of Totnes are considerably better armed than I thought. Two is that it assumes that we are at the end of innovation, and I disagree completely. We are on the cusp of an era of innovation unique in our history. What’s hanging us up is not so much carbon fuels and climate chaos as it is an obsolete paradigm.
The usage of the word Paradigm has changed significantly over the last century, but here I mean it as the axiomatic epistemological framework of a culture. I’m taking it from Kuhn’s idea of paradigm shift in The Structure of Scientific Revolutions, but not just applied to science. I mean the entire paradigm of the way we operate on earth.
The one we have right now is cobbled together from bits of desert religions and some economic ideologies based on an early and tragically misinformed interpretation of Darwinian evolution. Its main weakness is that it requires infinite resources and space. On the one hand you’ve got ‘go forth and multiply’ and on the other you’ve got ‘don’t worry when it (whatever it is) runs out or gets too expensive we’ll substitute something else for it.’ Both ideas are idiotic in a closed environment. So we need to get rid of it, as Bucky says, not by fighting it, but by making it obsolete.
We need a new framework. Let’s see if we can hack one out on the fly. We’ll need some basic rules. To make it more interesting we can make it a test. We’ll call it the intelligent species test. If you’re too dumb to manage your environment and population you go extinct.
Axioms of a New World Order:
1. All species that reproduce without limit in a closed environment die in their own poisons. I like this one because of its elegant simplicity. Take your pick, either you set a limit on your reproduction or you make earth an open system, which means you’re going to have to figure out space colonization. Or a bit of both?
2. The laws of thermodynamics are true. There’s no work around. That’s called magic, including those desert religions, and much as I love Harry Potter movies, it’s made up. Have you ever noticed that’s what all magic is about? Some sort of exception to the laws of thermodynamics. Only we’re making up rules for a real planet here, so no cheating.
3. Pollution is not intelligent design, it’s a complete failure of design – a failure of the imagination. Pollution is not waste. It is useful chemicals in the wrong place in the wrong concentrations. It’s our job to manage our chemical and metallurgical environment. Disposable? You live in a closed system dope. (Talking of closed systems did you see the news about the urine clogging up the water recycling on the space station?)
4. Adapt or die. Adaptation is time dependent. Whether we’re talking about a species or infrastructure, it all takes time. We can probably adjust to global average temperatures on a century timescale. On a decade timescale we won’t.
5. Complexity theory is true. Complex systems tend toward the fragile, and once their equilibrium is nudged by some enthusiast with a hammer they can get very unpredictable. Respect recursive environments, especially if you live in one.
That’ll do for a start.
I don’t think there’s much to do about the religions, unless there’s some mass spontaneous waking up experience round the corner. I’m stumped. About capitalism I’m more hopeful. Suppose it’s not the be all and end all of human economic organization? Why are we all so attached to it? I understand if you’re one of the 1% of the population that’s really profited from it, but I don’t understand all the enthusiasm from the 99% who didn’t. The Gini Coefficient numbers on most of the developed world outside Scandinavia are hilarious. It’s virtually feudal.
We can start by including Gini Coefficient in all national economic calculations, in the same way we include inflation etc. Scandinavia looks like it does okay with .25! And we go to full cost accounting, no artificial externalities. No, Virginia, carbon isn’t free. None of this cap and trade malarkey. You smoke it, you pay for it. Why are we subsidizing the use of fossil fuels? How is it that international aviation fuel isn’t taxed, but ground transportation fuel is? Let’s tax aviation fuel and subsidize solar and wind power. Subsidize disaster preparedness – think Haiti.
None of this is particularly threatening as far as I can see.
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