Thursday, 20 March 2008

The Upside of Down

When Jeremy Leggett spoke to Transition Town Lewes about peak oil and climate change a year ago, he told us that when peak oil hit, the economy would take a nosedive, recover temporarily and then go into a terminal decline. I never understood the reasoning behind that; surely markets adjust slowly and evolve to new ways of doing things?

I’m not an economist, but I’m starting to put the pieces together. Nobody’s spelling it out, but could the soaring price of oil and the collapsing economy be linked? Oil keeps hitting progressive price milestones, and just going up, which is what Leggett said would be a sign that Peak Oil had come in to the traders’ consciousness. If something is likely to be in shorter supply in the future, its price will go up, right? Meanwhile, our economy is, like a pack of cards, based on debt on the assumption of future economic growth. That assumption is based on ever increasing supplies of oil and other natural resources which, we all know, is the fatal dream that we’re starting to wake up from.

So if we are indeed witnessing the beginning of a systemic collapse, as many commentators are saying, the prevailing culture can either Keep the Show on the Road at any cost (including building runways and nuclear power stations and invading countries with the remaining fossil fuels) or Live within our Means. This will mean a radical although probably life saving rethink of all the assumptions of the Western Empire. As Richard Heinberg, who is talking in Lewes on 25 March, writes, ‘Economic contraction may be bitter medicine, but it's part of the cure for what ails our planetary home. However, we can manage this contraction either foolishly or intelligently.’

1 comment:

jamesgreyson said...

Suppose we could go back 5 or 10 years, to a point where there was a choice whether to proceed with ecological and financial debt towards ecological and financial collapse. Had society realised at that point that the path to collapse wasn't so smart we could have asked do we want to switch to a sustainable path with or without economic contraction? We could have noticed that it is not the scale of human enterprise itself, or the value of economic activity which is the problem, but the activity itself.

Think of all the work involved in creating a sustainable world. Imagine all the resources that no longer get used just once. All the seas and landscapes that no longer lose their productivity. All the people not getting sick so much. All the money circulating vigorously around local economies instead of disappearing to foreign fuel tycoons. All of it would add to growth and keep on coming back to add to growth.

I can't promise that this choice, of switching to sustainability, would have definitely preserved stable growth. (That would depend how it's done, and luck.) Equally it isn't at all obvious how this switch would have required economic contraction. Or that contraction is preferable. Remember that economic contraction and resource contraction are tied together only so long as society persists with a linear (take-make-dump) economic model.

Global society no longer has a choice about economic contraction, but to embrace contraction as progress sounds stupendously foolish.

It could be put more strongly. Business as usual has continued unchaIlenged over recent decades only because the green movement has been almost entirely vision-free about economic growth. Decades have been wasted whining about the speed of the economic engine and ignoring the glaring need for a new engine. We might as well all be wearing T-shirts printed "IGNORE US".