Unfathomable Economic Truths: Thoughts of a Dismal Scientist

April 1st, 2013 - by admin

Lisi Krall / State University of New York at Cortland – 2013-04-01 21:45:03


From a speech presented at a four-day conference on Techno-Utopianism held in San Francisco from March 1-4, 2013. Reprinted by permission of the author.

SAN FRANCISCO (March 4, 2013) — I think it’s important to have the economic conversations that make us feel hopeless. If for no other reason, they inform the many resistance movements now emerging about where they fit in the larger picture.

Yet it seems that difficult economic conversations have fallen out of favor and are even viewed disparagingly as counterproductive.

I think we’ve become preoccupied with hope when it might be better to sit with hopelessness so that a full accounting of the weight of this historical moment might register. My role as a dismal scientist is to have the economic conversations no one wants to have and so I offer these brief comments in that spirit.

Let me begin by telling you about an encounter that I had a couple of weeks ago. Sandra Steingraber had come to the gallery on the campus where I teach because we have Rob Shetterly’s American’s Who Tell the Truth exhibit and she is one of the activists whose portrait is displayed. She had come to tell ‘her truth’ and recount her personal journey, a journey that has now lead her to be one of the leaders of the anti-fracking movement in NY.

She’s a stalwart activist and some now call her the new Rachel Carson. She gave a wonderful presentation. At the end of her talk she made the point that fracking is simply bad and must be stopped and that, among other things, the state of New York should instead concentrate on the development of renewable energy.

I admire her and I agree that fracking is just bad and should be banned and I certainly have no problem with the development of renewable energy if it’s done in a way that makes sense. But I was bothered because I realized that I believe that a clear assessment of the possibilities, realities and limitations of renewable energy and the institutional structure that will give it life are in order.

Without this broader conversation, I’m not sure in the end the anti-fracking movement will be successful nor will the dissemination of renewable energy for that matter. But I could see that having that kind of a conversation also had the potential to undermine the movement because, let’s face it, if you’re against fracking and then say and “Oh, by the way — the only way to solve the problems we have with energy and this economy is to fundamentally remake the economy” — you simply lose credibility because that’s an economic conversation most people don’t embrace.

It is much easier to be optimistic about the prospects of renewable energy. Yet without a more critical assessment, the abiding belief is de facto that the technology of renewable energy can solve the problems of energy and this economy.

So that’s what was on my mind when Dr. Steingraber was ending her talk. I was thinking about the article that Charlie Hall had just forwarded me on the mining and processing of neodymium — a rare earth metal used in magnets which are used in wind turbines and the devastating pollution it was causing in China, and I was thinking about the battle that had been waging against an industrial wind farm in the county in Central New York where I live, and I was thinking about the relatively low EROIs on renewables, and I was thinking about the growth rates in the Chinese and Indian economies and their doubling times, and I was thinking about what the renewable energy transition would actually look like given our present economic structure. I had to concentrate on ‘not going to the place of fear’.

Despite the fact that technology always seems to end up in the same place in this system–never liberating and always controlling, imperialistic and alienating–there still seems to be an abiding belief in the capacity of technology to save us, and this belief is strong, even among very progressive people.

Renewable energy is a case in point. I believe this owes to the fact that technology is the last refuge before we have to face what we don’t want to face: And that is that this economic system can’t be reconciled with the biophysical limits of the planet. I think this may be the “unfathomable truth” (to borrow a phrase from Wes Jackson) that we want to deny. If our history tells us anything it tells us that we should ask more critical questions about the broader socio/economic context that infuses technology with its life.

We have a massive interconnected global economic system involving some 7 billion people. By all measures it is now in overshoot. In its present iteration of finance capital, it is a system that undermines the rule of law — on second thought the rules of this game have become the rule of law.

It is an economic system that now presents us with the following contradiction — I’ll put this in simple terms. The world economy grows too slowly to provide sufficient employment and there appears to be a secular decline it its rate of growth.

At the same time, it grows too quickly to remain within prudent biophysical limits. It isn’t clear to me how to resolve this contradiction. This problem, in all its complexity should occupy the minds of the best heterodox economists we have. It is that monumental. And yet few seriously think about it.

Our present time has been compared to the Great Depression but this is a wholly inaccurate comparison. The problems John Maynard Keynes had on his hands pale in comparison to what we face. The economic problems presented by the Great Depression could be resolved within the context of the existing economic order and it isn’t clear ours can.

It is no easy task to understand the complexity of our economic order. Economists haven’t helped matters. Yet it is imperative to strive for greater clarity. Let me share a brief outline of my effort to do so because it highlights some of what I believe to be important in this exercise to gain clarity. My exploration has led me in many directions but I’ll concentrate on three.*

1) I try to understand the economy as an articulate whole. It is impossible to do so without understanding the process and dynamic of capital accumulation. This system is defined by the dynamic and imperative of capital accumulation and not by economic efficiency (which itself is mostly an ideological term). Any analysis that doesn’t pay attention to this basic fundamental aspect of capitalism will not get under the economic arrangements we need to question.

2) I look critically at the models used to provide guidance for thinking about how to reconcile capitalism with the biophysical limits of the planet. For example, the framework that separates scale, distribution and allocation allows us to identify the problem of scale and put that problem front and center (this is good) but it does not direct us to look at the system as a whole (this is not so good).

By envisioning the economic system as a whole it is possible to understand that distribution is intimately connected to the process of accumulation and accumulation has everything to say about scale. As well it becomes very clear that the market economy is not about efficient allocation, it is about the expansion of value.

If we don’t look at the system as a whole we are led to offer remedies without understanding root causes and this leads us into very confusing institutional terrain. What does it mean to have development without growth? Is it capitalism or not? Is it even possible to have no-growth capitalism?

3) I concentrate on human economic evolution. I do this in two ways.

First, I think about the evolution of capitalism — how it went from mercantilism to petty commodity capital, to industrial capital, to monopoly capital and now to monopoly finance capital. We have a complex evolving system on our hands and I am of the belief that appreciating its dynamic of change enhances our understanding of how we got from there to here. This is especially important since many advocate a return to a kinder and smaller capitalism.

Second, I think more broadly about our evolutionary tendency to end up with this behemothic system that we can’t seem to disengage. For this exercise I start with hunter-gatherers — that long length of human history before we engaged in settled agriculture. I don’t think the 150,000 years we practiced this mode of production should be irrelevant to our understanding of how we might carve out a less imperialistic place on this planet.

At the very least understanding our long history before agriculture helps us to appreciate the profound revolution that occurred with agriculture. Our dynamic toward, growth, inequality and ecological disaster did not begin with capitalism and the Industrial Revolution, it began with agriculture.

The Agricultural Revolution changed the course of human evolution and put us on the path that landed us here with an economic organization that looks disturbingly similar to that of eusocial insects that end up as superorganisms. I think this is worth thinking about.

I would like to end here with a wonderful passage from Laurens van der Post’s book The Lost World of the Kalahari. I feel the weight of the responsibility to reconcile the “unfathomable truth” we are faced with and I’m sure you do too. I find solace and assurance in reflecting on a world of modest technology and a time before we became “a species out of context.” (Wes Jackson)

“The Bushman loved honey… And the taste of honey to the Bushman was like the light of the fire to his eye, and the warmth of its ruby flame in the black night of Africa. His bees’ nests, like his springs and waterholes were almost the only things in the land about which he felt possessive.

“He cared for the wild nests and collected his honey from them in such a way that the bees were not disturbed. He knew how to calm and secure a swarm on the wing, and his nests were passed down from father to son…Indeed, the taste of the honey on his tongue drove the Bushman to do many reckless things. He would scale great cliffs to get at honey in the place where only “the people who sit on their heels” would dare to go.

“I had one such place pointed out to me which I would not have attempted without rope and climbing boots. Yet the Bushman had climbed it regularly on bare hands and feet, driving pegs of wood for a grip into the fissures of the cliff face. At the top he had only a narrow ledge on which to stand while he made his special herbal smoke to drug the bees before he dared reach out for the honey in the hole in the damp overhanging rocks…

“Whenever some disaster overwhelmed his bees the Bushman would set out to look for a new swarm. He would be up early in the morning, hoping to find the black water-carrier bees among the dew, and with his eyes would follow them and their silver burden in the slanted light back to their base. Or he would stand still in some fragrant spot at sunset, comforted by the tall shadow beside him, and wait for an illumination of wings to draw a bee-line home.”

Author’s Notes
I have worked closely with two people. My intellectual connection to each of them is profound, so much so that is it difficult to separate their ideas from my own. It is appropriate to mention them.

Kent Klitgaard and I have collaborated to explore capitalism and the present contradiction we see between biophysical limits and the need for growth to create employment opportunities. We have also worked closely to critique existing models used to provide a framework for thinking about how to reconcile the economy with biophysical limits.

John Gowdy and I have collaborated to explore the complexity of human economic evolution. We are among very few economists that think it worthwhile to understand our pre-agricultural history and to appreciate the significance of the agriculture revolution in human economic evolution. We are now engaged in research that uses evolutionary biology to explore whether human social/economic evolution has certain commonalities with the evolution of eusocial insects.

Lisi Krall is a professor of economics at the State University of New York, Cortland. Her areas of specialization are labor economics, the political economy of women, environmental and resource economics, and ecological economics.