The need for a new Matrix…

9 04 2019

How many years have I been saying jobs are unsustainable? Here’s Tim Watkins explaining it better than me…

The (other) economic madness of the green new deal

Remind me again why you go to work in the morning?  Is it because you are so committed to the mission of your corporate employer that you would willingly work for nothing if they asked you to?  Does your job provide you with so high a degree of life-meaning and personal satisfaction that you would gladly do it in exchange for the minimum income required to feed and clothe yourself? 

No, I thought not.

For almost all of us, work is a means of obtaining money; and money is merely the means by which we are able to consume the goods and services we desire.

Now let me ask you a multiple choice question: why do you think that the oceans are currently so full of plastic that it has polluted the entire marine food chain?  Is it (a) because evil petrochemical companies simply dump plastic into the sea; or is it (b) because it is the inevitable product of mass consumption by 7.5 billion humans (especially those of us in developed states)?

Plastic pollution, along with all of the other fallouts from the globalised industrial economy, is the end consequence of our collective consumption of the goods and services that we desire.

The various versions of green new dealism that have hit the headlines recently have no alternative but to avoid both of these questions.  Instead, they reduce a human impact crisis – aka “the Anthropocene” or “the overshoot” crisis – to the single dimension of greenhouse gas emissions.  They then reduce the greenhouse gas emission crisis to a carbon dioxide crisis; which is further reduced to only the carbon dioxide emitted in the course of electricity generation.

The proposed solution – the mass deployment of non-renewable renewable energy-harvesting technologies like wind turbines and solar panels (and, tacitly, the grid infrastructure to support them) – has the primary aim of pulling the global economy out of the post-2008 doldrums by creating millions of new jobs.  Exactly how many new jobs has yet to be determined, although at least some proponents argue for a mobilisation on a par with the Second World War or landing humans on the Moon.  As Brian Murray at Forbes notes:

“Commentators have frequently compared the GND’s potential deployment to two examples from twentieth-century U.S. history that involved dramatic, rapid shifts: 1) the decision to send astronauts to the moon and 2) World War II.”

“The speed of progress toward the moonshot was staggering—and the effort was highly targeted, focusing on the specific technologies necessary to transport a single vehicle to and from the lunar landscape 240,000 miles away while keeping the occupants alive. At the height of the moon effort in 1966, relevant spending amounted to 0.7% of GDP.  In today’s dollars, that would be $150 billion.”

“By contrast, World War II consumed 35.8% of GDP at its peak (1945), an amount equal to $7.4 trillion today. The massive undertaking involved virtually every aspect of the economy. Over 17 percent of the work force was deployed in the armed forces and nearly five million women entered the work force (a 40 percent increase), many in place of men deployed overseas, to bolster domestic production to support war efforts.”

Murray argues that any attempt to implement the green new deal is likely to be closer to the Moon shot than the war.  Nevertheless, we are still talking about billions of dollars and millions of new construction jobs.  For Murray, the key economic problem here is that wind turbines and solar panels require very little labour to operate and maintain.  As a result, any jobs created would necessarily be temporary.  This, however is a secondary concern and is easily counter-critiqued by the proponents of green new dealism – the additional demand created in the wider economy by the new deal workers spending their wages will create a wider economic boom that will generate new jobs to employ these workers as the construction phase comes to an end.

Let us now revisit those awkward questions I posed at the beginning of this post.  What proportion of several millions of green new deal workers will be offering their labour for free?  What proportion will work in exchange for meals, clothing and a bed for the night?  Most will expect to be paid at least the minimum wage.  And if the promises of the green new dealers are to be realised, a large proportion of the jobs created will need to be high-skilled and high-paid.

Most workers do not simply save their wages every month.  Indeed, one of economist John Maynard Keynes’ observations which informed the original new dealism in the 1930s was that ordinary workers had a far greater propensity to spend than wealthier people.  That is, if someone who is currently only able to eat because of food stamps or a package from a foodbank is given a job at the current average wage – $56,500 (US) £28,600 (UK) – they are likely to spend almost all of it; whereas if the same average wage were given to the CEO of an international bank, they would be far more likely to save it.  So, from a demand point of view, creating lots of relatively well-paid jobs for people who are currently unemployed, underemployed or eking out a living on the minimum wage makes absolute economic sense.

Environmentally, not so much.  The technologies that the new jobs are created to deploy are intended to be greener than the technologies they replace – although they still necessarily involve fossil fuels in their manufacture, transportation, deployment and maintenance.  Nor – at least for now – are these technologies recyclable; indeed, solar panels contain toxic chemicals that prevent either recycling or landfill disposal.  And, of course, in the absence of seasonal grid-scale storage technologies nuclear baseload and gas stand-by capacity will continue to be needed to smooth out intermittency.  These, though, are again secondary problems.

The main issue that any green new deal has to overcome if it is to have any credibility is how we go about preventing millions of new workers from actually spending their additional income.  For all of its many flaws, one of the environmental benefits of quantitative easing since 2008 is that very little of the newly printed currency has seeped out into the real economy.  Most has been used for corporate share buy-backs or investment in various derivatives that do little to increase demand for goods and services across the real economy.  Indeed, this is one of the central criticisms of the current policies levelled by green new dealers.  Any green new deal, in contrast would be increasing global consumption of goods and services by billions – if not trillions – of dollars worldwide.  But mass consumption is precisely the cause of our environmental crisis in the first place.  Millions of new wage labourers are no less likely to purchase such things as single-use plastic containers, corn-fed beef, petrol cars and international travel than any of the current workforce.  The result is that as fast as the electricity generating industry is curbing carbon dioxide emissions, the manufacturing, transportation and industrialised agriculture sectors will be ramping up their emissions – and using up the planet’s remaining resources – to satisfy the new demand.

Far from being a means of sustaining a global economy built upon fossil fuels, a green new deal that creates new jobs and stimulates economic growth amounts to little more than a final blow-out binge before our once-and-done global economy comes crashing down around our ears.  The only means – assuming any is possible at this late stage – of mitigating the environmental catastrophe that is gathering pace around us is to engage in a managed process of de-growth (which may include some deployment of non-renewable renewable energy-harvesting technologies) to create far smaller, localised and less consumptive economies than we have had for many decades.  By necessity, the process would also require a shrinking of the human population to a level in accordance both with what is sustainable and with the standard of living we consider acceptable – i.e., the more consumptive our lifestyles, the lower our life expectancy/birth rate will have to be.

This is not, of course, anything that is going to win votes at an election.  But any detailed examination of the environmental impact of millions of new workers spending their new wages on even more of the same patterns of consumption that have already brought our planet to the edge of extinction should – in any sane world – be no less acceptable.  It is a tribute to our propensity for denial that so many people regard green new dealism as an environmental good rather than the catastrophe it is likely to become.





Big Picture article

14 12 2018

It’s so nice reading an article that joins the dots….  I get so sick of people concentrating on one issue or another, ignoring everything else troubling civilisation.  From Consciousness of Sheep, who else….?

Britain has – apparently – been thrown into crisis overnight.  Meanwhile across the channel, French president Macron is desperately trying to extinguish the flames of another weekend of mass protests that have now spread to Belgium and Holland.  In Eastern Europe the hard-right are gaining support; even undermining the previously untouchable Angela Merkel’s power base in the former East Germany.  Across the Atlantic meanwhile, the lines between deranged Democrats and MAGA nationalists are being drawn in readiness for America’s second civil war.  We are surely living through the greatest crisis in modern history.

Well, yes indeed we are.  But everything set out in the first paragraph is no more than the froth on the beer.  These political spasms are merely the outward manifestation of a human catastrophe that has been decades in the making.

Two far greater symptoms of our predicament have gained at least some public traction this year.  First was an all too visible plastic pollution crisis that is increasingly difficult to ignore now that China has ceased acting as the West’s rubbish dump.  Second is the somewhat less visible insect apocalypse that has seen the near extinction of a raft of pollinating insect species; without which we humans are doomed to starvation.  Interestingly, while these two symptoms are only tenuously related to climate change, they have tended to be included under that shorthand heading.  Plastic certainly damages the environment, but its build up owes far more to the ongoing power of the petrochemicals industry and the myth of recyclingthan to changes in climate.  The same goes for the insects.  While there may have been some climactic impact on migrations and reproduction, the main cause is the vast quantities of chemical insecticides required by an industrialised agriculture tasked with feeding 7.5 billion humans on a planet that could barely feed one seventh of that without fossil fuels and agrochemicals.

In the affected areas, local populations have been stunned by a series of “red tide” events that result in the mass deaths of fish and other marine creatures.  Climate change is indirectly involved in these events because of the increased rainfall from warmer storms.  But once again it is our industrial agriculture that is the primary cause – the giant oxygen-free zones beneath algae and phytoplankton blooms that form because of artificial fertilisers washed off the land when it rains.  When marine creatures stray into these oxygen-free zones (which are pinkish-red in colour due to concentrated hydrogen sulphide) they suffocate before they can swim to safety.

Off most people’s radar is the ongoing sixth mass extinction, as we lose thousands of species every year.  Again, while some of this is directly due to the changing climate, the larger part is due to human activities like agriculture, deforestation and strip mining simply chewing up natural habitats to make way for the creation of the various resources – including food – required to sustain a human population that is projected to reach 10 billion by mid-century.

The use of the term “climate change” to describe these catastrophes is deceptive.  If we were looking at our predicament in totality, we would include these crises alongside climate change as a series of (often interacting) sub-sets of a much greater problem… let’s call it the “human impact crisis.”

Crucially, by focussing solely on a changing climate, we can exercise a form of psychological denial in which human civilisation is able to continue chasing infinite growth on a finite planet while yet-to-be-invented technologies are deployed to magically heal the damage that our over-consumptive lifestyles are having on the human habitat.

The focus on climate change also permits us to avoid any examination of those human activities that increasingly stand in the way of the bright green technological future we keep promising ourselves.  Shortages in a range of key resources, including several rare earths, cobalt, lithium, chromium, zinc, gold and silver are very likely to materialise in the next decade if Western countries get anywhere close to their targets for switching to renewable electricity and electric cars (even though even these are just a fraction of what would be required to decarbonise the global economy).

Energy is an even bigger problem.  For the first time since the dark ages, humanity is switching from high-density energy sources (nuclear, coal, gas and oil) to ultra-low density energy sources (tide, wind, wave and solar).  We are – allegedly – choosing to do this.  However, because we have depleted fossil fuels on a low-hanging fruit basis, it is costing us more in both energy and money to maintain the energy needed to power the global economy.  As more of our energy has to be channelled into energy production (e.g. the hugely expensive Canadian bitumen sands and the US fracking industry) ever less energy is available to power the wider economy. This has forced us into a crisis I refer to as “Schrodinger’s renewables,” in which the technologies being deployed supposedly to wean us off fossil fuels end up merely being added in order to maintain sufficient economic growth to prevent the entire civilisation collapsing.

This, of course, brings us back to the increasingly heated debates in the US Congress, the UK Parliament and the streets of 100 French towns and cities.  Economic growth is the fantasy that almost everyone is buying into as a solution to our predicament.  Sure, some call it “green growth,” but it isn’t.  In reality it is, and always was central bank growth.  Why?  Because every unit of currency in circulation in the West was created with interest attached.  In such a system, we either grow the economy or we inflate the value currency back to something more in line with the real economy.  The former is impossible and the latter is devastating… which is why central bankers around the world have been quietly panicking for the best part of a decade.

To be clear, since 1980 the western economic system has inflated a series of asset bubbles, each of which has subsumed and outgrown its predecessor.  In the 1980s companies bailed out failing companies to save themselves.  In the 1990s stock markets bailed out companies to save stock markets.  In the 2000s banks bailed out stock markets and then states and central banks bailed out banks.  Next time around it will be states and currencies that need bailing out.  And in the absence of space aliens, it is not clear who is going to be riding to the rescue.  What that means, dear reader, is that everything you depend upon (but didn’t know it) for life support – inter-bank lending systems, letters of credit and freight insurance, international trade arrangements, employment, state pensions, etc.  – is going to go away (at least until some kind of debt-write-off (either directly or via “helicopter money”) and a new currency system can be put into place.

The other legacy from this period of debt-based asset inflation is a series of grossly unequal societies; divided, ultimately, between those who get to spend the (uninflated) debt-based currency first and those (the 99 percent) who only get the currency after its value has been inflated away – primarily those who depend upon a wage/salary from employment rather than an income from shares and other investments.  Most people accept some inequality.  However a lack of economic growth (outside banking and tech) has created deep hostility to those political parties that cling to the pre-2008 neoliberal orthodoxy.  The result has been a growth in populist movements claiming to know how to restore the economy to rates of growth last seen in the 1990s.  Political economist Mark Blyth summed up the difference between the left and right wing variants of populism thus:

  • The right says neoliberalism ruined the economy and immigrants took your jobs
  • The left says neoliberalism ruined the economy and capitalists took your jobs.

Needless to say – as the boy Macron is learning to his cost – now is not a happy time to be a neoliberal politician.  The broader problem, however, is that the proposed solutions from the populists are no more likely to result in another round of economic growth simply because western civilisation is already well past the point of overshoot.  China – the place where most of the jobs went and where most of the stuff we consume is made – already consumes half of the world’s coal, copper, steel, nickel and aluminium.  It also consumes nearly two-thirds of the world’s concrete.  To grow at just 3.5 percent would require that China consume all of the world’s reserves of those resources by 2038 – at which point it would also be consuming a quarter of the world’s oil and uranium and half of the world’s grain harvest.  The impossibility of this is what people mean when they use the word “unsustainable” to describe our situation.

Nevertheless, even supposedly green parties cling to the promotion of economic growth as an electoral strategy.  Rather than admit the impossibility of further growth, however, they reach instead for some mythical “green growth” that will supposedly follow the industrial scale deployment of non-renewable renewable energy harvesting technologies like wind turbines and solar panels that require fossil fuels in their manufacture , and for which the planet lacks sufficient material reserves.  Promising de-growth is, however, politically toxic in the current climate.

Most green growth advocates imagine a switch from extraction and manufacturing to (largely digital) services that will somehow decouple resource and energy growth from GDP.  That is, we can all continue to prosper even as our use of planetary resources falls back to something like the amounts consumed in the 1750s.  Writing in Resilience, Jason Hickel gives the lie to this:

“This sounds reasonable on the face of it. But services have grown dramatically in recent decades, as a proportion of world GDP — and yet global material use has not only continued to rise, but has accelerated, outstripping the rate of GDP growth. In other words, there has been no dematerialization of economic activity, despite a shift to services.

“The same is true of high-income nations as a group — and this despite the increasing contribution that services make to GDP growth in these economies. Indeed, while high-income nations have the highest share of services in terms of contribution to GDP, they also have the highest rates of resource consumption per capita. By far.

“Why is this? Partly because services require resource-intensive inputs (cinemas and gyms are hardly made out of air). And partly also because the income acquired from the service sector is used to purchase resource-intensive consumer goods (you might get your income from working in a cinema, but you use it to buy TVs and cars and beef).”

And, of course, without the income derived from making all of that stuff for service providers to consume, nobody can afford to buy the services and the economy will collapse.  Not that anyone has noticed this for now, as we are descend into the politics of blame in which widening inequality and poverty at the bottom is blamed on one or other of a culture’s preferred out groups – Tories, Democrats, socialists, libertarians, migrants, the banks, the European Union, Israel, Angela Merkel, the Rothschild family, Donald Trump… choose your favourite pantomime villain; but don’t expect to be going anywhere but down.

Politics matter, of course.  In a future of economic contraction it is far better to be governed consensually by people who understand the predicament and who plan a route to deindustrialisation that has as few casualties as possible on the way down… one reason not to keep voting for parties that dole out corporate welfare at the top while driving those at the bottom to destitution.  That road tends to end with guillotines and firing squads.

For all of its passion and drama, however, the role of politics in our current predicament is somewhat akin to the choice of footwear when setting out to climb a mountain.  Ideally you want to choose a pair of stout climbing boots; but nobody is offering those.  For now the choice is between high heels and flip-flops to climb the highest mountain we have ever faced.  If we are lucky, the political equivalent a half decent pair of training shoes might turn up, but while the world is focussed on economic growth; that is the best we can hope for… and we still have to climb the mountain whatever shoes we wear.