Adapting to energy decline and economic contraction.
|Kincardine Yacht Club, Returning from Wednesday Night Race|
In my last post I talked about some ways of expressing the nuances of political positions. I started out with the basic left-right spectrum and then moved on to the "Political Compass" , which gives us a two dimensional map of our position, using the left—right axis and the libertarian—authoritarian axis. But without too much sweat I was able to come up with four more axes that, along with those two, define what I think are the most important aspects of a political position.
There are probably more, but in this post I'd like to focus on how a government's position on each of those six axes might determine how successful it is likely to be in adapting to the challenges that face us during the next few decades. Challenges that it seems very likely will lead to the collapse of industrial civilization.
Acknowledge Limits <—> Deny Limits
We are already nicely into a crisis caused by the end of economic growth and the start of economic contraction. If you accept the idea that there are limits to growth, this is not surprising and can be attributed to a reduced amount of surplus energy due to the dwindling supply of high quality, easy to access (high EROEI) fossil fuels. The obvious solution is to prepare for and adapt to a significant decline in energy usage. Yes, we will adopt alternative sources of energy, but they are not capable of supplying us with the copious amounts of surplus energy that we became accustomed to in the twentieth century
Accepting the natural limits built into our finite planet also means accepting that we are using up the sinks that have been absorbing the pollution our civilization creates. In particular, that the accumulation of carbon dioxide in the atmosphere is causing the climate to change, and in the process making most of our other problems that much worse. Solving this problem will necessitate abandoning the use of fossil fuels, and with that a significant decline in energy usage.
If you are in denial about the limits to growth, then the current situation is probably quite puzzling and you will be casting about, looking for something (or someone) to blame things on and a way to get "business as usual" back on track. That's not going to work, but unfortunately it is likely to be the standard mode of operation for most governments in the immediate future.
In the long run, one would hope that intimate experience with limits will lead most of us to acknowledge them. But I suspect that, even then, there will still be a few enclaves hanging on where people can delude themselves that they are living the dream of progress, blissfully unfettered by any sort of limit.
Socially Inclusive <—> Socially Exclusive
At one end of this axis we have societies who feel a responsibility for the welfare of all their citizens, and to some extent all mankind and all of the other living things on this planet. They do what they can to provide for the poor as well as the rich, including an effort to limit inequality. It also includes a welcoming attitude to immigrants and refugees, and making an effort to be kind to the environment.
When the economy is contracting, the attempt is made to spread the pain around more or less evenly. There is no doubt in my mind that societies like this will do a much better job of coping with the declining circumstances in the years to come than those at the other end of this scale. There is much room for economic contraction in the lifestyles common in the developed nations, room for a lot of decline before we get to the point of not having enough to get by on.
At the other end of this axis we have societies where the rich and powerful make every effort to hang onto their wealth and power no matter what happens, with little or no concern for the poor or even the lower middle class, the bottom 80% economically speaking. As the economy continues to contract and even the rich begin to feel the squeeze, governments in these societies will become more forthright about their attitude toward the lower classes.
Every attempt will be made to replace labour with automation. Policies of "exterminism" will be applied to the poor, jobless and homeless. This term comes from Peter Frase's book Four Futures, and refers to simply getting rid of (exterminating) the "impoverished, economical superfluous rabble". I think it is pretty reasonable to expect a violent backlash from the lower classes in response to such policies. No doubt an attempt will be made to direct the dissatisfaction of the lower classes away from the upper classes using scapegoating and xenophobia, focused on one or more specific groups who are visibly different. In most of the developed world today, Muslims are shaping up to be one of the main targets.
It seems to me that U.S. is positioned at the exclusive end of this scale, with northern European social democracies at the inclusive end, and countries like Canada, Britain, Australia and New Zealand somewhere in between.
Fiscally Liberal <—> Fiscally Conservative
One hears fiscal conservatives complaining about "tax and spend liberals", implying that increasing taxes will have a negative effect on the economy. Fiscal liberals respond that the economy always performs worse under "borrow and spend conservatives". It seems that the two ends of this political spectrum have the opposite effects from what you might think. The policies usually followed by fiscal conservatives lead to deficits, while fiscal liberals manage to reduce or eliminate deficits.
The things is that when the economy was growing, deficit financing worked well. Government spending increased growth and helped pull the economy out of occasional recessions. And money borrowed one year could be repaid the next year using a smaller slice of a bigger pie. Government spending on infrastructure and social programs benefited everyone, so it was hard to argue with borrowing money to do it. This mode of operation was adopted by many western democracies after WW II, and it worked very well until 70s when economic growth began to falter. It stopped working altogether in the mid 90s when real economic growth came to a halt and was replaced by growing debt and financial bubbles.
Balancing a budget has two aspects: spending and revenue, and progressive taxation is the key to making revenue match spending. The idea that taxation has a negative effect on economic growth is self serving for businesses and the rich, but it doesn't stand up to a close examination.
There are countries at the liberal end of this spectrum where taxes are progressive and quite high. Things seem to be working quite well there—so well that even most of the rich folks who are paying those very high taxes are content with the system.
And of course there are countries like Canada who are somewhere in the middle of the spectrum, with moderately high taxes and government spending. Our budgets have even been balanced occasionally, though under Stephen Harper's Conservatives, taxes were lowered and deficits went back up. We hope our current government, under young Mr. Trudeau, will have better luck.
Sitting firmly at the conservative end of the spectrum we have the U.S. where taxes are low (and headed lower) and it is political suicide to discuss increasing them. Even poor working people seem to be against the very idea of taxation. I've asked Americans what's up with this and the best answer I've gotten, the one that comes closest to making sense, is that the American government is so corrupt that its citizens just aren't willing to trust it with their money. That may be so, but the American deficit keeps growing, despite numerous efforts to cut spending.
What can we expect to happen as the economy continues to contract? It seems to me that the U.S. deficit will grow until borrowing and printing money leads to a financial disaster that will greatly hasten the collapse of the country, hurting even those in the upper classes. More fiscally liberal countries will suffer less, managing a more graceful downward spiral.
At some point in this process, no matter how well managed, tax revenues will no longer support federal organizations like the UN, Europe, Canada or the US and decentralization will become a well established trend. It can be done the easy way, through negotiation and civilized agreements, or the hard way through secession and armed conflict. No doubt there will be some of both.
Communist <—> Capitalist
It is important to remember that this axis is about economics and not to get it confused with the types of government which are often associated communism or capitalism.
The totalitarian "communist" states of the twentieth century were actually practicing capitalism at the state level. And not very successfully. Most of those countries have since switched over to some more overt form of capitalism. At the same time, democracy has functioned best when restraining and regulating capitalism's excesses.
At the left end of this axis we have Communism. In the sense I am using here, it consists of the people in a group sharing resources and working together for their mutual benefit. The words "sharing", "work" and "benefit" give us the clue that we are talking about economics. Communism works well in small groups (up to 150 or 200 people) and was how we lived for all of our prehistory, more than two million years. And quite successfully, I might add.
At the right end of the axis we have Capitalism. It consists of a small minority of the people (the capitalists) in a group owning the resources and the rest of the people working for them to produce benefits that are enjoyed primarily by the capitalists.
The relationship between the capitalists and their workers may be outright slavery, serfdom or wage slavery. Outright slaves, who by no means have it easy, are at least provided with a minimum of food, clothing and shelter. Serfs in feudal cultures, don't have it easy either, but their lords do have certain obligations to them. Wage slaves, on the other hand, are provided only with a wage. Capitalist have no other responsibilities to them—in particular, when business is slow, capitalists are not responsible to provide jobs for all the workers who need them in order to live. And in modern capitalist societies there really isn't any other way to make a living.
This became particularly significant when we learned to convert heat energy into mechanical work and replace the muscle power of the workers with machinery. Initially, there was concern that many workers would be replaced by machinery and end up jobless. But workers were still needed to build, operate and maintain the machinery and for the last couple of centuries the economy grew fast enough to provide jobs for a growing work force and significantly increased their standard of living.
This is often pointed to as one of the great successes of capitalism, but it should actually be attributed to the increase in productivity made possible by the use of cheap, abundant fossil fuels. Indeed, capitalists did everything they could to improve their profits by reducing the amount of labour needed and the wages paid for that labour. It was only through unions and the support of left leaning democratic governments that labour made the gains it did.
Unfortunately, those days are over and with the slowing of economic growth, capitalists have been forced to try a number of strategies to maintain the viability of their businesses. And there has been a move to the right in many democratic governments which has helped with this.
Globalization, as long as shipping stays cheap, provides cheaper labour and a business environment with fewer safety and environmental regulations. Automation further reduces the number of workers required. And financialization offers a way of making profit by trading "virtual" commodities related to money, instead of real products. All this has been successful to some extent, but has worsened unemployment in the developed countries, and increased economic inequality between the working classes and the rich and powerful. This is a serious problem in consumer economies where the majority of consumers are also workers and need income to function adequately as consumers, in order to support the upper classes.
This and most of the other problems caused by capitalism occur when it is allowed to pursue short term profit (or shareholder value) to the exclusion of all else. As I said earlier, capitalism has worked best when governments have acted to restrain its excesses. Democracies have been particularly effective because with one vote per person the workers have more political power. But during the last few decades there has been a move to the right in most Western democracies and political parties, and power has slipped away from the workers and back to the capitalists.
It seems likely that this trend will continue, in an attempt to compensate for economic contraction. But it will not succeed in rescuing capitalism, which will collapse more quickly where it has the fewest restraints. Those of us with leftist leanings have always assumed that it would take action to end capitalism, but it's starting to appears that capitalism will collapse on its own, without there being anything ready to replace it.
Post collapse, with very much smaller and poorer states, and with capitalism already out of the way, and having acquired a bad reputation in the process, communities may be free to return to a more communistic approach.
Social Progressive <—> Social Conservative
The thing about this axis is that it changes over time as things that were progressive are gradually accepted and become the province of conservatives, while liberals move on to new horizons.
During the latter half of the twentieth century, in the developed world at least, social progressives won victories in gaining equal rights and freedoms for people of different races (particularly blacks in the U.S.) and different religions (particularly Jews, and at least in principle, Muslims), for women and for LGBT people. No doubt there are other similar battles to be won, but given the backlash we are seeing against the gains already made, it may not be time to move on just yet.
There are good reasons to think that society as a whole benefits when equal rights and freedoms are extended to those who have previously been excluded. That exclusion has resulted over the years in the failure to develop a great deal of human potential. Given the challenges we face currently and in the future, we simply cannot afford to do this. Excluding people for traits over which they have no control, which they did not choose, is surely unjust and it should not be necessary to explain why injustice is a bad thing.
Many people feel that as times get harder, socially conservative positions are more adaptive. I think just the opposite, but not surprisingly, that opinion is common among socially conservative kollapsniks, who see collapse as an opportunity to roll back social changes which they are not comfortable with, such as feminism, racial equality, religious freedom, and LGBT rights.
At the same time, I notice a trend for socially progressive people to hold a variety of anti-science positions. It is deeply shocking and abhorrent to me that they have bought into the wrong side of issues that are being pushed by people and companies for profit. The anti-vaccine movement lead by alternative medicine practitioners and the anti-genetic-engineering movement led by organic food producers and distributors are good examples of this, neither of which is supported in the least by the scientific consensus.
Libertarian <—> Authoritarian
It is important to be clear that this axis is about personal freedom, not economics. The libertarian movement and Libertarian political parties seem to be mainly about reducing taxes and removing restrictions on the activities of business in order to get rich, with no concern for other people or the environment. I find that sort of activity abhorrent, and it is not the sense in which I mean libertarian at all. Anarchism might be a better term (anarchists being poor libertarians), but this term also has negative connotations for many people.
At any rate, we're talking about politics in Western democracies here, so what we are really looking at is variations in an area around the middle of this axis.
In order to make large countries like the one I live in work, the citizens must be willing to accept a social contract including the rule of law, taxation, regulation of business and the government's monopoly on violence. One receives all kinds of benefits in return, and in a representative democracy you even get to help choose the people who make up your government. This is fine unless the range of parties to choose from is so narrow that it really isn't a choice at all.
I suspect that our immediate future will no doubt see a move toward increasing authoritarianism in states that are nominally democracies. We are already seeing this in the U.S. Being a dictator may seem like a fine thing, until you are confronted with actually solving the sort of thorny problems that face many nations today. It's not as easy as it looks, and more resources are required to enforce this kind of rule than one where the citizens co-operate willingly.
I think the rise of the surveillance state is also something to be worried about. Fear is being used to manipulate public opinion so those in control can get more control. It's clearly a case of exchanging freedom for security, which always turns out to be a poor deal in the long run. The expense of watching over its citizens is something governments will be less able to afford as the economy continues to contract, but I suspect they will be eager to shoulder that expense and expand upon it.
In the long run, as a lack of surplus energy makes large states impractical, we may see a move in the other direction, to less authoritarianism and less surveillance.
And in conclusion...
I guess it's not too hard to tell, from what I've said so far, that I would pick a political party that acknowledges limits, and is inclusive, fiscally liberal, economically leftist, socially liberal but pro-science, and more libertarian than authoritarian. This combination of political positions would, in my opinion, give us the best chance of navigating the collapse of industrial civilization as gracefully as possible.
Unfortunately, due to the realities of modern politics there is no such party and most of the political positions I favour are unlikely to win any elections in the near future. The details of those realities and their consequences will be the subject of my next post.