In trying to understand the state of the world today, I have come across three major theories: Peak Oil, Income Inequality and the Separatist Standard Narrative. All three of these stories assert that the world is in crisis and seem to be drawing on the same fundamental observations. They also seem to call for the same actions.
The Standard Narrative is the broadest and most encompassing explanation of the ailments of today’s world. Stories lie at the foundation of everything we believe. Facts, even, are only true within the context of a broader story. A story is kind of like an axiom for a mathematician. It isn’t something you question based on its truth value, you simply accept it as true based on its usefulness in interpreting the things you want to understand, and on your own personal feeling of comfort with it. The Standard Narrative is the guiding principle behind scientific discovery and economic exploitation and it goes something like this: Humans are the result of billions of years of evolution wherein soulless protein molecules that were able to replicate themselves grew in number. As molecules replicated, they grew more complicated and some replicated faster than others. Eventually cognition developed as a result of this evolutionary process and molecules which had joined together to become cells and organisms began to assert their will over their environment in an effort to reproduce even faster. Humans are the penultimate expression of this single purposed competition to reproduce and we are not only able to control our environment with extreme precision, but we are also able to develop schemes and meta-schemes which guarantee the survival of our offspring. To that end we constructed “society” and “civilization” so that we could reduce the exposure of ourselves and our progeny to the forces of nature while simultaneously employing the skills of others to our advantage. Love, human affection and morality are all psychological byproducts of our incredible and unparalleled cognitive capacity and are not so much perceptions of a higher truth as they are built in safety measures to ensure that we operate within society to both our own selfish best interest and the interest of our offspring. They make sure that we appear cooperative enough in order to ensure future contributions by other members of society. Our evolution from protein molecule to an organism capable of dividing atoms into their tiniest parts is proof of our superiority as a species. As a corollary we are not obligated to consider our impact on other members of our species, or our planet, except inasmuch as our impact might prevent the success of future generations of our own offspring. Indeed excessive concern for individuals other than ourselves would be detrimental to our own survival and is not recommended.
Modern social, business and political policies reflect a belief in the validity of the standard narrative. Capitalism is based on the idea of competition wherein weaker companies, those who cannot produce at low enough cost or whose profit margins are smaller than other companies, go out of business leaving stronger, fitter, more efficient companies behind. New companies join the market as a result of entrepreneurship, which is an analogue of the spontaneous mutations in evolution. Within the standard narrative, there is no call for government action to meddle in markets because at best it would be prolonging the operation of companies that overuse resources and provide a lower production to input ratio. In otherwords it would mean we are getting less stuff out of more resources. Unemployment is considered a necessary process of purging obsolete skills from the job market. The amassing of wealth and market power into smaller and smaller subsets of the population is also a necessary evil as it serves to encourage the constant struggle towards ever greater efficiency. In the standard narrative of markets, success and failure are all expressions of our individual fitness; similarly, pain and pleasure are are the personal indications of our survival or our failure to adapt but are in and of themselves not meaningful.
To the extent that people believe the standard narrative, they are also willing to accept the rules and policies that structure our society that are based on that narrative. However as markets fail in greater numbers to provide the prizes they promised in exchange for hard work, long hours and proper training, people are beginning to find difficulty in accepting the validity of that system. When college graduates routinely find their best prospects for work are as restaurant staff, when families see that their children, despite their best efforts at providing and preparing them for adulthood, are simply incapable of supporting themselves, and when the better and more prosperous world that the evolution of our markets is supposed to deliver us repeatedly fails to arrive, people begin to doubt. What the standard narrative fails to recognize is that people, in addition to their physical well being, also need a sense of identity and a sense of community. We are social creatures and are actually not equipped to make decisions well in the relative vaccuum of the atomic family unit. Many of our decision making processes are adaptive to social decision making in an environment that changes much more slowly than the one we live in today. What the standard narrative fails to recognize is that we are living beings wholly intertwined with our surroundings and that if you place all your energy and focus on one dimension of our existence, such as material consumption, you neglect the other critically important avenues of well being, without which we cannot thrive.
An alternative story to the Standard Narrative is one of interconnectedness wherein human well being is bolstered by the health of their environment both physical and social. In this alternative story, no decision on the market can be made without accounting for its impact on an array of factors that are not necessarily aggregatable into a single dimension. That means that money alone is an insufficient measure of value because it will not be able to account for a sense of belonging, of love, security or connectedness.
Peak oil and Income inequality are two stories about the state of the world that talk about our system directly. Peak oil says that the resources in our planet have peaked and that from here moving forward they will increase in cost and difficult to access. This is a result of the balance between the renewability of those resources, the technological capacity to extract and consume those resources, and the population of humans who depend on those resources. Over the last several hundred years we have been growing our population and our consumption of resources at an exponential rate. However, the resources themselves renew at slower than exponential. The result is that we will, or perhaps already have, inevitably hit the boundary of our ability to grow and the pace will stop very suddenly and probably painfully. Economic institutions like the financial system which depend on a steady growth rate of the economy will fail when this boundary is hit. The money supply, for example will faulter significantly as the growth of the money supply depends on the repayment of debt with interest. The reason people are willing to accept a loan with an interest payment is because they believe that they will be able to produce enough wealth in the future to pay back both. In other words, they believe they will be able to produce more in the future. This means that they believe they will have access to either more technology or more resources, or maybe just more money. When oil and other critical resources run out, which for our purposes simply means become available at a slower rate than the expansion of the economy, people will not receive the raises they anticipated when accepting the loans because companies will not be able to increase production enough to pay the wages. As a result, there will be a default on loans and the money supply will either contract naturally, or governments will step in to expand it artificially.
The difficulties that peaking natural resources bring to the world are more than just the need to rebalance our budgets to pay for increasing gas prices. First of all, we must stop and think about exactly what part of our budget does *not* depend on oil. Anything that is imported, anything made of plastic or packaged in plastic, anything that relies on synthetic fertilizers or pesticides, many medications, and yes even our electricity all depend on oil. So in order to be prepared for the exponential rise in the price of oil that we will inevitably face (as the distance between our needs and the earth’s ability to produce grows exponentially smaller), we will have to make our consumption of all of these goods exponentially smaller. If this is not a disaster, I’m not sure what is. But moreover, we will have to become conscious of how our money system, the lubrication that makes the market go, depends on growing access to energy. If the actual volume of production in the economy suddenly screaches to a less-than-exponential-growth halt, the money supply will have to slow down, too. With so much of our economy dependent on the idea that more money will always be available in the future, we will have to rethink the way we do business entirely.
The changes that will come with peak oil are huge and unavoidable. They will be changes to the most fundamental aspects of our lives and our thinking because oil is at the basis of everything we have grown accustomed to today. On an indiidual level, each person will be called upon to shift their dependency off of oil and onto renewable resources. This is not a new idea by any means, but the severity of the need is much larger than any electric car commercial would have us believe. Renewability will also mean locality as transportation of goods and services itself depends on oil. We will also need to reduce our reliance on money as a means of making transactions. This is huge. Most of us today don’t know what it means to do business without money, but actually the alternative is not some technological alternative (like Bitcoin), but in fact an old fashioned method: we will have to rely on our communities and personal relationships. Without money to keep a record of who has put in what effort and who is entitled to what resources we will have to rely on our own memories. The colloquial term for this is favors. Money transactions will have to be supplemented with gifts and favors, both of which require personal relationships. Given how globalized our world has become in the last fifty years, it is not feasible to imagine that all of us will, within our lifetimes, be able to transition out of the cities and onto self sustaining communal plots. Some things like medical technology cannot be replaced with personal favors. However reducing our reliance on money, and in particular our reliance on money to purchase oil-based products, is a necessary adaptation to the economy post-peak.
In some ways peak resources and the standard narrative go hand in hand. Those who are already beginning to feel the strain of our over populated overly oil dependent planet are not surprisingly also those who are beginning to doubt the narrative of separability and who have begun to seek other more sustainable alternative lifestyles. Without money or access to non-renewable resources we are really left with only one choice, which is the one to respect our place on the planet as only one of many life forces all intertwined and dependent on each other.
Finally, the third perspective on the state of our world today is one of resource distribution. The United States has terrible income inequality with the richest 400 citizens holding more wealth than some 250 million* of the rest of us. I made those numbers up, but they make my point and can be verified in the book After-shock by Robert Reich. The revolving door between politics and money creates a flow of change that consistently moves in one direction. Inequality is an unvaoidable feature of any society. However, there are degrees of inequality that are acceptable and perhaps even beneficial, and there is an extent beyond which inequality undermines the stability of a country. As wealth begins to amass in a smaller set of hands, those hands will naturally seek to protect and grow their own wealth. When their surplus is large enough they will feed that money into the political system in order to encourage the development of policies that will benefit them. In other words, when people have enough money they are able to buy rules that make it easier for them to get and hold more money.
As with the theory of peak resources, the primary economic problem with runaway income inequality is that it creates an imbalance between the monetary value of an individual or organization and the actual ability of that entity to produce enough stuff to live on. The richest members of society are first the bankers and second the CEOs of large multinational corporations. In the language of old, these are the business class. On a fundamental level, business people don’t actually produce anything. Their wealth comes from coordinating the production of others and then skimming a profit off the top. This is not a bad thing, but when the majority of the purchasing and decision making power in a country becomes concentrated in the hands of people who don’t actually produce anything, we have a recipe for inevitable social collapse. If we imagine that the current state of affairs be allowed to run interrupted to its logical conclusion, what we would see is ever increasing purchasing power in the hands of a small subset of the population that does not produce anything. The remainder of the population which does produce will be stripped of their ability to choose how to allocate their resources, meaning they will supply the physical maximum amount of labor possible while simultaneously consuming the cheapest products available. Cheapest, of course, is a function of price. So long as the economy is growing, prices can be lowered by exploiting resources that are not owned by anyone, and therefore need only be extracted at the cost of technology. When these resources run out, the producers will fail to produce and the wealthy will have all the resources and none of the abilities to produce anything with them. The result is chaos and massive human welfare decline.
Not surprisingly, the solution to rising income inequality can also be found in a shift towards local and community based systems. We can call for governments to reduce the policies that have caused this great imbalance, but we have no reason to believe they will listen to us now when they haven’t in the past. Instead, the solution is, like with Peak Oil, to reduce our dependency on money-based markets. Because wealth and income inequality is largely measured in dollars, by increasing our command of social capital, favors and gift-based obligations, we can increase our wealth and our purchasing power of critical necessities without needing governmental intervention or a rise in our wages.
While the problems facing our world today are insurmountable in the current framework of markets and politics, the solution is simple and available to all those who would seek it. Communities can be built without any additional physical resources, but merely a redistribution of our time and attention. Moreover, by solving the problem of our failing global economy with the substitution of personal relationships we also transfer value and meaning into the lives of a vast majority of humans who have been told for decades now that their failure to produce large sums of money through their labor is proof of their uselessness to the greater society. Farmers, carpenters, restaurant workers, care givers and any other human who makes their living by physically providing a service or producing a good that people can use are the people who will support and carry our world through the next years of transition. These are the people who have true power to affect change because they are the ones most connected to the world. At the same time the business people and bankers are those who are most invested in the system remaining the way it is. While they are highly adapted to operating in an economy which will grow perpetually, they are painfully and woefully divorced from the realities of where our livelihoods actually come from. When the world does finally begin its shift towards a contracting global economy, these people are going to have the most difficulty adjusting because they will find their entire skill sets are suddenly obsolete.
I am personally frightened of the changes that I am now convinced are waiting on a very near and very certain horizon. However, after a year of searching and reading and thinking, I have concluded that the solution the the world’s problems, and indeed the world that is waiting for us just beyond that horizon, is a beautiful one that will enable each human to thrive more wholly and more authentically than we have been able to for centuries, if not milenia of our history. It is a thrilling time to be alive.