Posted by steve on September 12, 2009
We find ourselves in the aftermath of a giant financial meltdown. Yet few really understand the seriousness of the situation. Faced with the choice of either
(a) reforming the economic system and ripping from the hands of the banking system its iron control of societies world wide,
or (b) trying to patch the system up.
Politicians chose the latter.
I can’t say I blame them. I am not sure I would have had the courage to go against the banking system. On the other hand I wish they had. What has happened in effect is that governments have put their own peoples into debt to pay the banks. The financial meltdown in the last year has cost $10,000 for every one who lives in the world’s richest countries, as reported by the BBC.
Econmic growth is the only way t pay it back. We don’t have it now. But how can we attain economic growth when the very engine of growth, oil, has reached its production peak?
From a sustainability point of view we really only have four choices of strategy. These are outlined below. The standards we enjoy today are the product of massive, global supply chains. We can ask ourselves: how well is the system performing, and do we want to demand of our politicians that they change? I do not give solutions here. Only what I consider to be the options open to people who by law shall represent the will of the people who elected them.
First let us consider the options:
Supply chains burden eco and climate systems by emitting large amounts of pollutants. Maybe that is worthwhile if it means we can live in prosperity. On the other hand, the emission of pollutants and depletion of resources only puts the cost of depletion and emission into the future for someone else to take. And it is hardly acceptable that despite the development of this system since the 50s, and all the people who have studied the subjects involved, still one billion of 6,7 billion of Earth’s citizens go to bed hungry. How much depletion and emission is allowed is determined by government ultimately. Although I wrack my brain to understand where they get that mandate.
Anyway, businesses operating in these supply chains are permitted by the governments that regulate them. This passing on of the negative consequences of supply chains is called externalization of costs in economic terms. It is a matter of time how long they can continue.
A matrix of outcomes can help to illustrate sustainable thinking. Achievement of living standards on one dimension is mapped against environmental depletion. (This includes depletion of both mineral deposits and disruption of climatic and biological systems.)
- The worst case is where costs are externalized, negatively affecting climate and eco systems and a standard of living in still not achieved.
- The next worst, the eco-challenge case, is where a standard of living is achieved, but at the expense of the eco system. This situation is temporary as externalized costs will come back for future generations to pay. One example would be the degradation of agricultural soil which costs more and more to achieve yields.
- The third case is where eco systems are preserved but a standard of living is not achieved either.
- The true sustainable situation, best case, is where a standard of living is achieved and climate and eco systems are functioning for coming generations.
Is it really so difficult to understand what political direction, loud and clear, people need to give their politicians? And to work towards themselves?
This text is taken in part from my white paper, Asset-Based Financing.