GEOG 352 – Day 9

Updated Debate Teams & Datesdate topic names

March 8th Property rights Elissa, Charlie, Alysha, Kylie, Darren, Yasmin

March 22nd Markets vs. regulation Estella, Leah, Emma, Karly

March 29th Sprawl or affordable housing

Sarah, Brittany, Paul S., Bucky

March 1st Rising tide lifts all boats?

Karen, Tara, Cheymus, Rebecca

March 3rd Hard work rewarded? Nick, Andrea, Paul L., Shane

March 1st Carbon markets Doug, Jeff, Derek

March 3rd How to promote healthy eating

Bethany, Meagan, Kris, Jill

ANY FURTHER PROBLEMS?

Housekeeping Items

I will pass out the articles for the debate groups.

Did anyone see “Fierce Light”? I meant to follow up on the question about

Sweden. Last day for submissions for WDCAG! (

http://www.sfu.ca/wdcag2011/call.htm) When you do a book presentation, please have

a discussion question or two. Today we will hear from Paul on “Black Swan”

and discuss Chapters 3 and 4 in Porritt. By the way, six books have arrived. Let’s discuss the best way to use them.

Porritt – Chapters 3 & 4

*Chapter 3 engages with the issue of economic growth, which is one of the sacred cows of capitalism. In this context, he recommends Limits to Growth: The 30-Year Update (so named for the original 1972 report) by Jorgen Randers and Dennis Meadows. I have the charts that illustrate the models on a CD, if you would be interested to see them some time. *In essence, they are arguing that there will not be one big collapse, but a situation where more and more capital will have to be diverted to coping with the ecological impacts of an expanding population and economy that eventually there won't be enough to sustain continuing growth in food and industrial production, and population growth will also be forced to cease. Do you think this is likely?

The Limits to Growth

*In this chapter, he deals with exponential growth. The size of the global economy is now doubling every 25 years, and trade has increased more than 12 times since the end of World War II!*In essence the constantly growing economy, as a sub-system of the biosphere, is bumping up against the fact that the biosphere and its resources are finite. It can only grow further by devouring its host. *Meanwhile we are bumping up against the limits of natural capital (resources, waste sinks, and life-support systems). The issue, as he sees it, is do we want a soft landing or a hard landing? The choice is up to us, and even more importantly up to our decision-makers. But to slow down and redirect growth challenges everything that this society is based. Will we do it?

The Limits to Growth

Although this is a heretical idea for mainstream economists, “the scale of the economic subsystem will eventually be determined by the overall scale of the ecosystem, by its ability to provide high-grade resources and to absorb low-grade waste, and by the inter-dependency of all interlocking elements.”

In other words, economics has to deal with the first and second laws of thermodynamics – the first stating that energy can neither be created nor destroyed, merely transformed into another state, and the second that it loses its capacity to do useful work with each transformation. Only the sun's incoming energy prevents the Earth from completely running down. With matter, entropy expresses itself as the loss of ability to serve as useful raw material, as with the finite ability for aluminium or paper to be recycled.

The Limits to Growth

The productivity of the economy and of the biosphere is limited by the amount of solar energy captured (all non-renewable resources will eventually be depleted). Therefore, economic growth can only continue to occur to the extent that it 'decouples' itself from entropy-producing throughput. Not only has economic growth been occurring continuously, it has been occurring exponentially.

Ekins therefore makes a distinction between growth in biophysical throughout, growth in economic value, and growth in economic and social welfare, each of which needs to be distinguished, rather than collapsed together. The goal should be growth in economic and social welfare. This relates to the concepts of dematerialization and resocialization.

The Limits to Happiness Porritt reviews some of the literature on

happiness and its links to income and shows (see also the URL for John Helliwell in the reading list) that beyond a certain point in income growth, life satisfaction levels off. He also cites Fred Hirsch and others that much of people's happiness or unhappiness is relative to how well off we see ourselves in relation to other people. Is this true?

As far back as the 1920, advertisers have directly sought to cultivate dissatisfaction and thereby to create new needs. Without the creation of new needs, the economy would largely grind to a halt. Can you think of significant new demand that has been created in recent years? Which products and services have genuinely enriched our lives and which not?

The Limits to Happiness Helliwell, Richard Layard and others are creating a

new 'science of happiness' which shows that much of what we think of as subjective has an objective basis – for instance, people who are of service to others tend to be happier, as are people with a richer community life and a slower pace of life. And yet we make increasing incomes and economic output the measure of society's success, not whether people's happiness is increasing.

Apparently, it isn’t as stress, anxiety, depression, addiction and other mental health issues are on the rise.

In line with this, Herman Daly makes the important distinction between quantitative expansion and qualitative improvement. Even in the steady-state economy he advocates, life quality can improve. But, apparently, it is not unequivocally improving with current growth.

The Limits to Growth

Is the idea of ‘limits to growth’ as radical an idea as a round earth not at the centre of the universe was to people living back in the Middle Ages?

Economists counter that we can substitute man-made capital for natural capital. However, are there are some things in nature that can't be substituted for?

Can we rely on rising prices to always ensure conservation of resources? It hasn't worked with many fisheries or with the now illegal trade in ivory, or with other resources.

The Limits of GDP As A Measure One of the main arguments against the

usefulness of GNP/ GDP as a measure of economic health is that we should subtract the loss of natural capital that occurs through economic activity each year, plus the various defensive expenditures that represent 'collateral damage' from economic activity – environmental protection and restoration, car accidents, poor health and rising crime rates, etc. Can you think of other examples?

The main point is that development (qualitative) is not the same as growth (quantitative).

Peak Oil and The Limits to Growth Since so much of the growth economy has been

premised on abundant supplies of fossil fuels, the arrival of peak oil (the point at which demand exceeds supply) – some time between 2008 and 2020 – may change all the rules economically, and socially as well.

Already the energy recovered to energy expended ratio has gone from 28:1 to 2:1, and is still declining.

Unfortunately, in the immortal words of our own Tim Naegele, we hit the collective “snooze button” back in the late '70s when oil prices started going back down and, as a result, we lost the opportunity of a 30-year head start on deflecting the current crisis in peak oil and climate change.

Chapter 4 of Porritt In this chapter, Porritt engages with what are the

defining characteristics of capitalism, and whether what some people have called “killer capitalism” can be tamed for purposes of sustainable development.

He notes that leftists tend to reject the profit motive and free markets as being inherently unsustainable, whereas right-wingers tend to see more privatization of natural capital and less government intervention as the key to success.

While Porritt has little time for either of these positions, he does strongly suggest that “capitalism, as we know it today would, indeed, appear to be incompatible with anything vaguely resembling sustainability.”

Capitalism vs. Communism?

He cites multi-billionaire, George Soros, on how the “capitalist threat” to democracy and human values now exceeds that from communism which has largely faded away.

Porritt notes how ecologically destructive communist societies – such as the USSR and China – have proven to be, even worse in many cases than their capitalist rivals.

For many 'Greens' the solution lies not in opposing socialism to capitalism but in creating economies that utilize markets, but on a smaller, more local scale. What do you think?

Markets vs. 'Market Society' This ties in with Karl Polanyi‘’s distinction

between markets, which have existed for millennia, and market society – a distinct form of society in which the nation-state has aided and abetted the rise of the corporation.

According to George Monbiot, an economy with markets that are effectively regulated in the interests of workers, consumers, and ecosystems is the kind of model we should be striving for.

Originally, when corporations were first chartered, their charters were supposed to be subject to revocation if they proved guilty of being socially irresponsible, but this been quietly forgotten and, by virtue of being 'persons' under the law, corporate boards are largely protected from prosecution.

Corporations and Society? Citing Joel Bakan (author of the book and film, The

Corporation) corporations have a fiduciary responsibility to their shareholders to maximize profits, and thus they are often willing to externalize their costs onto others and onto the environment in order to do so, unless this is against the law, and even that is sometimes an insufficient deterrent.

Between corporate behaviour and consumer addictions and self-interest, what impact is our current system having on values and morality?

Porritt argues that, rather than being mediators, between society and corporations, governments have tended to become colrporate partners, helping them to achieve their objectives domestically and internationally.

Financial irregularities have become common amongst the leading companies, and CEO rewards no longer seem linked to company performance, as we saw with the recent escapades involving the financial sector.

Private Property and Free Trade

So far, Porritt has looked at markets and profit. He next looks at the issue of private property, noting that while there may be situations where giving the poor more private property rights may assist in sustainability, in general attempting to privatize natural capital and ecosystem services seems to hold little promise.

It also ignores the many successful communal property management systems that have existed around the world. Do you know of any?

He notes that when David Ricardo advocated free trade in the early nineteenth century, neither capital nor labour were mobile. Nowadays, both, but especially the former are, and it tends to flow to countries with the cheapest labour and the lowest environmental standards.

Scale, Needs and Competition

On the issue of ecological scale, he notes that Peter Vitousek, et al. in 1986 estimated that human appropriation of net primary productivity (NPP) was 40%, and we’re only one of millions of species.

On the issue of meeting human needs, he suggests that there has proven to be a disconnect between economic growth, as generated by current patterns of capital allocation, and increases in human welfare, thus raising questions about “trickle down” vs. “gush up”.

He questions unbridled competition, citing Lyn Margulis and others that in nature, one observes 'competitive exclusion,' cooperation, and interdependence. Do you believe competition is a universal law?

Chapter 4 of Porritt

On inequality, he notes that developing countries spend $375 billion a year on servicing their 2.5 trillion debt – more than the combined expenditure on health and education, and 20 times what they receive in foreign aid. Moreover, the top 1% of all households in those countries receive between 70 and 90% of all the wealth.

In the U.S., household debt as a percentage of income rose from 58 to 133% from 1973 to 2007 (much, and the top 1% now earns more than the bottom 95%.

In the final section of the chapter, Porritt suggests that while we need effective pricing mechanisms to internalize the true value of ecosystem services, capitalism will remain a corrosive system unless it is buttressed with wisdom and values that transcend the purely economic.

The Ultimate Question

Can capitalism be made sustainable and, if not, what (if anything) is the alternative?

Have you encountered anything in your reading research so far that suggests answers to these questions?

Keep in mind the typology that I offered you at the beginning of the semester: big business; the public (government) sphere; small business; collectives and co-ops; non-profit organizations and community enterprises; volunteer activity; barter/ skills exchange or community currency; neighbourly or other forms of mutual aid, or takes place in the domestic (household) sphere.