Reality Check

The dangers of economic inequality (which are largely founded on economic injustice) threaten our economy and our polity, and in the process they cause suffering and destruction to real people.  They limit and may destroy the chances of future generations.  All of this--and all the economic and political theory outlined in President Obama's speech and my last two posts--are demonstrably true.

But they don't tell the whole story.  To the extent that in the end, none of this may matter much.  Because virtually all economic theory is fantasy.  It is, to be sure, really pretentious and boring fantasy, and the purveyors of these fantasies dress in severe suits and ties, and are boring and pretentious.  But nothing Disney ever produced is as unreal as the economics accepted as operating procedure by the global economy, by the institutions of commerce and finance and government, at every level.

Economic theories work within the premises, in both senses: they work within the artificial constructs, the closed system, within the building.  And for a few hundred years we've managed to pretty much stay inside the building.  But the building is not self-contained, not really.  The natural world outside it is essential to its survival, to our survival.  And the laws there are very different, and we've been ignoring them.  The world is so big that we got away with ignoring them.  But we're too big now, and we're destroying the world's ability to continue to give us life.

The most obvious way to translate this into economics is by assigning cost.  Costs are calculated without regard to the resources used and the environment ruined, such that it will not sustain as much life, or any life, in the future.  The jargon is that environmental costs are "externalized," that is, ignored.  But these days there is far too much damage being done on scales that are almost unimaginably vast and fast, by and on behalf of far, far too many people. 

We're using up resources and poisoning our planet, destroying the diversity of life we don't really understand, and in the process, we are destroying the human future.  And our economics ignores this most important fact.  If we don't get this right, none of the rest is going to matter for very much longer.

Waste is one of the most ignored problems.  Of all the resources that go into making products we use, only 6% of the materials actually show up in the products themselves.  And then many of the products become waste in short order, often toxic waste.  The computer revolution, which looks so clean and futuristic, is making this very much worse.  The rapid proliferation and obsolescence of devices is creating waste on a stupendous scale.  There are more discarded cell phones in Japan than there are Japanese.  It's getting worse, utterly out of control, and it is utterly ignored.

The greatest costs to be exacted on human civilization are the result of greenhouse gases still polluting and deforming our atmosphere at a record rate, decades after the dangers they pose were known.  The latest international climate crisis conference, in Durban, South Africa, is now over.  An agreement was reached in its final hours that some are hailing it as a modest success, and a blueprint for progress.  Others are less enthusiastic.

My first impression is this: The agreement (which is basically to negotiate a new treaty) sets out a framework that will be available in the near future, should world leaders (conspicuously absent at this conference) and their governments be scared enough by climate catastrophes into looking for a way to act, to forestall even worse effects.  And perhaps to deal with the effects then happening.

I don't think there are many climate scientists or close observers of climate science and what's already happening worldwide who believe that even a strong global treaty in 2020 is going to prevent climate catastrophe beginning in this century, and a much altered climate for the planet for many centuries. But if action is taken the prospect might be that the return to a very hot climate before human life arose--and one which would make human civilization unlikely if not impossible--might be forestalled, eventually. 

But nobody really knows.  Nobody knows what small changes may result in big changes.  Nobody knows if we've already passed any number of tipping points or not.  What almost everybody knows is that greenhouse gases in the atmosphere have caused, are causing and will cause global heating, with dire consequences for at least a significant proportion of the human species, and eventually negative consequences for all.  Not to mention the polar bears.  Every species lives within an interdependent ecology.  Some adjustments for some species are possible.  But the economy of life in the real world sometimes rules extinction, or something very much like it.

We're smart enough to figure that out.  But it does look like we've been too slow to accept it, take it seriously and act on it at the scale of the problem. This is the ultimate economics, and without dealing with it, the rest is going to be superseded.