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  • From: Tony Marzolino <tmarzolino@yahoo.com>
  • To: Healthy soil and sustainable growing <livingontheland@lists.ibiblio.org>
  • Subject: Re: [Livingontheland] Steady-State Economy: Light at the End of the Tunnel
  • Date: Wed, 18 Feb 2009 04:44:42 -0800 (PST)

Hello Paul,
Thanks for sending this article.  It is GREAT.  I am not sure the American public truly realizes the MASSIVE sums of dollars committed and sadly unless current policies change this may only be the beginning.....There is wonderful advice at the end of the article. 
 
Again, Thanks
Tony Marzolino
 
--- On Tue, 2/17/09, Tradingpost <tradingpost@lobo.net> wrote:

From: Tradingpost <tradingpost@lobo.net>
Subject: [Livingontheland] Steady-State Economy: Light at the End of the Tunnel
To: livingontheland@lists.ibiblio.org
Date: Tuesday, February 17, 2009, 9:18 PM



Steady-State Economy: Light at the End of the Tunnel
http://culturechange.org/cms/index.php?option=com_content&task=view&id
=327&Itemid=1
17 February 2009

The growing economic meltdown is a wake-up call that our infinite growth
bubble has burst. After the house of cards finishes falling, there will be
only one viable economic solution left standing: a steady-state economy.

Insolvency Crisis

The world economy is essentially broke. U.S. daily bankruptcy filings have
risen from about 1,300 in January 2006 to about 5,000 in September 2008.

Here is how big the problem really is. First, the value of all the money in
the world until recently was three times greater than the value of all
physical goods and services. In other words, our “money” is actually
worth 30 cents on the dollar. And considering, physical assets such as real
estate have been over valued, your pixel money is actually
“worth-less.”

Second, the U.S. government’s $9.7 trillion commitment to solving the
financial crisis amounts to almost two-thirds of the value of everything
produced in the U.S. last year. The promises are composed of about $1
trillion in stimulus packages, around $3 trillion in lending and spending
and $5.7 trillion in agreements to provide aid.

Third, until recently our growing economy has been able to cover our debts
and deficits, but now the blue-light-special lifestyle is over. Everyone,
from the public to governments is now under water. America has built up a
staggering amount of debt. At the time of the 1929 stock market crash,
total U.S. debt was 176 percent of GDP. Before the current financial crisis
began, total debt stood at a whopping 304 percent of GDP. Today it is far
worse; we are well beyond our means.

The next bubble to burst will be pensions. America’s 500 largest
companies have a deficit of $200 billion in their pension plans. If the Dow
hits 4,000, the deficit would rise to $400 to $500 billion. Companies will
stop contributing and reduce payouts when forced to make a choice between
payroll, corporate jets, and pension contributions.

Bailout Liquidity Makes Situation Worse

If the world financial crisis is really one of global insolvency, adding
liquidity in the form of more government debt is actually dangerous. If I
have a successful business and I borrow money for a temporary cash flow
problem, no problem. But, if I am actually insolvent, increasing my debt by
borrowing more money makes the situation worse for both me and the lender
who will lose their investment in my soon to be bankrupt business.

Because of their size, the bailouts may ignite hyperinflation from all of
the liquidity that is being generated out of thin air. Since the financial
crisis began last year, the money supply has been nearly doubled out of
thin air. Hyperinflation may cause the $50 trillion derivative markets to
explode. The credit default swaps would be the first to blow driving
interest rates to double digits which would light the fuse to the $50
trillion interest rate swaps supernova [more on this subject in a follow-up
article - ed.].

Wasted Opportunity

Since World War II, we have produced little of value, but built a huge pile
of debt upon debt. Europeans invaded what was an entire unspoiled continent
517 yeas ago, and today we have little of real value to show for it except
a lot of people and a trashed ecosystem. What was once a vast expanse of
fertility and old growth biodiversity from sea to shining sea is now an
input-dependent monoculture wasteland. Take a ride on an plane while you
still can and look down. Almost everything coming out of big-box stores is
soon destined for the dumpster and our spread out suburban infrastructure
will prove to be a liability as peak oil eliminates happy motoring.

Bernard Madoff’’s $50 billion ponzi scheme revealed how our Taker
economic system really works. The problem is bigger than just our
institutions such as fractional reserve banking, the Federal Reserve, and
the looming derivative bubble. Our entire Taker culture is based on little
of value. Growth, debt, greed, concentration of wealth, something for
nothing, depleted resources, and overpopulation are not assets—they are
liabilities. If we are to ultimately thrive, we must contribute to
biodiversity, not destroy it.

Long History

We have actually had this “value-less” system that Daniel Quinn calls
our Taker culture for 10,000 years since the agricultural revolution. Ever
since it became OK to lock up the food, privatize land, concentrate wealth,
make war, and for a minority to control the majority we have been
impoverished. As long as we had abundant enough natural resources and a low
enough population, the Taker ponzi scheme worked. We kept consuming the
world to keep everybody happy. But, now we have overshot the earth’s
carrying capacity.

Steady-State Economy

When all of the cards are done falling, local powered-down steady- state
economies will be the only replacement for our infinite growth global
consumer economy. To live within our means for perpetuity means living
within the earth’s carrying capacity which we have vastly reduced
especially over the last 100 years.

Economic growth is a threat because it assumes a growth in population,
production, and consumption within our finite planet. A steady-sate economy
has a constant stock of capital that is maintained by a rate of output no
higher than the environment can absorb. Even banks can lend only as much
money as they have.

In a steady-state economy, society focuses on more noble goals than
economic growth. The late Masanobu Fukuoka asked “Why do you have to
develop? If economic growth rises from 5 percent to 10 percent, is
happiness going to double? What's wrong with a growth rate of 0 percent?
Isn't this a rather stable kind of economics? Could there be anything
better than living simply and taking it easy?”

Our economic measurement systems are a shell game. Bhutan’s Gross
National Happiness is a better indicator than our Gross Domestic Product
(GDP). GDP counts goods and services, but ignores the important things such
a clean water, fresh air, public health, and biodiversity. GPD also lumps
everyone together. If executive pay goes from 100 times average wages to
1,000 times, while real middle classes wages are falling, GDP does not show
that. Concentration of wealth, externalized costs, depleted resources are
invisible.

A sustainable economy requires a stable population, lower per capita
consumption, and reduced complexity. In fact, since human population has
overshot the earth’s carrying capacity by over 20 percent, our population
and the economy are going to have to be significantly reduced size before
true stability can occur. See Chapters 3 and 4 of Culturequake for an
in-depth discussion of our population explosion and overshoot.

Also, since human population is in overshoot, taking more resources than
the earth can generate, future carrying capacity will continue to be
eroded. Imagine how great a population North America could have supported
with all of our old-growth forests, topsoil, watersheds, and biodiversity
intact? Now, half our topsoil is gone, much of what’s left is dead
mineral matter only able to supporting crops through fossil fuel
fertilizers, watersheds and fisheries are collapsing, the Ogallala aquifer
supplying farmers from the Dakotas to Texas will be depleted in forty
years, and global warming is ending stable weather. I’ll stop there.

Invest Locally

President Obama’s Herculean effort to revive the consumer economy is
about as useful as a bucket-brigade on the Titanic. I have great respect
for president Obama’s comitment and abilities, but he still clings to the
illusion that “growth” is still possible with dwindling resources and a
burgeoning population.

Other than feeding unemployed people and keeping them in their homes, the
rest of the money would be better spent rebuilding our big-box bombed-out
local communities, our railroads, and start Cuban-style urban agriculture
and land reformation. Urban agriculture feeds half the people in Havana and
80 to 100 percent of people in smaller cities. Bank deposits should be
insured and insolvent banks allowed to fail.

This will probably be last time we will be able to muster this level of
resources; the last time people will lend us this much money. Our resource
base is a shadow of what it was 100 years ago and our population has grown
six times. I am saddened to see what is ultimately my children’s tax
dollars squandered trying to revive the rusting, sinking hulk of our
industrial economy.

Because our elected leaders and the media do not realize that we are
entering the twilight of modern culture, they have not leveled with the
people. Thus the people are not ready for the kind of cultural change we
are going to see over the next century. It takes a crisis like this to be
the wake-up call.

Economic Decline Can Be a Good Thing

Earnest Callenbach wrote in Ecotopia that a financial panic can be turned
into an advantage if in the end society can be focus its energy, knowledge,
and skills to what is really important in life. With the ensuing flight of
capital, the factories, farms, and other productive facilities would fall
into the people’s hands like ripe plums. Whole markets should be
reorganized, no one or no corporation should be able to own more than say
40 acres. In fact, corporations should only exist for public projects such
as roads or utility infrastructure and be de-chartered when the project is
completed.

Our economy will be reshaped by many influences including re- localization,
new-urbanism, peak oil, and learning lost horticulture and craft skills.
Powering-down will happen discontinuously. We will rest at a plateau for a
while and then drop to the next lower energy and complexity level.
Governing institutions would be more useful if realigned along bioregion
and watersheds lines—not in a continent- sized country made up of
arbitrary squares.

Where to Begin?

Start where you are now and live your truth. Act from a sense of passion
and joy. Plug into your local community; offer your skills and resources to
sustainability efforts. Use your creative imagination. Ask yourself, “how
can I partially or completely unplug from the wage economy in the next
three years?” By doing so you will meet like- minded people. If people
see you as sharing what you have, they will share with you.

Turn off your TV and tune into your family, friends, and neighbors. Educate
yourself about useful skills such as permaculture. You are better off
living near a community on a good piece of land that you own in a yurt than
you are buying a house with a mortgage that the bank owns.

Seek a new vision and a new lifestyle. Instead of recycling, how can my
waste become another’s food? Instead of debt, how can I simplify? Instead
of mining topsoil how can I build it?

Humans are meant to take their modest place in a seamless web of life,
disturbing that web as little as possible. This means sacrificing present
complexity and consumption, but it ensures future survival. People should
be happy not to the extent that they exploit their fellow man and
creatures, but to the extent they live in balance with them.

Starting this spring, Culturequake essays will begin to describe our own
personal journey to re-localize on our small permaculture farm in Ashland,
OR. We will share our experiences with soil food web building, food forest
design, installation, harvest, appropriate technology, and community
education.


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