A new report from the University of Michigan starts off its press release with a not so optimistic phrase: “It’s a message no one wants to hear.”
Just what message is this? That it would take an extreme economic downturn to slow the effects of global warming.
Here is the single biggest question to consider about the economic, energy and environmental unwinding we are facing – what will the economy look as we go? I get more questions about this than about anything else – what should people do for work, what should they do with savings, how should they begin to prepare themselves for a lower energy world. What I find, however, is that among both the prepared and the unprepared, there’s a whole lot of people kidding themselves. There are those who imagine that there is no economy outside the world of the stock market and formal jobs – that a crash in those things is the end of the world, which means to them either that it can’t happen or they should buy a bunker and some ammo. Others have imagined themselves “free’ of all economic structures larger than the neighborhood, cheerfully providing most of their needs or bartering and never again touching cash. Both ideas fall into the realm of fantasy.
Money is woven into our minds, our perceptions, our identities. That is why, when a crisis of money strikes, it seems that the fabric of reality is unraveling, too—that the very world is falling apart. Yet this is also cause for great optimism, because money is a social construction that we have the power to change. What new kinds of perceptions, and what new kinds of collective actions, would accompany a new kind of money? – The fourth installment from Sacred Economics: Money, Gift, and Society in the Age of Transition.
The idea of economic growth as an unquestioned force for good is ingrained in the American psyche. But a longtime environmental leader argues it’s time for the U.S. to reinvent its economy into one that focuses on sustaining communities, family life, and the natural world. The case is strong that growth in the affluent U.S. is now doing more harm than good. It makes no sense to separate the two challenges: energy supply and climate change must be dealt with together.
But there are seldom-acknowledged factors external to financial and monetary systems that are effectively choking off efforts to restart growth. These factors, whose impacts are worsening over time, were briefly alluded to in the Introduction; here we will unpack them in more detail, discussing limits to oil and other energy sources, as well as to food, water, and minerals. We will also explore the increasing cost of industrial accidents and environmental disasters—and why, in the wide wake of global climate change, those costs are likely to escalate to the point that disaster avoidance and recovery will constitute a major portion of future government and private spending. Along the way, we will examine how markets respond to resource scarcity (it’s not a clear-cut matter of incrementally rising prices).
The central assertion of this book is both simple and startling: Economic growth as we have known it is over and done with. The “growth” we are talking about consists of the expansion of the overall size of the economy (with more people being served and more money changing hands) and of the quantities of energy and material goods flowing through it. The economic crisis that began in 2007-2008 was both foreseeable and inevitable, and it marks a permanent, fundamental break from past decades—a period during which most economists adopted the unrealistic view that perpetual economic growth is necessary and also possible to achieve. There are now fundamental barriers to ongoing economic expansion, and the world is colliding with those barriers.