A Tale of Two CurvesHelping to break the Conspiracy of Silence about Natural Limits and

Economic Growth.

A personal view by Nick Watts

Outline

1. Introducing the curves.2. How did we get here? A whistlestop tour of

economic history.3. Where are we now? The (de)pressing reality.4. What can be done about it? Systemic change

or mobilisation at grass-roots?

1. Introducing the Curves

• Preamble: Introduce myself & apologise for nerves or hiccups. Q&A to follow, bar open, notepaper/pens available, there will be a resource list at the end.

• Exponential function: Chessboard, compound interest (be optimistic – on savings not debt!) with graphs on flipchart, hockey stick

• Logistic distribution: Heights of the audience (normal distribution approximately the same), Hubbert’s bell curve & US oil peak [flipchart]

2. How did we get here?

• Hunter-gatherers, egalitarian & free!• Agriculture & settlements, stable climate, surplus food, population

growth, social hierarchy starts to take shape• Early civilisations - power elites emerge, ordinary people enslaved by a

protection racket (pay a share of your crops & we’ll look after you)• The feudal system - power shifts to aristocrats, ordinary people enslaved

to the land• The industrial revolution, wealth percolating upwards through the 3-tier

economy, power shifts to money, ordinary people become wage-slaves• The onslaught of consumerism & it’s new cultural stories - power shifts

to the media, ordinary people become debt-slaves• Peak Debt? Gambling (on) the future, $147 oil and the contraction of

Autumn 2008. The winds of change.

Earlier Economic Systems

• Hunter-gatherers. Small, nomadic tribes, low population density, resource rich on the broad scale but population consciously self-regulated to avoid overconsumption within their environment. And we call them primitive!

• Agriculture & settlements. Refer to slide

• Early civilisations, kingship and priesthood, centralised power in city-states, agricultural surpluses via military and spiritual enslavement provides for artisans hence trade in goods & services but also a social heirarchy from which a leisure class is born – art, science, philosophy,

politics. Examples found in Middle East, South America, China and Europe… Sumerian, Mayan, Greek, Egyptian, Roman empire – more to follow on these (Collapse)

• The feudal system, nobility, landlords & peasants in fairly harmonious equilibrium [“The primary economy is the natural world, which produces around 3/4 of all economic value used by human beings. The secondary economy is the production of goods and services from natural resources by human labour. The tertiary economy is the production and exchange of money – a term that includes everything that has value only because it can be exchanged for the products of the primary and secondary economies, and thus embraces everything from gold coins to the most vaporous products of today’s financial engineering.” (JMG)] Feudal system illustrates that people can live quite successfully for long periods of time without a tertiary economy.

The 3-tier economy• Tier 1: Mining growth (explain the term): Imperialism, global trade

in raw materials, black slavery. Refer to timeline on flipchart. “Trade causes attention to be directed toward what can be sold profitably on world markets rather than toward the careful adjustment to local resources that contributes to long-run stability” (MtF p224)

• Tier 2: Manufacturing growth: Factories, urbanisation, displacement of peasants & “white slavery” via enclosure acts & corn laws. “The enclosure movement transferred common lands into private holdings; the market was allowed to determine prices and wages…and in 1870 the Corn Laws were repealed in England and cheap American grains flooded in and ruined small farmers and landed aristocrats alike. Power shifted irrevocably to the commercial classes. The choices for people in villages were reduced to being landless agricultural labourers at less than subsistence wages, or going to work for 12-14 hours a day in the factories of the industrial towns and cities.” (MtF p52) Overt exploitation. I believe that was a retrograde step & wonder if there a prospect of now reversing that process.

• Tier 3: Money growth: Banks and usury. The Gold or (Sterling) Silver standard, Fiat money, Fractional reserve banking, neo-liberalism, home ownership, covert exploitation, debt-slavery.

The onslaught of consumerism &the power of cultural stories

• 1920-2010: Unique period in man’s history with an apparently limitless supply of cheap energy. Marketing & the media, 4 generations of growth in everything, corporate control & cultural brainwashing of their willing victims – media & shopping junkies. Metaphor of the Cave; Plato imagines a group of people who have lived chained in a cave all of their lives, facing a blank wall. The people watch shadows projected on the wall by things passing in front of a fire behind them…the shadows are as close as the prisoners get to seeing reality. [I]s it not reasonable that the prisoners would take the shadows to be real things…not just reflections of reality, since they are all they had ever seen or heard? Wouldn’t the whole of their society depend on the shadows on the wall?”

• Resource use, obsolescence (toasters & kettles) & the throw-away society -> waste = pollution, the story of “stuff”

• Bretton-Woods institutions, Trans-national corporations, the free

movement of capital, Globalisation as neo-imperialism, reinventing wage-slavery in the “developing” world

3. Where are we now?

• Population growth. See timeline

• Ecological crisis• Energy predicament → Economic crisis• Agricultural crisis. Soil, fossil fuels, water, poisons & pollinators.

• Global warming. Large civilisations depend on stable climate.

• Our civilisation is not immune from collapse

Ecological Crisis

• Resilience is the ability of a system to withstand shocks, a good attribute for survival. Biodiversity makes for a resilient ecosystem & man is destroying species at an alarming rate.

• Carrying capacity of an environment, overshoot, adaptive cycles

Energy Predicament• A predicament is a problem without a solution. Energy underpins

the industrial economy and must be central to our thinking.• Coal: The 19th Century [flipchart]

• Oil: The 20th Century [flipchart] “When you run the calculations, we discover that there is enough energy in a gallon of [petrol] to be roughly equivalent to a human person working 500 hours. This is called an "energy slave". Since we use fossil fuels in so many ways, for transportation, for industry to make our consumer goods, for heating our homes and running our appliances, for agriculture to grow our food, etc.... it turns out that the average European uses the equivalent of 100 energy slaves to maintain their lifestyle. “ (Christine

Patton) Crash Course• Peaking resources, the effect of net energy [flipchart with adjusted

downslope], all the low-hanging fruit is gone, Deepwater Horizon as an example of resorting to hard-to-find resources and complexity

• How do we fuel the 21st Century? Peter Aldous speech “We need a new and radical energy policy. If we do not have it, the lights will go out” and “We owe it to future generations to take a major step towards a low-carbon economy.”, he’s talked the talk now he must walk the walk.

Our civilisation is not immune from collapse

• The lessons of history. Civilisations like the ones mentioned in part 2 all collapsed for reasons largely to do with natural limits and environmental degradation.

• Complexity, the antithesis of resilience. Modern technology has built progressively more complex products (cars, computers, etc. novelty for the consumer market) and systems with a higher degree of integration, compromising resilience. A complex & tightly-integrated system is not only difficult to model or understand completely but when put under enough stress it will tend to fail catastrophically.

• The basis for sustainability is to avoid exponential growth. It is necessary to tackle both growth in population and material throughput of the economy.

• Corporate lobbyists, the financial sector, media and politicians – a conspiracy of the elite in favour of business-as-usual. Our new government still endorses growth because the current financial structures (tertiary economy) cannot function without it, and yet the environment we all depend on cannot function with it! Accepted by the electorate because the cultural story – growth and consumerism - is so firmly entrenched.

4. What can be done about it?• Be aware of natural limits and understand what growth really means

(hence the title of this talk). Think globally, act locally.• Powerdown – A global approach• The Cinderella economy. Energy and raw materials will become more expensive

and labour comparatively cheap. The industrialisation (mechanisation) process will gradually unwind under pressure of market forces. Cinders: You can go to work! Be wise, be prepared: Some ideas for stimulating job creation and trade in the local economy…

• Safe Investment? Given that economic growth within the current economic/financial system is neither desirable (resource usage, global warming) nor achievable (resource limits, peak debt) implosion is inevitable. The warning signs are already there in Greece etc. and looking behind the spin the entire global house of cards is shaking. Investing in local projects (e.g. via a Credit Union) would provide a viable, safer & sustainable alternative.

• Transition – A local approach (Sustainable Bungay). There is positive action which can be taken to benefit everyone in the community.

Powerdown• Tackling greenhouse gas emissions, depleting resources and a broken economic model in a

new paradigm of sustainability. Climate & energy challenges indicate this way forward, but how can it be achieved?

• Blue-sky thinking? Restructuring the Secondary economy with a focus on sustainability: market mechanisms (e.g. TEQs, precycling insurance leading to cradle-to-cradle product lifecycle where waste ≠ pollution) Decoupling (In economics, decoupling is often used in the context of economic production and environmental quality. In this context, it refers to the ability of an economy to grow without corresponding increases in environmental pressure. In many economies increasing production (GDP) would involve increased pressure on the environment. An economy that is able to sustain GDP growth, without also experiencing a worsening of environmental conditions, is said to be decoupled. Exactly how, if, or to what extent this can be achieved is a subject of much debate.

• Similarly, decoupling can refer to "breaking" the link between a dependent variable and its cause for a specific industry or activity. For instance, decoupling green house

gas emissions from increasing electrical power generation.) Remember from part 2 – the economic system has changed radically over time. How much disaster will we have to endure before politicians and economists recognise the need to implement such market mechanisms? Is it already too late for them to do any good?

• A cultural revolution? Free market capitalism is based on the ‘rationality’ of Adam Smith’s every participant acting in self-interest. I think Bill Rees’ complimentary idea says a lot about the way to avoid collapse. “We should be designing a smaller, equitable steady-state economy, that maintains itself within the carrying capacity. This is not difficult. The concepts are easy. The getting there is the difficult part, because of the conflictual nature of the human animal. Today, we for the first time in the history of our species reached the point where my selfish interests are identical to our collective interests. I cannot be sustainable on my own. No country can be sustainable on it's own. If the rest of the world carries on down the current pathway, they will take us down with it. Instead of being able to act out my own personal selfish fantasy, I've got to begin to be able to identify my interests with your interests. Because together we can pull this off, if we can convince enough people that it is in their selfish interest to serve the collective interest. It's the only way that we're going to make any real difference on this planet.“

Is it realistic to hope for a rapid turnaround in the individualism which consumer culture has taken 100 years to create?

Further information• Web: ”The greatest shortcoming of the human race is an inability to

understand the exponential function” Albert A. Bartlett (YouTube), The Story of Stuff by Annie Leonard, Wake Up Freak Out by Leo Murray, Crash Course by Chris Martenson, lecture by Dr. Bill Rees (audio) www.energybulletin.net/node/52961 (other relevant nodes include 52757, 52785, 52507), www.culturechange.org/cms/content/view/652/1/

• Books: Warren A. Johnson’s Muddling toward Frugality, Richard Heinberg (e.g. The Party’s Over, Powerdown, Peak Everything), Tim Jackson’s Prosperity without Growth, Thomas H. Greco’s Money, Bill McKibben’s Deep Economy, David Korten’s The Great Turning, John Michael Greer’s The Long Descent, E F Schumaker’s Small is Beautiful, Joseph Tainter's The Collapse of Complex Societies, Jared Diamond’s Collapse: How Societies Choose to Fail or Survive, Thomas Homer-Dixon’s The Upside of Down. Rob Hopkins’ The Transition Handbook, Ronald Wright’s A Short History of Progress

• Please ask if you want a printed copy of this slide.