“The era of cheap natural abundance is over. We must now compose common rules for an era in which nature is valuable.”
The above quote is from Paul Collier’s book The Plundered Planet, and it cuts to the heart of many of the themes that I have been exploring here that are fundamental for understanding the link between environmental concerns and international economic governance.
Somewhat starkly put, as the relationship between economically available natural resources and parties interested in those resources grows tighter and more strained, nation states are essentially faced with two broad options in dealing with the competitive interests of other nation states:
Option one is to opt for the path of cooperation by recognizing the inherent incompatibility of fully sating the desire of all parties for limitless growth on a planet with finite resources. In practice, this essentially boils down to a form of mutual suppression of desire for traditional growth through recognition of the ultimate unfeasibility inherent in limitless material expansion for all parties and instead adopting a changed societal paradigm. Option two is to refuse to suppress any desire for traditional economic growth and attempt to keep satisfying these demands unabatedly, hoping to outcompete other nations with similar interests in the process, thus accepting economic conflict with other parties that attempt the same.
I put “common rules” in italics in the above quote to underline the paramount importance of these two words in navigating the two options so as to hopefully strike upon the path of cooperation rather than conflict. However, a fundamental prerequisite for arriving at such rules is to first arrive at agreement about what these rules should consist of. After all, agreement does not come from making rules. Rules come from being in agreement.
I don’t presume to here lay out the exact “medicine” needed to arrive at the grand agreement that would make such common rules possible. Indeed, a Nobel peace prize is likely waiting for anyone managing to fully bridge the divide between current norms of economic activity and environmental concerns. I will however discuss some important facets of this that I believe have not received much attention.
In previous posts I have stated that world geopolitics right now are looking uncomfortably similar to the situation that reigned circa 1870-1910, i.e. the era of the “Great Powers”. For a more detailed argument on this, I recommend not just previous posts but also a recent speech at Chatham House, a think tank, which can be found here.
As we all know, the last era of the great powers did not end well. However, the current situation is different. Above all, we have international institutions now that did not exist then. The “million dollar question” that now faces the international community is consequently how robust these “modern” institutions are in holding together the above mentioned path of cooperation while under increasing pressure from forces that may cause conditions prone for increasing levels of conflict and international competition.
Informed by this question, it is quite safe to say that institutions for international cooperation will be very important in navigating the uncertain times ahead to avoid an “uncontrolled” sequence of activity with negative consequences. This of course begs the question, how ready are our international institutions to handle this role? The Italian dictator Benito Mussolini once quipped about the League of Nations that:
“The League is very well when sparrows shout, but no good at all when eagles fall out.”
Unfortunately, this remark is quite translatable to our own day. Our “eagles” of course being the nations and regions that today comprise our Great Powers. Would the WTO and other fora for international cooperation be well equipped to withstand if the eagles of the current political landscape fall out with one another? Hopefully, we will never have to find out, though there are indications that we might just have to.
Put differently, the current set of international instutions that we have can be considered the “insurance policy” that the world community has had time to build up since the last great global conflict that sprang from the Great Powers situation of that era. Indeed, for such a short time as 70 years, we probably deserve a pat on our backs for having come quite a long way in creating the avenues for global cooperation that we now already take quite for granted.
Of course, this insurance policy is not only part of the solution for the precarious time of transition that we find ourselves in, but also part of the problem. To many it represents an order that is outdated and inadequately reflects the dispersed modern landscape of geopolitical power, one that is now decidedly less centered on the developed countries. Thus, it is not unthinkable that such frustrations about the very origins of this “insurance policy” creates a lessened degree of acceptance for it. Needless to say this would make it harder for international institutions to serve its role as a force for continued cooperation and stability.
I believe there is an interesting connect here to culture, and thus a connect to the very heart and soul of what makes up regions and nation states into at least somewhat coherent units that then face each other to cooperate in international fora. The overall point would be that many of the cultural norms prevailing in many societies are rather poorly prepared to deal successfully with the transition to greater sustainability and lessened material wealth. For example, one could make the argument that much of the culture of the US is “geared” towards resource abundance, and that indeed this is taken quite for granted. Consequently, its social structure, like many other countries, at this point has comparatively few cultural “built-ins” to tackle prolonged times of economic and material contraction of growth. The US managed to navigate the great depression and the economic crises of the 1970’s, but arguably they did so with an eye towards something to “fix” before going back to a “normal” state of strong continued economic growth along traditional models. As a case in point, how may such a culture relate to a situation where limits to growth and resource abundance are not something temporary, but comes to constitute a new state of normalcy? I don’t know, and the US is just an example, but I suspect there may be some inherent difficulties here without some shifting of the very cultural norms on which several modern societies rest.
Why does this matter? It matters because it connects back to what I began this piece with – the choice between the path of cooperation, that may entail some mutual suppression of the common desire for unlimited growth, and the beggar-thy-neighbor approach of conflict that takes no heed to constraints while progressing with business as usual. The ease of cultural adaptiveness may be a key factor in what choice is ultimately preferred between these two.
The key point is that what we are facing is not something to “fix” in order to keep on trucking with our currently prevalent modes of operation. Yet this mindset can be seen everywhere. These issues and the transformational changes they will require are not “real” to most people. And, curiously, behavioural economics teaches us that this is to be expected. In that very interesting field, there is an expression called WYSIATI, or What You See Is All There Is. Basically what it means is that it is very hard for us to relate rationally to non-events. We are fundamentally beings of existence, and we prefer things and events to exist before we deal with them. This is probably one of the factors that makes difficult the changing of the societal norms that are firmly based in the currently existing state of economic normalcy. It is psychologically difficult for us to comprehend such a change, let alone to proactively and efficiently make it come about.
This is problematic since it seems, from having read a number of pivotal books on these issues, that we have gotten quite accustomed to what is in reality a rather brief anomaly in human history. One that began with the industrial revolution, which put us on the path to unparallelled material prosperity, and that looks likely to soon be coming to an end by pushing up against some of its inherent physical limits.
Gregory Clark of University of California Davis, in his much discussed book “A farewell to alms”, makes the rather bleak argument that this end of cheap material prosperity may essentially see us return to malthusian economic conditions, where poverty and strife regulate much of human activity due to hitting the limits of global zero-sum resource constraints. I underline that this view is bleak, because it presupposes the path of business as usual in facing these challenges. However, it is hard not to look at this line of reasoning on our economic future without being struck by the above mentioned connection to culture. This stretches beyond just the above made argument on how certain societies are “geared” towards abundant resources and cheap energy. It goes further and cuts to the heart of even the way we govern our societies. I believe, for instance, that the culture of extreme individualism that has been profligate in the west for much of the latter half of the 20th century could only have been possible during condtions of material superabundance. I also think that the wisdom of democracy has clear links to material abundance and may be a superior form of managing large amounts of wealth, when the pie is big, but not necessarily the superior system of governance in times of scarcity due to its high propensity for gridlock when individual interests become vastly separated. This is a controversial argument, to be sure, but the main point is that cultural adaptation to expected averages of material wealth is as much a part of this as anything technical in the way of economics or law. There are powerful cultural non-technical aspects that will influence whether or not we succeed with our transition to societies that embrace sustainability.
Importantly, this shift will affect all nations. The path of cooperation in dealing with these issues is not an argument for the abstract superiority of general do-goodery. It is recognition that nothing else will work. Even under the hypothetical situation that one single nation would completely outcompete every other under the go-it-alone scenario and thus succeed in its strategy to sustain unabated growth, this success would still be short lived. In his book Collapse – why societies choose to fail or succeed, geographer Jared Diamond makes a compelling argument for why an argument that says “as long as I am rich I will make it” is delusional when it comes to navigating the times ahead. He tells the story of the doomed viking colony on Greenland to illustrate his point. The vikings, quite by luck, happened to settle in Greenland in one of its most fertile and warm periods. Thinking this was the norm, they quickly expanded due to their relative abundance and soon had many farms, though the new ones were consistently less and less attractively located than the first ones that were settled. When the climate changed back to what was in fact its true normal, many of these farms simply ran out of food. Rather than starve, the vikings would then either raid or join the better located farms that were still able to produce food during the harsher times. In a domino effect from the collapse of the poorest farms, even the richest ones were suddenly put under great pressure by the scores of destitute vikings who were either seeking employment, shelter or quite simply to steal whatever they could to survive. This in fact continued until there was only one farm left on Greenland, Gardar, which was the richest of them all and the last domino to fall. The moral of the story is of course that it ultimately did not matter how rich Gardar farm was when it found itself under constant attack from raids and having to deal with scores of viking refugees from the collapsed poorer farms. Its richness had solved nothing, so to speak.
This little fable illustrates that no society is immune from global environmental concerns, nor from issues related to international economics and trade, regardless of its individual position, good intentions, or attempts at isolation from either.
Perhaps it is not as the famed Porter hypothesis believes then, that it will be profit based economic considerations (i.e. efficiency from innovation) that will lead to understanding and salvation for environmental problems. But perhaps rather it will be a matter of basic survival instinct, when understanding that without a functioning environmental baseplate all economic activity ultimately fails. And without economic activity, we fail.
Curiously however, our era of hyper-speed communication may actually make such a realization harder due to what is known as “creeping normalcy”. In other words, gradually accepting worsening economic conditions while persisting with an outdated mode of continued externalization due to the gradualness masking the deteriorating conditions. Creeping normalcy is the phenomenon that led people to cut down the last tree on easter island and shoot the last dodo. We often marvel at such folly, but creeping normalcy makes it perfectly understandable. When the last tree on easter island was cut, trees had long since ceased to be a meaningful economic resource on the island. Why not cut down the last one? After all, at that point it must have seemed to not really matter anymore.
It is not unthinkable that similar processes can reappear in our modern era where immediate communications makes events seem more gradual than ever, thus masking overall deteriorating effects (but also positive ones) even more efficiently.
In the hope that we do not fall into such traps however, perhaps it will be this focus on our own survival that will be the rallying call to understanding for societal change towards sustainability, moreso even than a focus on either the environment as such or the increasing of our material prosperity through innovation. And if we do come to such an understanding, we will have taken a major step towards finding the agreement that might just lead to embracing the path of cooperation and common rules.