THE ZILLION DOLLAR CRASH

More fish kills, oil spills, poisonous gas leaks matters have reached a critical stage as far as the Irish environment is concerned. Galvanised by the urgency of the threat to their environment, health and livelihoods, people are increasingly looking to themselves to halt the destructive spin-offs of the industrial system. And according to economist and writer Richard Douthwaite, more and more people are also beginning to research and forge community-controlled alternatives that won t jeopardize sustainable life for ourselves and our descendents.
Along with a growing number of thinkers, theorists and activists in many different walks of life, Douthwaite believes that this move from profit-driven monopolies back to a diversity of strong, locally-controlled economies is abolutely necessary if the human race is to avoid major catastophe on a global scale.
Douthwaite s argument and the ideology that it taps into the politics and economics of sustainability highlights the obvious truth that pollution is one of the negative results of economic growth . Yet those who critisise the effects of economic growth are often blamed for wanting to halt the triumphant march of progress. The beneficence of economic growth is the ruling ideology of our times, a myth that Richard Douthwaite s brilliant first book The Growth Illusion: How economic growth has enriched the few, impoverished the many, and endangered the planet dissects in an amazingly clear, factual and accessible way.
Douthwaite s ideas were influenced by another groundbreaking work, The Limits of Growth, published twenty years before The Growth Illusion. What those authors predicted, explains Douthwaite, was that pollution would build up to such a point that it caused a catastrophic crash in the earth s population.
In the late 80s, when information began to firm up about global warming, I thought, Ah, this is it. This is the way that pollution is going to act. We re polluting the atmosphere, we re causing the earth to warm, there can be catastrophic consequences causing a population crash as a result of that.
Because we re going into the unknown, there is a risk that there ll be a climate flip; that it will change from one relatively stable regime, such as what we ve got now, to another relatively stable regime, but the climate conditions will be very different. One school of thought believes in differential global warming, so what they think is going to happen is that sure enough, we ll get warming around the equator, but in latitudes such as the one Ireland is in, and further north, there will be a cooling because there s an increase in cloud cover. Now just looking at the past summer you would think that perhaps they re right about that.
This is sobering news. Outside, heavy clouds engulf the panoramic scenery of Glenbeigh, Co. Kerry, where Douthwaite is facilitating a four day course on the constructive ideas found in his second book, Short Circuit.
We could get an expansion of the areas which are permanently under snow, continues Douthwaite. As we know there are cycles of ice ages and inter-glacial periods, and we are towards the end of one of the 12,000 year inter-glacials at the present. And people have looked at ice-cores and shown that before the last ice age, there was an increase in the amount of carbon dioxide in the atmosphere. So what we could be doing is accelerating the process that leads up to another ice age. The chastening thing about this theory is that the reversion back to snow and ice is a process that could well take as little as 30 years.
This is a very serious threat the next rate of acceleration suggests the reversion to snow and ice could take place in as little as 30 years. So why aren t the world s economists jumping up and down calling for an end to the unsustainable methods of production upon which the whole industrial system now depends, and which, if continued, will eventually hasten our demise? Why are they recommending policies which contribute to increasing thermal pollution, therefore wrecking present and future generations chances for survival? Ireland is a very small, barely industrialized country in relative terms; yet our energy use from non-renewable fossil fuels has increased by 15% since 1990, and according to the Irish Wind Energy Association, that figure could rise to 100% by 2010. There will be a concomitant leap in climate-changing carbon-dioxide emissions during the same period; a rise of 33% is predicted. These increases in unsustainable, ultimately destructive practices are a direct result of the current economic boom in Ireland. And in global terms, they re just a drop in the ocean.
Douthwaite puts the blinkered nature of mainstream economics down to an overriding laissez-faire type attitude which supposes everything to be substitutable for everything else. For example, mainstream economics predicts that when the earth s fossil fuels run out (oil is predicted to run out in about forty years less if its use increases due to expanding population) human ingenuity will automatically invent something that can be used instead. This is very shaky ground upon which to base economic policy, considering that in our present system, the methods of production and distribution of the world s food is increasingly dependent upon the use of fossil fuels, which are getting gobbled up faster every year, and in relative terms will soon run out.
What economists consistently overlook is that the earth can only absorb so much of the pollutants in a given period without degradation, Douthwaite observes. And degradation means that its carrying capacity is reduced: in other words, its ability to support forms of life, including human life, but all forms of life come into this.
And so the real risk is that by pushing right up against, and over, the limits, not just with using too much fossil fuels but in all sorts of other areas, we re making our environment less productive. And there will be a population crash as a result of it. There won t be enough food. Reliable statistics show that the area of productive land per capita of population is now beginning to fall significantly.
And that s not the only nightmare scenario. The most serious, long term problems are connected with the food supply, says Douthwaite. One is soil erosion. Modern practices are breaking down the soils very rapidly. And that s not being allowed for either in the national accounts or the projections. To some extent we ve made up for this by piling on the fertliser, but that s a short-term solution as well. And that s causing problems itself. Nitrogenous fertilizers, which are the main ones, are very energy intensive they re based on fossil fuels. When the fossil fuel runs out, we won t be able to artificially buttress production in that way. In the Irish case, if you look at where a lot of the gas from the Kinsale field goes, it goes to NET, who are the main producers of fertilizer, and it s sold at a ridiculously low price to that organization.
The other most worrying factor, says Douthwaite, is that there is now less genetic diversity in the crops that we grow, meaning that resistance to voracious adaptive pests may well become impossible. What would this mean on a world scale?
What it means is that if you can no longer breed in resistance to the pests because there ll be no strong resistance left to use, nothing that you haven t used before in your gene bank then the pests will come along and be able to wipe out the whole crop. And so major crops like wheat and rice may become impossible to grow. Even more serious than that is that because we ve been breeding super pests, it s making it more and more difficult for organic producers to continue, because the pests have probably already found a way to encounter the resistance that is in the strains that they grow. So we re making our food supply extremely doubtful.
Can you put a time on this at all?
No. The book from which I got the information about this problem of the loss of genetic diversity in cultivated crops says that this could happen at any time. We could lose a major crop within the next ten years. And so inevitably that means starvation for a lot of people.
Richard Douthwaite defines the destructive process we ve been discussing as the captalist sytem s need for constant expansion.
It seems we re in a classic Catch-22 situation: unless we continue to expand we face economic depression, but by expanding we re also destroying what we depend upon for life.
Yes, agrees Douthwaite, though there are ways out of this situation. Even within the capitalist system, if you take away the need to compete and to invest very large quantities in order to remain competitive on an international level, I could see the capitalist system being able to make a soft landing rather than crashing into the ground. So it s not a fundamental flaw with capitalism, but just the type of capitalism that we ve got at present.
The myth of economic growth raises its head again; I ask Douthwaite for proof that it s not the good thing many believe it to be.
Until the late 60s, he says, economic growth generally was a good thing. The Index of Sustainable Economic Welfare [which indicates the quality of life as experienced by the majority of the people] went up in step with economic growth. Growth is an increase in national income, and the important thing is that national income is a mixture of goods and bads, of desirable expenditures and undesirable expenditures. So long as there isn t an undue increase in undesirable expenditures, then economic welfare which essentially has nothing to do with happiness, it just means that we live more luxurious lives economic welfare was keeping in step with the growth of national income. But then something happened during the 70s and more bads began to creep in and to use up not just all the growth, but some of the previous output, and so as a result, the level of economic welfare per person is falling in industrial countries.
Can you give me an example of bads?
If we clear up pollution, like oil spills, the cost of doing that goes to increase economic growth; if we have road accidents, the cost of mending the cars and the people involved, that counts to be economic growth. Crime contributes to economic growth because of the expenditures of the police, private security forces, insurance companies; so the growth figure doesn t tell us any longer whether we are getting any better off or not. So when the figures have been corrected for the undesirable things the things we really wish we didn t have to spend our money on that are included in economic growth we are going backwards.
And if you look at the social indicators the measures of how well people are, the proportion of the population who commit suicide, or the proportion of babies that die in infancy, this sort of thing, in Ireland we are in a slight decline in that area, in spite of all the economic growth that we ve had. In the US, the level of social health has slumped over the past twenty-five years; the last year was the worst ever despite the fact that GNP [Gross National Product a conventional economic growth index] is still going up. And that s one of the reasons why the US is an unsatisfactory place to live for most people these days.
So even though we re spending more and more, we re not actually getting any wealthier in real terms?
Yes. There s also all sorts of defensive expenditures. If traffic builds up on roads and people have to double-glaze their houses to try and keep out the noise, that is not even restoring them to the situation before growth increased the traffic, yet it is a cost that they have had to bear.
I m entirely confident that we are running backwards. We re doing more and more, there s more frenzied activity year after year because we have to keep the system going to stop it crashing. And there is a collusion between business, which needs to make profits, and governments, which desperately want to avoid a crash, because if there s a crash their tax base disappears and there s more people on social welfare. So business and government are running the economy in order to grow, but they are ignoring the fact that the type of growth that we re getting now is in fact making people worse off.
Is this a renegade attitude to have?
It s been ignored. In Europe, nobody is saying at a political or at a mainstream economic level that we re going backwards. I m very much a voice in the wilderness at present. But as the statistics are there, and as it accords with peoples experience that they are being squeezed in spite of the growth, I think attitudes could change very quickly on this, and it could become a political issue.
But right now, Douthwaite argues, politicians find themselves enslaved by the system.
By allowing themselves to be taken into free trade arrangements not just the EU but the whole panoply of the World Trade Organization and the various GATT rounds, and in particular the agreements on the free movements of capital, they have lost the ability to control the economy and to run it in a way in which they can protect the interests of the Irish people. And this is extremely serious.
If you want an example of this, we only have to look across the Irish Sea to what s going on in Britain. Why is Tony Blair s government just a Tory government with a pleasanter face? Why have they adopted so many of the predecessor s policies? Because they have no option but to do so. If they wish to increase taxes, for example, in order to provide better social services and education, then the investors would vote with their feet and pull out, and a crisis would be created in that way.
Despite the grim warnings that his research has thrown up, Richard Douthwaite retains an aura of optimism, humour and good-natured intelligence. His latest book Short Circuit: Strengthening Local Economies for Security in an Unstable World is a resoundingly positive, problem-solving, forward-looking work. Where The Growth Illusion exposed the problems, Short Circuit explores the solutions.
Along with many other thinkers and activists in the international movement for sustainability, Douthwaite (who is English-born but has lived in Mayo for over twenty years) believes that the conditions in Ireland make our country particularly amenable to the development of an alternative economic system.
Of anywhere in the industrialized world, if a new culture is born, I think it will be born in Ireland, he says. Having the rapid rate of growth that we ve had is in fact a big advantage, because in Britain at least, achieving a high rate of growth is still seen as a desirable objective. We have achieved this high rate of growth the Celtic Tiger but most of us know that apart from a small group who are doing extremely well, it s not made better lives for the rest of us. And in particular, it hasn t done a thing for the declining rural areas. It might be creating jobs, but it s not creating jobs say in parts of Mayo, where the the population is in decline. And I think an awful lot of communities have realised that if they are going to change their situation, they can t look to government any more that they re going to have to do it for themselves. And they are looking for the sort of solutions and in some cases they re trying them that I describe in my book, because that s where the information in my book came from.
The solution is that we must do more for ourselves with the resources of our area, and think much less about what we re going to sell to outsiders. The gap between the wealthy nations and the poor nations has more than doubled. So what we ve got to do in our communties is keep out of this rat race. And stop having to trade off in order to be competive. We don t have to compete! If we can make ourselves a protected local market, so that we re producing for sale to each other, then we can opt out of this. At the moment communities have to sell to the outside world, because they need essentials of life they need oil, they need coal, they need certain food supplies, and if they didn t get them, life would grind to a halt. So the first target should be to think how can they become energy self-sufficient; how can they develop the immediate resources of the area in order that they don t have to buy energy in the unstable outside economy.
And then secondly, how can they become self-sufficient for food. Now actually becoming self-sufficient for food shouldn t be a problem anywhere in Ireland, because the ratio of land to population is very favourable. So once a community has achieved that, and can meet its basic needs from its own resources, then it can trade with the outside world out of choice, not necessity.
In Short Ciruit I ve tried to analyse how this can be done, and there are two key steps that need to be taken. One is that the area needs its own local currency, so that it doesn t have to earn the units of exchange from the outside world in order for the people of the area to trade amongst themselves; so that regardless of how much or how little conventional cash is coming into that community, they can still do better than barter with each other. And they ve got to have their own banking system because they ve got to ensure that the interest rates charged in their community can be quite independent of the outside world. So once that s done, if they then use my title, Short Circuit , and produce things for local sale and sell directly to the customers or through a local shop, they can cut out the extremely ineffecient and long and expensive distribution chains that are used in the conventional system.
Short Circuit: Strengthening Local Economies for Security in an Unstable World is literally stuffed with informative case histories of the kind of economics we urgently need to move towards in order to sustain human and other forms of life. It s a how-to guide on setting up sustainable, community supported agriculture, renewable local energy production and financial micro-climates, and is specifically geared towards the British and Irish situation. There s a detailed description of how a declining town in Australia has completely reinvigorated itself over the past two decades, using many of the co-operative local economy techniques which Douthwaite discusses in his book.
What I m not saying is that our communities need to be totally self-reliant; it s just this question of balance, Douthwaite emphasises. Until a hundred years ago, most Irish communities were very largely self-sufficient; the families would grow a lot of what they needed, and trade for other things in the area with their surpluses, They produced their own energy and a lot of their own food. Then as communications developed they began to sell more and more outside and they got a wider range of choice. And this was good: it meant lives became better and less hard for many people. But we ve just carried it to far, and so from 90% self-reliance, as it might ve been a hundred years ago, we re only 10% self-reliant.
This leaves us extremely exposed. It means that the level at which we live is determined totally externally, because we re price takers we ve no discretion over the price we get paid; and then we turn that money around and we use it to buy things that we really need from outside with no control over that either. So this means that we ve no control; the world system determines the margin between the two and consequently the level at which we re able to live. What we ve got to do is to break out of that situation in order to take the pressure off us. n