Saturday, January 14, 2006

The Church of GDP

What's the dominant religion of the past 100 years? The answer isn't Christianity with its 2.1 billion followers, or Islam with its 1.3 billion. It's the idea of economic growth, the Church of GDP.
Holy moley!! That's Robert J. Samuelson, the bigshot economist, prolific pundit and TV guru.

When I saw Samuelson's words posted towards the top of the EnergyBulletin news clearinghouse's page I nearly had a heart attack. Could Samuelson actually be admitting anything even remotely approaching that his dismal science is nothing but religion?

Rather than continue reading the excerpt on EnergyBulletin, I clicked directly to the Washington Post to read the entire piece.

What a letdown. I should have known better.

Paraphrasing public health blogger Cervantes, Samuelson has set a little honey-trap for people looking for reinforcement of their prejudices. It obviously worked on me. He got me to read his piece. Trouble is, Samuelson's tactic only pissed me off. I now think less of him than I did before.

Samuelson's piece, which is a critique of a book by another economist making the case that economic growth is morally uplifting, does not even mention energy, resources, limits or exponentiation. It's just more of the same old bullshit.

After the disappointment of having read Samuelson's piece at the source, I returned to EnergyBulletin, where I found their take on Samuelson's piece further down the page. I agree completely with their reaction to Samuelson:
A profoundly irresponsible article from the Washington Post. Samuelson casts himself as a skeptic highlighting some counter examples, but is in fact in agreement with Friedman on the moral virtues of endless economic growth. He never mentions unfortunately, within this seemingly hard-questioning review, that we live on a planet with finite natural resources.

This is a classic case of 'fair and balanced' discourse where both parties share the same narrow framework of assumptions. Normally in a publication like the Washington Post 'growth is good' might be one of those shared assumptions. In opening this question up there is opportunity for some timely reflections on a fundamentally self-destructive — one could say completely deranged — thread through our dominant economic ideologies. But the question is opened only to be closed again more tightly. True reflection might be too painful. Endless growth on a finite planet is fundamentally impossible, and its pursuit (while an understandable enough response to the journey up the energy curve) is leading to mass extinctions, including possibly our own if we intend to try pursuing it on the downslope of the energy curve by burning up the Earth's remaining natural resources.

'The truth is so simple the mind is repulsed' to paraphrase Galbraith out of context.

Samuelson resorts to some outright doublethink: "Societies whose politics focus on the gaining and sharing of prosperity can promote their own stability." Sure, but how exactly can a system based on an unsustainable premise, (not to mention one emphasising competition rather than 'sharing') be considered in any way stable?

Peak Oil implies that we will be forced to embark on a period of economic contraction. But that does not have to mean the end of progress (by most definitions), positive social reforms, depth of human experience or moral virtues.

See instead Center for the Advancement of the Steady State Economy, Richard Douthwaite's book The Growth Illusion, Clive Hamilton's Growth Fetish, or perhaps William Catton's writings on Overshoot.
I just started reading another economist's 1987 book, Thomas Sowell's "A Conflict of Visions - Ideological Origins of Political Struggles". I'm hoping for a little insight into the conflict between Samuelson's claptrap and the words of one of the 2006 Edge Question respondents, Mihalyi Csikszentmihalyi, who responded to the question, "What is your dangerous idea?":
The free market

Generally ideas are thought to be dangerous when they threaten an entrenched authority. Galileo was sued not because he claimed that the earth revolved around the sun — a "hypothesis" his chief prosecutor, Cardinal Bellarmine, apparently was quite willing to entertain in private — but because the Church could not afford a fact it claimed to know be reversed by another epistemology, in this case by the scientific method. Similar conflicts arose when Darwin's view of how humans first appeared on the planet challenged religious accounts of creation, or when Mendelian genetics applied to the growth of hardier strains of wheat challenged Leninist doctrine as interpreted by Lysenko.

One of the most dangerous ideas at large in the current culture is that the "free market" is the ultimate arbiter of political decisions, and that there is an "invisible hand" that will direct us to the most desirable future provided the free market is allowed to actualize itself. This mystical faith is based on some reasonable empirical foundations, but when embraced as a final solution to the ills of humankind, it risks destroying both the material resources, and the cultural achievements that our species has so painstakingly developed.

So the dangerous idea on which our culture is based is that the political economy has a silver bullet — the free market — that must take precedence over any other value, and thereby lead to peace and prosperity. It is dangerous because like all silver bullets it is an intellectual and political scam that might benefit some, but ultimately requires the majority to pay for the destruction it causes.

My dangerous idea is dangerous only to those who support the hegemony of the market. It consists in pointing out that the imperial free market wears no clothes — it does not exist in the first place, and what passes for it is dangerous to the future well being of our species. Scientist need to turn their attention to what the complex system that is human life, will require in the future.

Beginnings like the Calvert-Henderson Quality of Life Indicators, which focus on such central requirements as health, education, infrastructure, environment, human rights, and public safety, need to become part of our social and political agenda. And when their findings come into conflict with the agenda of the prophets of the free market, the conflict should be examined — who is it that benefits from the erosion of the quality of life?

Emphasis mine.


jj mollo said...

On average, the citizens of the Earth are still very poor, verging on all sorts of calamity. If we can't control our population growth then we have no choice but to rely on Market Capitalism and innovation to keep us out of Malthus' reach. The kind of gentile poverty you seem to promote has been out of our grasp for about 3 doublings.

Steve said...

Thank you for the comment.

I'm not certain what you mean by "gentile poverty", but I don't think that wishing for a little more sanity in public policy is the same as advocating or promoting poverty. If "gentile poverty" is implicit in less freeways, less Hummers, less atmospheric trashing, though, so be it. "Gentile poverty" sounds better than where I see us headed.

I looked at your blog, and followed the link to your piece to about Borlaug. I generally like what I've seen of your perspective on things. I think the big difference between us is that you have a lot more more hope than I do. I added your RSS feed to my collection. Maybe some of your hope will rub off.

jj mollo said...

I found you through your book list, and I was impressed by your analysis of Samuelson. Attacking such an icon in such a convincing way puts me in mind of Hitchens attacking Mother Teresa. I don't think I agree with you, but its a very stimulating viewpoint.

I haven't figured out how to do the RSS thing, so I guess I'll have to come over here to visit every once in a while. My hope comes from the fact that our government, theoretically free and democratic, is in actuality as incompetent, distant, deceitful, foolish and contemptible as it seems to be.

How can that be, and things nevertheless run as smoothly as they do? In fact, there is so much room for improvement in the government's performance, and in society's performance in general, that one has to believe there is a huge potential there for beneficial action. This is what I believe.

I also think that I have discovered for myself, from a systems point of view, some of the principles that make the government engine hum and how to tune it up a little. I started my blog to try to explain some of my ideas, partially to understand them a little better myself, but also to recruit some folks who might be able to improve on them. I've had these ideas for years, but I've been quite unsuccessful at conveying them in a direct fashion or convincing other folks of their merit. I'm really a deliberate memepusher using the blog as artfully as I can. I appreciate your attention and your kind words.

Steve said...

Thanks again.

Your hope that the great deal of governmental, um, incompetence(?) points to the possibility of improvement (did I get that right?) is similar to my hope that the fantastically wasteful way we squander energy in this country may represent a buffer of sorts to what comes next. Unfortunately, that buffer represents many powerful interests. My hope is small and my fear is great. I have a 16-year-old, see.

The RSS thing comes in pretty handy. With the Firefox browser it's easy, too. There are dedicated RSS readers, but I'm not experienced with them. Firefox calls RSS feed links "live bookmarks". Here. It works very well. I keep my live bookmarks right on the link bar, organized into various categories. Mousing over a given live bookmark brings up the titles of the latest RSS feeds, which you click on if you'd like to go to the page of interest.

I've given up trying to push memes. One of my pet peeves is people's oblivion of the exponential consequences of steady growth. Another is oblivion of the consequences of increasing complexity. Bartlett deals convincingly with the former, and Tainter with the latter, but no. In the abstract of his paper on denial, Catton writes that "Denial by opponents of human ecology seems to be a way of coping with an insufferable contradiction between past convictions and present circumstances, a defense against intolerable anomalous information."

Intolerable anomlous information. Yep. That's it.

So life goes on. Cheers! Steve

jj mollo said...

Not so much a buffer, as an opportunity. What is the largest virtually untapped source of energy, readily available with proven reserves? I'm talking about something right before our eyes bigger than Saudi Arabia. Our only problem is we can't get people to use it. You know the answer. It's waste. Conservation is our biggest opportunity. We could with very little effort stop those supertankers in their tracks and send them home. It's a simple matter of changing our collective priorities just a little.

So why don't we do it? Precisely for the reasons you indicate. Unimaginative and incompetent officials who don't understand systems, but know how to get elected. The true situation is hard to see because it violates what people see in their daily experience. It's too mathematical. People can only see that things get better and better. They don't trust the academics, partly because the academic types are so blatantly wrong on some things, but mostly because they don't see the correspondence of theory and daily life. Is this denial? The romantic linkage of moral superiority and economic progress has been repeatedly confirmed for most folks.

Stewart Brand says that even the environmentalists are innumerate and romantic. They really don't have any comprehension of how dangerous the current situation is becoming. And just as the opportunity provided by waste, the opportunity provided by all this stupidity is enormous.

By the way, I like to explain exponential arithmetic to people by using the Rule of 72 and an example using money. It works much better than graphs and equations.

Here's another link for Norman Borlaug if you're interested, and this PDF.

Steve said...

Stewart Brand caught a lot of flack for that piece. I wonder if he changed any minds? I agree with him on GMO's and nuclear energy, but I think he's a little optimistic on the population front considering that projections still call for another two or three billion souls in the next few decades. Worse is that they all (effectively) have to increase their energy consumption substantially if they are to move to cities and/or out of frequently extreme poverty.

There are two graphs that tell the story for me. They're a bit dated but, I think, still substantially correct.

The first one is a projection from the Royal Society, from a June 99 report, "Nuclear energy - the future climate", of world energy consumption broken down between industrialized and developing countries. Industrialized countries energy consumption is projected to be fairly flat, while the developing countries energy use goes through the roof.

The second chart is from the Population Reference Bureau with data from the UN "World Population Prospects, The 1998 Revision" and their own estimates. I think their projections back then were a little high compared to today's, but what has not changed is the shape of the curves and how well they correspond to the first chart.

I think it's good, despite problems that declining populations will cause, that some industrialized countries' populations are starting to decline. I don't take much solace, though, because I think the two charts above tell the important story: that unless things become totally unhinged global energy consumption has to increase radically. I may be overstating a bit, but probably not by much.

Someone said that it's tough to make a forecast, especially about the future. I like that. I also like the line from that Tom Hanks movie about being stranded on a desert island, something to the effect of You've just got to keep on breathing because you never know what tomorrow will bring.

Time to hit the sack and read a couple more pages of Conflict of Visions. Cheers from Phoenix, where the day was gorgeous but we're having one of the longest dry spells on record.