The Dynamics of the Modern World, the Crises of the 21st Century and alternatives to our present economic system

 

 

 

 

 

The 21st century has begun with the unfolding of multiple crises that take root in the dynamics of the modern world and its economic system. This system has a number of characteristics that are very peculiar and can only lead us into crisis.

 

The first of these characteristics is that it is based on a quasi religious obsession with economic growth and development. Growth is perceived as being absolutely essential to the modern world. This leads to the never-ending accumulation of material wealth.

 

However, any system that requires never ending growth requires ever increasing volumes of resources and energy whilst generating a corresponding volume of wastes and pollution. Faced with the finite nature of planet Earth, this constant expansion can only but breach the physical limits of our planet.

 

The second fundamental characteristic is an economic system heavily dependant upon fossil fuels which are non-renewable. Currently, 80% of energy consumed worldwide comes from fossil fuels such oil, gas and coal. Severe supply constraints are now occurring in oil supply because of Peak Oil. Peak Coal and Peak Gas will happen after 2030.

 

The third characteristic is the linearity of our economic system. It extracts natural resources from the planet such as metals, minerals and biomass in ever increasing quantities, transforms them into consumer goods destined to be thrown away as quickly as possible into landfills or incinerated. The linear and wasteful nature of our economic system is obvious.

 

Adding it all up, it can clearly be seen that we have an economic system in constant expansion, that devours huge and increasing quantities of finite and non renewable fossil fuels whose resource bases decline with time, that consumes vast and increasing amounts of natural resources to satisfy consumer and throw away societies whose citizens have been conditioned to believe that this state of affairs is not only normal but above all desirable because synonymous with progress.

 

Faced with such an appalling state of affairs, why be surprised when environmental degradation continues unabated, and why be astonished when our civilisation itself creates crises that are serious, violent, insoluble and potentially catastrophic for that same civilisation?

 

As our economic system overshoots its resource base which is Planet Earth itself, this system generates crises which impact directly on the very civilisation it is supposed to sustain. These crises create much human misery in their wake and potentially can cause the decline of our modern human civilisation under its present form.

 

These crises can be regrouped under the acronym CAFEE which stands for Climatic, Agro-alimentary, Financial, Energy and Environmental. Let us go into some detail concerning the CAFEE crisis.

 

 

C for Climatic

 

The scientific consensus based on the best available scientific evidence is that the observed increases in Greenhouse gases (GHG) such as Carbon Dioxide and Methane are due to fossil fuel burning and intensive agriculture. These increases in GHG are causing an increase in world temperatures that translate into climate change. Although much debate exists on how severe and how soon will climate change hit us, at very least we can say that we shall live in a world of more extreme climatic events such as more severe droughts, floods and cyclones. The impacts are obvious.

 

A for alimentary

 

This year, 2011, has seen the world population shoot pass 7 billion humans who need to be fed 3 times a day, every day. At the same time, we have high oil prices, world fisheries are collapsing; soil degradation across the planet is severe and water scarcity rampant. The result is sharply rising food prices world wide that reduces the ability of the poor to feed themselves adequately.

 

F for financial

 

Cheap credit, mountains of debt that cannot be repaid, toxic assets, speculation and fraud on a massive scale have yielded a financial crisis of colossal proportion. The consequences of this on-going financial crisis is that countries like Spain, Iceland, Greece, Portugal, Italy are now either insolvent or very nearly so with others to follow. The world financial system is on the brink of collapse.

 

E for Environment

 

Biodiversity losses, land degradation, fisheries collapse, water scarcity, deforestation, widespread pollution are what characterises the environmental crisis. The loss in biodiversity is severe, according to the World Wildlife Fund and UNEP since the seventies there has been a decline of 40% in the Planetary Living Index which is an indicator of the state of the world’s biodiversity. It measures trends in populations of vertebrate species living in terrestrial, freshwater and water ecosystems. Land degradation is an acute problem that affects all continents and impacts heavily on the capacity of agricultural lands to produce food. Worldwide, 30% of fisheries have completely collapsed and the remaining is either collapsing or is over exploited.

Note how the alimentary and environmental crises are linked to one another.

 

 

E for Energy

 

The energy crisis is mainly an oil supply crisis due to Peak Oil which is the point in time when world oil supply reaches a maximum which is then followed by a slow but steady decline. Thus a shortfall in oil is created that generates high prices and is disruptive to the globalised world economy. There is a 50% probability that Peak Oil has been reached NOW. By 2020, this probability shoots to 80%. Peak Oil is inevitable given the fact that oil is a non renewable and finite resource. Similar phenomena will also happen for coal and natural gas but at later dates.

 

Combining those crises together, it is becoming increasingly clear that our modern way of life is NOT sustainable and will change whether we like it or not. The choice is clear: Either we initiate change willingly, and in an intelligent manner in response to the CAFEE crises, or change will be imposed upon us.

 

To respond intelligently to the CAFEE crisis, it follows that we should give much thought to alternative economic models because the one we have is becoming increasingly dysfunctional and is headed for decline and subsequent collapse. Thus the requirement for a new economic system is very much a question of the survival of human civilisation.

 

 

We need a new way of doing things that increases the sustainability of human civilisation and of our economic system. Sustainability is defined as the ability to continue an action without the risk of failure or collapse.

 

So what should be the main characteristics of this new economic system and civilisation? We have divided that into its physical, financial socio-cultural and mythical characteristics.

 

The Physical Characteristics

 

 

(1)   Biological agriculture – The growing of food that does not require fossil fuels inputs but requires the use of composts that recycle nutrients into the soil

(2)   The recycling of ALL wastes

(3)   The use of renewable (biomass) and recyclable resources (metals)

(4)   The use of renewable energies – The finite nature of fossil fuels makes their use problematic

 

 

 

The Financial Characteristics

 

 

Financial systems may no longer be based on interest rates as is the case today in western financial systems. This is because interest based financial systems have the tendency of making monetary systems become larger and larger with no end in sight. They diverge to infinity given time. We will have to think along the lines of Islamic Banking where profit accrued and risks are shared among all parties involved.

 

The Socio-cultural Characteristics

 

(1) A controlled demography

(2) A democratic, transparent, inclusive and accountable system of Governance

(3) A social structure that reduces social injustices and reinforces equity

 

The requirements of such characteristics are self evident.

 

The Mythical Characteristics

 

Every society is dominated by a central myth which is the fundamental belief system or narrative that is taken to be true and obvious by all, and is as such rarely discussed. The central myth of our civilization is that of progress and modernity. This myth has enabled the emergence of a mostly utilitarian vision of nature. Nature is simply seen as a place from which resources are extracted and into which waste is dumped. This materialistic and purely utilitarian vision of nature will have to change and we will have to cease seeing her as simply a door mat to the Temple of Consumerism and Wealth Accumulation.

 

Another myth and another vision of nature will have to prevail. Which myth and which vision will come to pass? We do not know as yet. But we can imagine that our new myth shall incorporate a narrative that perceives Nature as being a powerful ally essential to our survival and well being. Nature is to be respected but not feared. She can be bountiful or mean at times, placid or a fury at others.

But above all, we’ll have to accept that we are part of nature and nor apart from her. Nevertheless, the new myth of a future sustainable civilization will be the most difficult aspect to address.