Reimagining Capitalism in Post Sandy America
No scientist will tell you with certainty whether doping was the reason Lance Armstrong won any particular leg of his seven Tour de France titles. You know where I’m headed with this reasoning.
Bloomberg Businessweek put it rather succinctly on this week’s cover: “It’s Global Warming, STUPID.”
For the first time since 1984, not one challenge was raised about climate change in the presidential debates, while the rest of the world looked on in dismay. As we head to the polls today, however, suddenly the election issues the media had been focused on are “so 2012.” Sandy hit the target that Katrina missed, the powerful media and financial center of the world, and the homes of the (mostly) white elite that rules the roost. The future is now about our ecosystem crises and their direct, inextricable link to our economic system that ignorantly and unnecessarily optimizes short-term efficiency over system resiliency.
One complex, indivisible, systemic crisis: Good morning America!
Our response will come in two phases. The future of our species depends on how quickly we conquer phase one, and move on to tackle the root causes in phase two. Sandy and Katrina—the record heat, the historic drought—were all manifested in our one degree (warmer) world. Our best science advises we need to stay below two degrees of warming to avoid climate change tipping points, presenting civilization with our “$20 Trillion Big Choice”, which I previously wrote about. Stark new research out of Pricewaterhouse Coopers confirms how off track we are:
The report warns that even if we double the current rate of decarbonization of the economy, we are heading not just past 2 degrees, but to a 6 degree world in which we are told perhaps 90% of the human race becomes extinct.
Let us assume – I’m optimistic!—Sandy has kicked off the “easy part,” our Phase One response. This will include first of all a global carbon tax with teeth that phases in over the next five to ten years (think $10 gasoline, heading to $20). Various greenhouse gas emissions capping schemes will then be experimented with on top of the tax. Policies that catalyze the transition to renewable energy such as feed-in tariffs and energy efficiency tax credits dominate legislative agendas. Unwelcome but essential public investment requirements for breakthrough technology research and development and for enhancing infrastructure resiliency will crowd out America’s “defense expenditures” from half the global total to something more reasonable like perhaps one third. Massive public and private investment in renewable energy will be catalyzed via public infrastructure banks, which leverage government’s low-cost credit expansion capability, tax regimes that penalize destabilizing speculation and incentivize long-term investment in the energy transition agenda, radical rethinking of building codes, zoning restrictions, and fuel efficiency standards that will collectively transform transportation systems, business models, and consumer behavior.
In short, we’ll begin, for real, to do all the things we know we need to do, we know how to do, we have the technology and intelligence to do, but until now we’ve lacked the will to do. New leadership is already emerging to champion our Phase one response. Names like Bloomberg and, yes, Christie, who reportedly wept after receiving a consoling hug from his childhood idol Bruce Springsteen. These are the moments of epiphany.
That’s the easy part.
Phase Two is the hard part. Phase Two recognizes that Sandy and the historic heat and drought are mere symptoms of a systems design failure. That is, an economic system design failure, a system designed for a set of circumstances that applied in the past – huge planet, small economy – but are no longer relevant. It’s an economic system held hostage at its core not by merely our greed or rampant consumerism, but by our mistaken belief from a systems design perspective in the short-term primacy of capital at the expense of all other values.
Other symptoms of this systemic crisis include our cascading global fresh water crises, desertification, deforestation, chemicals poisoning our soils and food system, a nitrogen cycle out of balance, and an accelerating loss in biodiversity now called “the great extinction.” We’ll also see the connection to rising inequality now on a par with medieval times, the obesity epidemic, rising depression and suicide, and a host of other social problems. Phase Two will acknowledge that genuine solutions demand an examination of root causes, unbiased by ideological beliefs, but instead guided by the best modern science has to offer and the wisdom we bring forward from the past.
Phase Two is about reimagining capitalism itself. Here’s a list of five critical Phase Two challenges that a community of transdisciplinary practitioners and thinkers are already busy at work on.
- We will need an ethics grounded in what Albert Schweitzer called a “Reverence for Life” (for which he received the Nobel Peace Prize in 1952), and what scholar Peter Brown calls a “Right Relationship” between humanity, economy and ecology;
- We will need institutions that provide vital, scientifically derived data on the relative health of all core ecosystems, which will become the basis for global policy-making and governance;
- We will need to mobilize a war-like effort to preserve and regenerate the world’s natural carbon sinks – the oceans, grasslands, forests, and peat bogs – whose health or continued decay hold the future of humanity in the balance even if we manage to stop burning fossil fuels;
- We will need to reimagine products and services, business models, supply chains, indeed entire local and regional economies, and the global economic system, using nature’s holistic design principles that we know create resiliency;
- We will need an economy of sufficiency that does not demand exponential growth of material throughput from finite resources on a planet that is fixed in scale, served by financial theory and practice that does not demand exponential growth of aggregate financial capital, irrespective of qualitative factors.
When Einstein said that compound interest is the most powerful force in the universe, he was apparently both joking and serious. How prescient. Our Phase Two understanding will see that the entropy law, the second law (not theory) of thermodynamics, must and will assert its proper place as supreme ruler over the false abstraction of compound financial returns on an ever expanding stock of financial capital in the face of a diminishing stock of natural capital.
Phase One is a vital but insufficient response. The most important question before us today is how do we ensure our urgent and sustained attention to the wicked challenges of Phase Two in the decade ahead?