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Mending Dr PEMBy’s broken ladder

By Cameron Leckie - posted Tuesday, 1 November 2011


Just imagine for a few moments what the symptoms of a world at the limits to growth might include. Not just any world though, but one that has an economy that is global in nature, hyper-complex, industrial in form, credit driven, consumes resources (many of which are non-renewable) at an exponentially growing rate, and its financial system is designed around perpetual economic growth.

If this global economy was reaching the limits to growth it would be reasonable to expect that there would be warning signs. Symptoms that all was not well. Some possible symptoms, in no particular order, might include: Increased volatility in financial markets, whether they be in stocks, bonds, commodities, or precious metals; debt increasing to the point where the interest payments place a significant burden on society; increasing scarcity of key natural resources; increasing cost of living pressures on families and communities; increasing conflict between capital and labour; increasing political instability both in and between nations; increasing costs of dealing with the pollution caused by economic activity; and increasing difficulty in maintaining existing infrastructure and services.

A brief survey of news headlines around the world suggests that all of these symptoms currently exist to a greater or lesser degree.

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One of the key questions facing us today is whether these symptoms are acute or chronic. Due to the all powerful forces of the market combined with human ingenuity, the conventional wisdom suggests, or maybe hopes, that these symptoms are acute. The treatment described by Dr PEMBy (PEMBy = Politicians, Economists, mass Media and central Bankers) is government stimulus, low interest rates, and if it gets really serious, some electronic money printing (quantitative easing). These responses, it is hoped, will treat the acute symptoms leading to a return to growth, although it is hard to understand how when it fails to consider the other symptoms.

The sheer scale of responding too the global economies current symptoms suggest however that they are chronic in nature. The world’s greatest ever credit expansion took more than forty odd years to reach its zenith; it will no doubt take a decade or more to unwind. Developing alternatives to fossil fuels on a meaningful scale, if it is even possible, will take several decades. Stabilising our climate could take a century or more. If these symptoms are chronic then a different treatment regime is needed. Indeed treating the symptoms as acute when they are in fact chronic is likely to only exacerbate the underlying condition – namely a global economy at the limits to growth.

Whilst Dr PEMBy has, and will likely continue to tell us, that if we just swallow their prescription a return to growth is just around the corner, there is a significant difference between the current situation to previous economic downturns - differences that imply that the current downturn is not just cyclical as Dr PEMBy is ever so fond of telling us. This can best be explained by panarchy theory. 

Panarchy is a model that can be used to describe how ecological and social-ecological systems function. It recognises that such systems go through phases of growth and decline, the adaptive cycle. A system initially accumulates capital rapidly and its components become more connected. As the system matures it develops negative feedback loops amongst its components to keep the system in balance. Over time the system becomes so rigid and dependent upon a particular set of conditions that a change to those conditions triggers a collapse. The collapse breaks apart the connections within the system, increasing its resilience and setting the conditions for growth to recommence. Panarchy theory recognises that systems operate at multiple levels from the micro to the macro and over different timescales with each system providing feedback to those above and below it.

In normal times the feedback between the various systems provides buffering. So when a system collapses, the feedback from other systems at different phases in the adaptive cycle both limit the depth of the collapse and assist in its reorganisation. There is a danger however. When enough systems reach the collapse phase simultaneously, this result can be a very deep collapse from which recovery is either impossible or very slow.

This is the difficult prospect that we face. Not only are there a number of chronic symptoms afflicting the global economy but many of them appear to be approaching the collapse phase simultaneously. Examples include the increasingly erratic climate, the global peaking of crude oil production, the debt crises of many countries and the increasing difficulty of our politicians and the political system to address our current ills. This has the potential to lead to a deep and comparatively rapid collapse of many of the systems that we currently rely upon.   

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The prospect of a deep collapse is magnified by society’s tendency to, as Ronald Wright author of A Short History of Progress describes it, kick out the rungs beneath us as we climb the ladder of progress. These rungs can be thought of as a safety net. Take for example food. Only a couple of generations ago many people provided a proportion of their food through the backyard vegie patch, a few chickens and some fruit trees. Today, the vast majority of us rely almost exclusively on food provided by the global food industry. Not only are we now dependent on a system over which we have no control but most of us have lost the skills and knowledge required for successful food gardening. Combined with this loss of knowledge is the trend towards homes that do not have adequate space for something as quaint as a vegetable garden. We have thrown away this rung like so many others over the last century or more of ‘progress.’

It would not be an unreasonable assumption to suggest that the Dr PEMBy’s amongst us will be the last to realise, and publicly acknowledge, that our current method of organising the economy, and by extension society, has reached a point where it no longer meets the circumstances upon which it is predicated. In short it is failing. Whilst targeted at a different scenario, perhaps Norman Dixon nailed Dr PEMBy’s problem in On the Psychology of Military Incompetence when he stated that “After a long history of wrong thinking they could not afford to be wrong.”  

If the treatment prescribed by Dr PEMBy is only likely to worsen the condition, what should we do? Are street protests and the ‘Occupy’ movement appropriate responses? Or are there other more effective ways that the rest of us could and probably should respond? For most people, at least in the developed nations, economic growth and the expectation of it continuing are what we consider to be normal.

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About the Author

Cameron Leckie has a Bachelor Science and a Graduate Diploma in Education. Employment experience includes a range of management positions both in Australia and overseas in the telecommunications industry. He is a member of the Australian Association for the Study of Peak Oil and Gas (ASPO Australia). Since finding out about peak oil in 2005, he has written extensively on the topic and in particular, its impact on the aviation industry.

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