Wednesday, July 21, 2010

Biting off more than we can sustainably chew

"The larger question is, If we continue with business as usual—
with overpumping, overgrazing, overplowing, overfishing, and
overloading the atmosphere with carbon dioxide—how long will
it be before the Ponzi economy unravels and collapses? No one
knows. Our industrial civilization has not been here before.
Unlike Bernard Madoff’s Ponzi scheme, which was set up
with the knowledge that it would eventually fall apart, our
global Ponzi economy was not intended to collapse. It is on a
collision path because of market forces, perverse incentives, and
poorly chosen measures of progress. We rely heavily on the market
because it is in so many ways such an incredible institution.
It allocates resources with an efficiency that no central planning
body can match, and it easily balances supply and demand.

"The market does, however, have some fundamental, potentially
fatal, weaknesses. It does not respect the sustainable yield
thresholds of natural systems. It also favors the near term over
the long term, showing little concern for future generations. It
does not incorporate into the prices of goods the indirect costs
of producing them. As a result, it cannot provide the signals
telling us that we are caught up in a Ponzi scheme.
In addition to consuming our asset base, we have also
devised some clever techniques for leaving costs off the books—
much like the disgraced and bankrupt Texas-based energy company
Enron did some years ago. For example, when we use
electricity from a coal-fired power plant we get a monthly bill
from the local utility. It includes the cost of mining coal, transporting
it to the power plant, burning it, generating the electricity,
and delivering electricity to our homes. It does not,
however, include any costs of the climate change caused by
burning coal. That bill will come later—and it will likely be
delivered to our children. Unfortunately for them, their bill for
our coal use will be even larger than ours" (Brown 15-16).

1 comment:

Kimberly said...

Hmm...the idea of our whole economy as a Ponzi scheme is chilling and quite possibly accurate. Scary stuff!