Monday, January 11, 2010
Denial
"In a wider sense, one could argue that the whole economic system of modern Western society is founded on denial, in particular the denial of resource limitations. Schoolchildren are taught - and Nobel Prize-winning economics professors apparently still believe - that Earth-provided resources, from iron ore to fisheries, come into the category of "free goods", appearing as if by magic at the start of the economic process. These free goods, which include all the ecosystem services that support the human species, are considered financially valueless and left out of conventional economic accounting. The standard gross domestic product (GDP) measuring stick of national economic success totals up the values of production and consumption without considering the sustainability of the process. In a master stroke of creative accounting, conventional economic theory therefore counts the depletion of resources as an accumulation of wealth. This logic is analogous to individuals spending all of the money in their current account and counting it as income - an absurdity, but one that underpins our entire economy.
Bearing this societal dysfunction in mind, it is perhaps rather unfair to blame individuals for not facing up to climate change when the whole weight of economy and society effectively prevents them from doing so. Bob Dylan once sang about how the white Southerner who shot the black civil rights leader Medgar Evers in 1963 was "just a pawn in their game". So are we all, pawns in the game of global warming. But we are not entirely powerless, nor entirely blameless. The collective hand that moves these pawns is our own."
Mark Lynas, Six degrees - our future on a hotter planet, chapter "Choosing our future".
So there is no excuse not to act! We have some powerful tools to affect the collective hand: our votes, and our consumption patterns.
Thursday, September 3, 2009
Les vrais alarmistes
Ban Ki-moon, secrétaire général de l'ONU, 3e Conférence de l'ONU sur le climat, jeudi 3 septembre 2009 (rapporté par Le Monde).
Monday, August 10, 2009
Good private property and bad private property
E. F. Schumacher, Small is beautiful.
Thursday, March 5, 2009
Ego and consumerism
The physical needs for food, water, shelter, clothing, and basic comforts could be easily met for all humans on the planet, were it not for the imbalance of resources created by the insane and rapacious need for more, the greed of the ego. It finds collective expression in the economic structures of this world, such as the huge corporations, which are egoic entities that compete with each other for more. Their only blind aim is profit. They pursue that aim with absolute ruthlessness. Nature, animals, people, even their own employees, are no more than digits on a balance sheet, lifeless objects to be used, then discarded."
Eckhart Tolle, A New Earth - Awakening to your life's purpose, chapter "Ego: the current state of humanity".
Tuesday, December 9, 2008
Neither doomed, nor saved by the "invisible hand"
Jeffrey Sachs, Common Wealth, Economics for a crowded planet, chapter "Our crowded planet".
Monday, December 1, 2008
R & D financing
Jeffrey Sachs, Common Wealth, Economics for a crowded planet, chapter "Our crowded planet".
* Research and Development
Monday, November 10, 2008
Economics needs a scientific revolution
"Compared with physics, it seems fair to say that the quantitative success of the economic sciences has been disappointing. Rockets fly to the Moon; energy is extracted from minute changes of atomic mass. What is the flagship achievement of economics? Only its recurrent inability to predict and avert crises, including the current worldwide credit crunch.
Why is this so? Of course, to paraphrase Isaac Newton, modelling the madness of people is more difficult than modelling the motion of planets. But statistical regularities should emerge in the behaviour of large populations, just as the law of ideal gases emerges from the chaotic motion of individual molecules. To me, the crucial difference between modelling in physics and in economics lies rather in how the fields treat the relative role of concepts, equations and empirical data.
Classical economics is built on very strong assumptions that quickly become axioms: the rationality of economic agents (the premise that every economic agent, be that a person or a company, acts to maximize his profits), the 'invisible hand' (that agents, in the pursuit of their own profit, are led to do what is best for society as a whole) and market efficiency (that market prices faithfully reflect all known information about assets), for example. An economist once told me, to my bewilderment: "These concepts are so strong that they supersede any empirical observation." As economist Robert Nelson argued in his book, Economics as Religion (Pennsylvania State Univ. Press, 2002), the marketplace has been deified.
Physicists, on the other hand, have learned to be suspicious of axioms. If empirical observation is incompatible with a model, the model must be trashed or amended, even if it is conceptually beautiful or mathematically convenient. So many accepted ideas have been proven wrong in the history of physics that physicists have grown to be critical and queasy about their own models. [...]
The supposed omniscience and perfect efficacy of a free market stems from economic work done in the 1950s and 1960s, which with hindsight looks more like propaganda against communism than plausible science. In reality, markets are not efficient, humans tend to be over-focused in the short-term and blind in the long-term, and errors get amplified, ultimately leading to collective irrationality, panic and crashes. Free markets are wild markets. [...]Surprisingly, classical economics has no framework through which to understand 'wild' markets, even though their existence is so obvious to the layman. Physics, on the other hand, has developed several models that explain how small perturbations can lead to wild effects. The theory of complexity shows that although a system may have an optimum state, it is sometimes so hard to identify that the system never settles there. This optimum state is not only elusive, it is also hyper-fragile to small changes in the environment, and therefore often irrelevant to understanding what is going on. There are good reasons to believe that this paradigm should apply to economic systems in general and financial markets in particular. We need to break away from classical economics and develop completely different tools. Some behavioural economists and econo-physicists are attempting to do this now, in a patchy way, but their fringe endeavour is not taken seriously by mainstream economics.
While work is done to enhance models, regulation also needs to improve. Innovations in financial products should be scrutinized, crash-tested against extreme scenarios outside the realm of current models and approved by independent agencies, just as we have done with other potentially lethal industries (chemical, pharmaceutical, aerospace, nuclear energy).
Crucially, the mindset of those working in economics and financial engineering needs to change. Economics curricula need to include more natural science. The prerequisites for more stability in the long run are the development of a more pragmatic and realistic representation of what is going on in financial markets, and to focus on data, which should always supersede perfect equations and aesthetic axioms."
Wednesday, August 27, 2008
Ils sont fous ces économistes !
Hubert Reeves, Mal de Terre, chapitre "Quelles énergies pour demain ?"
Wednesday, July 23, 2008
Des biens indispensables
Mohandas Gandhi, Tous les hommes sont frères, chapitre "La pauvreté au coeur de l'abondance".
Saturday, May 31, 2008
Travail et richesse
"Le travail n'est pas la source de toute richesse. La nature est tout autant la source des valeurs d'usage (et c'est bien en cela que consiste la richesse matérielle !) que le travail, qui n'est lui-même que la manifestation d'une force naturelle, la force de travail humaine."
Karl Marx, Critique du programme de Gotha.
Ma confusion doit venir des différentes valeurs, d'usage vs d'échange, dont il fait la distinction dans Le Capital.
Il faudra donc que je le relise plus attentivement (et jusqu'au bout) un jour...
Tuesday, May 27, 2008
More humility
"Our comfort and abundance is the foundation for the great differences we see in public debate and private discussions about the environment. From business and government, we are presented with the concerned but optimistic "so far, so good" assessment, a school of thought that biologist E. O. Wilson calls exemptionalist. This line of thinking relies on the ability of human beings to overcome ecological "laws" through invention, ingenuity, and gumption. For every problem presented by environmentalists, optimists have an answer: desalinization, fusion, deep-sea mining, space, and bio-engineering. Their conjectures are easier to swallow than the alarmist voices of environmentalists who say we are outstripping the earth's means to sustain the human species. Ever since the Reverend Thomas Malthus wrote his "Essay on Population" in 1798, there has been a dispute as to when or whether humankind would exceed the capacity of the earth to provide our daily bread. Books such as Limits to Growth and The Population Bomb have enlivened the controversy, not only because they were based on research and science, but because the arguments were made forcefully and dramatically. The concept of doomsday has always had a perverse appeal, waking us from our humdrum existence to the allure of a future harrowing drama. Yet another view held by a small group of writers and journalists (very few scientists, however) proclaims that environmentalism is a hoax, that we have been unnecessarily frightened, that environmentalism is a delusional scam from the political fringes to coerce others into a liberal agenda. A large and anxious audience is quite ready to wake one morning and find that, much like the thermonuclear cold war, our environmental bad dream is over, the opposing sides having made peace, and that we needn't worry anymore.
The view I choose is this: The underlying principles informing such cautionary predictions are largely correct, while the timing and nature of humankind's destiny with earthly limits is still unknown. This means that the optimists who say we will be taken care of in the future will be correct for the time being, until the day they are wrong, when we will all be in big trouble. The environmentalists, warning of impending catastrophe, will usually be wrong with regard to specific predictions, but are right in principle. What does this tell us ? It suggests we find a path of existence that honors both camps; that recognizes limits while using our innovative capacity to invent and reimagine our world to increase eficiency, decrease harm, improve our existence. In other words, we need to create an economy and way of relating to our material world that is not an either/or argument, but a means to create the best life for the greatest number of people precisely because we do not know the eventual outcome or impact of our current industrial practices. In other words, we need an economy based on more humility."
Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability. (Chapter "The inestimable gift of a future").
Wednesday, April 30, 2008
Tragedy of the commons
Nevertheless, the solution to Hardin's dilemma of a deteriorating open access system would be a pasture utility, one that operated independently of the specific grazing and herding needs of the villagers. The utility would be managed to maximize income from grazing fees, and therefore would have no economic interest in overgrazing, since any form of degradation would reduce the value of the utility to its owners. The pasture utility would monitor usage by grazers so that income was maximized. The utility would pay careful and constant attention to yield, growth, rotation, and fencing. The commons would not deteriorate under such a guardianship, and the natural predilection to overgraze would be thwarted.
The pasture utility is a useful model for a mechanism to guard our own commons, whether local or global. Such a utility can maximize the strenghts of both the private and public sectors, without succumbing to the failings of either. Utilities are hybrid enterprises because they combine two unusual features. First, they are regulated by their constituencies through public utility commissions or other forms of public sector input. In return for accepting regulation, they are given monopolies and are guaranteed a certain level of profit. In other words, by allowing some form of public control, they receive a guaranteed return on their investment, a relationship that allows them to create and execute long-term projects, and attract capital while paying low interest rates."
Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability. (Chapter "Pink salmon and green fees").
An example of such a utility would be the Earth Atmospheric Trust (see also this post) for the global commons that our atmosphere is, and where the utility members would be every person on Earth !
Sunday, April 27, 2008
Strategic planning
"From a strategic point of view, the choice is clear. Whenever you are faced with two different paths, each with its uncertainties and unknowns, the cardinal rule in strategic planning is to take the path that allows you to shift to the other path should your initial decision prove wrong. As futurist Peter Schwartz advises in his book The Art of the Long View, choose the option that gives you the most options in the future. Even granting status-quo defenders their argument that we know too little about global warming to warrant changing from a hydrocarbon- to a solar-based economy, even granting them their dream that technology will come up with ingenious ways to solve many of the problems with the innate toxicity of hydrocarbons, maintaining the present course is a mistake.
If we continue on the same path and find out forty, fifty, or one hundred years from now that the scientific projections about global warming were correct, it may be too late to mount an effective counter-strategy. On the other hand, if we choose to make the transition to an economy that runs on perpetual solar income and we later find out the CO2 buildup was less a problem than anticipated, we are still ahead on every count. We have eliminated hundreds of billions of tons of pollution from the air, ground, and water, and improved health worldwide. We have engendered a myriad of new, safer, and friendlier technologies to replace those deposed. We have not poisoned the planet or our bodies with the toxins produced in a hydrocarbon-based economy. We have created hundreds of thousands of new companies and many more jobs than we lost, while moving toward a world whose work and money are infused with meaning and vision, toward a just and constructive future. Plus we will still have all of the coal and oil that we didn't burn up, extending the life of current reserves far into the future of humankind."
Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability. (Chapter "Pink salmon and green fees").
Wednesday, April 23, 2008
Good design
"In any endeavor, good design resides in two principles. First, it changes the least number of elements to achieve the greatest result. Second, it removes stress from a system rather than adding it. Bad design is pinning our hopes for environmental and cultural survival on a change in human consciousness and behavior alone, because we therefore depend on the highest number of uncontrollable elements--people--to undergo a great change. Likewise, bad design is having to institute several hundred thousand rules and restrictions under the jurisdiction of the government and expecting business to know them all, much less obey them.
Good design makes things easier and simpler. Good design seems natural, unaffected, and appeals to common sense. Good design for the commercial system accounts for and appeals to the innate behavioral modes of both governance and commerce. Let governance govern with a minimum of intrusion and with a genuinely "conservative" approach; let business be business at its best: humane and creative and efficient.
One of the ways to further this goal is to invert the old values and reverse the traditional cost-price incentives. We need a predictable and consistent market that recognizes the true, full costs of doing business and reassigns them to the marketplace, where they belong. We require a market economy that rewards the highest internalized cost, an economy in which business prospers when it is responsible both socially and ecologically. We need business to thrive by exceeding regulatory standards rather than by challenging or circumventing them. Businesses should literally compete to be more ecological, not only on moral or ethical grounds or because it is "the right thing to do", but because such behavior squarely aligns with their bottom line. In short, we must design a marketplace that obviates acts of environmental destruction by making them extremely expensive, and rewards restorative acts by bringing them within our means. If we do this, environmental restoration, economic prosperity, job creation, and social stability will become equivalent."
Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability. (Chapter "Restoring the guardian").
Thursday, April 17, 2008
Competition vs. cooperation (again)
"The concept that one business succeeds because another does not is part of the same thinking that has created the dichotomy between consumer and customer. But, in fact, there is a large and overwhelming body of evidence demonstrating that competition in human culture, whether it be in business or other endeavors, does not improve the species, but is maladaptive and far from being the most intelligent cultural strategy. The country we admire, fear, and dislike the most in economic matters is Japan, a country that places an unusually high, even extraordinary emphasis on cooperation, collaboration, and harmony. That does not mean that Japanese companies do not compete, but it does mean that they do so within the larger cultural imperative of harmony. One of the reasons we in this culture compete actually has nothing to do with business, but rather is the addiction to winning, to beating an opponent. If the purpose of this competition and winning is an enlarged ego system, then it goes without saying that we will pursue it endlessly because, as all winners know, the joy is short-lived, the hunger endless. A restorative economy will have as its hallmark a business community that coevolves with the natural and human communities it serves. This necessitates a high degree of cooperation, mutual support, and collaborative problem-solving. It depends on very different skill-sets than those that are being drummed into us in sports, movies, and business schools. Competition for the consumer or between businesses is impractical, wasteful, expensive and degrading to all involved. It imitates an immature ecosystem, and in this day and age, that is retrogressive, not progressive."
Paul Hawken, in The ecology of commerce. A declaration of sustainability, chapter "The opportunity of insignificance".
Monday, April 7, 2008
Hope (2)
Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability. (Chapter "The death of birth").
Tuesday, March 25, 2008
Ecological emergency (2)
Human populations are already being severely affected by damage to the environment due to depletion and degradation of resources. For decades, scientists and experts such as Robert Heilbroner, Paul Ehrlich, and Jessica Tuchman Matthews have predicted that resource shortages would engender widespread social discord, but there were no studies to support or refute those views. Recently, however, a team of thirty researchers, assembled under the auspices of the University of Toronto and the American Academy of Arts and Sciences, formed the Project on Environmental Change and Acute Conflict. This group examined a number of societies and countries where resource shortages were already occurring, and their findings were disturbing: «Scarcities of renewable resources are already contributing to violent conflicts in many parts of the developing world. These conflicts may foreshadow a surge of similar violence in coming decades, particularly in poor countries where shortages of water, forests and, especially, fertile land, coupled with rapidly expanding populations, already cause great hardship.» Land shortages in Bangladesh, for example, have led to mass migrations to India involving as many as 15 million people. These migrations have in turn led to fierce ethnic clashes. To those who discount such theories by arguing that resource conflicts have been an enduring element of human history, the authors warn: «We maintain ... that renewable-resource scarcities of the next 50 years will probably occur with a speed, complexity and magnitude unprecedented in history. Entire countries can now be deforested in a few decades, most of a region's topsoil can disappear in a generation, and acute ozone depletion may take place in as few as 20 years.»"
Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability.
(Chapter "The death of birth").
It is worth noting that the Project on Environmental Change and Acute Conflict was taking place in 1990-1993, just after the Montreal Protocol, which regulated the emissions of ozone-depleting substances worldwide, entered into force (on January 1, 1989). Since then, the atmospheric concentrations of the most important ozone-depleting substances have either leveled off or decreased, resulting in a stabilization of the global average amount of ozone depletion, and the ozone layer is expected to begin to recover in coming decades, assuming full compliance with the Montreal Protocol (according to the wikipedia article on ozone depletion).
This is a good example when proper international coordination and regulation can solve a problem generated by human activities but detected and warned-against by science, and finally taken care of by public and political will.
Why would we not be able to do the same for the green-house gases and the environmental degradation our economy is inflicting to our world ?
Are the above-mentioned threats perceived as more benign than the skin cancers associated with the ozone hole ? That would be a very short-term perception !
Tuesday, March 18, 2008
Issues... and solutions
The solution for all three dilemmas are three fundamental principles that govern nature. First, waste equals food. In nature, detritus is constantly recycled to nourish other systems with a minimum of energy and inputs. We call ourselves consumers, but the problem is that we do not consume. Each person in America produces twice his weight per day in household, hazardous, and industrial waste, and an additional half-ton per week when gaseous wastes such as carbon dioxide are included. An ecological model of commerce would imply that all waste have value to other modes of production so that everything is either reclaimed, reused, or recycled. Second, nature runs off of current solar income. The only input into the closed system of the earth is the sun. Last, nature depends on diversity, thrives on differences, and perishes in the imbalance of uniformity. Healthy systems are highly varied and specific to time and place. Nature is not mass-produced."
Paul Hawken, The Ecology of Commerce. A Declaration of Sustainability.
(Chapter "A teasing irony").
Monday, March 10, 2008
Un autre mode
Dès lors, il faut que la modernité choisisse ce qui lui est le plus essentiel: son exigence éthique d'égalité, qui débouche sur des principes d'universalisation, ou bien le mode de développement qu'elle s'est donné. On ne peut à la fois vouloir conserver son morceau de gâteau et le manger. Ou bien le monde actuellement développé s'isole, ce qui voudra dire de plus en plus qu'il se protège par des boucliers de toutes sortes contre les agressions que le ressentiment des laissés-pour-compte concevra chaque fois plus cruelles et plus abominables; ou bien s'invente un autre mode de rapport au monde, à la nature, aux choses et aux êtres, qui aura la propriété de pouvoir être universalisé à l'échelle de l'Humanité."
Jean-Pierre Dupuy, Pour un catastrophisme éclairé. Quand l'impossible est certain, cité par Bernard Maris dans l'Antimanuel d'économie. 2. Les cigales, chapitre "Économie et écologie ou comment «j'ai tué Maman»".
Wednesday, February 27, 2008
Croissance et développement
Bernard Maris, Antimanuel d'économie. 2. Les cigales, chapitre "Économie et écologie ou comment «j'ai tué Maman»".