Tag: economics

A Minimalist Experiment

What would life be like if you set completely different priorities? Here’s one answer:

If someone told me seven years ago, in my final year of a business and economics degree, that I’d now be living without money, I’d have probably choked on my microwaved ready meal. The plan back then was to get a ‘good’ job, make as much money as possible, and buy the stuff that would show society I was successful.

For a while I did it – I had a fantastic job managing a big organic food company; had myself a yacht on the harbour. If it hadn’t been for the chance purchase of a video calledGandhi, I’d still be doing it today. Instead, for the last fifteen months, I haven’t spent or received a single penny. Zilch.

The change in life path came one evening on the yacht whilst philosophising with a friend over a glass of merlot. Whilst I had been significantly influenced by the Mahatma’s quote “be the change you want to see in the world”, I had no idea what that change was up until then. We began talking about all major issues in the world – environmental destruction, resource wars, factory farms, sweatshop labour – and wondering which of these we would be best devoting our time to. Not that we felt we could make any difference, being two small drops in a highly polluted ocean.

But that evening I had a realisation. These issues weren’t as unrelated as I had previously thought – they had a common root cause. I believe the fact that we no longer see the direct repercussions our purchases have on the people, environment and animals they affect is the factor that unites these problems. The degrees of separation between the consumer and the consumed have increased so much that it now means we’re completely unaware of the levels of destruction and suffering embodied in the ‘stuff’ we buy.

Very few people actually want to cause suffering to others; most just don’t have any idea that they directly are. The tool that has enabled this separation is money, especially in its globalised format.

Take this for an example: if we grew our own food, we wouldn’t waste a third of it as we do today.

If we made our own tables and chairs, we wouldn’t throw them out the moment we changed the interior décor.

If we had to clean our own drinking water, we probably wouldn’t shit in it.

So to be the change I wanted to see in the world, it unfortunately meant I was going to have to give up money, which I decided to do for a year initially. So I made a list of the basics I’d need to survive. I adore food, so it was at the top. There are four legs to the food-for-free table: foraging wild food, growing your own, bartering and using waste grub, of which there far too much.

This guy is no doubt busy, but in a good way. I don’t know what our culture and economy would look like if everyone tried to live like this. But I do know that there is probably a hybrid somewhere in between a system of consumerist capitalism and this sort of minimalism. And I think it mostly could be catalyzed if the costs of everything reflected their environmental and social costs as well as their production costs. We’d produce less, earn less, consume less. And production and marketing would be completely transformed.

What Is The True Value Of The Oceans?

Mission Blue takes a stab at adding it all up.

The video totally nails the problem that traditional economics does not value or account for “natural capital,” the single greatest (and most catastrophic) flaw in the way we humans conduct our lives, cultures and economies. So thanks for getting that key point out.

But the video also irks me slightly because:

1) No value is placed on preserving the oceans simply because they are the most spectacular, beautiful, awesome, and life-nurturing resource on the planet (what I would call “existential capital”). Sure, those are intangibles, but not all value attached to the ocean can be expressed in dollars and cents, or benefits to the human race. And the lives of all the myriad species that live in the ocean are invaluable, even if they don’t directly benefit humans (or contribute to our cosmetics!). Even if the oceans didn’t protect our beach homes, provide us with a tourist destination, or regulate the climate so we don’t all overheat, I’d be in favor of protecting and defending the oceans. The oceans are the heart and soul of the planet.

2) The remedies are sorta lame. Go to a green resort? Buy “sustainable” fish, whatever that is? That won’t save the oceans. Saving the oceans, and stopping ocean acidification will require much more dramatic shifts in our behavior and culture. How about urging people to stop eating meat (the single greatest step any human can take to protect the planet)? And stop eating fish, period? Or stop living in humungous houses that are heated and cooled to ridiculous temperatures? Or to reduce their driving, and travel by airplane (the carbon emissions of that trip to the beach are significant)? Or stop using so much plastic? Or any number of the other 3,546 things that modern humans do that impact the oceans?

Maybe people should watch this video (and movie) instead, because Revolution really is the right response to the crisis of the oceans:

The Story Of Whaling And The US Economy

A fascinating look at whaling, innovation, and the 19th century American economy. With lessons for America in the 21st century! How’s that for a daily double?

The standard explanation for the decline of whaling in the second half of the century is a pat two-parter consisting of falling demand (from alternative sources for energy) and falling supply (from over-hunting). But according to Leviathan, the standard explanation is wrong.

To be sure, energy preferences had been flowing to another source of oil: petroleum. In 1859, the US produced no more than 2,000 barrels of the stuff a year. Forty years later, we were producing 2,000 barrels every 17 minutes.

But demand doesn’t tell the whole story. In the middle of the 19th century, whale oil prices increased, which should have led to more production. But output never recovered after the 1850s even as whaling continued to grow around the world. Why did Americans give up?

The answer from Davis, Gallman, and Gleiter will also look familiar to a modern business audience: US workers got too darn expensive, and other countries stole our share of the whale business.

Thanks to the dry-land industrial revolution, “higher wages, higher opportunity costs of capital, and a plethora of entrepreneurial alternatives turned Americans toward the domestic economy,” the authors write. Meanwhile, slower growth overseas made whaling more attractive to other countries. “Lower wages, lower opportunity costs of capital, and a lack of entrepreneurial alternatives pushed [people like the] Norwegians into exploiting the whale stocks,” they continue.

Of course, whaling has little to do with economics anymore. It’s much more about cultural identity, nationalism, and a bankrupt view of man’s dominion over the planet. The true innovation here would be to treat whales as if they had a right to life, liberty, and the pursuit of happiness.

Have We Reached “Peak Stuff”?

Journalist Fred Pearce thinks maybe:

Take Britain. A new study finds that the country that invented the industrial revolution two centuries ago reached “peak stuff” between 2001 and 2003. In the past decade, Britain has been consuming less water, building materials, paper, food (especially meat), cars, textiles, fertilizers and much else. Travel is down; so is energy production. The country produces less waste, too.

That’s the good news. The bad news is that Brits still consume about 30 tons of stuff every year, which only takes them back to the consumption levels of 1989. And the US, well the US is still consuming away. The point here is that even if advanced industrial societies, particularly those in Europe (kudos), are starting to streamline consumption through less waste and greater efficiency, it’s still nowhere near enough to alter the trajectory of depletion and degradation human culture is inflicting on the planet. So we need to think about consumption in much more radical terms.

I say that having just read this excerpt from Carl Safina’s “The View From Lazy Point.” Talk about a hard slap to the face. Thank-you, sir, can we have another?

The first century of the Industrial Revolution, the 1800s, was powered by coal, whale oil, and slaves. The 20th was the century of petroleum (though 40 percent of U.S. train freight is still coal). World electricity generation is still two-thirds combustion (40 percent coal, 20 percent natural gas, six percent oil); plus 15 percent nuclear, 16 percent hydropower, and 2 percent other renewables. That’s how we get energy.

Here’s a taste of how we waste it: In the U.S., where tap water is safe, bottled water costs about 1,000 times as much as tap water and consumes tens of millions of barrels of oil a year (I’ve seen estimates from about 17 to 50 million barrels); it’s been likened to having each bottle of water one-quarter full of oil. It takes three times as much water to make the plastic bottle as the bottle contains. America’s refrigerators use twice the electricity of the European average, and four times as much as the most efficient refrigerators already available. Using the most efficient appliances, worldwide, would eliminate the need to build the 1,400 coal-fired power-plants that are projected to be needed by 2020.

Cars. With nearly the least-miles-per-gallon and nearly the most-miles-driven-per-vehicle, U.S. drivers—with more than a quarter of the world’s cars—burn more gasoline than the next twenty countries combined, including Japan, Germany, China, Russia, plus Brazil—. If average fuel efficiency merely equaled some of the better cars now on the market (40 miles per gallon–5.9 l/100 km), Americans would halve their gasoline use. Just like that. Going to plug-in hybrids would drop driving costs to the equivalent of one dollar per gallon (from the current $3.70/gallon average); gasoline use would drop by 80 percent—without reducing the number of cars or miles driven. This isn’t sacrifice; we’re already sacrificing efficiency. Eventually, the electricity powering plug-in cars could come from wind or solar. Those are some opportunities we’re missing.

Henry Ford reputedly said that if he’d asked people what they wanted, they’d have said ‘a faster horse.’ What else might we be missing? Every hour, enough sunlight strikes Earth to power our world economy for a year. The upper six miles (10 km) of Earth’s crust (people have drilled 7 miles–11 km) holds something like 50,000 times as much energy (in the form of geothermal) as all the oil and gas. With an investment equaling the cost of one coal plant (about a billion dollars) the U.S. could by 2050 generate geothermal energy equal to 250 coal-burning plants. North Dakota, Kansas, and Texas have enough wind to supply not just all the U.S.’s electricity, but all its energy. (Denmark and parts of Germany already get 20 to 30 percent of their electricity from mere moving air.) On one windy quarter-acre, a farmer can grow $300 worth of corn, or allow a company to put up a wind turbine capable of generating $300,000 worth of electricity a year. If the company pays only one percent in royalties, the farmer still makes ten times as much by farming wind.

When ethanol made from corn puts people who need to eat in a bidding war with people who want to drive, drivers win. But some non-edible plants also produce oil. The seeds of Jatropha curcas are about one-third oil. Some algae yields up to 30 times more fuel than other energy crops. Airlines are already testing algae-based jet fuels. “The airplane performed perfectly,” one test-pilot said. “It was textbook.”

These aren’t even all the options. Compared to the possible oceans of improvements, humanity is still dog-paddling in the shallow end of the kiddie pool. Sometimes we seem determined to drown there just because we won’t stand up.

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