Rethinking Growth

Herman Daly is an ecological economist and co-founder and associate editor of the journal Ecological Economics. As the World Bank’s senior environmental economist from 1988 to 1994, Daly focused on Latin American poverty and development and helped to establish the discipline of ecological economics. Today, based at the School of Public Policy at the University of Maryland, Daly spoke with Seed editor Maywa Montenegro about growth, technology, happiness, and the steady-state economy.

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A Moral Operating System for Technology?

At TEDxSiliconValley, Damon Horowitz reviews the enormous new powers that technology gives us: to know more -- and more about each other -- than ever before. Drawing the audience into a philosophical discussion, Horowitz invites us to pay new attention to the basic philosophy -- the ethical principles -- behind the burst of invention remaking our world. Where's the moral operating system that allows us to make sense of it?

The Mere Smoke of Opinion

Bill Moyers and John Stewart had a great conversation on the Daily Show a few days ago about what's wrong with "journalism" and "politician speak". For journalism, Moyers made the clear distinction between what's immediate and what's important. News is now about what's immediate and very few journalists seek to find what's important, i.e. facts that will affect our future. Instead the media are full of opinion. Moyers recalled a quote from Thoreau "the mere smoke of opinion." In today's world politician's have to avoid the truth in a cloud of deceptive phrases ('the language of keeping things hidden").

You can watch the interview here: Part 1 and Part 2.

What follows is the complete quote and surrounding paragraphs from Henry David Thoreau's Walden. Please read it slowly and carefully.

"The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation. From the desperate city you go into the desperate country, and have to console yourself with the bravery of minks and muskrats. A stereotyped but unconscious despair is concealed even under what are called the games and amusements of mankind. There is no play in them, for this comes after work. But it is a characteristic of wisdom not to do desperate things.

When we consider what, to use the words of the catechism, is the chief end of man, and what are the true necessaries and means of life, it appears as if men had deliberately chosen the common mode of living because they preferred it to any other. Yet they honestly think there is no choice left. But alert and healthy natures remember that the sun rose clear. It is never too late to give up our prejudices. No way of thinking or doing, however ancient, can be trusted without proof. What everybody echoes or in silence passes by as true to-day may turn out to be falsehood to-morrow, mere smoke of opinion, which some had trusted for a cloud that would sprinkle fertilizing rain on their fields. What old people say you cannot do, you try and find that you can. Old deeds for old people, and new deeds for new. Old people did not know enough once, perchance, to fetch fresh fuel to keep the fire a-going; new people put a little dry wood under a pot, and are whirled round the globe with the speed of birds, in a way to kill old people, as the phrase is. Age is no better, hardly so well, qualified for an instructor as youth, for it has not profited so much as it has lost. One may almost doubt if the wisest man has learned anything of absolute value by living. Practically, the old have no very important advice to give the young, their own experience has been so partial, and their lives have been such miserable failures, for private reasons, as they must believe; and it may be that they have some faith left which belies that experience, and they are only less young than they were. I have lived some thirty years on this planet, and I have yet to hear the first syllable of valuable or even earnest advice from my seniors. They have told me nothing, and probably cannot tell me anything to the purpose. Here is life, an experiment to a great extent untried by me; but it does not avail me that they have tried it. If I have any experience which I think valuable, I am sure to reflect that this my Mentors said nothing about."

You can find an annotated text of the book here.

Patterns of Social Unrest, Complexity, Conflict, and Catastrophe

by John L. Casti, Album, Der Standard, April 16, 2011
(reprinted with permission of author)

Social Unrest
On February 24, 2010 Greek police fired tear-gas and clashed with demonstrators in central Athens after a march organized by unions to oppose the government’s program to cut the European Union’s biggest budget deficit. The president of a large union stated, “People on the street will send a strong message to the government but mainly to the European Union, the markets and our partners in Europe that people and their needs must be above the demands of markets. We didn’t create the crisis.” Later, air-traffic controllers, customs and tax officials, train drivers, doctors at state-run hospitals and school teachers walked off the job to protest government spending cuts. Journalists joined into the strikes as well, creating a media blackout.

Fast forwarding a year, we’ve recently seen long-standing regimes in both Tunisia and Egypt sent packing literally overnight, with Libya now being torched by the very same revolutionary flames as rebels battle the entrenched Qaddafi government in an attempt to overturn forty years of oppression.

On the surface, these types of civil disturbances give the appearance of arising out of the public’s discontent with their government over high unemployment, rising food prices, lack of housing, and other such necessities of everyday life. But such explanations are facile and superficial, failing to address the “root” cause of the societal collapse. The real culprit resides much deeper in the social system. It is a widening “complexity gap” between the government and its citizens, revolution breaking out when that gap can no longer be bridged.

Complexity Mismatches
Some years back, American archaeologist Joseph Tainter put forth the idea that societies respond to crises by adding complexity in order to solve problems they encounter. But each unit of resource the society adds―energy or money, usually―yields less return than the previous unit. So the additional layers of complexity bought by this expenditure consume resources with no corresponding return until the marginal return on investment in social complexity turns negative. But since the society knows how to solve problems only by adding complexity, it then begins to collapse under its own weight.

In Egypt (and now Libya) the added complexity is not just any sort of complexity, but as noted by futurist Ramez Naam it is a very special type: parasitism. This is one of the worst forms of complexity, as it consumes more and more of society’s resources without producing any value at all.

For example, Egypt had a state-controlled economy that was wildly mismanaged for decades. Even the noticeable improvement in recent years has been a case of too little, too late. Moreover the country is monumentally corrupt, as crony capitalism runs rampant throughout the entire social structure. Such a system of corruption relies upon bribes to officials to get contracts,
obtain jobs or to find adequate housing. One rumor had it that in Egypt the drug Viagra was kept off the market because its manufacturer, Pfizer, failed to pay a large enough bribe to the Egyptian Minister of Health for its approval.

This type of parasitic mismanagement and corruption doesn’t really add constructive complexity to the government, but simply works to freeze in place an already low-complexity system. But modern communication and social networking services like Twitter and Facebook do act to dramatically increase the social complexity―but the increase is in the complexity of the population, at-large, not an increase in the complexity of the government. This is why governments routinely act to shut off these services when they’re under attack, as more voices are heard and more and more highly-connected social networks are formed.

At some point the complexity gap between the stagnant level of government complexity and the growing level of general-public complexity becomes too great to be sustained. Result: Ouster of the Mubarak regime, and the likely downfall of the Qaddafi government as well.

A complex system theorist recognizes immediately the principle at work here in narrowing the complexity gap. It’s is called the Law of Requisite Variety (Complexity). The Principle states that in order to fully regulate/control a system, the complexity of the regulating system has to be at least as great as the complexity of the system to be controlled. An obvious corollary is that if the gap is too big (in either direction) you’re going to have trouble. And in the world of politics, “trouble” is often spelled “r-e-v-o-l-u-t-i-o-n”!

Examples of such mismatches abound: ancient Rome is one case that always comes to mind, where the ruling classes used political and military power to control the lower classes and to conquer neighbors in order to extract tax revenues. Ultimately, the entire resources of the society were being used to maintain an ever-growing, far-flung empire that had grown too complex to be sustained. The ancient Mayan civilization is another good case in point. Some
scholars, like historian Paul Kennedy, have argued that the American Empire is in the process of coming undone for much the same reasons.

This type of complexity gap is not confined just to the political and governmental domains either, as evidenced by the ongoing social unrest in Japan arising out of the radiation spewing forth from the reactors damaged by the March 11 earthquake. The ultimate cause of this unrest is a “design basis accident,” in which the tsunami overflowed retaining walls designed to keep the water out. The overflow then damaged backup electrical generators intended to supply emergency power for pumping water to cool the reactor’s nuclear fuel rods. This is a two-fold problem: First, the designer’s planned the height of the walls for a magnitude 8.3 quake, the largest that Japan had previously experienced, not considering that a quake might someday exceed that level, and what’s even worse, (2) they placed the generators on low ground where any overflow would short them out. So everything ultimately depended on the retaining walls doing their job―which they didn’t! This is a case of too little complexity in the control system (the combination of the height of the wall and the generator location) being overwhelmed by too much complexity in the system to be controlled (the magnitude of the tsunami).

Who’s Next?
When a society collapses, be it ancient Rome, the United State tomorrow or Egypt and Tunisia yesterday, it quickly loses complexity. All institutions, laws and technologies become simpler, a lot simpler. Moreover, the range of social roles and behaviors open to the population of such a society dramatically shrink.

These factors lead to a rapid reduction in living standards, since without complex institutions, infrastructures, technologies and social roles, large populations cannot be sustained at their previous standard of living. Consequently, people consume far less, stay at home, turn inward, and die much sooner.

What can we expect to over the next year or two? A good guess is that as people lose confidence in the ability of their governments to solve the financial crises and experience other social stresses that increase the government-public complexity gap, they’ll break out into violent protests and/or assaults on those they see as responsible for their misery. This group will certainly encompass government officials and bankers, but may well also include immigrants, ethnic and religious minorities, landlords, and even corporate managers and bosses.

If you want to be grimly impressed, start putting pins on a map where such violence has already broken out. Cities like Athens, Sofia (Bulgaria), Port-au-Prince, Riga (Latvia) and Vilnius (Lithuania) are on the map, and even much larger cities like Moscow, Rome, Paris and Dublin have seen huge protests over rising unemployment and declining wages. But security police in these cities have managed to keep the protests orderly, if not peaceful (so far). While it’s very likely such societal disruptions will be confined to specific locales, we cannot entirely discount the possibility that as the global economic situation worsens, some of these localized incidents will overrun national borders and become far more widespread and long-lasting events. Armed rebellions, military coups, and even wars between states over access to resources cannot be excluded.

Early-Warning Indicators
All civil disturbances have the same general two-part structure: a lack of confidence in the ability of established institutions to solve the problems at hand, and fear of the future. So any methodology purporting to provide earlywarning signals of social unrest will have to embrace these two factors. It turns out that a theoretical foundation for just such a theory was put forth by American political scientist James C. Davies more than fifty years ago.

Like all great insights, Davies big idea is simple: Social unrest takes place when a society’s rising expectations are suddenly dashed. In other words, a society’s mood, how they regard the future, grows increasingly positive as the society gets richer. But when the rug is pulled out from under citizen’s hopes for a brighter future, things turn ugly―fast. And as the gap between expectations
and reality widens, the mood of the population moves deeper into negative territory until it finally erupts into violence and revolution.

To illustrate Davies thesis, let’s take an item from the “It Can’t Happen Here” department. In a recent article in Vanity Fair magazine, Nobel-winning economist Joseph Stiglitz noted that in terms of income inequality, the United States today lags behind every country in Europe, ranking down with Russia and its oligarchs and Iran in the category of countries where the top 1% of the population control 40 percent or more of the nation’s wealth. As with the situations in the North African and Arab lands today, there are again two systems in conflict. But in the developed countries like the USA, the systems are not the government and the public; rather, they are the “haves” and the “have nots.”

In a society like the USA that is sharply divided in terms of wealth, the rich lead a high-complexity style of life that doesn’t rely on government to supply common needs like parks, education, security or medical care. The “haves” can supply all these things for themselves. In fact, this high-complexity life-style strata of society is one that worries a lot about strong government, especially a government that would reduce its complexity by doing things like raising taxes.

This attitude ultimately leads the have-nots to see the already low complexity of their lives become even lower, as a sense of living in an unjust system with shrinking opportunities creates feelings of alienation. Does this sound familiar?

Rising food prices, growing youth unemployment and lack of adequate housing and education are exactly the surface causes of the revolutions taking place today in Africa and the Middle East. Question: When will it come to America?

We’d like to be able to develop procedures for anticipating when that gap between the rich (read: high complexity lifestyles) and the not-so-rich (low complexity lives) will widen to an unsustainable level. How to do that?

The first step in identifying the “danger zone” where the gap between expectations and reality is reaching a critical level is to measure the society’s expectations, what we might term its “social mood”. This is the view the society holds about its future, optimistic (positive) or pessimistic (negative) on various time scales, weeks, months, years, or more. We then look for the turning points in this mood as an indicator of where society will move from one overall psychological mindset to another. Of course, the danger zone is the point at which the social mood begins to roll over from positive to negative, since that’s the point at which the society can “tip” from hope to despair. This is precisely where Davies’ theory suggests a civil disturbance becomes much more likely than not.

John L. Casti (casti@iiasa.ac.at) is a Senior Research Scholar at the International Institute for Applied Systems Analysis in Laxenburg bei Wien, und Founder of the Kenos Circle, a Vienna-based society for exploration of the future. His most recent book is Mood Matters: From Rising Skirt Lengths to the Collapse of World Powers (Copernicus Books, New York, 2010).

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