The 3 concepts of Environment, Growth and Democracy cannot co exist. The false hope of having a healthy environment, exponential economic growth and a flourishing democracy has been exposed drammatically since the failure of the Copenhagen Climate Change Conference in December 2009. The final act of this tragi-comedy was played out during the G-20 summit in November 2011, when Prime Minister George Papandreou of Greece was told his idea of a referendum to decide the fate of the next austerity measures would not be allowed. If he pursued the idea, an $8 billion bail out, essential for Greece to exist, which had been agreed, would be witheld.
Silvio Berlusconi, at the same conference, arrived without any extra proposals to rein in Italy’s $2 trillion debt, perhaps hoping for some “bunga bunga”. He was told EU commissioners would be installed in every Italian government department to ensure austerity measures were enacted. The next issue of Italian government bonds saw no purchases by the European Central Bank which had intervened when other PIIGS nations bond issues had been undersubscribed. The interest rate on Italian bond issues climed over 7%, Italy was facing financial collapse caused by the recently formed “Frankfurt Group” at the very same G-20 Summit that disposed of the elected Greek Prime Minister.
The European Union has always had problems with democracy, a messy process that can interfere with the grand designs of people at the top who know best. When Ireland voted no to the Nice Treaty, it was told to come up with the right result in a second ballot. The real decisions in Europe are now taken by the Frankfurt Group, an unelected cabal made of up eight people: Lagarde; Merkel; Sarkozy; Mario Draghi, the new president of the ECB; José Manuel Barroso, the president of the European Commission; Jean-Claude Juncker, chairman of the Eurogroup; Herman van Rompuy, the president of the European Council; and Olli Rehn, Europe’s economic and monetary affairs commissioner.
This group, which is accountable to no one, calls the shots in Europe. The cabal decides whether Greece should be allowed to hold a referendum and if and when Athens should get the next tranche of its bailout cash. What matters to this group is what the financial markets think not what voters might want.
To the extent that governments had any power, it has been removed and placed in the hands of the European Commission, the European Central Bank and the IMF. It is as if the democratic clock has been turned back to the days when France was ruled by the Bourbons. (Larry Elliot, Guardian, 9/11/2011).
For 20 years we have been told to hold fast to exponential economic growth as it would solve all the problems of global poverty, would increase economic wealth and prosperity, and, as the science became irrefutable, that it would also solve global warming and environmental degredation. Like a new “wonder cleaner” it was “advertised” and “branded” as the one solution to take all our cares away, but the last 9 months has demonstrated the lies. It has shown to even those who only take a cursory political stance on election day, that this whole facade of democratic life we have swallowed hook line and sinker is a myth.
Just prior to the Copenhagen Convention in October 2009, Viscount Monckton of Brenchley was speaking to a sceptics conference in America. His closing statements are informative and in many ways provide an indication of what is required as far as developing countries are concerned. More worrying is his interpretation of how democracy could be lost by supporting a globally binding environment agreement to continue the Kyoto Protocol. His sychophantic, grovelling remarks, are a call for America to maintain it’s “freedoms” and not surrender to the “communist inspired” environment lobby.
MONCKTON IS CORRECT WHEN HE SPEAKS OF THE NEED FOR A GLOBAL RE – DISTRIBUTION OF WEALTH FROM THE NORTH TO THE SOUTH. This is eloqently argued by Naomi Klein in the next post on this site. This is the only way that social justice, climate justice and economic justice can occur. However, his idea that this global agreement will destroy democracy is completely wrong, because as has just been demonstrated in Europe, economic growth has not only destroyed the financial system, it has also removed any semblance of democracy.
This is from “The Automatic Earth”. November 14th http://theautomaticearth.blogspot.com/2011/11/november-14-2011-growth-paradigm-has.html
Well, the coups have been successful: Greece changed Papa’s, and Italy’s going to get its Full Monti. If the financial world can’t get the votes, it simply chases away chosen leaders and appoints its own guys in their place. Everyone and their pet parrot are by now clamoring for the ECB to step in and buy everything under the sun, but that horse is already dead tired. The ECB itself doesn’t want to be lender of last resort, Germany doesn’t want it to be, and it also happens to be plain illegal to let it, under EU law and probably under that of some of its members as well.
European Council president van Rompuy is said to be working on treaty changes that should make it all possible, but I can guarantee you that one or more member countries will insist on at least a referendum on such issues. And Europe doesn’t have the time for that, let alone the gusto.So what to do? It’s really very simple. Europe needs to refuse to bail out financial institutions that can no longer stand on their own two feet without bail outs to prop them up. It then needs to demand full discovery of any and all assets in the bank vaults. It can offer temporary support to those banks that remain viable as going concerns once all their paper has been marked to market, insure any and all deposits from citizens and businesses, and subsequently close the doors on those banks that are going concerns no more.
Both Wall Street and European banks that hold too much American and European private debt, sovereign debt and/or derivatives, need to be purged from the system. Europe can make a start, and if America knows what’s good for it, it will follow suit. If not, tough luck.
It’s high time to come clean, to stop the incessant lying. To stop pretending things are a bit hard right now, but otherwise just fine. They’re not. Extend and pretend works only so long. Then it snaps back in your face with a vengeance. That’s why the bond markets are so successful in bringing down Italy and Greece. Not because the ECB doesn’t step in, since that would only serve to cover up reality for a little bit longer, but because they’ve both lied for so long about their real predicaments.
No, just stop lying. The consequences and challenges will be formidable, but they’ll be that anyway. You can’t cover up the debt and the losses forever. And the chances of growing your economies out of the cesspit are zero, if not below. Oh, and one other thing that must stop something urgent: stop talking about economic growth. There ain’t none, and we need to wonder hard and loud why we still and always unquestioningly assume and accept that we need it. No, the Greek economy will not grow its way out of its misery. Neither will Italy’s, or France’s or America’s. There’s too much debt to grow out of.
But perhaps this is hard to fathom without resorting to more philosophical questions. For those of you who’ve never read or heard Professor Albert Bartlett’s work on exponential growth (since that is what we’re talking bout), get moving. Bartlett is a physicist. That means he’s an actual scientist, and capable of understanding the inevitable endgame of exponential growth.
(Prof Alfred Bartlett explains the mathematics behind Exponential Growth)
And there’s another layer to the question, one that goes beyond the easy to understand impossibility of endless and eternal growth. That is, when we look around our respective places on the planet, why do we think we need to grow more? Why do we feel we haven’t grown enough? And perhaps more quintessential: what is it that we want to grow into? At what point, if we do want more growth, will it be enough for us? Have we even thought about that?
We are fed the constant growth story because it is indeed a necessity in our present system. When all money issued carries interest i.e. is issued as debt, you will need to grow your GDP at least as much a that interest rate to play even. Just as easy to understand as the exponential growth conundrum. Or so you would think.
In other words: if we don’t grow, we will shrink. And that, we are told, is the very definition of armageddon. If we would for instance consciously choose to shrink by 5%, we’d run a very real risk that we would cause 50% of the money to vanish. The system based on credit will have the tendency to go down like so many dominoes. It has very little resilience and is thus enormously fragile, something we don’t pay attention to when we have growth, and are therefore not prepared for when we no longer do.
These days we can find a lot of 2012 growth predictions in the media. Just about every single one contains a revision to the downside. 0.5%, 1%, that’s all that’s left. And that’s not enough to pay the interest. It’s always instructive to look at the terminology used in the news. Economic growth will be reported as meager vs healthy, robust vs lagging, weak vs strong. More is always better. A 1% growth number for a modern western economy just doesn’t cut it. Even though it’s just as much of an exponential growth number as any other. And exponential growth inevitably leads to disaster.
You can’t change the system overnight, I hear you say. It worked well for a long time. We are much better off than we were before. Than our parents and grand parents were.
That last one is a bit of a stretch. In her lectures, TAE’s Nicole “Stoneleigh” Foss puts the highest point of our wealth as a society (EU and US) at 1982 at the latest. As in for instance: what percentage of your income, wealth, went to pay for education, health care, then as opposed to now? It’s probably a few years earlier still: mid-70’s.
After that, and we’re talking some 35 years ago, more than a generation, the money as debt system really took off. It took a while for the psychopaths among us to realize the possibilities, but it’s 2011 now and boy, have they ever realized it. And so have we, of course. Greece and Italy have just put their fate and faith in the hands of non-democratically appointed leaders. Over the past 35 years, they may have gotten a bit richer, but those days are gone, and are the Greeks and Italians today really happier than the preceding generation?
The “return to growth” stories, whether they address the US or Greece or any other nation, is that it’s such a one-dimensional notion. I never see anyone asking questions about the core issue. And most of all, I never see a politician or economist addressing the question of what would happen to us, and what we should do, if we can not return to growth.
Surely we can all agree that political decisions and measures would in all likelihood be very different if we, if even hypothetically, considered a no-growth scenario. For now, it’s treated as a doomsday tale, to the extent that anyone gives it any thought at all.
Which means we’d better start talking about what to do when growth is no longer a viable option. And get rid of this quasi-religious clinging to it as something some immovable deity handed to us atop a removed mountaintop.
Because that’s it, in the end, isn’t it: the growth religion makes us destroy not only our economies, but the very world we live in. And that is embarrassing, if nothing else. For onr thing, how does that define as growth? It makes us look just about infinitely stupid. Luckily for us, we can do something about it: start thinking about and discussing why we want growth; if we need it, why we want it.
Stop your leaders from lying, and stop lying to yourselves. At the very least, you’ll feel less embarrassed. And ask yourself: what do you want to grow into? What’s missing?
The focus of other posts on this blog has been to show the complete incompatiblity between exponential economic growth and the environment, and up to the G-20 summit it had been maintained that the economic system would eventually right itself given time. In the months preceding the summit the whole world erupted to the tune of “OCCUPY”, based on the complete abandonment of justice to those liars and criminals responsible for the last 3 years of financial disaster. It was also defined as a movement “BY THE 99%” whose wage levels had FALLEN during the last 15 tears throughout the western world, the middle class is disappearing into poverty.
Millions responded globally on October 15th, to join their voices of discontent, they were met with brutality, the last bastion of a corrupt system. The belief that a basic tenet of a democratic and free society to peacefully demonstrate was shattered. Even more rallied at the site of police brutality and the scorn of right wing media outlets in a clear demonstration that they were not represented in the political system.
The fundamental belief in democratic justice had already been blown away when the wind of economic rescue filled the sails of the banking industry only and left clearly culpable individuals entrenched in their too big to fail institutions. The governments of America and England flatly refuse to introduce a financial transactions tax that would bring an income stream that could provide benefits for the newly created poor, the environment and the developing world.
The existing capitalist system in many western countries is damaged beyond repair, the still developing Asian tigers and BRICS countries are demonstrably creating their own property and financial bubbles that are destined to bring similar economic collapse.
The “western consumer society” has wokem up to the fact that THEY are the missing cog in the wheel, past exhortations to “go and do your patriotic duty and spend” at times of extreme, such as 9/11 and the Lehman Brothers meltdown, have exposed a side of capitalism that is very much designed to keep the 1% first and foremost. The absolute NEED for the economy to thrive on “retail therapy” has now moved past the envy of “conspicuous consumption” to be seen as the “bad taste” of the 2nd decade of the new millenium.
The reason for this is that there is simply TOO MUCH debt, the credit cards of the middle class are “maxed out” paying off the 20% interest rate that has hitherto been the lifeblood of the financial system. Housing is facing a “global revaluing”. With calls for “mark to market:” many households are now in “negative equity” with the “borrowing on equity” have exponentially inflated real estate.
It is now evident that exponential economic growth is NOT compatible with the Earth, the Home we live on, NOR us, the people that live in this Home. It is time to seriously consider the value, and necessity of a Steady State Economy.