While in transit at the Munich airport, which is in many ways the epitome of civilization, I’m watching on one of the TV monitors the live footage of the street riots in Athens where Greek citizens are protesting against their government’s budget cuts after decades-long fiscal excesses. It’s like watching CNN blend with surveillance cameras. Greece, the birthplace of democracy, the mother of all civil societies, recently rejuvenated by new infrastructure for the 2004 Olympics, has fallen prey to greed, moral decay, and poor governance. It is ironic (another Greek invention) that what was once a flourishing empire is now a red number on a balance sheet and a black sheep in one of modern democracy’s most ambitious projects: the European Union. If America went straight from Barbary to decadence, skipping civilization, as the joke goes, then Greece might be on its way straight from civilization to decadence to Barbary. Two people dead, hundreds injured. Police units carrying sticks and tear gas marching on the main streets of Athens. One is familiar with these images, but not with seeing them against this backdrop. It’s like an atavism invading our civilized lives, as a stark reminder of how fragile they are.
Greece is facing an unsettling time of austerity, as it is trying to repair the social contract with its citizens. The bail-out funds approved by the European Union provoke strong resentments on both sides – creditor and debtor – as can be seen by the strained German-Greek relationship. But maybe this crisis will have a cathartic effect, as German journalist Gabor Steingart opined, and finally pave the way for the United States of Europe as a more effective successor to the rather lofty political-economic abstraction of the European Union. Or perhaps, with a more negative spin, the deficit crisis is the precursor of a looming European crisis of much larger proportion that fundamentally threatens the sustainability of the European social welfare model, built and defended by predominantly left-leaning governments in post-war Europe. Gross public social expenditures in the European Union increased from 16 percent of GDP in 1980 to 21 percent in 2005, compared to 15.9 percent in the US. The New York Times comments: “With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes.” The "European Dream" has always been that economic growth would correspond with expanding social welfare systems, and as it turns out this dream might indeed remain a dream.
At least Europe was dreaming with its eyes wide open. In 1972, it was the Club of Rome, back then mainly made up of European scientists, which instigated and framed a subsequently heated debate after expressing strong concerns about finite resource supply. For its seminal “Limits to Growth” scenario report, it ran computational models factoring in world population growth, consumption trends, and the availability of various critical resources, and concluded that the end of growth would probably arrive between 2010 and 2050 (the study has been re-run repeatedly in the years since the original publication, using more sophisticated software and updated input data, with similar results).
Almost 40 years later, in light of the ongoing economic crisis, climate change, and a catastrophic oil spill in the Gulf of Mexico, the question of the “limits to growth” has risen to new prominence. Wall Street’s irrational exuberance and the growing number of failed capitalist states have shown us that market efficiencies alone cannot be relied upon in unlocking the physical limits of resource supply. “The party is over” views are mushrooming. Richard Heinberg, an American journalist and educator who has published extensively on ecological issues, writes on his blog: “In late 2009 and early 2010, the economy showed some signs of renewed vigor. Understandably, everyone wants it to get ‘back to normal.’ But here’s a disturbing thought: What if that is not possible? What if the goalposts have been moved, the rules rewritten, the game changed? What if the decades-long era of economic growth based on ever-increasing rates of resource extraction, manufacturing, and consumption is over, finished, and done? What if the economic conditions that all of us grew up expecting to continue practically forever were merely a blip on history’s timeline?”
Yet so far growth continues: The IMF is forecasting 3.9 percent global economic growth for 2010, despite the threat of a double-dip recession. And most research indicates that the world in 2050 will be richer than the world in 2010. But the problem is that current projections also show a steady decline in the growth rate and a population of around nine billion by the year 2050. The carrying capacity of the Earth’s ecosystem may then very well reach its limit.
Growth is relative indeed. There are, as economists might say, opportunity costs. The comprehensive report by former World Bank chief economist Nicholas Stern undertaken on behalf of the UK government, estimates the costs of climate change, for mitigation and adaptation, to range from five to 20 percent of global GDP.
In recent years China’s economy has been growing at eight percent or more per year; which means it is more than doubling in size every ten years. China now consumes more than twice as much coal as it did a decade ago – the same with iron ore and oil. And it is continuing its growth (11.9 per cent in the first quarter this year!) at the expense of curbing gashouse emissions (after a temporary decline they have risen to unprecedented levels this quarter, causing the largest six-month increase in the tonnage of human generated greenhouse gases ever by a single country).
Speaking of this in economic terms, one wonders what the bottom line of our civilization will look like when the full impact of growth is fully documented and externalized. What will offset the systematic exploitation of natural resources, increase in output, and the accumulation of materialistic wealth? It might be a desirable effort to craft a balance sheet of our societies that would juxtapose the absorption of material and human resources with an accurate documentation of the positive gains: cultural refinement, collective learning, freedom, happiness, spiritual enlightenment, delight, quality of life etc. Will there be scientific breakthroughs that sustain our existence or even extend it to other planets? Whether the accumulation of intellectual equity will ultimately save us from our seemingly inevitable demise, well, that’s a whole other question. At the very best it might possibly prolong the finite life-cycle of our species, and that appears to be a desirable result to most of us.
But perhaps it makes sense that we yet have to find ways to make all these intangible assets tangible, that we have hitherto fallen short of materializing the immaterialistic, as the lack thereof may well protect the very lynchpin of our striving for growth. Because in truth, it is not growth for growth’s sake that we’re seeking, it is hope. Perhaps it is the Calvinistic ethics, revisited and reversed: More than the wealth we're accumulating today it is the debt we're making that lets us persuade ourselves that there is a future. Paradoxically, debt is a warrant, an underwriting of the future, simply because someday someone must still be there who will ultimately have to pay for it all (you'd think).
What is growing, too – at the expense of privacy, as some would argue – is online social capital. More than 50 percent of the world’s population is under 30 years old, and 96 percent of them have joined a social network (“Social Media Revolution”). Facebook’s population represents the fourth largest country in the world. This “social wealth” stands in stark contrast to the “Age of Austerity” many now project on purely materialistic terms. As we mount this social wealth and generate more and more social and creative capital, maybe we can overcome the constraints of materialistic growth simply with our ability to inspire behavior change through the strength of our connectivity and the stubborn power of our imagination. At the very literal end of the day, this, and nothing else, is what innovation is all about.
[image credit: atticwritersworkshop]