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The Case For Economic Reform

By John Scales Avery

29 October, 2013

The serious threats which civilization is facing in the 21st century are well known. Nevertheless, it may be useful to list them and to examine how they are related to each other and to our growth-obsessed, war-addicted economic system.

Climate change

The concentration of carbon dioxide in the earth's atmosphere recently passed 400 ppm. The last time that the levels of this heat-trapping gas were so high was several million years ago. At that time the Arctic was free from ice and sea levels were 40 meters higher than they are today. The isotope ratio in gases trapped in Arctic ice cores shows that there is a close correlation between carbon dioxide concentration and temperature. Therefore we must expect that, after some delay, the Arctic will once again be ice-free, and that ocean levels will be very much higher than at present.

As global temperatures increase there are several feedback loops that may be initiated, which will cause temperatures to increase even more sharply. One of these is the albedo effect: As the polar oceans become ice-free, light-reflecting white ice and snow will be replaced by dark, light-absorbing water. As the balance between absorption and reflection is changed, the temperature will rise further, melting more ice. Thus the effect is self-re-enforcing.

Another feedback loop, which may cause temperatures to increase more rapidly than predicted by standard models, is the drying out and burning of tropical rain forests. When tropical forests, such as those in the Amazon Basin, are dried out by increasing temperatures, they become vulnerable to fires started by lightning. The effect of the fires is to release more carbon into the atmosphere, thus increasing the temperature and starting still more fires, in a vicious circle.

By far the most serious threatened feedback loop, however, comes from methane clathrates (hydrates) in frozen tundra and especially on ocean floors. Methane is a very much more potent greenhouse gas than carbon dioxide, although its half-life in the atmosphere is only 7 years. At high pressures, methane combines with water to form crystals called clathrates. These crystals are stable at the temperatures currently existing on ocean floors, but whenever the water temperature rises sufficiently, the crystals become unstable and methane gas bubbles to the surface. This effect has already been observed in the Arctic seas north of Russia. The total amount of methane clathrates on ocean floors is not precisely known, but it is estimated to be very large, corresponding to between 3,000 and 11,000 gigatons of carbon. The release of even a small fraction of this amount of methane into our atmosphere would greatly accelerate rising temperatures, leading to the release of still more methane, in a dangerous feedback loop.

The serious effects of climate change can already be observed in the form of droughts and floods, as well as the increased severity of hurricanes, tornadoes and wildfires. In the long term, anthropogenic climate change threatens to make much of the world uninhabitable and to lead to large-scale species extinctions.

How is it that our supposedly rational species has not long ago mobilized the political will to take the steps needed to prevent catastrophic climate change? Perhaps we can find an answer to this question by examining the faults in our present economic system: Large oil corporations, motivated only by greed, see the melting of Arctic ice not as a warning of future catastrophe, but as an opportunity to exploit the fossil fuel resources of the region, thus adding another dangerous feedback loop to those already mentioned. The more the Arctic icecap melts, the more oil can be extracted and burned, thus raising the temperature still further and melting more ice!

The threat of a catastrophic nuclear war

The concept of nuclear deterrence is seriously flawed, and it violates the fundamental ethical principles of all major religions. Besides being morally unacceptable, nuclear weapons are also illegal according to a historic 1996 decision of the International Court of Justice, a ruling that reflects the opinion of the vast majority of the world's peoples.

Even a small nuclear war would be an ecological catastrophe, not only killing civilian populations indiscriminately in both belligerent and neutral countries, but also severely damaging global agriculture and making large areas of the earth permanently uninhabitable through radioactive contamination. The danger of accidental nuclear war continues to be very great today, and the danger of nuclear terrorism is increasing.

In the long run, the threat of catastrophic nuclear destruction of human civilization and the biosphere can only be averted if the institution of war is abolished. This is because the knowledge of how to produce nuclear weapons can never be lost. Even if even if all the world's nuclear weapons were destroyed, they could be reconstructed during a major war.

The all-destroying weapons that have been produced through the misuse of science have made the institution of war a highly dangerous anachronism, but our economic system remains addicted to war. This is because of the almost unimaginable sums of money that are used for military purposes: 1.7 trillion dollars last year. The oligarchy, into whose pockets this vast river of money is flowing, uses it to control our governments and our mass media. To rid our society of this cancer-like military-industrial complex will require reforms of both our economic system, and our media. It will also require the restoration of democracy to the governments of many countries that claim to be democracies but which, in fact, more closely resemble the state described by George Orwell in his prophetic book, “1984”.

The threat of global famine

There is a danger that a famine of unprecedented scale may occur during the present century, caused by prohibitively high prices of fossil fuels (on which modern agriculture depends) compounded by population growth and the effects of climate change.

Has the number of humans in the world already exceeded the earth’s sustainable limits? Will the global population of humans crash catastrophically after having exceeded the carrying capacity of the environment? There is certainly a danger that this will happen, a danger that the 21st century will bring very large scale famines to vulnerable parts of the world, because modern energy-intensive agriculture will be dealt a severe blow by prohibitively high petroleum prices, and because climate change will reduce the world’s agricultural output.

When the major glaciers in the Himalayas have melted, they will no longer be able to give India and China summer water supplies; rising oceans will drown much agricultural land; and aridity will reduce the output of many regions that now produce much of the world’s grain. Falling water tables in overdrawn aquifers, and loss of topsoil will add to the problem. We should be aware of the threat of a serious global food crisis in the 21st century if we are to have a chance of avoiding it.

We saw above how famine-producing climate change is driven by flaws in our present economic system. The threat of large-scale famine is also related to our economic system's addiction to war. The enormous quantities of money that are presently wasted on war could be used instead to stabilize the world's population.

Sir Partha Dasgupta of Cambridge University has pointed out that the changes needed to break the cycle of overpopulation and poverty are all desirable in themselves. Besides education and higher status for women, they include state-provided social security for old people, provision of water supplies near to dwellings, provision of health services to all, abolition of child labor and general economic development.

The intrinsically desirable measures advocated by Sir Partha could be carried out globally for a tiny fraction of the money that is currently poured into the bottomless pit of war. Furthermore, a small fraction of global military expenses could sponsor agricultural research and programs for soil and water conservation Thus we begin to see that the serious threats that the world will face during the 21st century (and in the more distant future) are closely related to each other and to reform of our flawed economic system.

The threat of economic collapse

It is obvious that endless growth of industry on a finite planet is a logical impossibility. Nevertheless, for most economists and all governments, growth is the Holy Grail. To question the need for growth is political and economic heresy.

Some understanding of this irrational fixation on growth can be obtained by examining our fractional reserve banking system. In this system, private banks keep only a small fraction of the money that is entrusted to them by their depositors and lend out the remaining amount. Thus the money supply is controlled by the private banks rather than by the government, and also that profits made from any expansion of the money supply go to private corporations instead of being used to provide social services.

When an economy is growing, the fractional reserve banking system is unjust but not catastrophic. However if the economy contracts, the system produces a disaster. The depositors ask banks for their money, but it is not there. It has been lent out. We are familiar with this situation from the subprime mortgage crisis of 2008, when enormous banks were threatened with collapse, and were only saved by massive bailouts at the taxpayers' expense.

Looking towards the future, we can see that we are approaching a situation in which growth of industry will no longer be possible because of ecological constraints and because of exhaustion of non-renewable resources. When growth is no longer possible, economic stability can only be achieved by reforming our fractional reserve banking system.

What other reforms are needed? Labor must be moved to tasks related to ecological sustainability. The tasks include development of renewable energy, reforestation, soil and water conservation, replacement of private transportation by public transport. Health and family planning services must also be made available to all.

Opportunities for employment must be shared among those in need of work, even if this means reducing the number of hours that each person works each week and simultaneously reducing the use of luxury goods, unnecessary travel, conspicuous consumption and so on. It will be necessary for governments to introduce laws reducing the length of the working week, thus ensuring that opportunities for employment are shared equally.

It is clear that our present economic system, where selfishness is exalted as the mainspring for action, lacks both the ethical and ecological dimensions that are needed to ensure the long-term survival of human civilization. We must mobilize the political will to reform the system, before it is too late.

John Avery received a B.Sc. in theoretical physics from MIT and an M.Sc. from the University of Chicago. He later studied theoretical chemistry at the University of London, and was awarded a Ph.D. there in 1965. He is now Lektor Emeritus, Associate Professor, at the Department of Chemistry, University of Copenhagen. Fellowships, memberships in societies: Since 1990 he has been the Contact Person in Denmark for Pugwash Conferences on Science and World Affairs. In 1995, this group received the Nobel Peace Prize for their efforts. He was the Member of the Danish Peace Commission of 1998. Technical Advisor, World Health Organization, Regional Office for Europe (1988- 1997). Chairman of the Danish Peace Academy, April 2004. http://www.fredsakademiet.dk/ordbog/aord/a220.htm. He can be reached at avery.john.s@gmail.com


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