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December 19, 2007 2:09 PM   Subscribe

The dangers of living in a zero-sum world economy - naked capitalism reprints (with added commentary) an FT article by Martin Wolf on why it's vital for (civilised) society to sustain a 'positive-sum' world, otherwise: "A zero-sum economy leads, inevitably, to repression at home and plunder abroad." Wolf's solution? "The condition for success is successful investment in human ingenuity." Of course! Some are calling for more socialism, while others would press on to build more megaprojects. For me, at least part of the solution lies in environmental accounting and natural capitalism :P
posted by kliuless (42 comments total) 5 users marked this as a favorite

 
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posted by absalom at 2:21 PM on December 19, 2007


Uh, we live on a finite planet. Eventually we're going to hit the wall. All of these economics buzzwords are meaningless before that simple, inevitable fact.
posted by sonic meat machine at 2:35 PM on December 19, 2007 [4 favorites]


We need to be building more arcologies if we're ever going to win.
posted by mullingitover at 2:36 PM on December 19, 2007 [1 favorite]


sonic meat machine writes "Uh, we live on a finite planet."

Space elevators. Duh.
posted by mr_roboto at 2:37 PM on December 19, 2007 [1 favorite]


Yeah, well, I'm waiting for cross-planar tunneling. Space elevators are passé.
posted by sonic meat machine at 2:44 PM on December 19, 2007


I don't buy it. Massive economic growth doesn't really kick in until there is full-employement in a country. This can be applied to natural-resources also. Scarcity drives innovation. Technology is driven by efficiencies. This makes resources practically infinite. Population growth is slowing down. We are getting richer.
posted by blue_beetle at 2:45 PM on December 19, 2007


Uh, we live on a finite planet.

Yup. In the past, there was always room for expansion. I guess if "repression" means the old Capitalist song of "not let me do whatever the hell I want regardless of how it affects other people" then yeah, I guess. What we need to do is carefully delimit the boundaries where our actions affect others, and make sure that our rules don't intrude beyond them.
posted by delmoi at 2:47 PM on December 19, 2007


I think that we will create a sustainable form of economics within the next 20-30 years. To echo kliuless, it need not be zero-growth (a better descriptor than zero-sum, imho) thanks to technological development, aka human ingenuity.

The only visible solution is to account for our social and environmental values alongside the value we derive from economics. How we will implement this new form of accounting is the most exciting question of our time.
posted by FissionChips at 2:50 PM on December 19, 2007


Nice post, but was punctuating it with an emoticon necessary?

Now I know how my English teachers felt. "Great essay! Such a way with words? Wait, WTF? Why does it reek of weed? Oh, god, there's a leaf pressed into the back pages. What a jackass!"
posted by loquacious at 2:53 PM on December 19, 2007


Well, I agree that growth may tend to lead to fewer wars, but infinite growth just isn't sustainable. I'm not even sure that the population we have now is really sustainable -- how many people on the Earth are indirectly living off of petroleum products? (Via petrochemical-based fertilizers that have vastly increased food supplies and led to population increases.)

He views a "zero-sum world" as a danger, but I'm not sure it's avoidable. Eventually we're going to hit some sort of hard limit as a civilization. Exactly which limit we'll reach first is endlessly debatable, but I don't think you can just hand-wave the existence of some limit to growth away. It's going to happen eventually. The question is whether we want to just run ourselves full-speed into it, or try to manage the resources we do have, in order to lessen the impact when we do reach the inevitable maxima.
posted by Kadin2048 at 2:54 PM on December 19, 2007


"A zero-sum economy leads, inevitably, to repression at home and plunder abroad."

Funny. There is no such thing as a zero-sum economy. Non-thinkers assert that the economy is like a pie, and if I have two pieces, someone else goes hungry. As if Wal-Mart floated a big-ass barge over the Pacific and stole all those plastic toys from China instead of paying for them.

The truth is that the economic pie itself just keeps getting bigger, so it doesn't matter how many slices of pie I have, because we can just keep making more and tastier pie.

Yes, there are such things as monopoly, outright theft and repression. But then you're largely talking politics, not economics.
posted by Cool Papa Bell at 2:57 PM on December 19, 2007 [1 favorite]


blue_beetle, Simon's claim is childishly optimistic. He focuses on metals, which are unique in that they are often recoverable (at great expense) after they've been used. What about fuels? What about topsoil? What about resources we toss into the toxic, undifferentiated mounds of trash we call "landfills?"

Yes, people pay for services--but the services only exist because the resources those services exploit are available. If gold gets too expensive, for example, normal people will not be able to purchase any gold jewelry, and the jeweler's shop as a "service" will not exist.

I mean, yes, technology is cool and allows us to get more out of our resources, but by no means does it make them "infinite."
posted by sonic meat machine at 2:57 PM on December 19, 2007 [1 favorite]


Anarcho-syndicalist agrarian internationalism, yo. The only way forward.
posted by Jimbob at 3:11 PM on December 19, 2007


(Here's the alternative point of view, by the way.)
posted by Jimbob at 3:13 PM on December 19, 2007


What about resources we toss into the toxic, undifferentiated mounds of trash we call "landfills?"

I I've learned anything from the new Wall•e trailer, it's that landfills can eventually be converted into robot playgrounds. If I've learned anything else, it's that if I show the new trailer to my girlfriend, she will cry.
posted by Astro Zombie at 3:26 PM on December 19, 2007


The truth is that the economic pie itself just keeps getting bigger, so it doesn't matter how many slices of pie I have, because we can just keep making more and tastier pie.

Right, we can keep making more and tastier pies for a while, but eventually we're going to run out of filling. We might move on to other filling sources, and then run out of crust material, and so on. But eventually we are going to have to switch to sustainable pie ingredients and, unfortunately the supply of sustainable pie ingredients really will be limited.
posted by delmoi at 3:38 PM on December 19, 2007


But eventually we are going to have to switch to sustainable pie ingredients

Or just make different pies altogether.

To extend an analogy to the breaking point, I'm sure that at one point 'round the turn the 19th century, there were people that were concerned about the sheer number of horses required to run a "modern" society. Where are we going to get enough grain to feed the enormous population of horses we will need in the future? For heaven's sake, with the rise of the two-horse family, how will we ever get enough leather to make buggy whips?

"Sustainable" is not future-oriented. If it were, we'd be talking (like an economist) about different and smarter, not just less. "Sustainable" is a subtle code for "I don't like how you do things now, so I want to change your behavior now."
posted by Cool Papa Bell at 4:10 PM on December 19, 2007 [2 favorites]


What about resources we toss into the toxic, undifferentiated mounds of trash we call "landfills?"

Interesting article about mining landfills. It's not as easy as it sounds.
posted by Cool Papa Bell at 4:12 PM on December 19, 2007


re: different and smarter

that's what wolf means when he's talking about "investment in human ingenuity," but as far as gov't funding goes that's not getting any better -- indeed, the trend is ominous (cf.): "An essay on the Space Review site is reporting that a just-completed study indicates the average citizen has no idea how much funding NASA gets. Respondents generally estimated NASA's allocation of the national budget to be approximately 24% (it's actually closer to 0.58%) and the Department of Defense budget to be approximately 33% (it's actually closer to 21%). In other words, respondents believed NASA's budget approaches that of the Department of Defense, which receives almost 38 times more money. Once informed of the actual allocations, they were almost uniformly surprised. One of the more vocal participants exclaimed, 'No wonder we haven't gone anywhere!'"
posted by kliuless at 4:27 PM on December 19, 2007 [2 favorites]


Some are calling for more socialism, while others would press on to build more megaprojects.

First of all, both of those things are socialism. There is no megaproject that can be undertaken that wouldn't have massive government involvement, control, and regulation.

Furthermore, it isn't zero-sum unless you clearly define what is being summed up. human civilization generates a net positive amount of knowledge. Not information, but knowledge. There was oil in the ground in 1776, but it was worthless because no one knew what to do with it. Similarly, our world is full of things (i.e. water and sunlight) whose value to us now does not include the uses for those things that advanced technology will create in the future.

Also, sustainability is ultimately doomed to failure. The population keeps increasing so even if our behavior now is sustainable, it may not be scalable to twice the population or more. IF you want to talk about controlling population growth, that's another thing, but that would require the most obtrusive government imaginable.
posted by Pastabagel at 5:37 PM on December 19, 2007 [1 favorite]


The big problem with Julian Simon's big theory is that a) it requires that there be an infinite number of things to switch to and b) it relies on a nearly religious faith that science will advance fast enough to save us from ourselves. And what do we do when we've exhausted earth's resources? Why, we'll mine the moon!

Anybody using "Can the Supply of Natural Resources Really Be Infinite? Yes!" as support for their views needs to actually read it, it's five pages of concentrated insanity.
posted by Pope Guilty at 5:45 PM on December 19, 2007


First of all, both of those things are socialism. There is no megaproject that can be undertaken that wouldn't have massive government involvement, control, and regulation.

Does the degradation of the word "socialism" to where massive projects employing thousands of workers for the benefit of capitalist owners can be described as "socialist" bother the shit out of anyone else?
posted by Pope Guilty at 5:47 PM on December 19, 2007 [2 favorites]


The big problem with Julian Simon's big theory ...

... is that he strangely keeps winning bets with people and they don't want to admit he won.

Does the degradation of the word "socialism" to where massive projects employing thousands of workers for the benefit of capitalist owners can be described as "socialist" bother the shit out of anyone else?

I know in a previous thread we disagreed, but here we agree on something, at least in spirit. If a clean energy project like the Hoover Dam is now considered socialist ... well, then, fuck, I'm a socialist.

But I'd rather we spend billions on a big-ass hydroelectric dam than millions on a variety of pissant attempts to "encourage sustainable living practices."
posted by Cool Papa Bell at 6:14 PM on December 19, 2007


Cool papa bell:
"Sustainable" is not future-oriented. If it were, we'd be talking (like an economist) about different and smarter, not just less. "Sustainable" is a subtle code for "I don't like how you do things now, so I want to change your behavior now."

I'd like to disagree with you one one point. The whole notion of sustainability is predicated on a concept of the 'future'. That's the point of bringing the issue up in the first place.
posted by kuatto at 6:39 PM on December 19, 2007


I know in a previous thread we disagreed, but here we agree on something, at least in spirit. If a clean energy project like the Hoover Dam is now considered socialist ... well, then, fuck, I'm a socialist.

It seems counter intuitive to think of the Hoover Dam as socialist, but.. Look at the way the Canadian socialist party (NDP) has been hamstrung by the conflicting need to satisfy big manufacturing unions and anarchist/environmentalist/hippie-freak crowd.

No, the Hoover Dam is socialist - planned economy all the way.
posted by Chuckles at 8:12 PM on December 19, 2007


No, the Hoover Dam is socialist - planned economy all the way.

And that's a definition of socialist that spits in the face of every socialist that ever lived.
posted by Pope Guilty at 8:59 PM on December 19, 2007


WTH? The NDP is maligned for white elephant projects that keep union tradespeople employed - the BC Ferries project for example.

The problem with the NDP is that they're inept. Socialism has nothing to do with it. I stand with the NDP on their top-level ideas but I would never ever vote for them because they're incompetent and are too bogged down with their appeasement loyalties to corrupt unions who don't see the big picture.

Socialism is where everyone sacrifices a little bit for a greater return on the greater good.

Just like capitalism and consumerism and whatever -ism, competency is a huge factor.

A competent capitalist/socialist/communist/whatever system is better than any incompetent anything.

Say what you will about the Canadian Liberal party, but they've done the least harm compared to what the Conservatives (remember the PC/Alliance merger - how about the "Green" party pretending to be environmental when they're just a shill for corporations?) are trying to do and what the NDP would do.
posted by porpoise at 9:14 PM on December 19, 2007 [2 favorites]


I'd like to disagree with you one one point. The whole notion of sustainability is predicated on a concept of the 'future'. That's the point of bringing the issue up in the first place.

Heh. Yes, a future will exist. But are you thinking about what the future might look like? Because as I said before, above, a person that had never heard of a car might wonder where we'd get enough oats to feed all the horses we'll need. If you told a person two hundred years ago that horses would be something that are only kept by small numbers of rich people as pets, they'd think you were crazy. Or they'd think that perhaps everyone owned mules.

I think a lot of people miss the point that someone ranting about "sustainable living" is really talking only about today. As in, today we're certain that X is a problem, and that X will always be a problem, because X will always be desired, and therefore we should immediately change our behavior today.

I'll reach for another (possibly tortured) analogy. People rant about cars used for daily commuting, because drilling for oil and pumping out pollution is "unsustainable." So, should we buy everyone a bicycle?

That's not future-oriented thinking at all. That's today-oriented. That's a caveman response. "Uhhhr. Thog not like messy cars! Thog must replace messy cars with bikes so that cavemen not drive them to work every day!"

And then some enlightened Cro-Magnon comes along and asks, "Hey, what if large numbers of people didn't have to drive to work at all? What if they could telecommute or something?"
posted by Cool Papa Bell at 10:36 PM on December 19, 2007


I'll reach for another (possibly tortured) analogy. People rant about cars used for daily commuting, because drilling for oil and pumping out pollution is "unsustainable." So, should we buy everyone a bicycle?

First of all, your notion of "future oriented" is completely flawed. You can't predict the future. Technology doesn't become feasible just because you want it.

Second, people (me!) rant against cars because of:
  • resource wars
  • destroying nature preserves
  • wasting natural gas to wash dirt
  • wasting urban land for multi-lane roads
  • converting farmland into suburbs
  • parking in bicycle lanes
  • increased health care costs due to sedentary lifestyle
And, the list goes on and on.

"The people who felled the last tree could see it was the last, could know with complete certainty that there would never be another, and they felled it anyway."
posted by Chuckles at 11:03 PM on December 19, 2007 [1 favorite]


Yes, there are such things as monopoly, outright theft and repression. But then you're largely talking politics, not economics.

Awesome, and economists wonder why people don't consider them hard scientists.
posted by afu at 11:06 PM on December 19, 2007


Exactly, afu.. All I could think of while reading that Martin Wolf excerpt in the first link was, these assumptions are all wrong!

In addition to all the simplistic economics though, his reading of history is massively flawed. Is his version of the Industrial Revolution what they teach in economics school? He seems to be forgetting a lot of things..
posted by Chuckles at 11:18 PM on December 19, 2007


afu writes "Awesome, and economists wonder why people don't consider them hard scientists."

It's exactly because people use definition such as "hard scientist" that they will never find one.
posted by elpapacito at 1:31 AM on December 20, 2007


Economic planning is a painkiller. It relieves the pain caused by fluctuating price signals, but we need those price signals to tell us when to stop doing things that are hurting us.

Any resource shortage will be worsened by attempts at economic planning.
posted by hoverboards don't work on water at 3:29 AM on December 20, 2007


there are, however, technical prerequisites for a well-functioning market in order to have ('accurate') price signals, which tend to break down in the presence of externalities; hence, market failures and the inadequate provisioning of public goods.

carbon credit schemes for example are an attempt to 'close the loop' -- designed to fulfill preconceived target outcomes and achieve environmental goals (i.e., altho composed with market components, it's still economic 'planning' writ large). an 'x-prize' contest privately and/or publicly funded might also be another innovative way to do this.

it's an old problem in economics -- price is just an approximation of 'utility' (marx's use value vs. exchange value) and how can you aggregate individual utility preferences (curves) into a social utility function (that can presumably be 'maximised')? -- but increasingly relevant in the absence of 'sinks' (environmental, social or otherwise), which is what concerns wolf.
posted by kliuless at 6:18 AM on December 20, 2007


Does the degradation of the word "socialism" to where massive projects employing thousands of workers for the benefit of capitalist owners can be described as "socialist" bother the shit out of anyone else?

No, but using "degradation" in this context does. It is socialist because there is a large state apparatus that is directing the project. Without a central authority "planning" the economy in advance of the demands of the market, such projects could not come about.

-----

Socialism is where everyone sacrifices a little bit for a greater return on the greater good.

Just like capitalism and consumerism and whatever -ism, competency is a huge factor.


No. One of capitalism's principal claims to superiority is efficiency. This comes about due to the incentive of profit. A spontaneous complex order organizes itself to best meet the needs of the market according to the capabilities and inclinations of all. It is in the self interest of each participant to practice good stewardship. The feedback loop is direct.

In a planned economy there are no incentives for efficiency and innovation. A cause for motivation is not addressed. No one knows the future, and the predictions necessary for these long range, large scale plans is frequently wrong, resulting in tremendous waste.

Socialism is government directed economy. By its very nature, competence is pretty much out of the question.

-----

First of all, your notion of "future oriented" is completely flawed. You can't predict the future. Technology doesn't become feasible just because you want it.

It's true that you can't predict the future but you've drawn the wrong conclusions from that. The more reasonable response to an indeterminate future is to remain flexible and responsive. Feasible technology is not guaranteed, but we are confident in our abilities and we trust that we will be able to meet the challenges of the future. There simply isn't anything else.

Your link to the story of Easter Island is about mania. A small elite directing society does not eliminate the possibility of mania. If anything, their distance from local conditions and lack of feedback makes it more likely.

-----

Economic planning is a painkiller. It relieves the pain caused by fluctuating price signals, but we need those price signals to tell us when to stop doing things that are hurting us.

Yup. "Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated." - Thomas Sowell

-----

The piece on Martin Wolf, and his own article was pretty good. People must have the belief that they can better their families and their own lives through their efforts. This means production. Without that belief the love of one's own will motivate man to take from others so his can prosper.

Limits on emissions might not be the same as limits on growth, at least not for some countries, but that's a minor issue. Man's ability to affect climate change is not determined. If we do come to that conclusion then I think there will be some very grim consequences. The United Nations is an impotent body, it can't be considered any sort of an authority. China, India and other developing countries are not going to just shut down their economies because some scientists did a Power Point presentation. Especially not when the countries that refuse to play along gain in military strength, and those that comply weaken. You do the math.
posted by BigSky at 7:02 AM on December 20, 2007


well, that's what's 'neat' about global warming (and mutually assured destruction, for that matter); it brings externalities back on the collective balance sheet, so to speak, and makes people confront all the 'true' costs and consequences of business as usual, to understand their limitations (if any) -- that's why insurance companies, who in part have to pay for externalities, often take the lead on these issues with a longer time horizon in mind and encourage corporations, private citizens and gov't to think and operate differently :P

cheers!
posted by kliuless at 7:40 AM on December 20, 2007 [1 favorite]


I think a lot of people are missing the point. Resources BECOME infintite. Take oil for example, the more we use it up, the less there is, therefore the more expensive it gets. As oil gets more expensive it becomes incrementally cheaper to invest in non-oil based energy. Look at the growth of hybrid-cars, wind, solar, etc. As we spend more time and money on these alternate energy sources, we see cost reductions, they get cheaper, oil gets more expensive, more people use the alternate energy than oil, and eventually we stop using oil. It NEVER gets used up, so in a way, it lasts for every.

Eventually it will be cheaper to get our raw materials from space (asteroids, etc). Economics will push us off the earth, and this will enable huge reductions in the price of getting anywhere in the solar system. There will always be somewhere to go to get resources. If you don't believe that, look at the entire history of the human race. Look at recent colonization of North America. We came for the money and resources, and stayed for the... ummm... all that other stuff.

Standards of living are rising, technology is becoming more efficient, available resources are growing constantly. Take your gloom and doom somewhere else.
posted by blue_beetle at 8:58 AM on December 20, 2007


we could also all be living (matrix-like) in silico eventually :P yay!

Standards of living are rising, technology is becoming more efficient, available resources are growing constantly.

again, i think wolf's point would be that this isn't determined and shouldn't be taken for granted (foundation-like), esp if we don't 'invest in ingenuity'...
posted by kliuless at 9:19 AM on December 20, 2007


The dangers of living in a zero-sum world economy.

So, where does one look for historical economic reanalysis? For example, who's analysing the economic zero sum-ness (or not) of the renaissance, the middle ages, the roman empire? What about something a lot easier; recalculating the GDP of post war America adding in the hidden value of a house wife? Clearly that would give a very different view of the GDP vs. Energy use charts in Wolf's article.
posted by Chuckles at 10:40 AM on December 20, 2007


gregory clark? (also here & here, cf. and more, &c...)
posted by kliuless at 11:22 AM on December 20, 2007


Socialism is an economic structure where the means of production are owned by the workers who use them. There's state socialism and there's libertarian socialism, but describing capitalist economics as "socialist" is dishonest and serves both to make it harder to discuss socialism and easier to tar governmental regulation of the economy as "socialist".

Socialism is where everyone sacrifices a little bit for a greater return on the greater good.

See, this is what I'm talking about. This is not what socialism means, and continuing to use the word as though socialism means "government involvement with the economy" is exactly the sort of thing that Orwell wrote about in 1984 with Newspeak- the manipulation of language to make it impossible to talk about certain concepts.
posted by Pope Guilty at 1:42 PM on December 20, 2007


btw, just came across this and thought i'd add it to the discussion:
I read The Space Merchants by Pohl and Kornbluth in September. I guess it stuck in my head.

The advertising industry is the pinnacle of this society. In the book, an ad fellow has a job to convince people to colonise Venus. There is also a pro-environment, anti-consumerism terrorist organisation named 'the Consies.'

See, this makes sense. Environmentalism as it stands is conservatism - the refusal to see there might be another, better system - by another name. I say 'as it stands' because I don't see any signs that the movement has escaped being one side of this spectrum: on the one hand we can conserve our resources, and on the other we can use and risk them.

There is a third way, and that is to identify the system which generates this opposition and work to change that. For example we may see that the environmentalism debate would be rendered moot having a billion humans orbiting Jupiter and a trillion nano-scale Londons seeded and replicated over the Tharsis Bulge using solar energy and reversible computing. So we would make a risk assessment to figure out whether we want to achieve that. Maybe the polar bears and Bangladesh are worth that. You tell me.

The current dichotomy is not sustainable (ha!), and nor is the system which generates it. Environmentalism prolongs the existence of this system.

We've seen how this should be resolved with capitalism: Marx told us. The revolution must come, and indeed must be provoked by encouraging conflict (in the case of capitalism, between labour and capital by making peaceful strikes violent and so on). The sooner the revolution comes, the sooner we can get on.

Now I'm not advocating a Marxist approach to trees. But what emerged from this conflict was a world in which labour was treated differently. Granted it's one in which conglomerate control is more insidious and labour has transformed into automatic consumers, but at least it's different. At least it proves the point that just the possibility of revolution can bring about a synthesis--and, goodness, given that's happened once then maybe if it happens twice we'll be able to put the dots together and have continuous revolution instead...
worth keeping in mind :P
posted by kliuless at 7:10 PM on December 23, 2007


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