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The only way forwards is backwards: A budget reply

By Cameron Leckie - posted Tuesday, 17 May 2011

This is a budget reply from the hypothetical leader of the hypothetical catabolic collapse party, placing the not so hypothetical predicament of industrial society into budgetary perspective.

The (hypothetical) catabolic collapse party platform is based on the following principles:

  • The natural bounty of the earth is finite in quantity as is its ability to absorb waste in its various forms.
  • Socioeconomic systems that are based upon perpetual growth in the consumption of the earth's bounty are unsustainable over the long term.
  • Our current socioeconomic system by its very design is unsustainable due to its requirement to continually increase its consumption of natural resources. This in turn, means that it cannot and will not survive indefinitely in its current form.
  • Solving the problems of society by increasing complexity is subject to declining marginal returns. This implies that it is highly unlikely that neither new technologies, additional regulation nor a bigger government will solve industrial society's current predicament.
  • Growth is limited not by the total resources available but by the scarcest of those resources in relation to the systems needs as described by Justus Von Liebig's law of the minimum.
  • At this point in the trajectory of industrial society, catabolic collapse (a prolonged step like decline in the complexity of industrial society) cannot be avoided due to the convergence of stressors including, but not limited to, population growth, oil depletion, financial instability and climate change.
  • The level of disruption and discomfort that will be caused by catabolic collapse can be minimised based upon the choices that Australian's make today. Indeed, there are many potentially positive outcomes that could result.
  • Recognising that catabolic collapse is inevitable, the policies of the party are aimed at reducing its severity on Australia and ensuring that the basic needs of Australians are met through a partnership between the Australian people and its Government.

Dear Mr Speaker, it is obvious to all that cost of living pressures are increasing. Whilst the political rhetoric of eliminating the deficit and easing 'cost of living' pressures expounded by both the Treasurer and the Opposition leader during budget week is important in the current political environment, it doesn't just miss the point by a little it misses it entirely.

The question that should be but rarely is asked in current political discourse, is why are we facing cost of living pressures? The answer can be summed up in three words; declining marginal returns. Virtually every facet of the industrial lifestyle, from agriculture, to health care and energy production is facing this problem. Perhaps the reason why this is not discussed is because societies that reach the point of declining marginal returns become vulnerable to collapse. The catabolic collapse party, rather than pretending that we are different to past civilisations, confront this problem head on and acknowledge that major changes to our social, political and economic systems are urgently required to minimise the breadth and depth of the catabolic collapse path that industrial societies such as Australia are on.

Of course, Australia is a wealthy country, one of the wealthiest on the planet, the lucky country. But we would be wise to consider Peter Atwater's lesson in Banking 102; "The income statement is the past. The balance sheet is the future." This reminds us that our current prosperity, lifestyles and economic strength are based on the past.

As we look to our balance sheet we find ourselves laden in debt, increasingly dependent upon a declining number of oil exporting nations for our oil requirements and on other nations demand for our natural resources, whilst battling a changing climate. At the same time, there are many storm clouds on the horizon. Storm clouds which are moving closer day by day, year by year, all the time converging, all the time gaining in intensity. Storm clouds that, apart from some tinkering at the margins with regards to climate change, have not been identified by the budgets or parliamentary debates in general, weather radar.

Maybe the radar has just been turned off, maybe it is malfunctioning or maybe the operator can only deal with one storm at a time! It should not take sophisticated radar to detect these storm clouds, after all they are clearly visible to the trained human eye.

These storm clouds form the basis of this budget reply. A reply that proposes measures to prepare for, weather and recover from the storms ahead!


The first storm cloud is financial. Despite the attention given to it, Australian Government debt is relatively low, particularly when compared to other nations such as the USA. What is of major concern is the level of private debt in this nation, a level which peaked in 2010 at 88% of GDP, a ratio higher than that of the USAs just prior to the subprime mortgage shambles. The question must be asked, how and why do we allow such bubbles to be blown when the long experience of history informs us that bubbles always burst?

The reason is simple enough. We have taken an abstraction, money, and turned it into an end of its own, rather than a means to an end. Money, credit, debt! Through developments such as fractional reserve banking, fiat currencies and low interest rates, our monetary system has become so far disconnected from the finite nature of our planet that it threatens to destroy the very hand that feeds it.

The party's policy position is that sound money must be the basis of a sustainable economy. This requires urgent and revolutionary changes to our financial system. This would be achieved partly through the transformation of the Productivity Commission. It would be renamed the Sustainable Australia Commission, with its underlying economic philosophy changed from neo-classical to biophysical. Its first mission would be the development of policy advice to assist in the transformation of Australia's financial system by investigating options for:

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About the Author

Cameron Leckie has a Bachelor Science and a Graduate Diploma in Education. Employment experience includes a range of management positions both in Australia and overseas in the telecommunications industry. He is a member of the Australian Association for the Study of Peak Oil and Gas (ASPO Australia). Since finding out about peak oil in 2005, he has written extensively on the topic and in particular, its impact on the aviation industry.

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