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Responses to the Global Crisis

By Peter McMahon - posted Monday, 22 October 2012

The world is in crisis facing huge challenges on many fronts, most importantly economic meltdown and environmental disaster. It is apparent we need to come up with different ways of managing our now global society. In ‘Global Crisis, Global Reform’, I outlined how this change might happen. This article considers some of the basic issues at the core of the global crisis, in particular the tension between material realities, organisational limitations and popular perceptions.

Perhaps the greatest realisation of modern times, inherent in the Enlightenment itself, was that social development is constrained by material conditions. Before this humans hardly understood the material conditions of life, and how the availability of basic resources like food, water, and building materials limited economic and social development. They had little scientific capability and the prevailing focus on divine provenance tended to discourage such questions. The rise of modern science after the sixteenth century and the industrial revolution after 1750 both promoted new ideas about how human development was rooted in material conditions.

This notion was theorised and politicised by Marxian materialism and political economy more generally, and then by economics as it took its classical form after the 1880s. Due to science we knew ever more about the natural world and we could measure most aspects of economic activity, leading to the growing reliance on econometrics and mathematical formula to guide economic thinking.


However, even as this increasing capacity for assessing material conditions was enhancing the effect of economic theory, it was also making us aware of the environmental costs of mass-industrial development. The first conservation efforts began around the end of the nineteenth century and by the 1960s, when the long post-war boom and technological advances seemed to be indicating economic nirvana, science was telling us increasingly of environmental threats. Among other things, Rachel Carson wrote Silent Spring and a U.S. presidential science agency warned of the threat of global warming.

By the start of the 1990s concern about the environmental costs of economic development had generated global concern with many governments accepting a need to focus on sustainability to conserve environmental health and manage declining resources.

Unfortunately the global economic crisis that began in late 2007 has pushed this awareness into the background. With many national economies struggling to stay above water, governments have shifted their attention to dealing with the economic crisis, albeit with negligible real effect.

All this time there have been extraordinary advances in organisation of the economy and society, mostly through more capable technology. Developments in mass transport, initially driven by steam, then by internal combustion and jet power, and in telecommunications - such as telegraphy, telephony, radio, undersea cables and space satellites – radically altered the scope and scale of industrial production and other activities. Steam power, huge factories, urbanisation and the careful combination of supply and demand to generate ever-larger scale and more efficient economies. Digitisation after World War Two then accelerated all these trends.

The result has been a huge expansion in levels of wealth, albeit unevenly distributed wealth. It has been this wealth generation that economists and politicians have chosen to concentrate on.

The final issue is popular perception. It has only been with the rise in the West of the middle classes and democratic politics that this has even been an issue. With the rise of mass-communications – newspapers and magazines, radio, television and now the Internet – increasingly large numbers of people have been able to find out what was going on and talk to each other it.


However, these mass-communications have always been used by the powerful to promote their own views, resulting in right-wing press barons and stultifying network radio and TV that entertains but does not inform. This has resulted in recent decades in a trend away from a well-informed populace to one that too readily accepts simplistic answers to difficult questions and a general sense of apathetic powerlessness. The inane stunts that increasingly pass for political debate reflect and exacerbate this trend.

To get out of the mess we have created for ourselves as a species, a predicament that threatens our own demise, we need to recombine these basic aspects of social development in new ways. The bad news is that the need is now urgent; the good news is that more and more people are at work on the problem.

The first thing is that we need to recognise the material limits to economic growth, especially in regard to declining resource reserves and growing pollution levels. Many essential resources, from fresh water to arable land, from oil to strategic minerals, are approaching critical levels of depletion and so their future use needs careful management. Similarly, pollution levels, led in importance by the greenhouse gases, must be contained to avoid catastrophic changes.

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About the Author

Dr Peter McMahon has worked in a number of jobs including in politics at local, state and federal level. He has also taught Australian studies, politics and political economy at university level, and until recently he taught sustainable development at Murdoch University. He has been published in various newspapers, journals and magazines in Australia and has written a short history of economic development and sustainability in Western Australia. His book Global Control: Information Technology and Globalisation was published in the UK in 2002. He is now an independent researcher and writer on issues related to global change.

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