Responses to the Global Crisis

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.

Doing this will impose radical restraints on how some businesses operate, and cost structures in general. It will also mean a growing intervention in economic affairs by governments, at least initially, because government is the only institution with the necessary authority to oversee major structural change.

For instance, whether by direct action, a cap and trade system or taxation, any attempt to bring greenhouse gas emissions to safe levels will totally transform energy usage and many other commercial and social activities.

So how do we get out of this trap of an eroding material basis for economic development?

The answer lies in the other two areas – organisation and popular perception.

As pointed out, we have already seen amazing shifts in organisational capacity and wealth production utilising ideas like economies of scale and standardisation. However, this was accompanied by huge increases in fossil fuel usage, especially coal and oil. We somehow need to continue, even accelerate organisational improvements without increasing, indeed for a while decreasing, energy usage.

Is this possible? Well, that’s the big question, but I’ll make a case here that it is.

There are three arguments that give us hope: firstly, economic analysis for some decades has pointed to technology as the main driver in better productivity and growth; second, digitisation has really just got under way; third, many of the constraints on change are cultural or political and so can be readily affected.

The great organisational innovations of industrialisation, such as economies of scale and standardisation, were actually very wasteful in terms of resource usage and waste, but they effectively exploited what was a then critical information capacity. The key was investment in ever-larger hierarchies to control ever-larger scale and more complex operations. We can now completely recreate production and distribution systems to work much more efficiently through the application of more powerful digital control systems and networks.

The ongoing effect of Moore’s law, which says computer processing doubles every 18 months or so, means that we can continue to expect ongoing development of digital technology, and since information systems are now the core of almost all technology, in technology generally.

Perhaps most importantly we can use information technology to decrease energy usage. For instance, all energy conservation measures ultimately rely on enhanced information capacity, such as metering resource and energy usage or pollution levels, and associated costs. Since claims of up to 40 per cent cuts in energy usage through conservation alone in some activities have been made, this is potentially very important.

Because we can anticipate growing digital processing capacity at ever less cost – and we have already seen the phenomenal growth of the Internet, mobile phones, iPads – there is an enormous capacity for people, business and governments to use these technologies to do things more efficiently (i.e. use less energy).

So far, we have just assumed we can have both, the new technology along with old – email and air travel, mobile phones and SUVs – and we have mostly used cyberspace for mass-distraction. We need to start using this incredible capacity for world-wide, 24 hour interpersonal communication and processing power to live and work very differently.

Which brings us to the matter of popular perception. There is no doubt we need to rethink our core values and interests if we are to actually behave differently. Over the last few decades individualistic consumerism has become an increasingly central part of people’s lives. Whatever it has done for the economy, we know this shift has caused, or worsened, some serious personal and social problems. For instance, we know that growing mental health problems - everything from general stress levels to suicide rates - are related to the individualisation and alienation that comes from living in a materialist society with declining levels of family or community interaction. These core problems are of course to be treated by even more consumption – more pills, more gadgets, maybe a trip overseas.

In many ways, the key to using communications technologies effectively and changing our lives generally lies in changed perceptions of what really matters. The attraction of yet another goodie – hair dye, shirt, car, holiday – to make us feel better, for a while, is more immediately obvious than that of some quiet community activity working to some general benefit.

As an example, people who collaborate in an activity often find that the collaboration itself is the best result. Take the instance of community gardens: originally a way of producing tasty, healthy food and avoiding mass-produced junk food, what participants often find is the genuine satisfaction of working with others. Since many people, from kids to geriatrics, suffer from social isolation, efforts to bring people together in new ways can significantly improve quality of life.

This focus on relationships, or social interconnectivity, is sometimes called ‘social capital’. From this perspective, a society so interconnected would still be capitalist but in a different way.

Technology can reinforce isolation and selfishness for individuals and control by authorities, as cyberspace is tending to do now, or it can be used to promote community and greater participation in many areas, including politics. The latter will only happen if people value these things and live accordingly, which is why perceptions must change.

The basic material conditions are not negotiable and we must face this reality; real organisational changes can be achieved but there are technical limits; popular perceptions can change very quickly but this is not easy to do.

Clearly the best option would be for people and governments to operate in an increasingly open, integrated way to make new rules to guide a more efficient and sustainable society. Business, where much of the actual innovative organisational activity occurs, can then take the lead and operate differently to give us better choices in what we buy and how we work.

To this end we need an ever better-informed and well-intentioned debate. We cannot leave the decisions to the usual vested interests and their flunkies (witness the current political theatre in the U.S. where the two candidates refuse to acknowledge the dire situation of America in a world in trouble). We need to turn away from the growing distractions of media and the life of rampant over-consumption and face up to our real choices in a world already changed by our own past actions as a civilisation and species.