Sunday, September 28, 2008

The World's Largest Pyramid Scheme

In the early 1900s, Charles Ponzi invented a scheme whereby investors are lured by abnormally high returns ("profits"), which are acquired from money paid in by subsequent investors rather than from revenues generated by any sustainable or even real business. Many forms of this fraudulent Ponzi, or pyramid, scheme have been tried over the years. They have all failed. Ponzi was jailed several times and died in poverty.

Now humanity is playing the largest pyramid scheme in history. Economic growth is spiralling ever upward and all the new players that are born into the game want a piece of the good life. Our politicians, the modern-day Ponzis, worship economic growth and do everything possible to promote it. The wealth that supports the scheme is the environment and the oil, water, air, forests, fish and much more that it contains.

But where will it end? An ever expanding economy, an ever growing population and a finite resource to make it feasible is just an enormous pyramid scheme. And we all know that a pyramid scheme comes crashing to a halt when it reaches its limits.

Oil prices have rocketed to over $100 a barrel, grain prices have doubled in the past year and water shortages are looming. These are glaring signals that the limits of our rich cradle of resources are finally being reached. We need to rethink our priorities, curb our population growth and stop this ludicrous Ponzi scheme.


Sunday, September 21, 2008

Killer Lesson from Killer Whales: Let Moms Rule

Although rulers of the sea—even sharks fear them—killer whales (aka orcas), in contrast to humans, have not over-run their habitat. Instead they maintain stable populations and live in equilibrium with the world around them. In the orca world, everyone is part of the community; there are no outcasts, there is no poverty, there is no war. We homo sapiens have much to learn from them.

Why are orcas so successful? An orca's existence is marked by stability centred around the pod. They travel in groups of 10 to 25 with males living up to 40 years and females up to 70 years. The pod or family is organized into matrilines, that is, a matriarch and all her offspring plus her daughters' offspring live together. A unique feature is that all males and females stay in the pod for life. In contrast, human society is marked by high divorce rates, much job changing and enormous choice in everything from consumer goods to entertainment.

It seems a simpler life is better.
A key is the central role of females. Human experience shows that when women get education and responsibility, birth rates drop. The orca matriarch guides the pod and is a storehouse of knowledge, like an enormous computer database. And by adopting the gentleness of females instead of the testosterone-driven aggression of males, orcas avoid the conflict that brings poverty and misery to human society.

We should follow the orcas and let moms and a simpler, gentler life rule.

Sadly, resident orca numbers are decreasing under a myriad of threats, virtually all caused by humans, such as toxic chemicals, decreasing salmon stocks, noise pollution, and warming and acidification of oceans from climate change. I hope we can learn quickly, for if we don't, a century from now they—and possibly we humans also—will be mere footnotes in the long list of species driven into extinction.

Sunday, September 14, 2008

British Columbia's ‘most prolific' mother gives birth to her 18th baby

This headline, which ran in the newspaper recently, troubled me for days. Given that human population exceeds the carrying capacity of the planet, that the price of oil is skyrocketing, that global warming is running amok, and that grain prices have doubled and food riots have broken out, having 18 children seems terribly irresponsible. It speeds up the coming unpleasant difficulties that human society will face.

Just because there is no law against ridiculously large families (there should be), doesn't mean we should have them. There is a place for good common sense; aren't the parents aware that human population is fast approaching seven billion? Astonishingly, the father was quoted as saying, "I want to be a good citizen."

What grieved me even more was the attitude of the newspaper. It gushed over the family and its lifestyle. There was no hint that, perhaps, the parents are irresponsible, that human overpopulation is ravaging the earth and actions such as this only bring the train wreck nearer. With media's heads stuck firmly in the sand, how will politicians listen? I despair for the future.

Sunday, September 7, 2008

An Economist’s View

This letter (edited for brevity) from Vancouver's Mike Barkusky came in response to my article in the Vancouver Sun (see Sunday, August 24, 2008 post).

Dear Hans: Kudos to you for raising the unmentionable, and for pointing out the awkward facts. Although I consider myself an economist, I take my cue from ecological economist Herman Daly.

I think the economics of endless "economic" growth are intellectually flawed. As Daly says, what we are experiencing, increasingly, is UNeconomic growth.

Many feel we need population growth to offset the fiscal problem of an aging population. I think postponing population growth slowdown (and reversal) as a transition strategy might buy time, but simply makes the eventual adjustment to equilibrium that much harder.
I think the sooner the world gets to ZPG [zero population growth] or even shrinking human population, the better. My case for that view is ecological-economic, but a surprising number of the points I would make against continued economic growth rest on economic logic that is not really controversial (between standard neo-classical microeconomists and Daly-ite ecological economists).

Most macroeconomists (largely regardless of ideological or methodological school) on the other hand, are still addicted to growth, but mostly because the conceptual categories they deal in (national income, output, jobs in aggregate, etc.) are so aggregated and abstract (and so lacking in qualitative dimensions) that they have trouble seeing the difference between economic goods and "bads."

Herman Daly has written an excellent critique of the late Julian Simon's "Ultimate Resource" (a cornucopian justification of ongoing human population growth) and a number of excellent papers and books on ecological economics, including "Steady State Economics" and "For the Common Good." He considers his key intellectual forebears to include John Stuart Mill — who wrote perceptively and persuasively, in my opinion, on a "steady state economy" way back in 1848 (!) — Kenneth Boulding and Nicholas Georgescu-Roegen.

- Mike Barkusky, Vancouver