Earth Day And Failed Economics

The global commons are failing, and with it the world’s political leadership. Not only are individual states failing due to environmental stress leading to overload (Syria and Iraq) but it is not out of the question that entire regions might soon fall prey to failure. Whether the issue is water, soil, grasslands, fisheries, forests, drought, grain, atmosphere, human population or extreme urbanization, the future of civilization is seriously in doubt. Because humanity has always depended on its agricultural base (Cain and Abel represented two different variations of farming), the prospect of famine has always been with us. It has been two hundred and sixteen years since the publication of Thomas Malthus’s famous essay on food and population. In that time, many political economists on both the right and the left have written off Malthusian theory. Yet the current situation of environmental degradation, due to overpopulation and endlessly compounded economic growth, has led many activists and lay people back to Malthus.
Here in the US, an historic drought has raged across the American West for over a decade. As a frequent visitor to Nebraska, Kansas, Oklahoma, Texas and New Mexico, I can personally attest to the severity of the agricultural stress. Last fall many cattle ranchers transferred herds northward to the Dakotas due to absence of range caused by dry gulches and zero river flow. Unfortunately, an early devastating fall snowstorm caused the death of tens of thousands of these same cattle. This freak snowstorm was the precursor to one of the worst winters on record for the upper plains, while the southern plains still remained mired in drought due to lack of precipitation.
The great irony of last fall’s early snows and extreme farm losses was the unbelievable record warmth in the waters of the northeast Pacific Ocean. According to press reports (in the Wall St. Journal, which usually denies climate change) the severe weather was caused by pressures on the jet stream caused by Pacific hot air. This in turn forced the jet stream to move south, letting arctic air move from Canada into the usually warmer US. In other words, global warming (or its equivalent) caused an early bout of winter, catching both farmers and their precious cattle off-guard. Farming requires regularity, and without it the art of food production becomes nearly hopeless. But everywhere you look these days, regularity in farming has become a rare commodity.
Take Russia, for instance. In the summer of 2010, record heat not only cost thousands of lives but also played havoc with grain production. Instead of its usual one hundred million metric tons of wheat, Russia’s harvest was down by roughly forty percent. This was an astronomical amount, and the global repercussions were astounding. Russia immediately cut its exports dramatically. This caused panic across the fragile world of global grain importers. It also raised the prices of all grains. The global poor were, of course, most effected. But even richer countries like Saudi Arabia and cash-rich China stood up and took notice. If climate change can induce shortages in harvest production, then cash-rich but land-poor importers of grain must also beware– their access to global markets are in jeopardy.
Since 2010, a global land grab for agricultural territory in poorer countries (especially African nations) has been going on with a fever pitch. Corporations, hedge funds and most of all, foreign governments, have begun to buy land in record numbers. The grain-poor nations hope these lands will assure their populations access to grain when international markets fail due to environmental factors. Of course, this strategy is only possible if those same nations have large amounts of export wealth. For the grain-starved and cash-poor nations of the world, the chaos of rising food prices remains always a possibility.
Israel’s neighbors fall into this second category. Egypt, for example, depends more and more on imported grain to meet the needs of its rising population. As grain prices rise, food subsidies must keep pace, or social disorder could certainly overwhelm the country. Now, however, Egypt has a new worry — the diminishing flow of precious water from the regions of the Sudan, Southern Sudan and Ethiopia. These three countries have been targeted by the cash-rich but grain-poor economic behemoths as sellers of land for the development of dams and mega-farms for the production of grains. These massive plantations will be highly mechanized and irrigated by the newly created reservoirs. The grain produced will be for both human and livestock consumption. So Egypt’s problems are twofold: As a net importer of grain and a producer, they face potential shortages on two fronts. They also face price hikes. So could grain and agriculture be at the center of the region’s destabilization? Certainly this was true in Syria.
Years before the start of the Syrian uprising, drought had plagued the Arab Levant, leading to massive urbanization and the lack of economic opportunity. From the very beginning, at the early demonstrations against Assad, the class differences were strikingly apparent. The newly urban, disenfranchised rural poor had seen their livelihoods squeezed and their way of life altered. They represented a lost peasantry whose connection to the Baath Party had been severed by the neo-liberal tilt of the elite’s new, younger generation. As grain prices rose and subsidies fell, the explicit inequality became too much for the ex-peasants living in poverty on the urban edges. With regime change already accomplished in Tunisia and Egypt, the Syrian underclass took to the streets. Meanwhile, Turkish hunger for the waters of the upper Euphrates only exacerbated an already volatile situation. Something had to give, and it did.
But Syria and Egypt are only the tip of the global Malthusian thesis. At the core of the problem sits the influential hubris of the Sherpas of world economic policy, the economists. These same people failed to anticipate the near meltdown of the global financial system in 2008. Yet they continue to espouse the dangerous and erroneous proposition that there can be something on the order of a permanent and sustainable compounded economic growth. But within the obvious limitations of the biosphere (and its sub-systems for human agriculture) lies the very heart of their economic contradiction. The capitalist world system requires continued compounded growth to realize production (pay off debt by selling to customers), and it must continually pay off the all-important interest on the debt. Hence without continued economic expansion (at roughly three percent per year compounded), the entire capitalist system grinds to a halt. Simply put: Capitalism cannot afford limitations, literally.
Nature, however, is all about limitation. Human civilization is merely a sub-system of the natural world. As Chief Seattle once said: “The earth does not belong to us, we belong to the earth”. In the Hebrew Bible, the earth does not belong to us, the earth is the property of G-d. We humans are merely caretakers of the Lord’s creation. But capitalism does not hold to this theological description. Capitalism requires constant debt and interest on that constant debt. Without expansion, the debt simply can’t be paid off in full (including interest), and the capital would be destroyed. In capitalism, capital must expand because of debt with interest.
In the Hebrew Bible, interest on debt is sin. It is forbidden by Divine Law. The economy of ancient Israel was agricultural. It was limited by Divine coordination with natural processes, through the instrument of revealed law. The economy of present day capitalism knows no natural bounds, since it is based on money (the physical or non-physical representation of capital). But the acquisition of money requires a constant supply of customers and a continual overabundance of workers (consumers and cheap labor, a contradiction). Over the last twenty-five years China came into the system, as land and property were privatized and held as scarce commodities. But where will the next China come from, and the next — ad infinitum?
In the Hebrew Bible, land is a sacred natural trust, and everyone is entitled to a piece (not to be owned, but to be nourished). Every fifty years the Divine Authority requires us to respect the Jubilee, when all land and social relations return to their original state. In the Hebrew Bible, expansion and monopoly are held in check by Jubilee through Holy trust. Judaism subscribes to a sustainable, steady-state economy.
Herein lies the central contradiction of modern day capitalism and the reason for the failure of economics: Capitalism cannot survive without a constant rise in population, whereas civilization (and the natural systems upon which it depends) cannot survive without limits to constant population expansion. In the end, humans require food, water, housing, clothing and a secure place for our waste. The natural systems must be respected for humans to survive. G-d has guaranteed us a place on this earth, but He has not guaranteed us riches beyond our wildest imaginations. If we are to survive as a species, we must remember the earth is a creation of G-d. His laws are supreme, and He has built all kinds of limitations into those laws. The economic system of Judaism is clearly on the side of all humanity and the entire creation. The days of our judgement are upon us. Will we choose G-d’s creation, or our own? Malthus understood this choice. Will we understand?