Open For Debate

Open For Debate - Every month, we will publish a controversial (we hope!) article, and give you, the reader, a chance to give us your opinion. We will compile selected opinions into an article, in the broadest range possible, for the next month's issue.

      CAPITALISM   Against   DEMOCRACY
(one-dollar-one-vote)   (one-person-one-vote)


                PART ONE: THE DESCRIPTION

                            by Jay Hanson--April 1995


        "It is not from the benevolence | "The aim of every political
         of the butcher, the brewer, or |  constitution is, or ought to be,
         the baker, that we expect our  |  first to obtain for rulers men who
         dinner, but from their regard  |  possess most wisdom to discern,
         or their own self-interest.    |  and most virtue to pursue, the
         We address ourselves not to    |  common good of the society; and in
         their humanity but to their    |  the next place, to take the most
         self-love, and never talk to   |  effectual precautions for keeping
         them of our own necessities,   |  them virtuous whilst they continue
         but of their advantages."      |  to hold their public trust."
                                        |
            Wealth of Nations           |      Federalist # 57
            Adam Smith (1776)           |      James Madison (1787)
         - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                (Madison is known as the father of our Constitution.)

"I consider our relations with others as constituting the bounds of morality. . . . To ourselves, in strict language, we can owe no duties . . . Self-love, therefore, is no part of morality. Indeed it is exactly its counterpart. It is the sole antagonist of virtue, leading us constantly . . . in violation of our moral duties to others."

American democracy was designed for altruistic leadership. Jefferson and Madison knew that altruism would be essential to conduct the only legitimate activity of our government: to discern and pursue the Common Good. It follows that our government is ignorant when it does not know the Common Good, and corrupt when it knowingly acts against the Common Good. Boy, have we got a problem in our political system!

Solving our problem cannot begin until there is an adequate description of the problem. Moreover, a comprehensive description of a problem usually suggests its own solution.

This paper describes how our economic system has corrupted our political system by working to eliminate altruism from our society. This in turn has caused our political system to become nothing but a puppet for our economic system. In other words, we do not have a genuine political system, only a pseudo-political system that is manipulated by our economic system. Nevertheless, my work is not just another "end-of-world" scenario--it is a work of hope and optimism. I envision two parts; this, the first, is a "descriptive" paper. Later (hopefully within the year) a "prescriptive" paper.

Interacting, interrelated, or interdependent parts combine to form a "system." A system exhibits emergent "properties" that are different from the properties of the individual parts. Alone, the individual parts of a bicycle do not exhibit the property of a bicycle (people transporter). The property of a bicycle emerges once the parts are in their proper places and interacting together.

To solve a problem in a system, one must analyze the relationships of the parts to each other and to the environment. For example, if the spark plugs were removed from a car's engine and put in the back seat, an inventory of the parts would show the car intact. To understand why the car's properties had changed, one would have to study the relationship of the spark plugs to the rest of the engine.

It is important to understand that system properties derive from the ongoing interaction of the parts. If a system is producing unwanted effects, then we consider improving the system so that it stops producing those unwanted effects. For example, should we "treat the symptoms" of an unmoving car by attaching a horse, or should we improve the system by putting the spark plugs back into the engine? This example is not as silly as it seems, because we usually treat symptoms rather than improve systems--it's the way our economic system works.

For example, some unwanted effects of the "booze" industry are alcoholics. Rather than trying to improve the system (e.g., by banning booze advertising), we treat the symptoms by creating a new industry to treat alcoholism. If the pesticide or tobacco industry causes cancer, then so much the better for those in the cancer industry. The same illustrations also apply to many other social and environmental problems.

Obviously, if our economic system is producing unwanted effects, we should improve it so it stops producing those unwanted effects. We know it can be done because lobbyists "improve" our economic system all the time.

A system can process "feedback" to maintain stability. I use "negative feedback" to refer to feedback that stabilizes systems and "positive feedback" to refer to feedback that destabilizes systems. For example, a car can be said to maintain directional stability (stay on a straight course) by responding to negative feedback received through the steering wheel.

The car's environment-thermostat-heater system is also stabilized with negative feedback. Temperature information is sent by the environment to the thermostat. Once the temperature reaches specific set points, the thermostat acts to maintain stability by sending an "on" or "off" signal to the heater.

This system must be carefully designed to accomplish its specific "function" (maintain a constant temperature). What would happen if the signals from the thermostat to the heater were inverted? Nothing--as long as the temperature stayed cool. But once a gradually rising temperature crossed the thermostat's set point, the heater would turn on and cause a "runaway" temperature rise.

This type of system exhibits runaway positive feedback. In other words, it selects for its own failure.

Systems that select for failure are often called Greshamite systems after the English financier Sir Thomas Gresham (1519?--1579). His name was given to Gresham's Law, the economic principle that "bad money drives out good." When depreciated, mutilated, or debased (bad) money circulates concurrently with money of high value (e.g., silver or gold), the good money disappears because of hoarding. As more and more people notice that good money is being hoarded, more and more good money is hoarded--runaway positive feedback again. Ultimately, the monetary system fails.

Many Greshamite systems exist in our society. For example, a pesticide kills all but resistant pests. As this process continues, increasing percentages of the pests are resistant to the pesticide. Runaway positive feedback occurs as pesticide applications are increased to offset increasing resistance. Ultimately, the pesticide fails. This same process occurs with antibiotics, producing resistant diseases.

Our so-called political system can also be seen as a Greshamite system. To understand why, first consider the theoretical premise of our political system: a government that is willing to act for the Common Good. Next, consider two very different candidates for public office. Ms. Honesty believes in the principle embodied in our Pledge of Allegiance "... liberty and justice for all." If Honesty is elected, she will treat everyone fairly and pursue the Common Good. Mr. Corruption is motivated to pursue his own private gain. He has studied the system carefully and knows that he can gain political power by rewarding his friends and punishing his enemies.

Which of these candidates has the advantage? Mr. Corruption. Why? Because of our dominant ideology of individual self-interest and what economists call "public goods" (public goods are available to everyone, e.g., the benefit of honest government).

Huey is a local developer who has money, employees and influence. Philosophically, he is an average, self-interested individual who was trained by television (and to some extent by his family and formal education) to maximize his own private goods. Public goods were never even mentioned, so Huey has little incentive to contribute to the provision of public goods.

Will Huey contribute to Ms. Honesty? No, why should he? If she wins, Huey will receive justice and fairness from her anyway (a public good). If she loses, Huey will be punished by Mr. Corruption for helping her.

Will Huey contribute to Mr. Corruption? Yes, because Huey has been promised a private good (e.g., a change of zoning). Moreover, Huey will not be punished by Ms. Honesty for helping Corruption. So Huey helps Corruption.

This Greshamite system tends to elect politicians who are motivated to maximize their own private gain (obviously, there are individual exceptions). Runaway positive feedback occurs as politicians need more and more money to run for public office. As this process continues, increasing percentages of politicians are corrupt.

Bad drives out good and Corruption drives out Honesty. To what end? In the end, we do not have a genuine political system, only a pseudo-political system.

Garrett Hardin's essay, "The Tragedy of the Commons" (1968), is a modern classic in environmental literature. The "commons" refers to the common resources that are owned by everyone. The "tragedy" occurs as the result of everyone being free to maximize one's own profit by exploiting the commons.

Hardin's essay goes something like this: Visualize a pasture as a system that is open to everyone. The carrying capacity of this pasture is 10 animals. Ten herdsmen are each grazing an animal to fatten up for market. In other words, all the grass that the pasture can produce is now being consumed by the 10 animals.

Dewey (one of the herdsmen) will add one more animal to the pasture if he can make a profit. He subtracts the original cost of the new animal from the expected sales price of the fattened animal and then considers the cost of the food. Adding one more animal will mean less food for each of the present animals, but since Dewey only has only 1/10 of the herd, he has to pay only 1/10 of the cost. Dewey decides to add an animal and take a profit while the other herdsmen suffer losses. These losses are known as "externalities." There is no "technological" solution to this problem. Theoretically, "political" solutions are possible, but with no genuine political system, there are no genuine solutions.

Shrinking profit margins force the other herdsmen either to go out of business or add more animals (more runaway positive feedback). This process continues until overgrazing and erosion destroy the pasture system.

Although Hardin's essay describes a problem inherent in an unregulated public pasture, it serves as a metaphor for our entire society. Our communities are the commons. Our schools are the commons. Our roads, our air, our water; we all are the commons!

Our commons are being polluted by runaway positive feedback in the economic system. For example, a century ago CFCs did not exist. But once the first company incorporated them into its products, competition forced other companies to follow. As more and more products with CFCs entered the market, more and more CFCs were designed into new products. These chemicals are now widely used in air conditioners, refrigerators, solvents, plastic packaging, and foam insulation.

NASA researchers have found conclusive evidence showing that CFCs are the cause of the Antarctic ozone hole. The Earth has lost about three percent of its protective stratospheric ozone, resulting in a six percent rise in ultraviolet radiation. Another three percent loss is expected by 2000. Even with a complete phase-out of CFCs, the ozone layer is not expected to return to pre-CFC manufacturing levels until 2060. Worldwide, a billion (a thousand million) skin cancers are expected to result from ozone loss--including 17 million deaths (RHWN, #380).

A billion skin cancers? Better get used to it, because this is what happens when we wipe out chunks of our life support system--and we are picking up the pace.

We are all completely dependent on the environmental services that are provided by Mother Earth's complex life support system. Scientists cannot even identify all the variables, much less measure them. Developers often call what they do "improvements," but this is actually a euphemism for "intervention." Interventions in our life support system are, in principle, irreversible and unpredictable (Gleick, 1987). Moreover, these interventions nearly always decrease the Earth's "carrying capacity."

I define carrying capacity as the maximum load that can be exerted on a life support system without damaging the system itself. Like hungry men eating their own hands, populations exceeding carrying capacity devour their ability to feed themselves. Ultimately, high mortality rates (negative feedback) return the population to a now-decreased carrying capacity.

The Kaibab Plateau (north of the Grand Canyon) was originally capable of sustaining as many as 40,000 deer. Wolves, cougars, and coyotes provided the negative feedback necessary to preserve the deer's life support system (limiting the deer population to less than the plateau's carrying capacity).

When bounties encouraged hunters to kill the deer's natural predators (kill the negative feedback), the number of deer mushroomed from a few thousand to at least 50,000. Once the carrying capacity of the plateau was exceeded, the deer had no recourse but to consume the life support system itself. They eventually scoured the landscape for every edible scrap, even eating the bark of the trees. The carrying capacity of the Kaibab Plateau plunged to 10,000 as four out of five deer starved to death.

The story of the Kaibab Plateau deer illustrates carrying capacity in its starkest, biologically simplest form: A certain number of animals acting in a certain way can be sustained by the resources in a given region. Anything over that number consumes the life support system itself and decreases the carrying capacity.

There is now scientific consensus that the human herd is already beyond carrying capacity (Ekins, 1994). By definition, a biological species beyond carrying capacity cannot be sustained--it will be cropped and truncated--one way or another. Indeed, there is good evidence that we may have less than 35 years until the "functional integrity" of the ecosystem is destroyed (Rees and Wackernagel, 1994).

Yet we rush to consume more and more of our life support system for more and more trivialities and distractions. Economic theory assumes that wants are infinite, and attempts to supply them from a finite world. Since this activity is destined to crash, perhaps it is time to ask what humans actually "need."

Natural needs are the same in all human beings, for they are inherent in human nature. Material needs include such basics as air, food, water, shelter, sleep, and physical security. Our social needs include such things as liberty, true economic security (not just jobs), love, affection, acceptance, esteem by others, and self-esteem. Moral needs include service, meaningfulness, aesthetics, perfection, truth, and justice (Ekins and Max-Neef, 1992). A good education, a sense of community, and a dependable job are examples of needs.

It's clear that Mother Earth can not be all things to all people. We have to decide "what," and to "whom."

When confronted with the inevitability of life support system collapse, those who feel threatened will invariably retreat to the thought-stopping political mantra: "private property." It is thought-stopping because it diverts attention away from the issue of collapse and directs attention to politics.

"Private property" (actually a code phrase for "I do not want to talk about it!") is a culturally-correct form of denial. Culture can be seen as a shared conspiracy against self-knowledge and psychological growth in which we collude together to protect our defenses and illusions. But one fact can not be denied: We all share a common life support system which must remain intact to fulfill its function (keep us alive). Once this obvious fact is accepted, it becomes equally obvious that property cannot actually be "private" at all.

Suppose Louie bought a forest for one million dollars. It's labeled private property, but all living creatures rely on the life support services provided by forests (e.g., habitat, watershed, fisheries in rivers, climate stabilization, recreation). Harvesting and replanting the forest (in a way that does not consume the life support system itself) will yield a 4% return on capital ($40,000 per year).

Now suppose Louie could clear-cut and sell all the trees for one million dollars, then invest the proceeds in a bank at 5% ($50,000 per year). NO MORE FOREST! Indeed, "clear-cutting for profit" happens all day long, every day of the year, all over the world. In the last decade, 154 million hectares of forest--an area three times the size of France--have been converted to other uses (WRI, 1994-95, p. 131).

These private properties were part of our life support system before they became cash. Property can not be private if we need it for life!

Could we bring back the prosperity of the 50's and 60's if we could straighten out our social systems? NO! We prospered by depleting high-quality deposits of nonrenewable resources and degrading high-quality renewable resources. The "laws of thermodynamics" are quite clear on what we can and cannot do.

The first law of thermodynamics (the conservation law) says that there can be no creation or destruction of matter-energy. The second law gives a precise definition of a property called "entropy," which is a measure of disorder in a system.

The idea that we can never go back requires some explanation. Consider the Earth as an hour glass. It is a closed system in that nothing enters the glass and nothing leaves (except solar energy). The amount of sand in the glass is constant--no sand is created or destroyed within the hour glass. Although the quantity of sand in the hour glass is constant, its qualitative distribution is constantly changing as the top chamber (low entropy) is falling into the bottom chamber (high entropy). Sand in the top chamber is capable of doing work by falling (like water at the top of a waterfall). Sand in the bottom chamber has spent its capacity to do work. The hour glass cannot be turned upside down (waste energy cannot be recycled, except by spending more energy to recycle than would be reclaimed in the amount recycled).

The loss of sand in the top chamber of the hour glass represents the loss of nonrenewable energy resources. The rising sand in the bottom chamber represents rising externality losses (as in the commons tragedy).

Gross Domestic Product (GDP) is how we measure our economic "success." An increase in the GDP actually means the satisfaction of more and more trivial wants, while creating more and more powerful externalities that in turn destroy both our life support and social systems. When society spends even more money to defend itself against these unwanted externalities, the GDP increases even more (positive feedback again). For example, the costs of treatment of cigarette-induced cancer, pollution-induced emphysema, and television-induced crime are added to the GDP. There is strong evidence that the U.S. economy is making us poorer by increasing costs faster than it increases benefits (Daly and Cobb, 1989, appendix).

Poverty intensifies with each rise and fall of the horsehead (the moving part of an oil well), each new spasm of industrial pollution--and each new crop of garbage. The fragility of our economic system comes as a surprise to most people. After all, there were no news stories regarding inevitable poverty. Average U.S. citizens are struggling so hard to make ends meet that they do not notice the resource depletion and pollution that occurs with each dollar of economic activity.

Who will pay for a billion skin cancers?

The fundamental flaw in our social systems is runaway positive feedback. If a picture is worth a thousand words, then the following graphic view of our society should help us to understand these interlocking social systems. As you can see, my view is nearly the inverse of what we have been led to believe. If I am right, our so-called political system cannot save us from the coming collapse.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If names be not correct, language is not in accordance with the truth of things. If language be not in accordance with the truth of things, affairs cannot be carried on to success.
Confucius

* BOTTOMLINEWORLD is based on "standard economics" which asserts: " . that the economy is an isolated system in which exchange value circulates between firms and households. Nothing enters from the environment, nothing exits to the environment. . . . For all practical purposes, an isolated system has no environment" (Daly, 1991, p. xiii)

As you can see there are no formal feedbacks from the life support system to the economic system because lobbyists have designed our economic system to benefit their own special interests. As a result, once sustainable-yield thresholds are crossed, economic responses only make matters worse (positive feedback again). For example, a scarcity of fish causes fish prices to rise. The economic response to rising prices is to invest more in production--invest in more fishing trawlers to increase profits. But this response only hastens the collapse of the fishery!

Similarly, as falling water tables cause food prices to rise, the economic response is to plant more crops and spend more on irrigation. But where water tables are already falling, investing in more wells simply accelerates the depletion of the aquifer and the ultimate decline in irrigation. Bad system design is now a matter of life or death.

The future looks hopeless. The Soviet Union provided ample evidence that even a police state cannot save our life support system. Despite strict environmental laws, that country was completely ravaged. The lesson: as long as humans are rewarded by exploiting the environment and other humans, they will continue to do so--whatever the political system.

If it is not politically possible to make our disintegrating social systems viable (by providing the necessary negative feedback), where does hope lie? I see only a very slim chance that humans will be able to avoid social chaos (and possibly total extinction).

Our hope lies in a "paradigm shift" that is as radical as the Copernican shift. For 14 centuries, Ptolemy's astronomical theory that everything in the universe revolved around the Earth was taught as religious dogma throughout Western Christendom.

But all that changed when Copernicus caused tremendous controversies in religion, philosophy, and social theory by proving mathematically that the Earth moves around the Sun. It was heresy on a grand scale. Ultimately, the Copernican revolution successfully challenged ancient authority and caused a paradigm shift in our entire conception of the universe.

Realizing that we do not have a genuine political system is a paradigm shift in itself and calls for new survival tactics. Our challenge, in the next three decades, is to survive the collapse of these non-viable systems while attempting to avoid the nearly inevitable panic and social chaos (Laszlo, 1994, p. 60; Meadows, et al., 1992, p. 133).

The possibilities for a new society will inevitably increase as the old macro system disintegrates. The Soviet Union disintegrated when it did because Soviet citizens saw a better model in the West. I suggest that a parallel macro system be established with new rules for BOTTOMLINEWORLD. Chaos and violence will overwhelm the old system, rising negative feedback will drive people laterally into the new system and the present Western system will disintegrate just as the old Soviet one did.

If a new working model can put together somewhere, it would be just a matter of time before the lateral migration begins.

I am presently working on part two. Please send your ideas or prescriptions for a new society to: jhanson@igc.apc.org

Daly, 1991:  STEADY STATE ECONOMICS -- Island Press
    800-828-1302, 707-983-6432, Fax 707-983-6164,
     Internet: http://www.islandpress.com
Daly and Cobb, 1989:  FOR THE COMMON GOOD --
    Beacon Press, Boston;  800-631-8571,  Fax 617-723-3097
Ekins, 1994:  TOWARD SUSTAINABLE DEVELOPMENT --
    The International Society for Ecological Economics (ISEE)
    and Island Press
Ekins and Max-Neef, 1992:  REAL-LIFE ECONOMICS --
    Routledge, NY;  212-244-3336
Gleick, 1987:  CHAOS -- Penguin, NY;  800-332-4624,
    Fax 212-366-2666
Laszlo, 1994:  VISION 2020 -- Gordon and Breach, NY;
    212-206-8900
Meadows, et al., 1992:  BEYOND THE LIMITS -- Chelsea Green
    Publishing Company, Lebanon, NH; 800-639-4099,
    603-448-0317, Fax 603-448-2576
Rees and Wackernagel, 1994:  INVESTING IN NATURAL CAPITAL --
    ISEE and Island Press
RHWN:  RACHEL'S HAZARDOUS WASTE NEWS --
    Environmental Research Foundation,  410-263-1584,
    Fax 410-263-8944;  Internet: erf@igc.apc.org;
    Back issues: anonymous ftp world.std.com/periodicals/rachel
    and via gopher server at world.std.com and at envirolink.org
    and at igc.apc.org.
WRI, 1994-95:  WORLD RESOURCES 1994-1995, NY;
     202-638-6300, Fax 202-638-0036, email: wri@igc.apc.org.

If you are new to ecology, read this book:
    OVERSHOOT by Catton, 1982 -- University of Illinois Press,
    800-545-4703,   Fax 217-244-8082
To learn out about the coming energy crash, read:
    BEYOND OIL, by Gever, et al., 1991 -- University Press
    of Colorado 303-530-5337

"We have no government armed with power capable of contending
 with human passions unbridled by morality and religion...Our
 Constitution was made only for a moral and religious people.
 It is wholly inadequate to the government of any other."
                                                  John Adams

  Jay Hanson, 78-6622 Alii Drive, Kailua-Kona,  HI  96740
        Phone/Fax 808-329-6645  jhanson@igc.apc.org

  This article is archived at:
  gopher://csf.colorado.edu/11/environment/authors/Hanson.Jay