Tuesday, November 18, 2008

A lifetime looking ahead

A slice of history - one long lifetime
This world in 1940 - 2040


The period since my birth in 1940 can be divided into a number of stages. Despite some very considerable changes, much of recent history in this ‘modern’ age has been a simple continuation of the past millennia of the ‘development’ of ‘civilisation’ and human colonisation of every corner of the globe.

One constant has been the persisting influence of the very powerful and rich. Class differences are wider now than forty years ago, and social control is more comprehensive through the highly pervasive ubiquitous advertising of this consumer society. Yet class is off the agenda.

The last 40 years have seen a further stage of the population explosion, as the global population has doubled. Yet population is missing from current planning in New Zealand.

The following summary of stages of social development mentions other global issues which are talked about but not dealt with. An inevitable conclusion is that the future will bring no resolution of such festering problems as the chickens come home to roost and the foreboding forecasts become reality. Now that it is too late to prevent catastrophe and the social and environmental advances dreamt of in past years are no longer possible, the best we can do is to rearrange the chairs on the deck of the Titanic, while the band plays on with hopeful, superstitious hymns to take our attention away from what we have done and what is happening to us. It is not surprising that religion is stronger than ever, with fundamentalism on the rise in both Christianity and Islam – the real world is too dire to face.

How can we deal with this mess? The point of this little note is to call attention to the current reality and to suggest a hard-headed way to live out our lives as best we can. It is too late to shift direction; we are on this one world, a small boat going over the rapids, and the best we can do is to learn how to guide our little corner. It is a matter of survival, not sustainability.

Stages in global society


In a repeat of the curious human habit of tearing down and destroying what they have just built in order to be able to start all over again (considered in my own study of Sisyphustics), the collapse of the depression led into the widespread destruction of the Second World War. The end of the war was a time of hope and renewal.


In the post-war mixed economy, capitalist private enterprise and socialist collective enterprise coexisted, with each doing what it did best. The subsequent division of power provided a place for each group and restraint from the potential hegemony of a dictatorial class.

The long boom of these years was a simple consequence of the need for material goods; quality of life improved as basic needs were met.


However by 1970 many needs were satisfied and there was overproduction in many sectors. The cracks in the system became clear as the USA went off the gold standard that year.

Oil production peaked in the USA in 1970. This had been forecast in 1956 but that forecast had been denied. The shift of the USA from exporter to importer of oil provided the base for the two oil shocks of the 1970s, which were also connected with significant geopolitical events.

A dissatisfaction with a materialist consumer society among significant groups in the advanced economies led to considerable questioning and social upheaval in 1968. There was at the same time a widespread growing awareness of environmental problems and of the fragility of the finite planet. The decade 1968-1978 witnessed many developments in response to those concerns, including the growth of the Department of Conservation and the formation of the Commission for the Future.

Big business remained addicted to growth and in denial of the physical reality. There was a widespread belief - rather self-serving for the wealthy - that freedom was dependent on capitalism, that capitalism demanded growth, and that growth was an absolute necessity. That concept ignored totally the finite nature of the planet, the impossibility of endless growth, and the looming catastrophe which was by then quite evident.

The champions of the far right, Thatcher (Great Britain 1979-1990), Reagan (USA 1981-1989) and Douglas (New Zealand 1984-90), took on the fight and won the battle. The many alternatives put forth in the lively debates of the 1970s were met, not with debate but with the simplistic slogan of TINA – There Is No Alternative. While at first changes were proposed to deal with high debt levels, those debts actually mushroomed under the far right along with a fire sale of state assets. The mixed economy with its balance of power was destroyed in this revolution of the right, leaving management and the financial sector firmly in control.

There were the two oil shocks which upset the global economy. There was the 1987 stock market crash. There was a time of stagflation (inflation in stagnant economies) as governments lost control of the financial system and international banks took over the printing of money. Shareholders lost control of corporations. The incomes of working people diminished while economic growth continued and inequalities soared. Here in New Zealand a new underclass appeared. Yet, despite those facts, the system declared the end of history and trumpeted that capitalism (under the guise of liberal democracy) had triumphed and would be the system for the coming years.

One major spokesman for the triumph of this globalism has been Alan Greenspan, for seventeen years governor of the US central bank. He believes in ‘the inherent stability and growth of what we now term free-market capitalism’ - which stability and growth arises from the guiding principle of the ‘invisible hand’. Greenspan has said that “One could hardly imagine that today’s awesome array of international transactions would produce the relative economic stability that we experience daily if they were not led by some interna­tional version of Smith’s invisible hand.” Now in 2008 Greenspan has appeared before a Congressional Committee to say how amazed he is that the market has been so amiss as to allow an unexpected and mystifying crash.

That history proves once again the truth of Hitler’s maxim in Mein Kampf that “The broad mass of a nation … will more easily fall victim to a big lie than to a small one”. However a major difference is that the current rulers believe their own propaganda.

In 1961 President Eisenhower had warned of the growth of a Military-Industrial Complex. “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.” That power has grown and has long been dominant.

In those years, 1970-2000, the early warnings of global problematique were ignored and denied as the ‘business as usual’ of growthmania continued. As global warming became clear, governments decided to set up a new trading system, which was clearly inadequate. No actions were taken to limit oil consumption – indeed advertisements for cars continue and there has been a boom in the sale of gas-guzzlers. The world population doubled in 40 years, yet population is off the agenda. Estimates of the numbers of extinctions of other species continue to rise; yet distress over the overcrowded environment is a minority concern.


I expected this to be a period of instability and uncertainly, and it is certainly that. There have been a number of foreshocks which presage the later global collapse. The expected oil peak has occurred, characterised by the expected price instability. Inaction over greenhouse gases is the norm, as here in New Zealand where cheap talk goes hand-in-hand with increased emissions. War over resources came a bit earlier than expected as the USA invaded Iraq. Water is getting short, climate change seems to be under way, population growth goes on (still largely ignored, ‘the elephant in the room’, with many New Zealanders wanting a much bigger population and no national debate). As feared, production of bio-fuels has led to increases in the cost of foodstuffs, and ongoing shortages.

The very high unemployment of the post-1984 period dropped as New Zealand funded its activities by running a huge deficit of 7-9% of GDP, unconsciously making good use of the financial bubble.

The globalisation of economies has continued and a mystical belief in the stability and permanence of that system has only now (2008) been dented. While the current crash is just the bursting of another of a series of bubbles, and quite expected, there is no certainty of what will happen next; the current instability may be the onset of an extensive depression, like 1929-1933, or of a more modest depression which the world will crawl out of when the excess capital gets flowing again. Proably assume here that the huge flows of international excess capital will continue, moving on from the housing bubble (and the long line of bubbles in the past several decades) into a next growth sector; this is assumed here. What else can happen to that considerable mass of capital?


The limits to growth and other more complex global models forecast a potential series of crises and a breakdown of modern society at some time around 2050. By 1980 my research suggested that the more pessimistic forecasts would prove robust, and pointed to an earlier onset, probably around 2030. The world will then see extensive overpopulation, environmental damage, food shortages, energy shortages, other resource shortages, starvation, disease, war over resources, breakdown of systems, anarchy and a resurgence of fascism. All hell will break loose.

That forecast is based on trends which were evident by 1968. Many of the trends identified have become evident and thus provided advance warnings, through a series of foreshocks, which presage the future collapse.

Directions for New Zealand in 2008

It is too late to avoid the crisis; a choice of a future direction for New Zealand is now a matter of survival, not sustainability. Many long-term goals are now redundant and the emphasis should be on dealing with uncertainty, instability and crisis rather than producing a leisure society, which is now impossible. Meanwhile inequality will continue high as the focus continues to be on satisfying the requirements of the wealthy (wine, yachts, fashions) – there is no change there. It is a time for Machiavellian pragmatism.

Excess capital has dominated and will continue to do so. Since 2000, New Zealand has done well out of the last bubble. The country could now adapt to the next bubble and continue to appear a safe haven for capital, continuing to go deeper into hock.

The key question now, in 2008, is to identify the next bubble. Many signs point to a continuing demand for fuels, even though fossil fuels will diminish. New Zealand is well placed to advertise itself as a bio-fuel producer, and could live off the investment inflow while that bubble lasts. This is the future direction for the coming decades.

For the rest, we may as well live as is there were no tomorrow, because that tomorrow will be awful beyond imagination. Eat drink and be merry, for tomorrow we die. Let the deck of the Titanic be a happy place in our corner of the world as we together smooth the pillow of a dying society.

John Robinson, Island Bay, 25 October 2008