The End of Growth

I’ve been making my way through Richard Heinberg’s The End of Growth for over a year now and it raises some very pertinent concerns about a Capitalist economy and the energy that sustains it. Thanks to the people over at Occupy Educated, I was intrigued into getting it and has been a good source of alternate analysis to the status quo “everything is fine unless you stir things up” discourse of the mainstream. In seeking a range of economic backing to address worries over the viability of our social order, the peak oil theorists seem to deserve a look, especially considering their popularity.

The question nagging me with the fury of a bee protecting its hive is: “does our economy – whatever that is – need a material increase in energy and speed to keep growing?” And then to follow that up, “without a growth based economy moving goods around with increased efficiency, does the whole system just collapse in spectacular chaos?”

I am convinced that an economy based on the principles of Capitalist organization, as this increasingly global one surely and without question is, demands growth in some form or another. The imperative to make more and more money, to have your money become a means to acquire more money somehow, necessitates a growth based economy when extended outward into the social field as a whole – playing the dominant role in our relationships with one another. Where that growth comes from (commodity exchange, financial securitization, lifelong debt slavery, or just plain old wage slavery) is important in the narrowing down of capital’s function into more specific contexts, but the big problem that must be thought here is this: without some kind of economic growth, do we really get doom and gloom, chaos and destruction, fantastical apocalypse?

Or is that a mere blocking device characteristic of our collective imagination mediated by those in charge of government and the spectacle?

First of all, let’s bring in Heinberg on growth based economies:

…we have created monetary and financial systems that require growth. As long as the economy is growing, that means more money and credit are available, expectations are high, people but more goods, businesses take out more loans, and interest on existing loans can be repaid. But if the economy is not growing, new money isn’t entering the system, and the interest on existing loans cannot be paid; as a result defaults snowball, jobs are lost, incomes fall, and consumer spending contracts – which leads less businesses to take out loans, causing still less new money to enter the economy. This is a self-reinforcing destructive feedback loop that is very difficult to stop once it gets going.

In other words, the existing market economy has no “stable” or “neutral” setting: there is only growth or contraction. (p.6)

If what Heinberg writes is true, then business as usual means the large economies of the world continue steamrolling with capital expansion in a positive feedback loop or it rapidly disintegrates in the opposite direction and we have a depression. This probably the most basic and essential logistical fact of the last 150 years or so of human history. A strategy of continual and material expansion has developed and found its way into the central aspects of society. Without it, we are plunged into uncharted territory; something we cannot predict and have an extremely hard time imagining must take its place. But this exercise in the imagination does take place and for a reason: we are very much culturally aware of this system’s limitations and the cliff that it is bringing us closer and closer to.

The main message to take home about “economic growth” – a phrase uttered repeatedly in high political discourse – is that it needs, requires, demands, and cannot exist without the complementing energy to move around material goods. This has been taken for granted in the last 150 years and we’ve hit a wall. The fossil fuels supplying this energy will not only peak and destroy a growth based economy, they will destroy the non-growth based ecology of the biosphere. A fundamental restructuring of the economy is the only thing that will stop those expecting returns on their investments in a monetary scheme (capitalists) from ruining it for all of the rest of us, most living organisms included.

Skipping ahead in the book, after his more thoroughgoing analysis of the bubble burst of 2008 and how growth and the economy in general cannot return, Heinberg explains the wall we’ve hit:

We have accumulated too many monetary-financial claims on real assets – consisting of energy, food, labor, manufactured products, built infrastructure, and natural resources. Those claims, essentially IOUs, exist in the form of debt and derivatives. Our debt cannot be fully repaid: every dollar saved in the past is owed ever-multiplying returns in the future, yet the planet’s stores of resources are finite ands shrinking. Claims just keep growing while resources keep depleting – and real prices of energy and commodities have begun rising. At some point it will become clear that this vast ocean of outstanding claims will never be honored, and the result could be a tidal wave of defaults and bankruptcies that would sweep away most of the economy. (p.236-7)

What we are experiencing now is this in slow motion. The Fed policies that funnel credit to giant banks hoping that tried-and-true methods will “revive” the economy fail to take the material aspect of energy and resource depletion. The plan so far from our insular elites is to inject more credit into this system from the top to get things moving as they once were – without any fundamental restructuring of wealth or value. This economy is dying and can only die more or less slowly. Considering the violent domineering that militaries have enacted on the behalf of economic growth, I hope it will die quickly and without to much “fuss”. ¬†Transitioning away from the growth-based model might require a slower, steadier work to avoid the confusing shocks that go to the benefit of the military.

The great question that will define our age and also the fate of all subsequent ages so long as they are able to retain an historical memory is: how best can we transition from this devouring monster of a system into another more ecological system? How can we slay these vampire squids and stop the zombie apocalypse? If we cannot answer these question and/or reorganize ourselves against economic growth, the preventable consequences will be horrifying, but very much imaginable.

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