the inflection is near
I feel like I haven't posted anything substantial here in awhile. In any case, Thomas Friedman wrote an excellent Op-Ed in the New York Times about this recession marking an inflection point in the way that we think about the economy. (I suspect that you've already read it since it's currently Number 1 on the popularity list for "Most emailed"). Perhaps in the future, we will no longer measure the health of the economy in terms of growth, but rather in terms of flow (sustainability and reproduction). Friedman has a way of finding witty little catchphrases and analogies to describe current events, which for some reason I find annoying, despite the fact that they are generally intelligent and helpful in explaining the matter at hand. Perhaps I am jealous :P
In any case, now that I am done rambling, here are some notable excerpts from the article:
Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”
“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows.
“We are taking a system operating past its capacity and driving it faster and harder,” he wrote me. “No matter how wonderful the system is, the laws of physics and biology still apply.” We must have growth, but we must grow in a different way. For starters, economies need to transition to the concept of net-zero, whereby buildings, cars, factories and homes are designed not only to generate as much energy as they use but to be infinitely recyclable in as many parts as possible. Let’s grow by creating flows rather than plundering more stocks.
2 comments:
Although I'm sympathetic to Friedman's point that our current economic trajectory is ecologically unsustainable, I don't see how that caused the present financial crisis.
By analogy, suppose that there was a man who ate poorly and rarely exercised. Suppose that his doctor and friends told him that his present practices were unsustainable, and that if he didn't change his ways he would eventually develop diseases such as diabetes, heart disease, or stroke.
Now suppose this man came down with a bad case of the flu. Would his friends and doctors be right in saying to him, "What if your body is telling you that your habits created over the last 50 years are simply unsustainable health-wise, and that you've hit the wall — when your body just says, 'No more.'"
Good point-- though I think the current recession is triggering us reassess our economic trajectory, just as a bad case of the flu might make the unhealthy man rethink his habits.
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