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Time to end the multigenerational Ponzi scheme

By Kim Stanley Robinson

22 February 2009

First, we need to trust our science. We do this every time we fly in a jet or rush to the doctor in hope of relief from illness; but now there is some cherry-picking of science going on in the various kinds of resistance to the news about climate change, and this double standard needs to be called out. The so-called climate change skeptics are now simply in denial. All science is skeptical, and the scientific community has looked at this situation and found compelling evidence for anyone with an open mind.

Science is telling us that if we keep living the way we do, we will trigger an unstoppable and irreversible climate change that may de-ice the planet and acidify the oceans, causing mass extinction. It took tens of millions of years for Earth to recover from previous mass extinctions. It is certain that human beings would be devastated by such an event, despite our intelligence and technological power—and there are instabilities in the climate system that include tipping points that we are closing in on fast.

That’s what our science is telling us. The most rational way to act is to believe that and then to act on that belief.

Above all, we need to decarbonize our power and transport systems, and, more generally, to build a carbon-neutral or even carbon-negative civilization as quickly as possible. It’s not a matter of technology. We already have good starter technology for lithium-ion batteries in cars; clean, renewable energy generation; cleaner building methods; and so on. The technical solutions are being improved all the time in research labs.

The main problem is making these changes happen more quickly than they can in the false pricing system that we have created and enforced within our hierarchical power structure. There is conflict over how to pay for decarbonizing, which is deemed “too expensive” to execute quickly. There is both a defense of the destructive carbon burning we are engaged in and a resistance to the most obvious solutions among people who remain frightened of the idea of government-led economic programs. But now we simply must have such programs because the market is not capable of taking action.

Am I saying that capitalism is going to have to change or else we will have an environmental catastrophe? Yes, I am. It should not be shocking to suggest that capitalism has to change. Capitalism evolved out of feudalism. Although the basis of power has changed from land to money and the system has become more mobile, the distribution of power and wealth has not changed that much. It’s still a hierarchical power structure, it was not designed with ecological sustainability in mind, and it won’t achieve that as it is currently constituted.

The main reason I believe capitalism is not up to the challenge is that it improperly and systemically undervalues the future. I’ll give two illustrations of this. First, our commodities and our carbon burning are almost universally underpriced, so we charge less for them than they cost. When this is done deliberately to kill off an economic competitor, it’s called predatory dumping; you could say that the victims of our predation are the generations to come, which are at a decided disadvantage in any competition with the present.

Second, the promise of capitalism was always that of class mobility—the idea that a working-class family could bootstrap their children into the middle class. With the right policies, over time, the whole world could do the same. There’s a problem with this, though. For everyone on Earth to live at Western levels of consumption, we would need two or three Earths. Looking at it this way, capitalism has become a kind of multigenerational Ponzi scheme, in which future generations are left holding the empty bag.

You could say we are that moment now. Half of the world’s people live on less than $2 a day, and yet the depletion of resources and environmental degradation mean they can never hope to rise to the level of affluent Westerners, who consume about 30 times as much in resources as they do. So this is now a false promise. The poorest three billion on Earth are being cheated if we pretend that the promise is still possible. The global population therefore exists in a kind of pyramid structure, with a horizontal line marking an adequate standard of living that is set about halfway down the pyramid.

The goal of world civilization should be the creation of something more like an oval on its side, resting on the line of adequacy. This may seem to be veering the discussion away from questions of climate to questions of social justice, but it is not; the two are intimately related. It turns out that the top and bottom ends of our global social pyramid are the two sectors that are by far the most carbon intensive and environmentally destructive, the poorest by way of deforestation and topsoil loss, the richest by way of hyperconsumption. The oval resting sideways on the line of adequacy is the best social shape for the climate.

This doubling of benefits when justice and sustainability are both considered is not unique. Another example: world population growth, which stands at about 75 million people a year, needs to slow down. What stabilizes population growth best? The full exercise of women’s rights. There is a direct correlation between population stabilization in nations and the degree to which women enjoy full human rights. So here is another area in which justice becomes a kind of climate change technology. Whenever we discuss climate change, these social and economic paradigm shifts must be part of the discussion.

Given this analysis, what are my suggestions?

Believe in science.
Believe in government, remembering always that it is of the people, by the people, and for the people, and crucial in the current situation.
Support a really strong follow-up to the Kyoto Protocol.
Institute carbon cap-and-trade systems.
Impose a carbon tax designed to charge for the real costs of burning carbon.
Follow the full “Green New Deal” program now coming together in discussions by the Obama administration.
Structure global economic policy to reward rapid transitions from carbon-burning to carbon-neutral technologies.
Support the full slate of human rights everywhere, even in countries that claim such justice is not part of their tradition.
Support global universal education as part of human-rights advocacy.
Dispense with all magical, talismanic phrases such as “free markets” and promote a larger systems analysis that is more empirical, without fundamentalist biases.
Encourage all business schools to include foundational classes in ecology, environmental economics, biology, and history.
Start programs at these same schools in postcapitalist studies.

Does the word postcapitalism look odd to you? It should, because you hardly ever see it. We have a blank spot in our vision of the future. Perhaps we think that history has somehow gone away. In fact, history is with us now more than ever, because we are at a crux in the human story. Choosing not to study a successor system to capitalism is an example of another kind of denial, an ostrich failure on the part of the field of economics and of business schools, I think, but it’s really all of us together, a social aporia or fear. We have persistently ignored and devalued the future—as if our actions are not creating that future for our children, as if things never change. But everything evolves. With a catastrophe bearing down on us, we need to evolve at nearly revolutionary speed. So some study of what could improve and replace our society’s current structure and systems is in order. If we don’t take such steps, the consequences will be intolerable. On the other hand, successfully dealing with this situation could lead to a sustainable civilization that would be truly exciting in its human potential.

Comment [35]

Agree? Disagree? Let us know what you think. Please include your full name with your comment. Comments may be edited.

I would like to explore the mentioned link between sustainability and social justice.

I am not sure I have visualised the ideal “oval shaped” distribution of wealth / resources correctly. Perhaps the author can give us a diagram comparing the present pyramid and the ideal oval-shape based on the current world population.

I would also like to know what the author sees as a sustainable equilibrium for world wealth / resource distribution in the steady state. For example, would it be a) A world where the rich first-world countries continue to pay a sum of money to the third world to maintain their forests in perpetuity? or b) A world where every country is educated, developed, productive and carbon neutral?

I personally don’t think any third-world country would accept scenario a) in perpetuity. The aspiration of all the most populous peoples in the third-world is to be educated, developed and productive (if not rich). An analogy is the difference between being on state assistance in a welfare state and being an income-earning tax-payer. Most of us would much prefer to be the latter. The preference would be less acute if both individuals could be raised to the same standard of living, but would be difficult to expect the tax-payer to surrender enough to raise the welfare receiver’s standard of living to his own.

It seems to me that scenario b) is the only universally acceptable outcome. Is carbon-cap and trade the best way to achieve it? Perhaps the first world should seek first to become carbon neutral or better still carbon negative, while investing systematically in the third world for it to catch up in development in as controlled a manner as is possible. And yes, as the author opined, this cannot be done with the capitalist intention of owning the returns from the development of the third world.

Posted 12 March 2009, 02:15 by Lee Yeong Wee
Quite simply, this article is breath taking, and spot on. I agree fully. Now to get the jokers running the ponzi scheme to step down and grow up.

For years I keep asking what about our children, and their children, and all the ones who come after them. But alas the answer has always been the same. Our children matter no more than we do. They talk about women and children into the lifeboats first, all while turning their back on us and our needs, our future.

It’s heart breaking.

Posted 10 March 2009, 03:17 by Samantha Quinn
Kim,
What you have said is much worth meditating and acting upon. You have given voice to very sound principles. But they are not new. The idea of a post-capitalist system, in which extremes of both wealth and poverty are eliminated, in which justice is an inherent guiding principle for all collective enterprises, in which science trumps religion-based superstitions that cannot stand up to scientific scrutiny but in which science itself is moderated by enduring ethical, moral and spritual principles, in which the rights of women are coequal with the rights of men, in which the seeing-to of universal education is an obligatory duty of all governments, in which Human Rights are taken as being God-Given rights, in which all work should be approached in the spirit of service, in which preservation of the environment is seriously regarded as being identical to preserving the human species, in which institutions are created to oversee the equitable distribution of the world’s resources, in which other institutions are established to unite the works of all national governments in the service of humanity..all these concepts and more were first elucidated in great detail more than 150 years ago by the founder of the Baha’i Faith. These ideas, remedies for a sick world, were proposed as the only practical way to divert humanity from the path eventual self-extinction.

Two key principles, among many, were: Justice and Unity, presented as necessary and vital paradigms that must become a deeply embedded part of all cultures, especially the then-emerging and nascient global culture. Though competition at one time undoubtedly served the survival interests of a young humanity long-since evolved from primitive ancestors, by the time these idea were laid out, it was clear that unbridled competition could no longer serve us. Indeed, the modern competitive model is little more than applied sociopathy attempting to serve as the basis for human all human enterprises. Instead, only cooperation and unity could preserve our continuing existence and carry us into a future of limitless possibilities. Justice, meanwhile, was presented as humanity’s life’s breath, the opposite of injustice, wherein any form of injustice..social, class, gender, race, ethnic, economic, environmental…were demonstrated to be forms of collective suicide. Injustice breeds disunity, disunity breeds strife, misery and need, in a viscious and ever-reinforcing cycle of degradation. Civilization and it’s continuing existence was depicted as being an ediface supported by the pillars of justice and unity, wherein the failure of either pillar must mean the eventual collapse of the ediface.

The consequences for failing to change our course were described at length, in explicit detail. Obviously, we’ve made little and inadequate progress to date towards applying the needed remedies. Unsuprisingly, those consequences have been playing out exactly as predicted over the last 150 + years.

It can be observed that all actions have consequences, including all acts that occur as part of a social dynamic. As inevitable, immutable and irresistable as are the laws of physics, which dictate the function of all physical processes in the universe, the inevitable consequences that follows actions or deeds in a social context appear also to proceed under an equivalent to physical law. I’ve seen that equivalent loosely described as “natural law”. Climate scientists have been describing a process that is determined entirely by the laws of physics and chemistry, which long ago passed an inflection point on a curve of alarming change. It is a picture of a complex dynamic process that is out of balance and equilibrium, moving rapidly towards chaos. It could be argued that our civilization is also out of balance, due to our ongoing and persistent work to collectively violate principles that would otherwise assure our long-term well being. Principles are principles, because the outcomes for upholding or violating them are invariant, across all cultures and paradigms. The invariance of consequences brings about the the “natural law” part. Our way of doing things is wrong. It’s not working, nor can it work. The possible collapse of our life enabling and sustsaining ecosphere is one of the direct physical consequences of our continuing efforts to escape and evade the operation of “natural laws”. In both cases, it appears to my eyes that we are running out of time to get things right.

Posted 9 March 2009, 11:02 by Paul
“The changes will fail if they come from government, it has to be people creating a market for such a mindset by changing the way we thinking from when we grow up.”

The media will only change when the government regulates it to do so.

Posted 8 March 2009, 19:07 by Shayne
I agree with what your saying, however I’m not sure science is always that sound. It’s interesting right now that people are on one end of the spectrum being told to believe the scientists when it comes to climate and on the other Michael Pollan’s popular books are saying don’t trust the science when it comes to nutrition. These are very different sciences and I do agree with the climate scientists, but I also agree with Pollan about the nutrition scientists. And I wouldn’t say people trust their medical doctors any more either. People are confused what to believe anymore. Science isn’t perfect. But everything going on right now, including the climate crisis can be used as an opportunity to look at our lives from a broader perspective and where we are and what we’re collectively doing to the planet, and hopefully create a new global identity one where love, generosity, understanding, abundance can be integrated into practical social, economic and political systems.

Posted 8 March 2009, 18:57 by Shayne
“capitalism … improperly and systemically undervalues the future.” This is true, but not because capitalism is evil, any more than feudalism is evil, or communism is evil. But to get beyond ideological accusations of good and evil, we need to know how the assumptions of capitalism are in error, so that we can correct them in a system with better assumptions, one that will allow our descendants to live with wealth and happiness.

The difficulty with capitalism versus both the future and atmospheric CO2 is that capitalism is determinedly local, while the future is a common good. The tragedy of the commons wreaks its vengeance on the future, since nobody can claim a personal slice of it. The future cannot be privatized. This excludes most of the libertarian solutions to the tragedy, unfortunately.

As long as human influence on this planet was negligibly small, we had an infinite supply supply of futures to draw on, but those days are over. It’s ironic that those who insist that humans have no influence over atmospheric heat flow are often also those who believe that the world was created especially for them — they can’t distinguish dominion from destruction.

This might sound like mushy liberalism, but it’s actually the reverse: it’s stringent, militant liberalism. There appears to be a theorem of planetary social organization: The future will be worth living for only if people can recognize their personal relationships with everyone else that they will be sharing the future with, and take personal responsibility for cooperating with them. This means recognizing and accepting diverse histories — fighting with people because they come from different backgrounds or cultures leads to poverty and death for everyone.

Understanding this is not a question of belief, it’s a question of clear thinking and submission to physical reality and not political or religious wishes. It’s not “trust in science” or “belief in science”, it’s recognizing and participating in the systematic critique that is the scientific method, and having the humility to act while we can on the best information we have, to not take irrevocable steps unless we have to, and not to wait until it’s too late before acting.

Posted 7 March 2009, 01:02 by Dean Loomis
The term “multigenerational ponzi scheme” is quite apt and extremely ironic in view of the fact that human culture by its nature is a reverse ponzi scheme. It adds value for each succeeding generation because there’s always more than there was before (with small blips in the other direction like the burning of the Library of Alexandria). But in the last few centuries we’ve discovered a way of removing something of value from human civilization faster than we (so far) have been able to replace it.

I believe you’re correct that capitalism can’t solve this problem; capitalism, and especially the religious belief in capitalism, is part of the problem. The notion of a free and unencumbered market was always a mirage; the nature of the agents in a market is that they attempt to take as much of it as they can; eventually some will be successful in controlling enough of it that the market will no longer be free. And those who control the market are almost guaranteed to have very short time horizons compared to what’s needed to preserve human civilization over generations.

We need to find a better set of values for our basic ethos: one which values our children at least as much as we say we do.

Posted 5 March 2009, 11:41 by SpeakerToManagers
Postcapitalism as a term is something to really work with. It will be a new value system that we must create and indeed, it must be away from the almighty dollar and towards sustainable practices through and through (or “cradle to cradle”, thank you William McDonough and Michael Braungart). Values of justice, equity, safety with a sense of the environment as a full fledged stakeholder, as well as future genrations.
I am happy to see these thoughts from a McKinsey publication. Future leaders, dare I say “business leaders” need to think what the new business paradigm will be. Triple Bottom Line- let’s go!

Posted 4 March 2009, 22:37 by Rebecca
As a follow up on why governments won’t be the answer in enforcing such things..governments are electable and thus newly elected administrations always have different policies and ideas. It has to start lower on the “value chain” than the political spectrum…we reach the level of having set ideas on politics too late in our life for government to make an impact, by then people will vote on issues based on ideas/values influenced by their surrounding environment

You have to start earlier in the “value chain” with parents/media influence etc

Posted 4 March 2009, 16:30 by Rahul
You make certain valid points, however the answer to the solution cannot and will not be successful if it is put in place via government policies intended to strain and guide the population into this lifestyle.

We all grew up with certain values instilled in us by our parents, we also are heavily influenced by media culture around us influencing us to think things such as “its not cool to be good at school”.

I’m not going to go on naming examples but the gist of what I’m saying is that in order to change the mentality of people and move in this direction it will take 2-3 generations of people instilling values in their kids as they grow up and also a change in the media culture and marketing schemes to move in this direction as well.

The changes will fail if they come from government, it has to be people creating a market for such a mindset by changing the way we thinking from when we grow up.

The media and parents will play a huge role in making such a change.

Posted 4 March 2009, 16:10 by Rahul

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