Entering the era of conservation

Full disclosure: am wearing purple Birkenstocks while writing.

Economies can’t expand forever, according to this Stephen King – though the dire scenario he describes might as well be the brainchild of the other Stephen King.

The great waves of global growth (e.g., trade, consumer credit, and expanded education), will subside and we will be left with economic stagnation and decline. Sounds Malthusian, right? 

King says: "The end of the golden age cannot be explained by some technological reversal. From iPad apps to shale gas, technology continues to advance. The underlying reason for the stagnation is that a half-century of remarkable one-off developments in the industrialized world will not be repeated.“

Yes, given current economic assumptions, we cannot replicate the growth of the last 50 years, in U.S. and elsewhere.

The biggest and most wrought of those assumptions is that of low-cost energy being the most important driver of growth. All one has to do to get a sense of its holy standing in economics and politics is watch Obama dance around the realities of fracking in his effort to cheerlead on natural gas drilling, ignoring its real costs to all of us. 

We can create nothing but marginal growth if we continue to plumb the earth looking for lower and lower quality fuel sources. Tar sands excavation and fracking for shale gas mark a new level of desperation to drive growth. We are like alcoholics drinking the contents of our medicine cabinets.

The first step is admitting there’s a problem with our models, with our growth assumptions. And recalling this: “The future is not shaped by people who don’t really believe in the future.” — John Gardner.

We need to untether ourselves from gas to grow, adopting a new outlook re: renewables, and cast off capital market models that serve the whim of giant pools of money seeking higher and higher returns, and we need to do so in favor of new investment models and expectations around social as well as financial returns – it’s time for more Grameen banks and new models for reducing poverty.

What King’s essay appears to be saying is that global growth is over for everyone and, as such, capital resources will be reapportioned but not expanded significantly in the coming years and decades. With this in mind, we are entering an era of global conservation, and we will be saving what we would have spent, drilled, mined, and taxed.

Beyond our basic order of needs – food and shelter and such – there is the risk of inequality. If we can control for that, we can soften the landing from previous high-growth eras. So long as we continue to be creative in how we reduce poverty and inequality around the world, a slowdown won’t be apocalyptic. So, let’s plan for that and stop trying to squeeze out every last drop of growth having only short-term gains in mind.

Photo: Demonstration in Angelica, NY where the landfill is trying to fast-track a permit for accepting fracking waste from Pennsylvania.