The Book
Economic austerity has resulted in the proliferation of poor quality products made ever cheaper and less durable to satisfy an increasingly cash-strapped consumer. These products, underused or quickly worn out, fill our landfills and cause excess pollution. We need to have an economy in which there is an incentive to work hard, to innovate, and find better solutions, but at the same time, to be more frugal in our consumption habits. Rationing Earth proposes a radical strategy to bring consumption in line with available resources. It is about how our economy functions, how it must change, and how to reduce our consumption and impact on the planet without a significant sacrifice to our prosperity. The rationing I have in mind is not oppressive, because we will never have to have less than we had before. Improvements in efficiency will allow us to have more, but with less impact—if our overall consumption is rationed appropriately. We will gain from the benefits of an improved environment, improved infrastructure, better service, and higher quality products. Rationing Earth is structured in four parts—overconsumption, unemployment, distribution, and external costs—to address the fundamental problems of our economy. Prince Hamlet, the titular character from Shakespeare’s play, will lead us on our journey through these four parts. In his famous speech in Act 3, Scene 1, Hamlet contemplates suicide. My modernized version of his speech reflects on our present inaction on the environmental crisis as Hamlet considers the moral impasse we all face, and the possible death of our civilization. The speech is divided into four sections, each forming an introduction to the four parts of the book. Part One, “Overconsumption,” raises a fundamental question about whether to respect ecological limits, do something about the environmental crisis, or take no action and enjoy the present by sacrificing the future. To be, or not to be, that is the question: Whether ‘tis nobler in the mind to suffer The hurricanes and floods of global warming, And to take many long distance vacations, Or by opposing end them. To not buy—to consume, No more; but without consuming say we end The economic growth and thousand useful products Our world is blessed with: ‘tis a consummation Sincerely to avoid. To buy, to consume; To consume, to forget the future—ay, there’s the rub: For in that consumption what future may come, When we have gotten rid of all resources, Must give us pause [1] Hamlet tries to decide whether it is better to respect the limits to growth and make the required changes for an uncertain future, or just to continue on the pleasant path of increasing consumption, to our eventual demise. He questions economic growth and asks what will be the result of getting rid of all resources. The developed world has many of the characteristics of a stagnating economy, including persistent underemployment, declining quality of infrastructure, high poverty rates, and stagnant wage levels. What has superficially appeared to be economic growth we can now reinterpret as a simple dysfunction of the market mechanism. It includes the inflation of house prices and other assets, inflation of rewards for a few participants, and unproductive gambling in the financial sector. The wealth supposedly created now sits as abstract value in a few isolated bank accounts rather than becoming a real increase in the capital stock of the nation. Although life is much better than it was in the 1930s, it does not conform to the statistics of economic growth. Problems with the environment are becoming serious and financial security for most people is lower. The promises of a constantly improving quality of life and increasing leisure time now seem in doubt. To me, a practising industrial designer, the mechanical workings of the economy are wrong. It is like a poorly designed machine that works, but not well. The total reliance on the market mechanism to solve the problems of society is ineffective and increasingly inappropriate. I present the case that the size of the economy indicated by the Gross Domestic Product (GDP) is not an appropriate measure of prosperity, or a reliable indicator of environmental harm. It is true that environmental impact is highly correlated with economic growth, but it is not necessarily caused by it. GDP increases only by 1 or 2 percent per year and by far the largest proportion of economic transactions: growth in wealth and growth in income have no value in resource terms. The need to funnel huge amounts of money into the economy to keep it fluid results in increasing disparities of wealth. This inequality places miserly restrictions on poor people and has no effect on the consumption habits of the rich. The price of most goods we buy is going down. External costs representing damage to the environment are not included in GDP at all. However, consumption of resources has increased along with the nominal economic growth. Consumption is increasing, I maintain, not because of economic growth but because clever marketing, lack of government regulation, and our extravagant lifestyles encourage it. We need the long-term efficiency that results from effective design that increases the quality of what we produce. By eliminating wasteful and unnecessary consumption, by increasing quality of manufacture, and by improving design, I believe we can increase prosperity while reducing environmental impact. |
Shakespeare's plays have been published several times, with each version significantly different from the last. Three versions of the soliloquy of Act 3, Scene 1 from the play Hamlet are given below. The "Bad Quarto," published in 1603, is described as an unreliable version of the play put together from the memories of actors and reporters. It may have been similar to what was originally acted on stage. In 1604 or 1605 the text was enlarged with more careful text in the "Good Quarto." Shakespeare worked on the play Hamlet for years basing it on another play called Ur Hamlet that had been performed in the 1580s. If Shakespeare were alive today, he would be alarmed at the state of things and I believe he would make some changes to the play. "New Quarto" is part of this hypothetical version.
BAD QUARTO (1603) To be, or not to be, I there's the point, To Die, to sleepe, is that all? I all: No, to sleepe, to dreame, I mary there it goes, For in that dreame of death, when wee awake, And borne before an everlasting Judge, From whence no passenger ever returned, The undiscovered country, at whose sight The happy smile, and the accursed damn'd. But for this, the joyful hope of this, Who'd bear the scorns and flattery of the world, Scorned by the right rich, the rich cursed of the poor? The widow being oppressed, the orphan wrong'd, The taste of hunger, or a tyrants reign, And thousand more calamities besides, To grunt and sweat under this weary life, When that he may his full Quietus make, With a bare bodkin, who would this endure, But for a hope of something after death? Which puzzles the brain, and doth confound the sense, Which makes us rather bear those evils we have, Than fly to others that we know not of. Aye that, O this conscience makes cowards of us all, Lady in thy orizons, be all my sins remembered. GOOD QUARTO (1604-05) To be, or not to be, that is the question, Whether tis nobler in the minde to suffer The slings and arrowes of outragious fortune, Or to take Armes against a sea of troubles, And by opposing, end them, to die to sleepe No more, and by a sleepe, to say we end The hart-ake, and the thousand naturall shocks That flesh is heire to; tis a consumation Deuoutly to be wisht to die to sleepe, To sleepe, perchance to dreame, I there's the rub, For in that sleepe of death what dreames may come When we haue shuffled off this mortall coyle Must giue vs pause, there's the respect That makes calamitie of so long life: For who would beare the whips and scornes of time, Th'oppressors wrong, the proude mans contumely, The pangs of despiz'd loue, the lawes delay, The insolence of office, and the spurnes That patient merrit of th'vnworthy takes, When he himselfe might his quietas make With a bare bodkin; who would fardels beare, To grunt and sweat vnder a wearie life, But that the dread of something after death, The vndiscouer'd country, from whose borne No trauiler returnes, puzzels the will, And makes vs rather beare those ills we haue, Then flie to others that we know not of. Thus conscience dooes make cowards, And thus the natiue hiew of resolution Is sickled ore with the pale cast of thought, And enterprises of great pitch and moment, With this regard theyr currents turne awry, And loose the name of action. Soft you now, The faire Ophelia, Nimph in thy orizons Be all my sinnes remembred. NEW QUARTO (2016) To be, or not to be, that is the question: Whether ‘tis nobler in the mind to suffer The hurricanes and floods of global warming, And to take many long distance vacations, Or by opposing end them. To not buy—to consume, No more; but without consuming say we end The economic growth and thousand useful products Our world is blessed with: ‘tis a consummation Sincerely to avoid. To buy, to consume; To consume, to forget the future—ay, there’s the rub: For in that consumption what future may come, When we have gotten rid of all resources, Must give us pause—there's the problem With the environmental movement. For who would bear the recycling and conservation, The reusable shopping bag, the carbon tax, The pangs of a despised Gaia theory, Kyoto’s protocol, The insolence of eco-friendly products That the climate change denier takes, When he himself might his SUV drive With air conditioning? Who will bear the burden, To grunt and sweat with no more fossil fuels, But for the dread of environmental collapse, The unconfirmed future of computer simulation No time traveller attests, puzzles the will, And makes us rather accept the way the world is Than consider others that we know not of? Past failures thus make cowards of us all, And thus the quest to end global warming Is tainted with selfish individualism, And green enterprises of great importance With this regard their currents turn awry And lose the name of action. Soft you now, Sweet Gaia! Mother Earth, hear our prayers; Please forgive us all our sins. |
Hamlet’s speech continues in Part Two, “Unemployment.” If we accept the restrictions of the environmental movement, who will bear the burden of more work with less pay?
… there’s the problem
With the environmental movement.
For who would bear the recycling and conservation,
The reusable shopping bag, the carbon tax,
The pangs of a despised Gaia theory, Kyoto’s protocol,
The insolence of eco-friendly products
That the climate change denier takes,
When he himself might his SUV drive
With air conditioning? Who will bear the burden,
To grunt and sweat with no more fossil fuels,…
Part Two concerns labour and capital, describing how economic growth is about the growth of capital, and how the economy must shift to one based on the preservation of resources. Unemployment is a persistent problem of industrialization caused by the more efficient use of labour for a given level of production. This is not a new problem, however. Since the beginning of agriculture, technology has displaced labour towards other functions not related to survival, such as religion, science, the fine arts, and politics. The threat of machines doing all work will not be the end of human labour, but the start of a new era of personal, social, and cultural development. Changes in the economy are required to make this transition possible. The economy, instead of being built on work that earns a salary, has to provide for needs more directly, allowing for the freer application of labour for the benefit of the self and society.
In Part Three, “Distribution,” Hamlet reminds us, though our future is unconfirmed, our past must be our guide. We must not be complacent because of present comforts.
But for the dread of environmental collapse,
The unconfirmed future of computer simulation
No time traveller attests, puzzles the will,
And makes us rather accept the way the world is
Than consider others that we know not of?
Past failures thus make cowards of us all,…
The limitation of the resources of the earth is absolute. If resources are limited, a degree of austerity is justified. When a government runs out of money, it is because it has chosen, for political reasons, to do so. As this happens, a relative poverty in our social institutions prompts a private response of excessive and environmentally destructive consumption. We can increase prosperity by addressing the imbalances in our economy through more funding for social programs, more progressive taxation, and higher minimum wages. When these systems are stronger, rationing limited resources will seem fair and inevitable for an overcrowded world.
Conventional wisdom is that markets are the most efficient way to allocate the right amount of goods and services to those that need them. But this is only true for goods and services that are optional. For those products and services that are universally required, governments can often be more efficient for distribution. A well-funded and effective government can improve the quality of the universally required goods and services we receive.
In Part Three, I discuss the philosophical underpinnings of our economy, the reasons changes are required to save our planet and, in summary, what these changes should be. We don’t need to abandon capitalism, but we do need to abandon neoliberalism and get back to the type of capitalism originally advocated by Adam Smith—an economy based on self-interest, but limited by a strict morality and effective regulation. There must be fairer distribution of wealth and adequate funding of social programs.
The stresses of industrialization in the last century led to unfortunate political movements like communism and fascism, and to major world wars. The argument is that the welfare state and the mixed economy that emerged were what mitigated these stresses and paved the way for recent prosperity. I describe the growth of the welfare state in Chapter Seven and conclude it has been a necessary development because of industrialization, and a spontaneous evolution from the city-state that emerged with the agricultural revolution.
Lack of regulation in the economy has caused a severe economic crisis and has made the coordination and changes required to address the problems of the environment more difficult. The market economy, based as it is on self-interest alone, cannot work without a moral framework and proper regulation. This becomes more important as the economy not only requires individual effort but cooperative sacrifice.
In Part Four, “External Costs,” Prince Hamlet, shaken by the arguments of the first three parts, has a sudden churning of conscience, a regret of missed opportunities, and a desire to ask for forgiveness and make amends.
And thus the quest to end global warming
Is tainted with selfish individualism,
And green enterprises of great importance
With this regard their currents turn awry
And lose the name of action. Soft you now,
Sweet Gaia! Mother Earth, hear our prayers;
Please forgive us all our sins.
Governments can also address the final problem, of external costs, with taxation and regulation. However, the problem is not that environmental costs are external to the market pricing mechanism; the problem is that they lie on an entirely different dimension of value. In the market economy, increasing cost indicates increasing value. A Lamborghini costs more than a Toyota. However, a carbon tax added to the cost of a product does the opposite. A product with a high carbon footprint should be less valuable and less desirable. There are really two independent dimensions of value. The problem is that our one-dimensional currencies only measure the value of desirability, and not the underlying cost of resource scarcity. Adding a second dimension of value increases market efficiency by not interfering with the usual parameters of supply and demand.
Ideally, market value would reflect the real cost of goods including all external costs. In the real world, market value is often subsidized and external costs are not included. The relative scarcity of many of the goods and services we buy requires that we often have to pay a high rent for their use above the underlying resource cost. These rents do not provide an indication of environmental harm. Instead, they distort and trivialize the cost of the resources we use.
The rationing of impact suggests we adopt a new value system that is perpendicular to the current market based values. Unlike the carbon tax that further distorts the economic value we place on manufactured goods, I suggest that our economic system of value should become two-dimensional. I introduce the concept of a two-dimensional currency (TDC) in Chapter Eleven to give the consumer two dimensions of value. One dimension is the value in conventional terms according to supply and demand, the other measures the damage to the environment and the scarcity of the resources used according to costs normally external to market value. One dimension rations and limits overall consumption while preserving choice, whereas the other dimension maintains the exclusionary principle of the market for the optional qualities of products.
While technology has created many of our problems, it has also made it possible for the world’s seven billion people to survive. Industrialization has increased food production and provided the infrastructure to allow the concentration of many people into densely populated cities. Other technologies are now required to improve the efficiency of production in resource terms with far less impact on the environment. Unfortunately, our economy and most research and development are geared towards producing goods more efficiently and finding ways to sell more products. A lot must change politically and culturally for the right investments to be made to improve production efficiency in terms of resources instead of labour.
… there’s the problem
With the environmental movement.
For who would bear the recycling and conservation,
The reusable shopping bag, the carbon tax,
The pangs of a despised Gaia theory, Kyoto’s protocol,
The insolence of eco-friendly products
That the climate change denier takes,
When he himself might his SUV drive
With air conditioning? Who will bear the burden,
To grunt and sweat with no more fossil fuels,…
Part Two concerns labour and capital, describing how economic growth is about the growth of capital, and how the economy must shift to one based on the preservation of resources. Unemployment is a persistent problem of industrialization caused by the more efficient use of labour for a given level of production. This is not a new problem, however. Since the beginning of agriculture, technology has displaced labour towards other functions not related to survival, such as religion, science, the fine arts, and politics. The threat of machines doing all work will not be the end of human labour, but the start of a new era of personal, social, and cultural development. Changes in the economy are required to make this transition possible. The economy, instead of being built on work that earns a salary, has to provide for needs more directly, allowing for the freer application of labour for the benefit of the self and society.
In Part Three, “Distribution,” Hamlet reminds us, though our future is unconfirmed, our past must be our guide. We must not be complacent because of present comforts.
But for the dread of environmental collapse,
The unconfirmed future of computer simulation
No time traveller attests, puzzles the will,
And makes us rather accept the way the world is
Than consider others that we know not of?
Past failures thus make cowards of us all,…
The limitation of the resources of the earth is absolute. If resources are limited, a degree of austerity is justified. When a government runs out of money, it is because it has chosen, for political reasons, to do so. As this happens, a relative poverty in our social institutions prompts a private response of excessive and environmentally destructive consumption. We can increase prosperity by addressing the imbalances in our economy through more funding for social programs, more progressive taxation, and higher minimum wages. When these systems are stronger, rationing limited resources will seem fair and inevitable for an overcrowded world.
Conventional wisdom is that markets are the most efficient way to allocate the right amount of goods and services to those that need them. But this is only true for goods and services that are optional. For those products and services that are universally required, governments can often be more efficient for distribution. A well-funded and effective government can improve the quality of the universally required goods and services we receive.
In Part Three, I discuss the philosophical underpinnings of our economy, the reasons changes are required to save our planet and, in summary, what these changes should be. We don’t need to abandon capitalism, but we do need to abandon neoliberalism and get back to the type of capitalism originally advocated by Adam Smith—an economy based on self-interest, but limited by a strict morality and effective regulation. There must be fairer distribution of wealth and adequate funding of social programs.
The stresses of industrialization in the last century led to unfortunate political movements like communism and fascism, and to major world wars. The argument is that the welfare state and the mixed economy that emerged were what mitigated these stresses and paved the way for recent prosperity. I describe the growth of the welfare state in Chapter Seven and conclude it has been a necessary development because of industrialization, and a spontaneous evolution from the city-state that emerged with the agricultural revolution.
Lack of regulation in the economy has caused a severe economic crisis and has made the coordination and changes required to address the problems of the environment more difficult. The market economy, based as it is on self-interest alone, cannot work without a moral framework and proper regulation. This becomes more important as the economy not only requires individual effort but cooperative sacrifice.
In Part Four, “External Costs,” Prince Hamlet, shaken by the arguments of the first three parts, has a sudden churning of conscience, a regret of missed opportunities, and a desire to ask for forgiveness and make amends.
And thus the quest to end global warming
Is tainted with selfish individualism,
And green enterprises of great importance
With this regard their currents turn awry
And lose the name of action. Soft you now,
Sweet Gaia! Mother Earth, hear our prayers;
Please forgive us all our sins.
Governments can also address the final problem, of external costs, with taxation and regulation. However, the problem is not that environmental costs are external to the market pricing mechanism; the problem is that they lie on an entirely different dimension of value. In the market economy, increasing cost indicates increasing value. A Lamborghini costs more than a Toyota. However, a carbon tax added to the cost of a product does the opposite. A product with a high carbon footprint should be less valuable and less desirable. There are really two independent dimensions of value. The problem is that our one-dimensional currencies only measure the value of desirability, and not the underlying cost of resource scarcity. Adding a second dimension of value increases market efficiency by not interfering with the usual parameters of supply and demand.
Ideally, market value would reflect the real cost of goods including all external costs. In the real world, market value is often subsidized and external costs are not included. The relative scarcity of many of the goods and services we buy requires that we often have to pay a high rent for their use above the underlying resource cost. These rents do not provide an indication of environmental harm. Instead, they distort and trivialize the cost of the resources we use.
The rationing of impact suggests we adopt a new value system that is perpendicular to the current market based values. Unlike the carbon tax that further distorts the economic value we place on manufactured goods, I suggest that our economic system of value should become two-dimensional. I introduce the concept of a two-dimensional currency (TDC) in Chapter Eleven to give the consumer two dimensions of value. One dimension is the value in conventional terms according to supply and demand, the other measures the damage to the environment and the scarcity of the resources used according to costs normally external to market value. One dimension rations and limits overall consumption while preserving choice, whereas the other dimension maintains the exclusionary principle of the market for the optional qualities of products.
While technology has created many of our problems, it has also made it possible for the world’s seven billion people to survive. Industrialization has increased food production and provided the infrastructure to allow the concentration of many people into densely populated cities. Other technologies are now required to improve the efficiency of production in resource terms with far less impact on the environment. Unfortunately, our economy and most research and development are geared towards producing goods more efficiently and finding ways to sell more products. A lot must change politically and culturally for the right investments to be made to improve production efficiency in terms of resources instead of labour.
CONTENTS
1 |
PREFACE |
7 |
INTRODUCTION |
23 |
PART ONE OVERCONSUMPTION |
24 |
ONE THE RISE OF CIVILIZATION AND ITS COLLAPSE |
33 |
TWO THE LIMITATIONS OF GROWTH |
62 |
THREE THE GROWTH OF QUALITY |
83 |
PART TWO UNEMPLOYMENT |
84 |
FOUR LABOUR, WORK, AND ACTION |
95 |
FIVE THE NEED FOR A LABOUR ECONOMY |
106 |
SIX EXTREME CAPITALIZATION |
127 |
PART THREE DISTRIBUTION |
128 |
SEVEN CORPORATISM AND THE WELFARE STATE |
156 |
EIGHT THE PRISONER'S DILEMMA |
176 |
NINE MARKET FAILURES |
201 |
TEN FAIR DISTRIBUTION |
221 |
PART FOUR EXTERNAL COSTS |
222 |
ELEVEN RATIONING WITH MARKETS |
242 |
TWELVE RATIONAL PESSIMISM |
[1] This passage and other similar ones are adapted by the author from William Shakespeare, Hamlet, the soliloquy of Act 3, Scene 1.