07 June 2009

Relocalization, not globalization, is the way forward for Singapore and the rest of the world. However, I doubt that relocalization efforts will take place until we enter the collapse phase of panarchy theory (see article below), but then it might be too late to prevent a societal breakdown. The 2008 oil crisis and financial panic ought to have awaken us to the fragility of a globalized world. Instead we are calling for greater economic integration and free trade - talk about insanity - doing the same thing over and over again and expecting different results. We are sacrificing long term ecological sustainability and balance for short term paper profits. Monetary abstractions will be of little use after we extract and exhaust all the minerals and resources from the earth in this lifetime. This will not end well.


As valuable as Dr. Buzz Holling's notion of panarchy theory is in helping us understand the cyclical changes in forests -- the way they move through continuous phases of regeneration, growth, increasing connectivity, and then rigidity, crisis, collapse and regeneration again -- his thinking is much more valuable in helping us identify and correct the same trends occurring in our modern civilization. It, too, is a natural system that has been moving through a growth phase for the last several centuries and is now becoming increasingly interconnected and rigid, conditions that are prelude to a crisis.

Indeed, the course of our globalized world has been following all the adaptive characteristics of Holling's notion of panarchy theory. If he is correct, we are approaching the end of a growth phase, a time when the rising "dependence" within the system, together with increasing specialization and efficiency, create a fatal loss of resilience. As we continue to exploit every possible resource and niche on the planet, our entire socio-economic system loses its adaptive options as it becomes more dependent on the smooth functioning of a rising proportion of its interlinked components. This "peaking", Holling contends, usually leads to a collapse.

As a measure of our vulnerability, simply choose a few examples of the cumulative effects that can be caused by any single disruption:

- Just one crash on a freeway stops traffic, creates huge jams and leaves thousands of commuters and transporters delayed for hours.

- Contamination at just one processing plant taints food supplies across a continent.

- A malfunction at one nuclear power plant almost eliminates the supply of critically important medical isotopes.

- One terrorist attack inflicts huge amounts of fear and a country spends billions of dollars on measures to prevent the repeat of such an event.

- Just the hint of a pandemic raises global panic, devastates tourist industries and slows international travel for months.

- A policy of unregulated mortgages in the US triggers a subprime crisis that spreads throughout the international financial system, undermining confidence in money markets and sending the global economy into a tailspin.

- Our nearly total dependence on a supply of cheap oil for transportation, innumerable consumer products and nearly half our food production transforms any hint of a shortage into convulsions of worry and nightmares of consequence.

- The excessive emission of a single gas, carbon dioxide, threatens to alter the planet's climate, displace hundreds of millions of people, induce droughts and restructure global economies.

Indeed, the very efficiency of our global economic system, an attribute we herald as a virtue, is victimizing the planet's ecology. Maximizing performance and productivity drives the continual expansion of the world's economy. "Based on current trends," writes Thomas Homer-Dixon, "global output of goods and services will quadruple from US $60 to $240 trillion (in 2005 dollars) by 2050" (WorldWatch, March/April, 2009).

Panarchy theory argues that this kind of growth eventually self destructs. A civilization, like an athlete trying to run ever faster, needs progressively more energy to maintain itself. The system collapses when the energy return falls below the energy invested. The Roman Empire failed, Homer-Dixon suggests, because it became too complex to be supported by its food-based energy system. How, then, are we to reconcile rising growth with falling energy supplies?

Panarchy theory -- and even common sense -- dictates that the growth phase of any adaptive cycle cannot continue indefinitely. Continuous growth may seem possible when we are wholly emersed in the euphoria of it. This is why the insightful perspective of such people as Buzz Holling are so important -- and so disturbing.

In Holling's assessment of our history, "This is a moment of great volatility and instability in the world system. We need urgently to do what we can to avoid deep collapse. We also need to figure out how to exploit the opportunity provided by crisis and collapse when they occur, because some kind of systemic breakdown is now almost certain" (Ibid).

Holling makes two crucially important points here. The first purpose of panarchy theory is to identify the behaviour that is leading to collapse and, therefore, to use the forewarning to avoid the unwelcome outcome that it predicts. The second is to prepare for the collapse by minimizing the impact.

Some people have already started to prepare for this eventuality, as if a subliminal consciousness were already sensing an impending danger.

Globalization is losing its allure. Countries are moving toward greater self-sufficiency. Agricultural land is being protected, resources considered and ecologies preserved. Food security is prompting local buying and home gardens -- community gardens are appearing in many urban and rural neighbourhoods. Young people are returning to old farms to restore the fields with vegetable crops. Organics are on the rise.

Cycling is popular and is being encouraged for commuting in most cities.

Cars are getting smaller and more efficient. The indications of awareness are everywhere.

These steps, of course, are just the beginning of the beginning. But the signs are evident. The marvel that many people hold for our modern civilization now comes coupled with a pervasive apprehension. Perhaps panarchy theory offers some clarifying insights about what is amiss and what we might do.


03 June 2009

To sustain growth and vitality in our economy, we need a growing population in Singapore with talents in every field. -- PM Lee Hsien Loong in the 2006 National Day Rally
Contrast the above statement with an interesting speech given by former Senior Minister of State for Foreign Affairs of Singapore, Dr. Ow Chin Hock, in 1978 at the opening of the Family Planning Association.
At the national level, a large population not only means greater demand for jobs and for social infrastructure such as education, housing, medical and health services. It also means that the material gains accruing from economic development have to be shared by a larger number of people, resulting in lower living standards for everyone. Thus, Two Is Enough is not a mere slogan. ‘It is the responsibility of every parent and citizen to ' put it into practice. -- Dr. Ow Chin Hock
I fully agree with Dr. Ow here. He makes alot more sense than our present Singapore leaders who worship at the altar of unlimited growth, which will soon be kept in check by a finite resource base.

Growth Does Not Equal Prosperity!

Speech by Dr. Ow Chin Hock on Family Planning (1978) Speech by Dr. Ow Chin Hock on Family Planning (1978)

01 June 2009

Geologist Colin Campbell made a number of astute observations in this 2005 video interview (below) about oil and the financial system. We have to wake up to the fact that we are nearing or at the end of growth.

The boom time of the last 50 years was based on cheap oil which is now coming to an end. The end of growth threatens to bring down our debt-based monetary system which is founded on economic growth to pay off interest-bearing debt obligations.

We can expect decade-long, unprecedented market gyrations and volatility as central bankers resort to every trick in the economic textbooks and their magic bags to starve off a recession. They will ultimately fail because unlike credit, they can't create oil and natural resources out of thin air.

Dear bankers, welcome back to biophysical reality.

Unfortuantely, the growth mentality is still deeply entrenched in our government as can been seen from the Prime Minister's speech in Parliament (27 May '09):

At the broadest level, our approach to economic development and to growth remains valid. We have to stay open to trade and global competition.

So the question is how do we encourage energy conservation to grow more sustainably and to be less affected when energy prices go up from time to time, all in the long term?
The opposition leader Low Thia Khiang, seemingly oblivious to the relationship between cheap oil and globalization, fares no better:
The Workers’ Party chief and Hougang MP defended the long-held growth model, saying in Mandarin: ‘I believe it is correct to attract foreign investments to encourage competition in a free market, to open up our market and to go global and…integrate with the global economy.’
It won't be easy to discard this mentality until we hit a more severe oil crisis of some kind in the near future to awaken us.

Two economists, Jeff Rubin and James Hamilton, have concluded that the current recession was caused by oil spikes.

Graph Source: http://www.theoildrum.com

Colin Campbell Interview:

The first half of the age of oil saw the rapid expansion of industry, transport, trade, agriculture - all of those things allowed the population to expand six-fold. So you have this enormous and brief chapter in history of this rapid expansion, and included in that thing is financial capital....

..the banks lend more than they have in deposit...the banks had confidence that the resulting expansion of all of this investment in debt and loans and everything was sufficient collateral for today's debt...

So expansion tomorrow covered the debt of today.

..But unseen by anybody or unrecognized was that this expansion was not just money. It was the good old cheap energy (oil) to make the wheels turn and do everything. So we now face a situation when the bankers begin to wake up and say "well this expansion cannot go on anymore without the cheap energy to make it happen". That means that the massive amount of debt throughout the world is loosing its collateral...

...[Bankers] will wake up and say "we got bad debt on our hands"....

Every single company market quoted on the stock market have a tacit business-as-usual assumption of continuing cheap easy oil such as they have known in their business. So once you realise that this cheap abundant easy oil isn't there, that tells you that virtually every company quoted on the stock market is now overvalued. There has to be some radical readjustment and capital really has to be reduced in some way to match the declining energy supply that on which it eventually depends. So this is the kind of crisis that is staring us in the face...