An Empire in Decline Ctd.

 Read JP's original post, An Empire in Decline.

The driving force behind this unprecedented globalized collapse is financial. Hazel Henderson has characterized conventional economics as “a form of brain damage.” We’re experiencing its devastating effects right now. It rationalizes the insatiable predation of nature and people, while disappearing environmental and social costs from the balance sheet. It concentrates wealth and distributes poverty. It exalts greed and self-interest. It conflates free markets with democracy. It merges corporations and the state. Its foreign policy is empire. It has been a catastrophic success.

As Kevin Phillips has chronicled, every major empire over the past several hundred years has undergone a depressingly predictable cycle of collapse, usually within 10 to 20 years of its peak power.

The hallmarks are always the same:

• The financialization of the economy, moving from manufacturing to speculation;
• Very high levels of debt;
• Extreme economic inequality;
• And costly military overreaching.

The Dutch, Spanish and British empires followed this pattern. The US is repeating it. But as J. Paul Getty said, “Every time history repeats itself, the price goes up.” 

Yet there’s an even deeper story behind empire crash.

Energy is a nation’s master resource. Each empire has had an idiosyncratic ability to exploit a particular energy source that propelled its rise to economic power. The Dutch learned how to tap wood, wind and water. The British Empire fueled its ascendancy on coal. The American empire has dominated with oil.

The cautionary tale is this: No empire has been able to manage the transition to the next energy source. The joker in the deck this time around is the climate imperative to transition off fossil fuels worldwide. It requires the most complex and fiercely urgent passage in the history of human civilization. Nothing like it has ever been done.

Ecological regime change demands political regime change As Lester Brown wrote, “Socialism collapsed because it did not allow prices to tell the economic truth. Capitalism may collapse because it does not allow prices to tell the ecological truth. We are in a race between tipping points in nature and our political systems.”

Just as economics is driving the destruction, it needs to power the restoration. The charge is to transform the global economy from a vicious cycle to a virtuous cycle.

As the Archbishop of Canterbury said, “The economy is a wholly owned subsidiary of the environment.” Real wealth creation is based on replenishing natural systems and restoring the built environment, especially our infrastructure and cities. It’s based on investing in our communities and workforce. It’s been shown to work best when done all at once. Restoration is an estimated $100 trillion market. There’s plenty of work to do, plenty of people to do it, and abundant financial incentive. And every dollar we spend on pre-disaster risk management will prevent seven dollars in later losses.

The rules of virtuous engagement aren’t that complicated. As Fred Block wrote in “The Moral Economy,” “The essential idea was brilliantly expressed in the title of a 1980s bestseller, All I Really Need to Know I Learned in Kindergarten. The guiding principles are familiar rules such as: don't hit - take turns - play by the rules - listen to the teacher - don't waste food and art supplies - and be prepared to share. These principles produce order in the elementary school classroom, and they can also assure order and prosperity in our nation's economy.”

The question is: Will we change our old bad habits fast enough to beat forbidding odds?