The End of Progress (1)

Some economists think the economy has bottomed out and we are now climbing out of the very big ditch that some very foolish financial wizards drove us into. The shape of the recession is a big U for Ugh, Unhappy, Ugly and a lot of other expressions that either start with ‘U’ or have a ‘u’ in them. Others think the recovery will be short and that we’re heading for the ditch again. Their diagram for the recession is a W – for George W, whose Whacky, free-Wheeling market polices helped bring us the big Ugly. But the laws of economics are smoke in the mirror of human nature anyway, so who knows?

In any event, governments world-wide are goosing their economies by trillions of
dollars, hoping to restore public confidence in an economic system that not
even the system’s managers have much confidence in (witness GM’s execs selling
off their shares in their own company just before filing for bankruptcy).
Confidence, even more than greed, is the great motivator of the stock market:
fortunes rise and fall on how sure investors are that they’ll get a decent
return on their money. Those of us who are clinging to the flotsam of what’s
left of our retirement investments might be forgiven for thinking, “confidence
game.” And those of us who couldn’t afford to get in the game in the first
place are at least getting the last laugh.

But I wonder if we’re also looking at something else: the end of progress.

Money, the economists tell us, is like water – it flows away from risk and toward the
best return. And, in fact, a synonym, “currency,” comes from the Middle English
word “curraunt” which means “in circulation” or “flowing.” Some economists
claim money “trickles” down from the wealthy (who are “dripping” with it or
“swimming” in it) to the not so wealthy who, if they believe this fiction, are
often left “high and dry” and wondering who turned off the tap. And for some
people, money just slips through their fingers like water, so that they are
“drowning” in debt.

This way of thinking about money is troubling, for it implies money has a mind of
its own about where it goes and why and that it follows some sort of immutable
law of economics. In other words, it takes human motivation out of
consideration when it is, after all, our hopes and dreams and greed that drive
the whole system.

“It takes money to make money” is something else we hear. If we take that maxim to
heart, we rush out to invest in a variety of opportunities or to start a
business, never minding that the people who like to say this are usually taking
other people’s money to make theirs. Nevertheless, “making money” and “creating
wealth” do us credit, and we all have to do it if we want to make a living.

But wealth is not created out of nothing. Wealth requires an expenditure of energy
of some sort: from extracting something (trees, oil, water, minerals) from the
earth to energetic and informed investing in companies that actually make
things. If wealth were created out of nothing, it would violate the first law
of thermodynamics which says, in any system, energy is neither created nor
destroyed; but it can be changed from one form into another. And, unless the
system is closed, energy is easily dissipated.

If we step outside the laws of nature, we enter the realm of fairy tales where
Rumpelstiltskin can spin straw into gold. In reality, wealth is created at a
cost: if wealth is created in one part of an economic system, then debt must be
created in another part.

If credit (having stuff or having enough money to buy stuff) is one side of the
coin (so to speak), then the other side is debt. Not just our personal debt,
but the debt we owe as a civilization for what we use up. Perhaps what’s needed
is a better accounting system – a bigger ledger that takes account of
everything we touch.

In the debit column are the things we need to make wealth: water, air, trees,
minerals, labour. Labour, like the others, is badly exploited, not only in the
third world, but here too where workers are expected to bear the pain of
failing companies even when the failures are caused by poor management. This is
somewhat counter productive because, as wages go down and people are laid off,
the population can no longer purchase the stuff that management has to sell to
stay afloat or at least solvent (there’s that water imagery again).

In the credit column of our big new ledger are the things we make: cars, offices,
refrigerators, barbeques, dishwashers, X-ray machines, nuclear reactors, wind
turbines, computers, insulin, antibiotics, gasoline, movies, TVs, MP3 players,
books, sculptures, money, stocks, bonds. The list is endless. This is our
society’s idea of growth: more stuff, for more people, forever.

It is also our idea of progress, for many of us believe that our individual
progress in the world is best measured by the stuff we have. It is also the
measure of progress for our civilization, for some of the stuff we make benefit
people medically or culturally or technologically.

To spur growth on the credit side of their own, small ledgers, banks invented the
credit card; and third world sweat shops invented Wal-Mart (or was it the other
way around?). Can’t afford stuff? No problem, take that new car or TV or sofa right
now and pay later. No credit? No problem. Go next door and buy the Chinese
version. As credit and cheaper goods became more and more accessible, our
economies grew, along with personal and ecological debt. And progress marched
along in lock step.

The final absurdity came when Wall Street packaged up the American Dream (in this
case, of owning your own home with a sub-prime mortgage) and sold it to the
world as a good investment. Financial institutions from Japan to Germany bought
these new packages, re-packaged them for their markets and sold them again. Out
of debt against the poor, wealth was magically “created.” You’d think someone
would have noticed that we had left the real world for Rumpelstiltskin’s.

But even in fairy tales, easy credit incurs a heavy debt and if you remember
Rumpelstiltskin’s deal, the debt incurred by the miller’s daughter for getting
off the hook with the king had to be paid with her first born child. So bankers
sold their subprime mortgages to people who couldn’t afford them and no one
said anything. Everything went along tickity-boo until (surprise!) the people
living in the basement of this house of cards began to default on their
mortgages, or literally, if you reach back to the origin of that word, their
“death pledges.”

We’re told we’re in a credit crisis: there’s not enough currency flowing to enough
people to buy enough stuff to keep the economy growing. But I think we are in a
debt crisis: we’ve used too much from the debit side of the ledger – too many
trees, too much water; too many minerals, too much cheap labour – to grow, let
alone to progress.

This could have been predicted, for the second law of thermodynamics says that all
systems tend toward entropy – they wind down. And, in fact, it was predicted.
In 1972, a team of scientists at MIT, after studying the matter for over a
year, concluded that the growth of populations and material goods cannot be
sustained. If economic growth were not halted soon, their report said, the
world as we know it would be over by 2042.

© David McLaren
15 June 2009

David McLaren is a writer living on the Bruce Peninsula in Ontario, Canada who looks for connections between the news and fairy tales.

Published Owen Sound Sun Times, June 16, 2009

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About David McLaren

David McLaren is an award-winning writer. He has worked in government and the private sector, with NGOs and First Nations in Ontario. He is currently writing from Neyaashiinigamiing on the shore of Georgian Bay and can be reached at david.mclaren@utoronto.ca. In February 2015, he won the nomination for the NDP to represent the riding of Bruce-Grey-Owen Sound in the 2015 federal election. See that page for writings during the campaign.
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