Meditations On Collapse  

Richard Heinberg has reviewed Jared Diamond's book "Collapse". He seems to be pretty disappointed with the book as a whole, but makes some interesting comments.

One hesitates to criticize too harshly a book that tries to tell the world a truth that all too many refuse to hear. And yet this isn't the book that it could have been. At this point in time, we could stand a prominent book by an important author that finally announces what so many of us know all too well: collapse has begun.

Such a message need not be fatalistic in tone, because fatalism implies absence of choice. Diamond is right: we always have some control over events, or at least our response to events. The choice we have now is not as to whether our society will collapse, but how. Ladies and gentleman, the ship is sinking. I suggest that we set aside our immediate plans and consider how best to proceed, given the facts.

I found the comment about economic limits to growth quite interesting (even if I'm not sure I entirely agree with it - limits to growth have to be dealt with, but that doesn't mean there aren't ways around them. Nor does the collapse of the US economy necessarily imply the collapse of the rest of the world's - I'm sure Bhutan, for example, probably won't notice).

At the same time, the global economic system and the world's monetary system are becoming increasingly dysfunctional for other reasons. Currently, the US dollar functions as the global reserve currency, and the dollar (like most other currencies) is loaned into existence at interest. This means that continual economic growth is structurally required in order to stave off a currency crash. Yet infinite growth within a closed system (e.g., the Earth) is impossible. So how long can growth continue? There are strong signs that the American economy, and hence that of the entire world, is headed soon toward a "correction" of unprecedented proportions. US debt (in the forms of consumer debt, government debt, and trade deficits) is at truly frightening levels and the American mortgage and real estate bubbles appear ready to burst at any moment. If one looks deeper, there are still other reasons to conclude that the global economy has nearly reached fundamental and non-negotiable restrictions on expansion. In his book The Limits of Business Development and Economic Growth (Palgrave Macmillan, 2005), business strategist Mats Larsson makes the point that most of technology and business development in the past has had as its goal the reduction of time and cost in manufacturing. But nothing can be done at less than no time or at less than no cost. He cites the example of the printing and distribution of books and other written media: with these, Gutenberg famously reduced time and cost. Now, the Internet enables the electronic reproduction and distribution of books, films, and music at almost no cost and in almost no time. Similarly, labor cost in China is probably now at close to the absolute theoretical minimum. Larsson's conclusion is that economic growth is perilously close to its ultimate bounds, even when resource constraints are not factored into the calculation.