Deep Economy

The Wealth Of Communities And The Durable Future

By Bill McKibben.
Reviewed by Mike Ryan CFP®

The conservation movement began as a conservative initiative. Teddy Roosevelt established the National Park system and set in motion the basic tenants of environmental protection that would be the policy of the United States. When a marine biologist named Rachel Carson wrote Silent Spring in 1952 there was wide spread bi-partisan support which resulted in the elimination of the pesticide DDT, the establishment of a grassroots environmental movement and the creation of the Environmental Protection Agency. While there are always problems and frustrations with any federal bureaucracy, on balance the improvements to the environment over the past forty-five years, including cleaner air, water and land, have been very rewarding.

Unfortunately in our current political climate having a reasoned discourse about the environment is difficult. On one side are protectionists who may sound like strident Luddites intent on sending us back to a hunter-gatherer economy. On the other are those who regard any restriction on business and growth as not only bad policy but also outright seditious and/or blasphemous. Bill McKibben has written a book that should receive careful attention from each group. The former will feel very comfortable with both the diagnosis and the prescription but will benefit from the tempered way both are presented. The latter, if they are willing to overcome their visceral aversion to any environmental message that deviates from their constricted beliefs, will experience a reasoned conservative, non-judgmental description of the problem and an outline for an equally conservative set of possible solutions.

McKibben begins the book with a wonderful metaphor. “For most of human history, the two birds More and Better roosted on the same branch. You could toss one stone and hope to hit them both.” Following the dictum of “the invisible hand” of Adam Smith the developed countries have pursued the idea that individuals pursuing their own interests in a market economy will make one another richer through increased efficiency and productivity. The result has in large part built unprecedented wealth and prosperity. It has become not only our mantra but also our statement of faith.

According to McKibben things have changed. Better has flown to another tree and in many cases we must choose between More and Better. Also we are finding that while growth does make us wealthier at some point that increased wealth no longer makes us happier. Into the more and better equation there is a new variable: enough. Economists call enough “”utility maximization” to define how ideas like happiness and satisfaction effect consumer market decisions. New schools like “Behavioral Economics’ and “Complexity Economics” are challenging the basic tenants of “rational” consumer behavior and shaking the foundations of traditional economics. Contrary to long held growth dogma in many cases “Less is More”.

Yet McKibben acknowledges that up to a certain point more is definitely better. The poorest people in the poorest countries have very little use for ideas like “less is more”. But with increased growth there is a point of diminished returns. In “Beyond Money: Toward an Economy of Well-Being” Ed Diener and Martin Seligman report that money does indeed buy happiness up to a point of $10,000 per capita. After that point the correlation disappears. The challenge is how to engineer the growth required to provide this balance of more and enough for the billions of people on the planet still mired in poverty.

In McKibben’s opinion the overriding problem to this solution comes from the very source of energy that has fueled the growth of the industrialized west over the past three hundred years: fossil fuels. These fuels are extremely energy efficient and have been relatively easy to extract. The problem is that for every gallon of gas (weighing about six pounds) burned five pounds of carbon dioxide is released into the atmosphere. Over the centuries we have mined the fuel and grown our economies but ignored the biological reality that the pools of fossil fuels have been transformed into a giant reservoir of carbon dioxide blanketing the planet. The resulting changes to climate are creating unprecedented challenges to our growth model.

McKibben cites the eco-statistician Lester Brown who claims that under our current growth model by 2031 the 1.3 billion Chinese will be consuming two thirds of our current global grain harvest. They will use 99 million barrels of oil per day 20 million more than the entire world consumes today. If China reaches the current level of annual coal consumption in the United States of two tons per person they will use more than the entire world production of 2.5 billion tons. As for cars they would have 1.1 billion on the road, half again as many as are currently on the world’s roads. One may dispute the accuracy of these predictions but it is certain that by 2031 India will have a larger population than China and it’s economy is growing almost as fast.

In response to these daunting prospects McKibben believes that we can find solutions through community beginning at the local level. We have seen the results of community action. London was able to clean itself of the pollution deposited during the early stages of the industrial revolution. Los Angeles, once the smog capital now has some of the nation’s cleanest air. If we want to conserve fuel consume locally grown produce. He tells the story of a city in South America that encouraged use of the local bus system by fixing the traffic control lights to automatically give right of way to the community transport over the private drivers. Suddenly the slow cumbersome bus ride became rapid transit and passenger levels sky rocketed. The book is full of practical examples of how community action can make a significant difference in better energy use.

Yet McKibben believes that community development faces a strong ideological foe. Our faith in the “invisible hand” resulting from individual efforts to provide for necessary community services independent of concerted action has evolved from individualism to what McKibben calls hyper-individualism. In the political arena this is perhaps best represented by a quote from Margaret Thatcher. “There is no such thing as “society”. There are just individuals and their families.” He claims that this ethos has crept in to every part of our modern society. We have cut back welfare programs, taxes, infrastructure development, education and community development. In the process we have seen the greatest gap between income equality since the gilded age of the nineteenth century.

In any case we are all on this ship together and whatever political opinions we may hold we must work together. McKibben is calling for a new attitude about growth. It will require compromise, tolerance and creativity to begin the dialogue that is at the heart of community.

McKibben concludes, “It’s extremely hard to imagine a world substantially different from the one we know. But our current economies are changing the physical world in horrifying ways. It’s our greatest challenge-the only real question of our time- to see whether we can transform those economies enough to prevent some damage and to help us cope with what we can’t prevent. To see if we can manage to mobilize the wealth of our communities to make the transition tolerable, even sweet, instead of tragic.”

Financial planners have practical experience in community building. During the eighties and nineties financial planning was polarized with two competing membership organizations claiming to be the authentic voice. In 2000 the FPA was created and a circle of community has developed bringing diverse personalities together recognizing that the beauty of the individual voice is compounded when sung in harmony with different voices. Perhaps there is a message in our experience for others?

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About the Author

The What is Finology? Project considers the nature of money and it's meaning in our lives. The Finology Fellows are a group of experienced Certified Financial Planner™ Professionals who have a deep and grounded understanding of Finology, the Financial Planning Profession and the nature of how we exchange value.

What Is Finology

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