Other websites shriek "the end of capitalism" but really, it is hardly that.
Almost everyone is writing about a new study submitted to the UN by a Finnish team led by Paavo Järvensivu, jumping on its discussion of economic theory; nothing gets the pageviews like putting “end of capitalism" in the title, such as Motherboard’s Scientists Warn the UN of Capitalism's Imminent Demise and The Big Think’s Scientists to U.N.: To stop climate change, modern capitalism needs to die. Our own Ilana was far more restrained with her 3 climate change policies that no one's talking about.
The first line of the study is: “We live in an era of turmoil and profound change in the energetic and material underpinnings of economies. The era of cheap energy is coming to an end.”
Now, the entire energy infrastructure needs to be transformed. The energy return on investment (EROI) decreases across the spectrum – unconventional oils, nuclear and renewables return less energy in generation than conventional oils, whose production has peaked – and societies need to abandon fossil fuels because of their impact on the climate.
The authors prescriptions are particularly TreeHuggerish; with energy, they suggest that meeting demand with renewables is going to be “difficult, if not impossible.” So they recommend my mantra, reducing demand. To that end, they recommend bikes and walking instead of cars.
In cities, walking and biking should be emphasized and the remaining public or semi-public transport in and between cities should be largely electrified. This will require changes in city planning (for example, how homes and workplaces are connected to each other and how convenient biking is).
Here is where we begin to see a problem; just look at how city planning works in North America, or how cities are actually rolling up bike lanes. (just last week New York City did this) They also call for more local food to reduce dependence on shipping, and a massive shift to wood construction. (the authors are Finns, who are world leaders in this, the first big wood building we ever showed was Finnish)
Then they get into economics, tying all of the crises we face together, because they all are connected.
In addition to rapid climate change, biodiversity loss, and other environmental hazards, societies are witnessing rising inequality, rising unemployment, slow economic growth, rising debt levels, and governments without workable tools for managing their economies.
However, nowhere in this entire study can I find the authors declaring “the end of capitalism.” In fact, they call for a very American form of government intervention:
Historically, major system-level innovations such as the US Apollo program have required the state to set the mission and coordinate and finance much of the related research and development.
And their vision hardly sounds like the end of capitalism; it sounds more like Denmark, or maybe Finland.
“…a Keynesian world with planetary boundaries”: unique, autonomous economies and societies engaging in regulated international trade for specific reasons, such as food security, rather than for the sake of free trade as a principle. Individuals, organizations, and nations would approach the economy as a tool to enable a good life rather than as an end in itself. Economic activity will gain meaning not by achieving economic growth but by rebuilding infrastructure and practices toward a post-fossil fuel world with a radically smaller burden on natural ecosystems. In rich countries, citizens would have less purchasing power than now, but it would be distributed more equally.
It sounds lovely. But there are a couple of fundamental flaws. The authors say that “the era of cheap energy is coming to an end” quoting sources from 2005 to 2014, when in 2018 the economy is being driven by cheap energy; we are awash in cheap natural gas, even if some, like Bethany McLean in the New York Times, write that it is a house of cards. It is hard to find any government anywhere on earth outside of Samoa that is actually doing anything to seriously reduce carbon emissions; they can’t, because as Vaclav Smil has written, energy IS the economy, they are two sides of the same coin. You can’t decouple them.
To talk about energy and the economy is a tautology: every economic activity is fundamentally nothing but a conversion of one kind of energy to another, and monies are just a convenient (and often rather unrepresentative) proxy for valuing the energy flows.
Smil doesn’t think anyone is going to buy into this new vision of moderation. “Any suggestions of deliberately reducing certain resource uses are rejected by those who believe that endless technical advances can satisfy steadily growing demand.”
I rather like the vision of the future that Järvensivu and his team are offering: reduced demand, bikes, good planning, local food, wood construction and a strong social safety net. And it is not the end of capitalism as we know it; it is just good old democratic socialism as practiced in many countries.
Alas, I have come to agree with Smil. Nobody wants to give up anything, particularly fossil fuels. And it will not end well.