Rachel's Democracy & Health News #858 [Printer-friendly version] June 8, 2006 THE CONTEXT OF OUR WORK: SLOW ECONOMIC GROWTH, PART 2 [Rachel's introduction: Here we pick up the thread from last week, examining the consequences of three decades of decelerating economic growth. The system's responses to slowed economic growth explain much of what passes for "the news" each day.] By Peter Montague Introduction: We began last week examining the effects of slowed economic growth on U.S. society. The argument is simple: since 1970, each decade has brought slower economic growth while at the same time there is a glut of capital seeking a decent return on investment. More capital accrues each year; that's what "economic growth" means. Each year it gets a little harder to find safe places to invest the ever- growing supply of capital to provide decent returns. As a result, corporate-governmental policies are increasingly aimed primarily at helping investors achieve their goals. Don't misunderstand: This is not about greedy individuals demanding to get rich -- this is about "system responses" from a complex system that cannot continue unmodified without a hefty rate of growth because, as the system is currently set up, the only alternative to substantial growth is recession or depression. The economy either grows or it stalls and goes into a decline -- a steady state is not an option. Those who are doing their best to pump up returns for investors believe that what they are doing is essential for saving the modern economy, and they may be right. Unfortunately, on a finite planet, perpetual growth of material production is impossible to sustain, so the current path is, without doubt, a dead end. Ecological limits have already begun to appear. System response No. 13: Relax environmental standards As growth slows, environmental standards are being relaxed on the assumption that they retard economic growth. This is the main force driving the current bipartisan move to extinguish all meaningful environmental regulations, to the extent that any ever really existed. For reasons that escape me, environmentalists want to see environmental regulations as a partisan issue. Angry books have been written about the way the George W. Bush administration has relaxed environmental standards, so I won't go into it here. But let's not forget to examine the Clinton/Gore administration's fudging and waffling on environmental controls in the name of stimulating economic growth. And let's not forget that it was Republican Richard Nixon who created the EPA (U.S. Environmental Protection Agency). Both Republicans and Democrats have an identical interest in returning the economy to historical rates of growth, and to the extent that protecting nature is seem as an impediment to growth, to that extent regulations to protect nature will be ignored, repudiated, reinterpreted or placed within the purview of a "regulatory" system the main purpose of which is to keep the public at bay, give the appearance that people's concerns are being addressed, and meanwhile leave corporations free to do what they need to do to make the economy grow. Most importantly, let's ask ourselves whether the nation's labyrinth of environmental laws and regulations -- at least 12,000 pages of fine print in the Federal Register -- is adequate to resolve the problems it was presumably intended to fix. If we are honest, we will acknowledge that the regulations are hopelessly inadequate. An overwhelming body of scientific and medical evidence -- much of it available to every reader of a daily newspaper -- demonstrates that damage to nature and human health is steadily increasing. As Donella Meadows observed shortly before her death, the best that can be said after 40 years of environmental regulation is that things are growing worse at a slower rate. System response No. 14: A Social Insecurity Program The cumulative effect of the previous 12 system responses has been to stabilize and regularize American society by making middle- and working-class Americans more insecure, and at the same time busier, each passing year. Insecure people do not start revolutions or even ask too many questions. They tend to assume that change will be for the worse -- and for at least three decades they have been right. As Eric Hoffer has observed, "Fear of the future causes us to lean against and cling to the present..."[30, pg. 19] And: "In a modern society, people can live without hope only when kept dazed and out of breath by incessant hustling."[30, pg. 24] In sum, keeping people insecure and ever-busier keeps them in line, holds them in thrall. As a result of slow economic growth -- and the 14 system responses described above -- Americans are working longer hours for the same or less pay. They are traveling further in worsening traffic to find a tolerable job. They are borrowing more -- a lot more -- and taking extra work to pay off their loans. Many are not sure they will have a job next year; they are not even sure their employer will exist next year, perhaps the victim of a hostile takeover, perhaps simply moved to Mexico where labor is cheap and rules are few. For the U.S. workforce, benefits like health insurance and retirement benefits are getting scarcer. Overtime pay is under attack. Rollbacks and givebacks are demanded of the nation's workforce at every turn. We are constantly reminded that food and water are laced with cancer- causing chemicals, which corporate/governmental risk assessors assure us are "completely safe" (wink, wink). Everyone knows someone who has had, or now has, cancer. The cost of college tuition rises each year, at the same time we are told thriving in the "information age" will require a college degree. With libraries closing and most schools overcrowded and many downright dangerous, how will the kids survive in a world of unbridled competition? It's enough to keep you awake at night -- which may be the point. In sum, the net result of the past 30 years is a huge increase in anxiety and insecurity. Perhaps in response, people are turning to crime or escaping into addictions (drugs, alcohol, TV) and apocalyptic visions of a divine end to earthly distress. In late 2004, a Newsweek poll found that one out of every six Americans -- some 51 million people -- now expect the world to end during their lifetime. Far from being a lunatic fringe, these people now form the electoral base of the ruling political party in the U.S. If the country is not run in a way that measures up to their other-worldly preconceptions, they threaten to turn the Republicans out of office, and most likely they have the power to do it. In deference to this contingent, both President Bush and Senator Hillary Clinton are presently stumping for a Constitutional amendment to outlaw burning the American flag as a political statement (while retaining the right of their wealthier, politically-satisfied supporters to blow their noses on American-flag cocktail napkins or kerchiefs). Everyone knows the system is rigged against the average person. The people who run the system no longer even try very hard to hide that fact. The response of most people in the face of widespread corruption and cronyism is to withdraw into weariness, resignation, cynicism -- and flashes of anger. That anger draws a response because its politically dangerous. There's now a whole industry devoted to deflecting that anger away from the Masters of Our Fate and onto "welfare queens" (shorthand for poor black single mothers and, by extension, all black women); "Willie Horton" (shorthand for black male criminals, and, by extension, all black men); physicians who perform abortions; homosexuals; so-called "liberal elites," and other scapegoats, now including most recently Muslims and foreigners, especially those with brown skin. The science of scapegoating -- which entered world consciousness via the work of Paul Joseph Goebbels, Hitler's minister of propaganda -- is now a very highly developed set of techniques. In the U.S. the science of scapegoating was refined to greatest effect by Lee Atwater, political advisor to Presidents Ronald Reagan and George H.W. Bush, and by Atwater's best-known student, Carl Rove, political advisor to President George W. Bush. The lineage from Goebbels to Rove is direct and unlikely to be broken because these techniques really do work. System response No. 15: Divide and Rule As noted above, five percent of the population owns 2/3rds of all private wealth in the U.S., and the other 95% of the population makes do by divvying up the remaining one-third of the nation's private wealth. Naturally this astonishing inequality in wealth gives rise to enormous disparities in income, quality of life (employment, health, education, leisure time, and life span), and overall opportunities. Each year these economic inequalities grow greater as the 5% become a little wealthier and the 95% a little less so. You can think of the U.S. economy now as a kind of Rube Goldberg conveyor belt, lifting money out of the pockets of the middle class and the working poor and moving it, by circuitous routes, into the pockets of the super rich. Lights flash, whistles shriek, gizmos pop and spin, gears and belts carry weights and buckets to and fro -- all highly amusing and distracting, as all of Rube Goldberg inventions were. But beneath it all runs a steady conveyor, relentlessly moving money from the have-lesses to the have-mores. It's not greed; it's the way the system functions in order to survive. The first thing we might notice here is that, by definition, the super rich 5% are outnumbered 19 to 1 -- yet each year that tiny minority manages to retain (and even strengthen) social and economic policies that keep that conveyor belt chugging along, steadily transferring rewards upward. Since the 95% could readily outvote the 5%, the only ESSENTIAL strategy for the 5% is divide and rule. If 54% of the 95% ever got together, rule by the 5% would end. Indeed, divide and rule, or divide and conquer, is really the ONLY thing the 5% have going for them. It is their lifeline, and therefore also their major vulnerability. To maintain the status quo, the 5% must divide the 95% (or convince them that voting will not change anything and is therefore pointless). This is the essential function of "social issues" like abortion rights, gun control, prayer in school, amendments to prohibit flag burning, women's liberation, "liberal elites," "pointy-headed intellectuals" (as former Vice President Spiro Agnew liked to call his adversaries), the "Eastern establishment," godless communists, Muslim evil-doers, bunny huggers, labor bosses, welfare queens, homosexuals -- name your favorite pariah. The reason your favorite pariah exists as an "issue" is to keep the pot boiling, to ensnare 48% of the 95% into voting with the 5% (or staying home on election day), so the 5% can continue to have their way with us all. The divide-and-rule strategy has a noble lineage. The British discovered in 1610 that they could divide Ireland and thus finally bring it under British rule after 250 years of failed effort. King James I realized that he could split northen Ireland along Protestant- Catholic lines and thus allow a foreign power to dominate both Protestants AND Catholics who could never combine forces to confront their common enemy. It worked like a charm and thus entered the book of tricks used ever since by the few to rule the many. The Brits went on to use "divide and rule" to subjugate India, Africa, and the Middle East. By pitting one group of subjects against another group (offering one group special privileges, for example) and constantly whipping up ethnic, religious and class or caste animosities, tiny numbers of Brits were able to dominate enormous numbers of colonials for 400 years, exacting tribute for the mother country all the while. The threat of violence by the British military always lay in the background during these colonial adventures but it was generally not needed. The Brits used a combination of carrots and sticks -- plus leadership jealousies, religious fractures, tribal disputes, regional differences, and cultural animosities -- to get half a population to help them subjugate the other half. I am reminded of the strategic advice given by U.S. financier and railroad businessman, Jay Gould: "I can hire one half of the working class to kill the other half." SUMMARY Using nature as a toilet in the name of economic stimulus is not restricted to one political party or the other -- let us acknowledge that, to gain election, both parties must feed at the same trough and therefore serve the same master. Some might say that real campaign finance reform is the only hope for fixing this. But it goes far deeper than that. Given an economic system that derives investment capital from investors who have a right to expect a substantial annual return on investment, and given that such a system requires growth to produce the return for those investors, and given that environmental harm is roughly proportional to economic growth, it seems silly and naive to think that nature can be protected from this ever-growing juggernaut by a set of rules negotiated between the juggernaut and a central bureaucracy created by the juggernaut. If I am entitled to a 7% annual return on my investment (or even a 3% return), that return must come from somewhere without much delay, and that requires stuff to be dug up or grown, moved, processed, moved again, packaged, promoted and sold, moved again, used, moved again, perhaps recycled a few times, and eventually discarded (at which point nature starts moving it once again, into waterways and food webs). The second law of thermodynamics tells us that each of these steps will inevitably be accompanied by waste, disorder and other disruptive unintended consequences. Environmental regulations are not going to change any of that, no matter who negotiates them. The pattern of the U.S. regulatory system was designed by business interests in the early 20th century to serve business interests by stabilizing and regularizing the social/governmental environment within which business operates. Environmental regulation followed that same pattern when it evolved in the 1970s. As Tom Linzey and Richard Grossman point out, the social purpose of environmental regulation is not so much to regulate business as it is to restrict the objections that can be raised by dissenters (whether small business competitors or angry citizens). Regulation limits and channels the responses anyone can make to corporate harms and thus environmental regulations mainly serve to make citizens predictable and manageable. The same could be said of labor regulations, financial regulations, and all the other regulatory constraints placed on business enterprises. The purpose is the regularize and stabilize the business environment, which means restricting the responses of those who are (inadvertently or not) harmed, taken advantage of, shortchanged, cheated or otherwise abused. Real protection of nature and human health will require reforms far more fundamental than trying to curb the flow of corrupt money into elections and creating bureaucracies in Washington to try to police the behavior of corporations that can operate in 120 countries on all continents simultaneously in outer space if they choose to. The simple fact is that the owners of capital want decent returns, this requires economic growth, and they will not be denied their due. Against this ever-growing juggernaut, regulations are powerless to protect nature or human health. Harm will be done, and it will be judged justifiable as the cost of doing business. It is now clear that continued growth is incompatible with the need to protect the ecosystems on which all humans (and all other creatures) depend -- so human survival requires that growth must slow and then stop. In this essay, I have described 15 system responses to a slow- down in the rate of growth, so this should give us some idea of the task we face and the intensity of the opposition that will develop if we proceed down this road. It could easily turn ugly. The global south needs growth (of roads, ports, and power plants) to give people the basics, and the global north already suffers from too much growth (and a glut of basics, which is one reason return on investment has diminished in recent decades). So growth in the north will need to stop -- or even go negative -- so that growth in the global south can proceed apace. Many in the investor class are unlikely to sit idly by as this unfolds, especially if they are made to feel unwelcome in the global south. Perpetual growth on a finite planet is a logical and physical impossibility. In recent decades it has become indisputably clear that an irresistible force (the human-animal need to protect the Earth, its habitat) has met an immovable object (the need for economic growth to reward investors so that the modern economic system can survive unmodified). Let's at least acknowledge that this is the nub of "the environmental problem" and that the environmental movement hasn't yet begun to bark up this particular tree. ============  Richard W. Stevenson, "The 2004 Campaign: The Issues: President Has Aggressively Pursued 'Pro-Growth' Ideas Nurtured in the Texas Oil Fields," New York Times Oct. 8, 2004, pg. A20. And see http://www.nrdc.org/bushrecord/  For example, Donald C. Lord, Dubya: The Toxic Texan : George W. Bush and Environmental Degradation (N.Y.: iUniverse, 2005); ISBN 0595351034.  Gabriel Kolko, The Triumph of Conservatism; A Reinterpretation of American History, 1900-1916. NY: The Free Press, 1963, describes the historical development of the regulatory system as a necessary adjunct to the growth of corporate influence over the nation's political, commercial, and cultural life.  I have been documenting this since 1986 in Rachel's News (www.rachel.org).  Eric Hoffer, The True Believer; Thoughts on the Nature of Mass Movements. NY: Harper and Row, 1951. Edition cited here is Mentor paperback published by New American Library, 1958.  Kate Zernike, "Violent Crime Rising Sharply in Some Cities," New York Times February 12, 2006, pg. A1, reports, "Milwaukee -- One woman here killed a friend after they argued over a brown silk dress. A man killed a neighbor whose 10-year-old son had mistakenly used his dish soap. Two men argued over a cellphone, and pulling out their guns, the police say, killed a 13-year-old girl in the crossfire. "While violent crime has been at historic lows nationwide and in cities like New York, Miami and Los Angeles, it is rising sharply here and in many other places across the country. "And while such crime in the 1990's was characterized by battles over gangs and drug turf, the police say the current rise in homicides has been set off by something more bewildering: petty disputes that hardly seem the stuff of fistfights, much less gunfire"  According to a Newsweek poll, 17 percent of Americans (one in every six) expect the world to end in their lifetime. Cited in Frank Rich "Now on DVD: The Passion of the Bush," New York Times Oct. 3, 2004.  In his book, What's the Matter With Kansas (NY: Henry Holt, 2004; paperback 2005; ISBN 0-8050-7774X), Thomas Frank "reveals how the political right continues to win elections, despite the fact that its economic policies hurt the vast majority of ordinary people, by portraying itself as the defender of mainstream values against a malevolent cultural elite. The right 'mobilizes voters with explosive social issues, summoning public outrage which it then marries to pro- business economic policies. Cultural anger is marshaled to achieve economic ends." This is showmanship at its best. Politicians talk about 'traditional values," but their true loyalty is to economic policies intended to primarily benefit the wealthiest 5%: 'Vote to stop abortion; receive a rollback in capital gains taxes. Vote to stand tall against terrorists; receive Social Security privatization." It may seem far-fetched, but so far it's working." writes Paul Krugman, "Kansas on My Mind," New York Times Feb. 25, 2005.