crazy from the heat

your prosperity is fake and your system is rotten

I’m not exactly in summer re-runs, but the effects of the “heat dome” over Europe have me thinking about the passage at the end of a book review I wrote for Hypertext last year, where I tried to invent the concept of “degrowth Abundance”.

“…concerned not with abundance at all but rather its opposite, bankruptcy. Greece’s Odious Debt, by Jason Manolopoulos, was a polemic published in May 2011, in the very earliest days of the Greek debt crisis. While all three books discussed here so far are attempting to address the question of how we can stop our once-productive social and political institutions from becoming pathological, Manolopolous was forced to ask the same question shortly after the bill became due.

Greece’s Odious Debt contains a thoroughly unsentimental but nonetheless moving history of how the Hellenic Republic got to where it was, and importantly how the combination of financialization, political myopia and the economics of European Monetary Union caused it to spend a decade in a world of false abundance. For a few years, Greek citizens lived well beyond their means, importing Mercedes cars and enjoying a real estate boom. When the crisis happened, they were brought face to face, as few peacetime societies ever are, with two facts: Their system of governance was rotten, and their prosperity was fake.

The economy of Greece has still not recovered; GDP is about 20 percent below its 2008 peak. And its politics have by no means been transformed. So there is no solution here, but there is a lesson. Environmental debts will come due, just like financial ones. So will political and social problems that have been put off to the future because they didn’t appear to have engineering or lawyerly solutions.”

I still think this might be a serious challenge to the Abundance agenda; that achieving the goal of growth and human flourishing might occasionally involve taking a step back, and that we might be at one of those points right now. It doesn’t mean that the whole project is discredited - far from it, it implies that solving the problems which make it too difficult to construct renewable energy infrastructure is really very urgent.

But it does mean that we can’t brush off “degrowth” as easily as we might want to. Carbon dioxide emissions are very like debt; they provide a current benefit in exchange for a future liability, and the future liability might be significantly bigger than the initial benefit. It’s just that it’s a form of future obligation which doesn’t appear in the same balance sheet as financial debt.

I don’t think this is a difficult accounting problem; it’s tricky to quantify the environmental debt and to translate it into a precise number of pounds or dollars. But it’s surely not difficult to understand that it exists, or that it’s likely to be big - we’re already thinking about abandoning entire towns, for heaven’s sake. And yet, people say that Net Zero is unaffordable, who would never say the same thing about the 4.75% October 2035 Gilt.

When a country has an excessive debt burden of either kind, bad things are likely to happen, and the only solution is either a bailout or a period of austerity. I had, and have, many disagreements with Yanis Varoufakis and with Wolfgang Schaeuble, but they did, at least, start from recognising the facts. Who is going to tell us that our prosperity is fake?

And more worryingly, what is going to happen to them when they do? One of the key motivating factors behind the Abundance Agenda is that the politics of scarcity are incredibly bad right now. The main reason why we need policies capable of delivering economic growth is that without it, a lot of voters seem to develop a really unattractive and dangerous mean streak. I still think it’s possible to design some glide path which will maintain developed world consumption levels while financing investment and writing off a large part of the last twenty years’ malinvestment. Just don’t ask me to write it down right now.