Collapsing systems

Credit: Devfactory, CC-BY-SA 2.0

Another great systems theory based book on why nations fail is out. This time its academic, journalist and writer Nafeez Ahmed, who long wrote for the Guardian but now has his own crowdsourced news site (Insurge-intelligence), who has delivered the goods. 

In his book, "Failing states, Collapsing systems: Biophysical Triggers of Political Violence", Nafeez presents the essential data on resource depletion, net energy decline, economic stagnation (debt bubble) and ties it nicely together with the acceleration of civil unrest around the globe. It's a big picture analysis of how the triple crises of energy, climate and food production impact societies around the world. A current example, according to Ahmed, of how these multiple stressors interact and can lead to systemic failure is war torn Syria. 

Syrian oil production peaked in 1996 while population, and thus consumption, kept increasing. By 2008 the government, who relied on petrol money for maintaining the state budget, had to slash fuel subsidies which tripled the price of petrol and food almost overnight. A huge deal to anyone already spending almost half of their income on food. At the same time as an ongoing drought in the eastern part of Syria devastated harvests and drove people from the countryside into the cities. Yemen experienced a similar fate of depleting resources, peak oil, and the resulting high vulnerability to shocks. Based on these two cases it takes about 15 years for a country that experiences its peak in oil production before additional pressures, such as climate change, contribute to systemic failure. 

It's not only the Middle East. Many other countries, for example Mexico,  are well on their way of having little to no extra oil to export for keeping their budget in balance or pay for subsidies that people depend on. And the counties who are still able to import some oil or have some mix of energy sources to depend on will be a target of immigrants looking to flee bankrupt and failing nations. Which in turn will fuel the nationalist sentiments and a grab for what's left, military interventions. Something we are already witnessing in Europe and the US.

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Minimize regret through acceptance, not denial

Source: Free great pictures, CC0 Public Domain

It’s too late when someone is already gone. That is the lesson one learns when a close relative dies. I have witnessed up close how truly crushing futile optimism can be. The fact that our human brain refuses to accept sad news and tries to cope by counteracting it with hope right up until the end can be a very cruel thing. Not being mentally prepared for the misery to come causes a shock so severe it puts one in a state of almost complete apathy. I am both lucky and cursed that I have experienced plenty of misery, both in my work as a nurse and in my own life, to know how bad things can get and therefore be somewhat mentally prepared for it. Some may call me a pessimist but I prefer the term realist. It´s not that I don’t have hopes, dreams and wishes just like anybody else. I obviously do. It’s simply that I am aware of the human brain's tendency for denial in face of difficult truths, like one’s own mortality. Denial is not only a coping mechanism but also an inherent trait of the human species. Because we are aware of our own and others suffering we realize our own mortality, which is a terrifying thing, that could lead to fear and depression that hinders reproduction and survival. Thus we need to deny death risks and mortality to keep on going, in evolutionary terms. That’s why we are overly optimistic, despite difficult circumstances, because we are wired for it.

Sure, unwarranted optimism (or reality denial) can be a good thing in certain situations, giving people extra strength to carry on despite high odds of failure. But it can also be very detrimental. For example in the case of climate change or species extinction where there is no going back. In these cases blind optimism in high tech solutions or unknown future discoveries etc. is actually dangerous. We have already perturbed the climate system to such a degree that it may change abruptly and shift into another stability domain, a much hotter and hostile one than we humans have never experienced. This is a fact. It’s not a very pleasant one but denying it doesn’t change anything. It only makes things worse, both in terms of not mitigating the worst impacts and being prepared for them. Without, at least, mental preparation people will be shocked, confused and in a panic when devastation hits. They will likely blame other people around them instead of understanding the underlying reasons for why such events happened. Like two rats in a cage getting electrocuted they won't know what to do but fight to the death.

Accepting one’s own mortality and living in a meaningful way to minimize regrets is a better way to deal with unpleasant facts. Accepting, for example, death, climate change and biodiversity loss doesn’t imply we like it. It simply means that we understand it and that we can take constructive action to build a life that is more meaningful and resilient to future shocks and disturbances. We can all find a life of meaning that is also beneficial for society and nature. A farmer knows this. We simply have to have the courage to strive for it. One day it’s truly too late...

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2017 - When bad turns worse

Sweeping the pengő inflation banknotes after the introduction of the forint in August 1946. Source: Mizerák István (CC-BY-SA 3.0)
I must say that I'm amazed over the fact that the international monetary system is still intact. It's now eight years since the global financial crisis first broke out. Irresponsible lax monetary policy in the belief of a "perpetual money machine", i.e lowering interest rates and expanding monetary supply, has lead to several bubbles and bursts. A process that started in the 1980s when industrial economies stopped generating GDP growth from productivity increases. And eight years is about the interval between every bubble bursting since then. 2017 could be the year when people finally lose faith in the system.

Of course there's a much deeper story to all this. The massive debt explosion that started in the 1980s has to do with diminishing returns on resource extraction. As real GDP growth slowed down, and wages stagnated, the cost of basic goods and living increased. People and governments started taking on huge loans to cover their continued consumption. An act of postponing the harsh consequences of going broke into the future, on to the next generation, while enjoying the present. By now we all know that most nations, and its peoples, are basically bankrupt since global GDP growth has come to a standstill while debts, not even including liabilities, have increased and are now impossible to pay back.

Instead of dealing with the real underlying issue, most nations have decided to double down on a failing policy of ever lower interest rates that keeps inflating markets and creating massive bubbles in stocks, bonds and housing. Sweden is a prime example of a country that never deleveraged during the last crisis and thus runs a much higher risk of having to face a major financial crisis soon. It doesn't take a genius to figure out that with its negative interest rates and  massive housing bubble Swedes are living way beyond their means. A small 40 m2 flat in central Stockholm cost at least 2-3 million SEK which makes it the third most overvalued housing market in the world, after Vancouver and London.
Mainstream media is still mostly blind to all this, claiming rising prosperity and a bright future ahead. And the few people who do stick their neck out are ridiculed based on silly arguments like "if it's a bubble why hasn't it popped yet?" as if that proves anything but faulty linear thinking of complex systems. It takes time for instabilities to build up. At a certain point, incremental change is suddenly replaced by abrupt change that can collapse the entire system. This is well-known within systems theory. To bad most economist never even study this and thus understands nothing about how the financial system or economy actually works as a whole.

Who knows how long this pretend and extend game can go on for, but one thing is certain, people are starting to lose faith in the system. We see that clearly in the political arena and spread of alternative media. We also see it in the rise of ever more elaborate conspiracy theories. The status quo is breaking down.

Unfortunately there are plenty of madmen and privileged people who are ready to use the resulting polarisation and confusion for their own benefit. The "let's blame immigrants" card is already in full swing. Cutting funding for climate change research is another type of witch hunt that's not happening only in the US, for example, the Sweden Democrats want to do something similar here claiming the meteorological authority's scenarios, which are based on IPCC's research,  are too alarmist. For us who study the topic of climate change this statement is laughable as it's more like the other way around, most projections underestimate the risks. Also, the increasing flow of refugees are partly a consequence of depleting resources and climate change. Perhaps politicians fear a loss of voters if the public understood that fact properly.

Anyway, 2017 looks to me as a year of high risk of political turmoil, social unrest, and financial calamity. Drawing most attention away from the underlying issues: resource depletion, biodiversity loss, climate change and overpopulation.

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