January 8 2011
Norman Pagett writes:
“You can get this burst of wealth that we have created from this rapacious behavior. But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate…’ Real wealth is something you can pass on in a way that others can enjoy.” Dr Joseph Romm, fellow of think tank Center for American Progress and editor, Climate Progress
Our global economy depends on the input of fossil fuel energy and natural resources. Logic tells us that both are finite and that the present level of consumption cannot go on forever. Yet the commercial system that we have created reassures us it can.
Privately, we have nagging doubts that life is too good to be true. But we also know that broadcasting the truth is likely to either invite derision from the many who perpetuate the Panglossian view or to cause panic. One day there will be panic, and worse, catastrophe, but it is in all our interests to support the collective myth of perpetual prosperity. We are living at 30% in excess of global capacity to fund our lifestyle, so we are consuming our asset base to create what we imagine to be wealth.
I’ll put that more simply. I have just described the basic function of a Ponzi scheme.
Can the world economy really be a gigantic Ponzi scheme? Consider the similarities and judge for yourself.
Some 150 years ago, fossil fuel began to be used on a global scale, making vast fortunes for those who were quick to exploit its potential, such as Rockefeller, Carnegie, Ford, Goodyear, Vanderbilt, and Cunard. They began to build our pyramid of prosperity, using the willing labour of millions who bought into the dream that they too could share such wealth.
To most of those millions, success on the Ponzi pyramid was expressed as a moderately successful job, a car, a home and other trappings of modern life including assets that seemed to grow in monetary value year on year. Not everyone could achieve the wealth of a Carnegie, but they did well enough.
But growth in financial wealth has depended entirely on the constant input of fossil fuel and the labour it bought. That resource is only available for use once. We have in effect been the recipients of the first (and only) payout of the global fraud of our own creation.
We are rapidly exhausting fossil fuels and natural resources, while at the same time, rapidly developing nations are seeing our prosperity and comfort and are wanting their fair share. Everyone is demanding their payout and when that happens, all Ponzi schemes collapse. We are about to see dramatic changes to every aspect of our lives. Welcome to the Middle Ages.