Countercurrents.org

Thirty-three years ago, I watched as a culture that had been sealed off from the rest of the world was suddenly thrown open to economic development. Witnessing the impact of the modern world on an ancient culture gave me insights into how economic globalisation creates feelings of inadequacy and inferiority, particularly in the young, and how those psychological pressures are helping to spread the global consumer culture. Since that time I have been promoting the rebuilding of community and local economies as the foundation of an ‘Economics of Happiness’.

When I first arrived in Ladakh or “Little Tibet”, a region high on the Tibetan plateau, it was still largely unaffected by either colonialism or the global economy. For political reasons, the region had been isolated for many centuries, both geographically and culturally. During several years of living amongst the Ladakhis, I found them to be the most contented and happy people I had ever encountered. Their sense of self-worth was deep and solid; smiles and laughter were their constant companions. Then in 1975, the Indian government abruptly opened Ladakh to imported food and consumer goods, to tourism and the global media, to western education and other trappings of the ‘development’ process. Romanticised impressions of the West gleaned from media, advertising and fleeting encounters with tourists had an immediate and profound impact on the Ladakhis. The sanitised and glamorised images of the urban consumer culture created the illusion that people outside Ladakh enjoyed infinite wealth and leisure. By contrast, working in the fields and providing for one’s own needs seemed backward and primitive. Suddenly, everything from their food and clothing to their houses and language seemed inferior. The young were particularly affected, quickly succumbing to a sense of insecurity and self-rejection. The use of a dangerous skin-lightening cream called “Fair and Lovely” became widespread, symbolising the newly-created need to imitate the distant role models – western, urban, blonde – provided by the media.

Over the past three decades, I have studied this process in numerous cultures around the world and discovered that we are all victims of these same psychological pressures. In virtually every industrialised country, including the US, UK, Australia, France and Japan, there is now what is described as an epidemic of depression. In Japan, it is estimated that one million youths refuse to leave their bedrooms – sometimes for decades – in a phenomenon known as “Hikikomori.” In the US, a growing proportion of young girls are so deeply insecure about their appearance they fall victim to anorexia and bulimia, or undergo expensive cosmetic surgery.

Why is this happening? Too often these signs of breakdown are seen as ‘normal’: we assume that depression is a universal affliction, that children are by nature insecure about their appearance, that greed, acquisitiveness, and competition are innate to the human condition. What we fail to consider are the billions of dollars spent by marketers targeting children as young as two, with a goal of instilling the belief that material possessions will ensure them the love and appreciation they crave.

As global media reaches into the most remote parts of the planet, the underlying message is: “if you want to be seen, heard, appreciated and loved you must have the right running shoes, the most fashionable jeans, the latest toys and gadgets”. But the reality is that consumption leads to greater competition and envy, leaving children more isolated, insecure, and unhappy, thereby fuelling still more frantic consumption in a vicious cycle. In this way, the global consumer culture taps into the fundamental human need for love and twists it into insatiable greed.

Today, more and more people are waking up to fact that, because of its environmental costs, an economic model based on endless consumption is simply unsustainable. But because there is far less understanding of the social and psychological costs of the consumer culture, most believe that making the changes necessary to save the environment will entail great sacrifice. Once we realise that oil-dependent global growth is not only responsible for climate change and other environmental crises, but also for increased stress, anxiety and social breakdown, then it becomes clear that the steps we need to take to heal the planet are the same as those needed to heal ourselves: both require reducing the scale of the economy – in other words localising rather than continuing to globalise economic activity. My sense from interviewing people in four continents is that this realisation is already growing, and has the potential to spread like wildfire.

Economic localisation means bringing economic activity closer to home – supporting local economies and communities rather than huge, distant corporations. Instead of a global economy based on sweatshop in the South, stressed-out two-earner families in the North, and a handful of billionaire elites in both, localisation means a smaller gap between rich and poor and closer contact between producers and consumers. This translates into greater social cohesion : a recent study found that shoppers at farmers’ markets had ten times more conversations than people in supermarkets.

And community is a key ingredient in happiness. Almost universally, research confirms that feeling connected to others is a fundamental human need. Local, community-based economies are also crucial for the well-being of our children, providing them with living role models and a healthy sense of identity. Recent childhood development research demonstrates the importance, in the early years of life, of learning about who we are in relation to parents, siblings, and the larger community. These are real role models, unlike the artificial stereotypes found in the media.

A deep connection with nature is similarly fundamental to our well-being. Author Richard Louv has even coined the expression ‘nature deficit disorder’ to describe what is happening to children deprived of contact with the living world. The therapeutic benefits of contact with nature, meanwhile, are becoming ever more clear. A recent UK study showed that 90 percent of people suffering from depression experience an increase in self-esteem after a walk in a park. After a visit to a shopping centre, on the other hand, 44 percent feel a decrease in self-esteem and 22 percent feel more depressed. Considering that over 31 million prescriptions for anti-depressants were handed out in the UK last year, this is a crucial finding.

Despite the enormity of the crises we face, turning towards the more community-based, localised economies represents a powerful solution multiplier. As Kali Wendorf, editor of Kindred magazine, says, “the way forward is actually quite simple: it’s more time with each other, more time in nature, more time in collective situations that give us a sense of community, like farmers’ markets, for example, or developing a relationship with the corner shop where you get your fruits and vegetables. It’s not going back to the Stone Age. It’s just getting back to that foundation of connection again.”

Efforts to localise economies are happening at the grassroots all over the world, and bringing with them a sense of well-being. A young man who started an urban garden in Detroit, one of America’s most blighted cities, told us, “I’ve lived in this community over 35 years and people I’d never met came up and talked to me when we started this project. We found that it reconnects us with the people around us, it makes community a reality”. Another young gardener in Detroit put it this way: “Everything just feels better to people when there is something growing.”

Global warming and the end of cheap oil demand a fundamental shift in the way that we live. The choice is ours. We can continue down the path of economic globalisation, which at the very least will create greater human suffering and environmental problems, and at worst, threatens our very survival. Or, through localisation, we can begin to rebuild our communities and local economies, the foundations of sustainability and happiness.

Everyone agrees: our economy is sick. The inescapable symptoms include declines in consumer spending and consumer confidence, together with a contraction of international trade and available credit. Add a collapse in real estate values and carnage in the automotive and airline industries and the picture looks grim indeed.

But why are both the U.S. economy and the larger global economy ailing? Among the mainstream media, world leaders, and America’s economists-in-chief (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) there is near-unanimity of opinion: these recent troubles are primarily due to a combination of bad real estate loans and poor regulation of financial derivatives.

This is the Conventional Diagnosis. If it is correct, then the treatment for our economic malady might logically include heavy doses of bailout money for beleaguered financial institutions, mortgage lenders, and car companies; better regulation of derivatives and futures markets; and stimulus programs to jumpstart consumer spending.

But what if this diagnosis is fundamentally flawed? The metaphor needs no belaboring: we all know that tragedy can result from a doctor’s misreading of symptoms, mistaking one disease for another.

Something similar holds for our national and global economic infirmity. If we don’t understand why the world’s industrial and financial metabolism is seizing up, we are unlikely to apply the right medicine and could end up making matters much worse than they would otherwise be.

To be sure: the Conventional Diagnosis is clearly at least partly right. The causal connections between subprime mortgage loans and the crises at Fannie Mae, Freddie Mac, and Lehman Brothers have been thoroughly explored and are well known. Clearly, over the past few years, speculative bubbles in real estate and the financial industry were blown up to colossal dimensions, and their bursting was inevitable. It is hard to disagree with the words of Australian Prime Minister Kevin Rudd, in his July 25 essay in the Sydney Morning Herald: “The roots of the crisis lie in the preceding decade of excess. In it the world enjoyed an extraordinary boom…However, as we later learnt, the global boom was built in large part…on a house of cards. First, in many Western countries the boom was created on a pile of debt held by consumers, corporations and some governments. As the global financier George Soros put it: ‘For 25 years [the West] has been consuming more than we have been producing…living beyond our means.’” (1)

But is this as far as we need look to get to the root of the continuing global economic meltdown?

A case can be made that dire events having to do with real estate, the derivatives markets, and the auto and airline industries were themselves merely symptoms of an even deeper, systemic dysfunction that spells the end of economic growth as we have known it.

In short, I am suggesting an Alternative Diagnosis. This explanation for the economic crisis is not for the faint of heart because, if correct, it implies that the patient is far sicker than even the most pessimistic economists are telling us. But if it is correct, then by ignoring it we risk even greater peril.

Economic Growth, The Financial Crisis, and Peak Oil

For several years, a swelling subculture of commentators (which includes the present author) has been forecasting a financial crash, basing this prognosis on the assessment that global oil production was about to peak. (2) Our reasoning went like this:

Continual increases in population and consumption cannot continue forever on a finite planet. This is an axiomatic observation with which everyone familiar with the mathematics of compounded arithmetic growth must agree, even if they hedge their agreement with vague references to “substitutability” and “demographic transitions.” (3)

This axiomatic limit to growth means that the rapid expansion in both population and per-capita consumption of resources that has occurred over the past century or two must cease at some particular time. But when is this likely to occur?

The unfairly maligned Limits to Growth studies, published first in 1972 with periodic updates since, have attempted to answer the question with analysis of resource availability and depletion, and multiple scenarios for future population growth and consumption rates. The most pessimistic scenario in 1972 suggested an end of world economic growth around 2015. (4)

But there may be a simpler way of forecasting growth’s demise.

Energy is the ultimate enabler of growth (again, this is axiomatic: physics and biology both tell us that without energy nothing happens). Industrial expansion throughout the past two centuries has in every instance been based on increased energy consumption.(5) More specifically, industrialism has been inextricably tied to the availability and consumption of cheap energy from coal and oil (and more recently, natural gas). However, fossil fuels are by their very nature depleting, non-renewable resources. Therefore (according to the Peak Oil thesis), the eventual inability to continue increasing supplies of cheap fossil energy will likely lead to a cessation of economic growth in general, unless alternative energy sources and efficiency of energy use can be deployed rapidly and to a sufficient degree. (6)

Of the three conventional fossil fuels, oil is arguably the most economically vital, since it supplies 95 percent of all transport energy. Further, petroleum is the fuel with which we are likely to encounter supply problems soonest, because global petroleum discoveries have been declining for decades, and most oil producing countries are already seeing production declines. (7)

So, by this logic, the end of economic growth (as conventionally defined) is inevitable, and Peak Oil is the likely trigger.

Why would Peak Oil lead not just to problems for the transport industry, but a more general economic and financial crisis? During the past century growth has become institutionalized in the very sinews of our economic system. Every city and business wants to grow. This is understandable merely in terms of human nature: nearly everyone wants a competitive advantage over someone else, and growth provides the opportunity to achieve it. But there is also a financial survival motive at work: without growth, businesses and governments are unable to service their debt. And debt has become endemic to the industrial system. During the past couple of decades, the financial services industry has grown faster than any other sector of the American economy, even outpacing the rise in health care expenditures, accounting for a third of all growth in the U.S. economy. From 1990 to the present, the ratio of debt-to-GDP expanded from 165 percent to over 350 percent. In essence, the present welfare of the economy rests on debt, and the collateral for that debt consists of a wager that next year’s levels of production and consumption will be higher than this year’s.

Given that growth cannot continue on a finite planet, this wager, and its embodiment in the institutions of finance, can be said to constitute history’s greatest Ponzi scheme. We have justified present borrowing with the irrational belief that perpetual growth is possible, necessary, and inevitable. In effect we have borrowed from future generations so that we could gamble away their capital today.

Until recently, the Peak Oil argument has been framed as a forecast: the inevitable decline in world petroleum production, whenever it occurs, will kill growth. But here is where forecast becomes diagnosis: during the period from 2005 to 2008, energy stopped growing and oil prices rose to record levels. By July of 2008, the price of a barrel of oil was nudging close to $150—half again higher than any previous petroleum price in inflation-adjusted terms—and the global economy was beginning to topple. The auto and airline industries shuddered; ordinary consumers had trouble buying gasoline for their commute to work while still paying their mortgages. Consumer spending began to decline. By September the economic crisis was also a financial crisis, as banks trembled and imploded. (8)

Given how much is at stake, it is important to evaluate the two diagnoses on the basis of facts, not preconceptions.

It is unnecessary to examine evidence supporting or refuting the Conventional Diagnosis, because its validity is not in doubt—as a partial explanation for what is occurring. The question is whether it is a sufficient explanation, and hence an adequate basis for designing a successful response.

What’s the evidence favoring the Alternative? A good place to begin is with a recent paper by economist James Hamilton of the University of California, San Diego, titled “Causes and Consequences of the Oil Shock of 2007-08,” which discusses oil prices and economic impacts with clarity, logic, and numbers, explaining how and why the economic crash is related to the oil price shock of 2008. (9)

Hamilton starts by citing previous studies showing a tight correlation between oil price spikes and recessions. On the basis of this correlation, every attentive economist should have forecast a steep recession for 2008. “Indeed,” writes Hamilton, “the relation could account for the entire downturn of 2007-08…If one could have known in advance what happened to oil prices during 2007-08, and if one had used the historically estimated relation [between price rise and economic impact]…one would have been able to predict the level of real GDP for both of 2008:Q3 and 2008:Q4 quite accurately.”

Again, this is not to ignore the role of the financial and real estate sectors in the ongoing global economic meltdown. But in the Alternative Diagnosis the collapse of the housing and derivatives markets is seen as amplifying a signal ultimately emanating from a failure to increase the rate of supply of depleting resources. Hamilton again: “At a minimum it is clear that something other than housing deteriorated to turn slow growth into a recession. That something, in my mind, includes the collapse in automobile purchases, slowdown in overall consumption spending, and deteriorating consumer sentiment, in which the oil shock was indisputably a contributing factor.”

Moreover, Hamilton notes that there was “an interaction effect between the oil shock and the problems in housing.” That is, in many metropolitan areas, house prices in 2007 were still rising in the zip codes closest to urban centers but already falling fast in zip codes where commutes were long. (10)

Why Did the Oil Price Spike?

Those who espouse the Conventional Diagnosis for our ongoing economic collapse might agree that there was some element of causal correlation between the oil price spike and the recession, but they would deny that the price spike itself had anything to do with resource limits, because (they say) it was caused mostly by speculation in the oil futures market, and had little to do with fundamentals of supply and demand.

In this, the Conventional Diagnosis once again has some basis in reality. Speculation in oil futures during the period in question almost certainly helped drive oil prices higher than was justified by fundamentals. But why were investors buying oil futures? Was the mania for oil contracts just another bubble, like the dot.com stock frenzy of the late ’90s or the real estate boom of 2003 to 2006?

During the period from 2005 to mid-2008, demand for oil was growing, especially in China (which went from being self-sufficient in oil in 1995 to being the world’s second-foremost importer, after the U.S., by 2006). But the global supply of oil was essentially stagnant: monthly production figures for crude oil bounced around within a fairly narrow band between 72 and 75 million barrels per day. As prices rose, production figures barely budged in response. There was every indication that all oil producers were pumping flat-out: even the Saudis appeared to be rushing to capitalize on the price bonanza.

Thus a good argument can be made that speculation in oil futures was merely magnifying price moves that were inevitable on the basis of the fundamentals of supply and demand. James Hamilton (in his publication previously cited) puts it this way: “With hindsight, it is hard to deny that the price rose too high in July 2008, and that this miscalculation was influenced in part by the flow of investment dollars into commodity futures contracts. It is worth emphasizing, however, that the two key ingredients needed to make such a story coherent—a low price elasticity of demand, and the failure of physical production to increase—are the same key elements of a fundamentals-based explanation of the same phenomenon. I therefore conclude that these two factors, rather than speculation per se, should be construed as the primary cause of the oil shock of 2007-08.”

Aftermath of the Peak

There is also controversy over to what degree troubles in the automobile, trucking, and airline industries should be attributed to the oil price spike or the economic crash. Of course, if the Alternative Diagnosis is correct, the latter two events are causally related in any case. However, it may be helpful to review the situation.

Everyone knows that GM and Chrysler went bankrupt this year because U.S. car sales cratered. The current forecast is for sales of about 10.3 million vehicles in the U.S. for 2009, down from last year’s 13.2 million and 16.1 million in 2007. U.S. car sales have not been this low since the 1970s. Sales of light trucks, the most profitable vehicles, took the biggest hit during 2008, as fuel prices soared and car buyers avoided gas-guzzlers. It was at this point that the auto companies really began feeling the pain.

The airline industry’s ills are summarized in a recent GAO document: “After 2 years of profits, the U.S. passenger airline industry lost $4.3 billion in the first 3 quarters of 2008 [as jet fuel prices climbed]. Collectively, U.S. airlines reduced domestic capacity, as measured by the number of seats flown, by about 9 percent from the fourth quarter of 2007 to the fourth quarter of 2008…To reduce capacity, airlines reduced the overall number of active aircraft in their fleets by 18 percent…Airlines also collectively reduced their workforces by about 28,000, or nearly 7 percent, from the end of 2007 to the end of 2008…The contraction of the U.S. airline industry in 2008 reduced airport revenues, passengers’ access to the national aviation system, and revenues for the Trust Fund.”(11)

For the trucking industry, fuel accounts for nearly 40 percent of total operational costs. In 2007, as diesel prices rose, carriers began losing money and added fuel price surcharges; meanwhile the volume of freight began falling. After July 2008, as oil prices crashed, tonnage continued to decline. Overall, the cumulative decrease in loads for flatbed, tanker, and dry vans ranged between 15 percent and 20 percent just in the period from June to December 2008. (12)

This last set of statistics raises a couple of questions crucial to understanding the Alternative Diagnosis: Why, if global oil production had just peaked, did petroleum prices fall in the last five months of 2008? And, if oil prices were a major factor in the economic crisis, why didn’t the economy begin to turn around after the prices softened?

Why Did Oil Prices Fall?

And Why Didn’t Lower Oil Prices Lead to a Quick Recovery?

The Peak Oil thesis predicts that, as world oil production reaches its maximum level and begins to decline, the price of oil will rise dramatically. But it also forecasts a dramatic increase in the volatility of prices.

The argument goes as follows. As oil becomes scarce, its price will rise until it begins to undermine economic activity in general. Economic contraction will then result in substantially reduced demand for oil, which will in turn cause its price to fall temporarily. Then one of two things will happen: either (a) the economy will begin to recover, stoking renewed oil demand, leading again to high prices which will again undermine economic activity; or (b), if the economy does not quickly recover, petroleum production will gradually fall due to depletion until spare production capacity (created by lower demand) is wiped out, leading again to higher prices and even more economic contraction. In both cases, oil prices remain volatile and the economy contracts.

This scenario corresponds very closely with the reality that is unfolding, though it remains to be seen whether situation (a) or (b) will ensue.

Over the past three years, oil prices rose and fell more dramatically than would have been the case if it had not been for widespread speculation in oil futures. Nevertheless, the general direction of prices—way up, then way down, then part-way back up—is entirely consistent with the Peak Oil thesis and the Alternative Diagnosis.

Why has the economy not quickly recovered, given that oil prices are now only half what they were in July 2008? Again, Peak Oil is not the only cause of the current economic crisis. Enormous bubbles in the real estate and finance sectors constituted accidents waiting to happen, and the implosion of those bubbles has created a serious credit crisis (as well as solvency and looming currency crises) that will likely take several years to resolve even if energy supplies don’t pose a problem.

But now the potential for renewed high oil prices acts as a ceiling for economic recovery. Whenever the economy does appear to show renewed signs of life (as has happened in May-July this year, with stock values rebounding and the general pace of economic contraction slowing somewhat), oil prices will take off again as oil speculators anticipate a recovery of demand. Indeed, oil prices have rebounded from $30 in January to nearly $70 currently, provoking widespread concern that high energy prices could nip recovery in the bud.(14)

A barrel of oil from newly developed sources costs in the neighborhood of $60 to produce, now that all of the cheaper prospects have been exploited: finding new oilfields today usually means drilling under miles of ocean water, or in politically unstable nations where equipment and personnel are at high risk. (15) So as soon as consumers demand more oil, the price will have to stay noticeably above that figure in order to provide the incentive for producers to drill.

Volatile oil prices hurt on the upside, but they also hurt on the downside. The oil price collapse of August-December 2008, plus the worsening credit crisis, caused a dramatic contraction in oil industry investment, leading to the cancellation of about $150 billion worth of new oil production projects—whose potential productive capacity will be required to offset declines in existing oilfields if world oil production is to remain stable. (16) This means that even if demand remains low, production capacity will almost certainly decline to meet those demand levels, causing oil prices to rise again in real terms at some point, perhaps two or three years from now. Volatile petroleum prices also hurt the development of alternative energy, as was shown during the past few months when falling oil prices led to financial troubles for ethanol manufacturers. (17)

One way or another, growth will be highly problematic if not unachievable.

Big Picture Diagnosis: Continuing the Trail of Logic

At this point in the discussion many readers will be wondering why alternative energy sources and efficiency measures cannot be deployed to solve the Peak Oil crisis. After all, as petroleum becomes more expensive, ethanol, biodiesel, and electric cars all start to look more attractive both to producers and consumers. Won’t the magic of the market intervene to render oil shortages irrelevant to future growth?

It is impossible in the context of this discussion to provide a detailed explanation of why the market probably cannot solve the Peak Oil problem. Such an explanation requires a discussion of energy evaluation criteria, and an analysis of many individual energy alternatives on the basis of those criteria. I have offered brief overviews of this subject previously and a much longer one is in press. (18)

My summary conclusions in this regard are as follows.

About 85 percent of our current energy is derived from three primary sources—oil, natural gas, and coal—that are non-renewable, whose price is likely to trend sharply higher over the next years and decades leading to severe shortages, and whose environmental impacts are unacceptable. While these sources historically have had very high economic value, we cannot rely on them in the future; indeed, the longer the transition to alternative energy sources is delayed, the more difficult that transition will be unless some practical mix of alternative energy systems can be identified that will have superior economic and environmental characteristics.

But identifying such a mix is harder than one might initially think. Each energy source has highly specific characteristics. In fact, it has been the characteristics of our present energy sources (principally oil, coal, and natural gas) that have enabled the building of an urbanized society with high mobility, large population, and high economic growth rates. Surveying the available alternative energy sources for criteria such as energy density, environmental impacts, reliance on depleting raw materials, intermittency versus constancy of supply, and the percentage of energy returned on the energy invested in energy production, none currently appears capable of perpetuating this kind of society.

Moreover, national energy systems are expensive and slow to develop. Energy efficiency likewise requires investment, and further incremental investments in efficiency tend to yield diminishing returns over time, since it is impossible to perform work with zero energy input. Where is there the will or ability to muster sufficient investment capital for deployment of alternative energy sources and efficiency measures on the scale needed?

While there are many successful alternative energy production installations around the world (ranging from small home-scale photovoltaic systems to large “farms” of three-megawatt wind turbines), there are very few modern industrial nations that now get the bulk of their energy from sources other than oil, coal, and natural gas. One example is Sweden, which obtains most of its energy from nuclear and hydropower. Another is Iceland, which benefits from unusually large domestic geothermal resources not found in most other countries. Even for these two nations, the situation is complex: the construction of the infrastructure for their power plants mostly relied on fossil fuels for the mining of the ores and raw materials, for materials processing, for transportation, for the manufacturing of components, for the mining of uranium, for construction energy, and so on. Thus a meaningful energy transition away from fossil fuels is still a matter of theory and wishful thinking, not reality.

My conclusion from a careful survey of energy alternatives, then, is that there is little likelihood that either conventional fossil fuels or alternative energy sources can be counted on to provide the amount and quality of energy that will be needed to sustain economic growth—or even current levels of economic activity—during the remainder of this century. (19)

But the problem extends beyond oil and other fossil fuels: the world’s fresh water resources are strained to the point that billions of people may soon find themselves with only precarious access to water for drinking and irrigation. Biodiversity is declining rapidly. We are losing 24 billion tons of topsoil each year to erosion. And many economically significant minerals—from antimony to zinc—are depleting quickly, requiring the mining of ever lower-grade ores in ever more remote locations. Thus the Peak Oil crisis is really just the leading edge of a broader Peak Everything dilemma.

In essence, humanity faces an entirely predictable peril: our population has been growing dramatically for the past 200 years (expanding from under one billion to nearly seven billion), while our per-capita consumption of resources has also grown. For any species, this is virtually the definition of biological success. And yet all of this has taken place in the context of a finite planet with fixed stores of non-renewable resources (fossil fuels and minerals), a limited ability to regenerate renewable resources (forests, fish, fresh water, and topsoil), and a limited ability to absorb industrial wastes (including carbon dioxide). If we step back and look at the industrial period from a broad historical perspective that is informed by an appreciation of ecological limits, it is hard to avoid the conclusion that we are today living at the end of a relatively brief pulse—a 200-year rapid expansionary phase enabled by a temporary energy subsidy (in the form of cheap fossil fuels) that will inevitably be followed by an even more rapid and dramatic contraction as those fuels deplete.

The winding down of this historic growth-contraction pulse doesn’t necessarily mean the end of the world, but it does mean the end of a certain kind of economy. One way or another, humanity must return to a more normal pattern of existence characterized by reliance on immediate solar income (via crops, wind, or the direct conversion of sunlight to electricity) rather than stored ancient sunlight.

This is not to say that the remainder of the 21st century must consist of a collapse of industrialism, a die-off of most of the human population, and a return by the survivors to a way of life essentially identical to that of 16th century peasants or indigenous hunter-gatherers. It is possible instead to imagine acceptable and even inviting ways in which humanity could adapt to ecological limits while further developing cultural richness, scientific understanding, and quality of life (more of this below).

But however it is negotiated, the transition will spell an end to economic growth in the conventional sense. And that transition appears to have begun.

How Do We Know Which Diagnosis Is Correct?

If the patient is an individual human and the cause of distress is uncertain, more diagnostic tests can be prescribed. But to what sorts of blood tests, x-rays, and CAT scans can we subject the national or global economy?

In a sense, the tests have already been done. During the past few decades thousands of scientific surveys of natural resources, biodiversity, and ecosystems have showed increasing rates of depletion and decline. (20) The continuing increase in human population, pollution, and consumption are likewise well documented. This information formed the basis for the Limits to Growth studies, previously mentioned, which use computer modeling to show how current trends are likely play out—and most resulting scenarios show them leading to an end of economic growth and a collapse of industrial output some time in the early 21st century.

Why are the results of such diagnostic tests not universally accepted as a challenge to expectations of continued growth? Primarily because their conclusion runs counter to the beliefs and proclamations of most economists, who maintain that there are no practical limits to growth. They deny that resource constraints provide an eventual cap on production and consumption. And so their diagnostic efforts tend to ignore environmental factors in favor of easily measured internal features of the human economy such as money supply, consumer confidence, interest rates, and price indices.

Ecologist Charles Hall, among many others, has argued that the discipline of economics, as currently practiced, does not constitute a science, since it proceeds primarily on the basis of correlative logic rather than through the building of knowledge by a continuous, rigorous process of proposing and testing hypotheses. (21) While economics uses complex terminology and mathematics, as science does, its basic assertions about the world—such as the principle of infinite substitutability, which holds that for any resource that becomes scarce, the market will find a substitute—are not subjected to careful experimental examination. (It is worth noting that Hall and others have made the effort to lay the conceptual foundations for a new economics based on scientific principles and methods, which they call “biophysical economics.” (22)

Moreover, mainstream economists failed on the whole to foresee the current crash. There was no consistent or concerted effort on the part of Secretaries of the Treasury, Federal Reserve Chairmen, or “Nobel” prize-winning economists to warn policy makers or the general public that, sometime in the early 21st century, the global economy would begin to come apart at the seams. (23) One might think that this predictive failure—the inability to foresee so historically significant an event as the rapid contraction of nearly the entire global economy, entailing the failure of some of the world’s largest banks and manufacturing companies—would cause mainstream economists to stop and re-examine their fundamental premises. But there is little evidence to suggest that this is occurring.

At the risk of repetition: physical scientists from several disciplines have indeed foreseen an end to economic growth in the early 21st century, and have warned policy makers and the general public on many occasions.

Whom should we believe?

The specifics of the Alternative Diagnosis are falsifiable. If economic activity were to rebound above 2007 levels, or if oil production were to rise above the July 2008 high-water mark, then the attribution of the current economic crisis to resource-tied limits to growth may be considered at least partly disproven. However, even if these things were to occur, the underlying reasoning behind the Alternative Diagnosis might still be correct. If the world oil production peak is delayed until, let us say, 2015 or 2020, and if another—this time bottomless—global economic crash results then, the ultimate outcome will be essentially the same. But if, meanwhile, the Alternative Diagnosis were to be taken seriously and acted upon, the consequences of doing so would be beneficial: a decade would have been spent preparing for the event.

Could the Alternative Diagnosis be altogether wrong? That is, might conventional economists be right in thinking that growth can continue forever? It is often said that anything is possible, but some things are clearly much more possible than others. The perpetual growth of human population and consumption within the confines of a finite planet seems like a very long shot indeed, especially since warning signs are everywhere apparent that ecological limits are already being reached and surpassed. (24)

What Not to Do: Prescribe Punishingly Expensive Placebos

If the physical scientists who warn about limits to growth are right, confronting the global economic meltdown implies far more than merely getting the banks and mortgage lenders back on their feet. Indeed, in that case we face a fundamental change in our economy as significant as the advent of the industrial revolution. We are at a historic inflection point—the ending of decades of expansion and the beginning of an inevitable period of contraction that will continue until humanity is once again living within the limits of Earth’s regenerative systems.

But there are few signs that policy makers understand any of this. Their thinking appears to be shaped primarily by mainstream economists’ assurances that growth can and must continue into the indefinite future, and that the economic contraction the world is currently experiencing is only temporary–a problem that can and must be solved.

Still, the problem is not a minor one in the eyes of economists and policy makers. Consider the gargantuan size of the Treasury and Federal Reserve bailouts and stimulus packages that have been deployed in the possibly futile attempt to end contraction and restart growth. According to the special inspector general of the U.S. government’s Troubled Asset Relief Program (TARP), in remarks submitted to the House Committee on Oversight and Government Reform on July 21, $23.7 trillion have been committed in “total potential federal government support.” This is expensive medicine indeed. It takes a moment to even begin to comprehend the enormity of the figure. It represents about half of annual world GDP, and is over three times the total amount spent by the U.S. government, in inflation-adjusted dollars, on all wars combined, from 1776 to the present. It is nearly fifty times the cost of the New Deal.

Other nations, including Britain, China, and Germany have committed to paying for stimulus packages and bailouts that, while much smaller in absolute terms, represent an impressive (or should we say frightful?) share of national GDP.

If the Alternative Diagnosis is valid, none of this will work in the end, because existing financial institutions—with their basis in debt and interest and their requirements for constant expansion—cannot be made to function in a context where energy and resource constraints impose effective caps on manufacturing and transport.

Are the bailouts and stimulus packages working? Much evidence suggests that they are not, except in limited ways. In the U.S., unemployment continues to increase, while real estate values continue to fall. And most of the reputed “green shoots” in the economy so far sighted amount merely to an arguably temporary decline in the rate of contraction. For example, the home price index released July 28 of this year showed that in May, seasonally adjusted prices fell just 0.16 percent from the previous month. That represents an annual rate of decline of a little under 2 percent, which is a substantial improvement over the annualized rate of more than 20 percent that prevailed from September 2008 through March of 2009. Many commentators seized upon this news as a sign of an imminent turnaround. Nevertheless, new home sales are down from 1.4 million per year in 2005 to 350,000 per year today, and house prices are down 50 percent from the bubble peak and still declining in most places. Moreover, manufacturing is still shrinking, small businesses are in trouble, there are still significant danger signs on the horizon, including a new round of mortgage resets, a likely dive in commercial real estate values, and the looming reality that toxic assets at the center of the banking crisis have yet to be dealt with. (25)

President Obama has made the argument that bailouts are justified to stabilize the system long enough so that leaders can make fundamental changes to institutions and regulations, enabling the economy to then go forward healthier and more immune to similar crises in the future. But there is little to suggest that the kinds of systemic changes that are actually needed (ones that would enable the economy to function during a prolonged period of contraction) are under way or even contemplated. Meanwhile, as growth-based institutions are temporarily propped up, the ultimate scale of the damage is likely only to increase: when the inevitable collapse of those institutions does come, the consequences will likely be even worse because so much capital will have been squandered in attempting to salvage them.

In using up non-renewable resources like metals, minerals, and fossil fuels, we have stolen from future generations. Now in effect we are stealing from those generations the financial wherewithal that could have been used to build a bridge to a sustainable economy. The construction of a renewable energy infrastructure (including not only generating capacity, but distribution and storage infrastructure, as well as post-petroleum transport and agriculture systems) will require enormous investments and decades of work. Where will the investment capital come from if governments are already buried in debt? If we have committed nearly $24 trillion to propping up an old economy with no real survival prospects, what’s left with which to finance the new one?

If the current prescription for our economic malady is wrong-headed, the same is true of many proposed cures for our energy problems. According to the Conventional Diagnosis, today’s high oil prices are due to speculation; the cure must therefore lie in the tighter regulation of oil futures trading (which may be a good idea, though it doesn’t get to the heart of the problem), while providing more opportunities to oil companies to explore for domestic oil (even though the likely production rates from currently off-limits reserves would be relatively paltry, and would have a negligible effect on oil prices). In fact, though, investing further in fossil fuel energy systems (including “clean coal” technology) will yield declining returns, given that the highest quality resources have already been used up; meanwhile, doing so takes investment capital away from the development of renewable energy, which we will have to rely on increasingly as fossil fuels deplete. (26)

What is required but is still utterly lacking is a fundamental recognition that circumstances have changed: what worked decades ago will not work now.

What To Do: Adapt to the New Reality

If the Alternative Diagnosis is correct, there will be no easy fix for the current economic breakdown. Some illnesses are not curable; they require that we simply adapt and make the best of our new situation.

If humanity has indeed embarked upon the contraction phase of the industrial pulse, we should assume that ahead of us lie much lower average income levels (for nearly everyone in the wealthy nations, and for high wage earners in poorer nations); different employment opportunities (fewer jobs in sales, marketing, and finance; more in basic production); and more costly energy, transport, and food. Further, we should assume that key aspects of our economic system that are inextricably tied to the need for future growth will cease to work in this new context.

Rather than attempting to prop up banks and insurance companies with trillions in bailouts, it would probably be better simply to let them fail, however nasty the short-term consequences, since they will fail anyway sooner or later. The sooner they are replaced with institutions that serve essential functions within a contracting economy, the better off we will all be.

Meanwhile the thought-leaders in society, especially the President, must begin breaking the news—in understandable and measured ways—that growth isn’t returning and that the world has entered a new and unprecedented economic phase, but that we can all survive and thrive in this challenging transitional period if we apply ourselves and work together. At the heart of this general re-education must be a public and institutional acknowledgment of three basic rules of sustainability: growth in population cannot be sustained; the ongoing extraction of non-renewable resources cannot be sustained; and the use of renewable resources is sustainable only if it proceeds at rates below those of natural replenishment.

Without cheap energy, global trade cannot increase. This doesn’t mean that trade will disappear, only that economic incentives will inexorably shift as transport costs rise, favoring local production for local consumption. But this may be a nice way of putting it: if and when fuel shortages arise, fragile globe-spanning systems of provisioning could be disrupted, with dire effects for consumers cut off from sources of necessary products. Thus a high priority must be placed on the building of community resilience through the preferential local sourcing of necessities and the maintenance of larger regional inventories—especially of food and fuel. (28)

It currently takes an average of 8.5 calories of energy from oil and natural gas to produce each calorie of food energy. Without cheap fuel for agriculture, farm production will plummet and farmers will go bankrupt—unless proactive efforts are undertaken to reform agriculture to reduce its reliance on fossil fuels. (29)

Obviously, alternative energy sources and energy efficiency strategies must be high priorities, and must be subjects of intensive research using a carefully chosen spectrum of criteria. The best candidates will have to be funded robustly even while fossil fuels are still relatively cheap: the build-out time for the renewable energy infrastructure will inevitably be measured in decades and so we must begin the process now rather than waiting for market forces to lead the way.

In the face of credit and (potential) currency crises, new ways of financing such projects will be needed. Given that our current monetary and financial systems are founded on the need for growth, we will require new ways of creating money and new ways of issuing credit. Considerable thought has gone into finding solutions to this problem, and some communities are already experimenting with local capital co-ops, alternative currencies, and no-interest banks. (30)

With oil becoming increasingly expensive in real terms, we will need more efficient ways of getting people and goods around. Our first priority in this regard must be to reduce the need for transport with better urban planning and re-localized production systems. But where transport is needed, rail and light rail will probably be preferable to cars and trucks. (31)

We will also need a revolution in the built environment to minimize the need for heating, cooling, and artificial lighting in all our homes and public buildings. This revolution is already under way, but is currently moving far too slowly due to the inertia of established interests in the construction industry. (32)

These projects will need more than local credit and money; they will also require skilled workers. There will be a call not just for installers of solar panels and home insulation: millions of new food producers and builders of low-energy infrastructure will be needed as well. A broad range of new opportunities could open up to replace vanishing jobs in marketing and finance—if there is cheap training available at local community colleges.

It is worth noting that the $23.7 trillion recently committed for U.S. bailouts and loan guarantees represents about $80,000 for each man, woman, and child in America. A level of investment even a substantial fraction that size could pay for all needed job training while ensuring universal provision of basic necessities during the transition. What would we be getting for our money? A collective sense that, in a time of crisis, no one is being left behind. Without the feeling of cooperative buy-in that such a safety net would help engender, similar to what was achieved with the New Deal but on an even larger scale, economic contraction could devolve into a horrific fight over the scraps of the waning industrial period.

However contentious, the population question must be addressed. All problems that have to do with resources are harder to solve when there are more people needing those resources. The U.S. must encourage smaller families and must establish an immigration policy consistent with a no-growth population target. This has foreign policy implications: we must help other nations succeed with their own economic transitions so that their citizens do not need to emigrate to survive. (33)

If economic growth ceases to be an achievable goal, society will have to find better ways of measuring success. Economists must shift from assessing well-being with the blunt instrument of GDP, and begin paying more attention to indices of human and social capital in areas such as education, health, and cultural achievements. This redefinition of growth and progress has already begun in some quarters, but for the most part has yet to be taken up by governments. (34)

A case can be made that after all this is done the end result will be a more satisfying way of life for the vast majority of citizens—offering more of a sense of community, more of a connection with the natural world, more satisfying work, and a healthier environment. Studies have repeatedly shown that higher levels of consumption do not translate to elevated levels of satisfaction with life. (35) This means that if “progress” can be thought of in terms of happiness, rather than a constantly accelerating process of extracting raw materials and turning them into products that themselves quickly become waste, then progress can certainly continue. In any case, “selling” this enormous and unprecedented project to the general public will require emphasizing its benefits. Several organizations are already exploring the messaging and public relations aspects of the transition. (36) But those in charge need to understand that looking on the bright side doesn’t mean promising what can’t be delivered—such as a return to the days of growth and thoughtless consumption.

Can We? Will We?

It is important to state the implications of all this as plainly as possible. If the Alternative Diagnosis is correct, there will be no full economic “recovery”—not this year, or the next, or five or ten years from now. There may be temporary rebounds that take us back to some fraction of peak economic activity, but these will be only brief respites.

We have entered a new economic era in which the former rules no longer apply. Low interest rates and government spending no longer translate to incentives for borrowing and job production. Cheap energy won’t appear just because there is demand for it. Substitutes for essential resources will in most cases not be found. Over all, the economy will continue to shrink in fits and starts until it can be maintained by the energy and material resources that Earth can supply on ongoing basis.

This is of course very difficult news. It is analogous to being told by your physician that you have contracted a systemic, potentially fatal disease that cannot be cured, but only managed; and managing it means you must make profound lifestyle changes.

Some readers may note that climate change has not figured prominently in this discussion. It is clearly, after all, the worst environmental catastrophe in human history. Indeed, its consequences could be far worse than the mere destruction of national economies: hundreds of millions of people and millions of other species could be imperiled. The reason for the relatively limited discussion of climate here is that (assuming the Alternative Diagnosis is correct) it is not climate change that has proven to be the most immediate limit to economic growth, but resource depletion. However, while there is not as yet general agreement on the point, climate change itself and the needed steps to minimize it both constitute limits to growth, just as resource depletion does. Moreover, if we fail to successfully manage the inevitable process of economic contraction that will characterize the coming decades, there will be no hope of mounting an organized and coherent response to climate change—a response consisting of efforts both to reduce climate impacts and to adapt to them. It is important to note, though, that the measures advocated here (including the development of renewable energy sources and energy efficiency, a rapid reduction of reliance on fossil fuels in transport and agriculture, and the stabilization of population levels) are among the steps that will help most to reduce carbon emissions.

Is this essay likely to change the thinking and actions of policy makers? Unfortunately, that is unlikely. Their belief in the possibility and necessity of continued growth is pervasive, and the notion that growth may no longer be possible is unthinkable. But the Alternative Diagnosis must be a matter of record. This essay, composed by a mere journalist, in many ways represents the thinking of thousands of physical scientists working over the past several decades on issues having to do with population, resources, pollution, and biodiversity. Ignoring the diagnosis itself—whether as articulated here or as implied in tens of thousands of scientific papers—may waste our last chance to avert a complete collapse, not just of the economy, but of civility and organized human existence. It may risk a historic discontinuity with qualitative antecedents in the fall of the Roman and Mayan civilizations. (37) But there is no true precedent for what may be in store, because those earlier examples of collapse affected geographically bounded societies whose influence on their environments was also bounded. Today’s civilization is global, and its fate, Earth’s fate, and humanity’s fate are inextricably tied.

But even if policy makers continue to ignore warnings such as this, individuals and communities can take heed and begin the process of building resilience, and of detaching themselves from reliance on fossil fuels and institutions that are inextricably tied to the perpetual growth machine. We cannot sit passively by as world leaders squander opportunites to awaken and adapt to growth limits. We can make changes in our own lives, and we can join with our neighbors. And we can let policy makers know we disapprove of their allegiance to the status quo, but that there are other options.

Is it too late to begin a managed transition to a post-fossil fuel society? Perhaps. But we will not know unless we try. And if we are to make that effort, we must begin by acknowledging one simple, stark reality: growth as we have known it can no longer be our goal.

Notes

1. “Pain on the Road to Recovery”. (http://www.smh.com.au/national/pain-on-the-road-to-recovery-20090724-dw6q.html?page=-1).

2. Here, for example, are a few relevant excerpts from the present author’s book The Party’s Over: Oil, War and the Fate of Industrial Societies (Gabriola Island, BC: New Society, 2003): “Our current financial system was designed during a period of consistent growth in available energy, with its designers operating under the assumption that continued economic growth was both inevitable and desirable. This ideology of growth has become embodied in systemic financial structures requiring growth…Until now, this loose linkage between a financial system predicated upon the perpetual growth of the money supply, and an economy growing year by year because of an increasing availability of energy and other resources, has worked reasonably well—with a few notable exceptions, such as the Great Depression… However, [when global oil production peaks] the financial system may not respond so rationally…This might predictably trigger a financial crisis…”

3. See Albert Bartlett, “Arithmetic, Population and Energy” (lecture transcript). (http//www.globalpublicmedia.com/transcripts/645).

4. Donella H. Meadows, Dennis L. Meadows, Jorgen Randers, and William W. Behrens III, Limits to Growth (New York: Universe Books, 1972); Donella H. Meadows, Dennis L. Meadows, and Jorgen Randers, Beyond the Limits (Post Mills, VT: Chelsea Green, 1992); Donella H. Meadows, Dennis L. Meadows, and Jorgen Randers, Limits to Growth: The 30 Year Update (White River Junction, VT: Chelsea Green, 2003). See also the recent CSIRO study, “A Comparison of the Limits to Growth with Thirty Years of Reality” (2009) (http://www.csiro.au/files/files/plje.pdf).

5. See, for example, Robert U. Ayers and Benjamin Warr, The Economic Growth Engine: How Energy and Work Drive Material Prosperity (Cambridge, UK: Edward Elgar Publishing, 2005); and Robert Barro and Xavier Sala-i-Martin, Economic Growth (Cambridge, MA: MIT Press, 2003) (http://www.bookrags.com/research/economic-growth-and-energy-consumpt-mee-01/).

6. See Richard Heinberg, The Party’s Over: Oil, War and the Fate of Industrial Societies (2003, 2005); Powerdown: Options and Actions for a PostCarbon World (2004); and The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism, and Economic Collapse (2006); as well as books by Kenneth Deffeyes, Colin Campbell, and Matthew Simmons; and websites www.theoildrum.com and www.energybulletin.net. The Association for the Study of Peak Oil organizes international conferences to study issues related to oil and gas depletion (www.peakoil.net and www.aspo-usa.com), and the U.S. chapter of ASPO publishes a weekly survey of relevant news, “Peak Oil Review,” compiled by former CIA analyst Tom Whipple. At the annual Association for the Study of Peak Oil conference in Cork, Ireland, in September 2007, former U.S. Energy Secretary, James Schlesinger, said: “Conceptually the battle is over. The peakists have won. We’re all peakists now.” See also Steve Connor, “Warning: Oil supplies are running out fast,” The Independent, August 3, 2009 (http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html).

7. The declining rate of discovery of new oilfields, and the list of past-peak oil producing countries, are widely documented; e.g.: Roger D. Blanchard, The Future of Global Oil Production: Facts, Figures, Trends and Projections by Region (Jefferson, NC: McFarlane and Co., 2005).

8. A May 4, 2009 report from Raymond James Associates (“Stat of the Week”) argued that world oil production peaked in July 2008 (http://blogs.wsj.com/environmentalcapital/2009/05/04/peak-oil-global-oil-productions-peaked-analyst-says/). In a subsequent interview, Marshall Adkins, author of the report, suggested that most knowledgeable players within the petroleum industry now accept the Peak Oil thesis in some form, whether or not they acknowledge it publicly (http://www.aspousa.org/index.php/2009/07/interview-with-marshall-adkins/).

9. Brookings Papers on Economic Activity, March 2009 http://eepurl.com/cSPu.

10. See Joe Cortright, “Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs,” Discussion paper, CEOs for Cities, 2008 (http://www.ceosforcities.org/).

11. U.S. Government Accountability Office, “Commercial Aviation: Airline Industry Contraction Due to Volatile Fuel Prices and Falling Demand Affects Airports, Passengers, and Federal Government Revenues,” April 21, 2009 (http://www.gao.gov/products/GAO-09-393). For a detailed discussion of the likely future impacts of high oil prices and oil shortages on the airline industry, see Charles Schlumberger, “The Oil Price Spike of 2008: The Result of Speculation or an Early Indicator of a Major and Growing Future Challenge to the Airline Industry?” Annals of Air and Space Law, Vol. XXXIV, [2009], McGill University (http://www.globalpublicmedia.com/the_oil_price_spike_of_2008).

12. American Trucking Association (http://www.truckline.com/Pages/Home.aspx).

13. This scenario is implied in Robert L. Hirsch, Roger Bezdek, and Robert Wendling, “Peaking of World Oil Production: Impacts, Mitigation and Risk Management” (U.S. Department of Energy: 2005): “As peaking is approached, liquid fuel prices and price volatility will increase dramatically…” (http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf).

14. See, for example, “Troubling Signs That Oil Prices Could Hamper Recovery,” Wall Street 24/7, May 8, 2009 (http://247wallst.com/2009/05/08/troubling-signs-that-oil-prices-could-hamper-recovery/)

15. See, for example, James Herron, “Low Oil Prices, Credit Woes Could Spell Trouble for UK North Sea,” Rigzone, November 14, 2008 (http://www.rigzone.com/news/article.asp?a_id=69507).

16. Jad Mouawad, “Big Oil Projects Put in Jeopardy by Fall in Prices,” New York Times, December 15, 2008 (http://www.nytimes.com/2008/12/16/business/16oil.html).

17. See David R. Baker, “Low oil prices take wind out of renewable fuels,” San Francisco Chronicle, October 27, 2008 (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/26/MNSK13NNK4.DTL).

18. See The Party’s Over, Chapter 4; Powerdown, Chapter 4; The Oil Depletion Protocol, pages 23-31. A longer treatment of the subject, tentatively titled Energy Limits to Growth, will be published by International Forum on Globalization and Post Carbon Institute in September.

19. This conclusion is echoed in, for example, Ted Trainer, Renewable Energy Cannot Sustain a Consumer Society (Dordrecht, The Netherlands: Springer, 2007); and (with some reservations), David J. C. McKay, Sustainable Energy Without the Hot Air (Cambridge, UK: UIK Cambridge, 2008), (www.withouthotair.com).

20. Just one example, from a press release April 20, 1998 describing the results of a poll commissioned by the American Museum of Natural History: “The American Museum of Natural History announced today results of a nationwide survey titled Biodiversity in the Next Millennium, developed by the Museum in conjunction with Louis Harris and Associates, Inc. The survey reveals that seven out of ten biologists believe that we are in the midst of a mass extinction of living things, and that this loss of species will pose a major threat to human existence in the next century.”

21. Charles A. S. Hall and Kent A. Klitgaard, International Journal of Transdisciplinary Research, Vol. 1, No. 1 (2006) (http://www.peakoil.net/files/the%20need%20for%20a%20new%20biophysical-based%20paradigm%20in%20economics%20….pdf) “The Need for a New, Biophysical-Based Paradigm in Economics for the Second Half of the Age of Oil,”, Charles A. S. Hall, D. Lindenberger, R. Kummell, T. Kroeger and W. Eichorn, “The Need to Reintegrate the Natural Sciences with Economics.” Bioscience 51:663-673, 2001 (http://web.mac.com/biophysicalecon/iWeb/Site/Downloads_files/Hall_2001_NeedtoReintegrate.pdf).

22. Cutler J. Cleveland, “Biophysical Economics,” The Encyclopedia of Earth (http://www.eoearth.org/article/Biophysical_economics). See also the related field of Ecological Economics, especially the books of Herman Daly, including Toward a Steady State Economy (New York: Freeman, 1973); and, with Joshua Farley, Ecological Economics: Principles and Applications (Washington: Island Press, 2004).

23. The quotation marks around the Nobel name are justified because the Nobel family has never acknowledged economics as a science: the so-called “Nobel prize in economics” is awarded by a Swedish Bank.

24. See The Millennium Ecosystem Assessment (http://www.millenniumassessment.org/en/index.aspx).

25. See, for example, J. S. Kim, “Irrational Exuberance of the Green Shoots,” July 24, 2009 (http://seekingalpha.com/article/151101-irrational-exuberance-of-the-green-shoots).

26. See Richard Heinberg, Blackout: Coal, Climate and the Last Energy Crisis (Gabriola Island, BC: New Society, 2009), pages 137-143, 145-168.

27. The opinion that banks and insurance companies should be allowed to fail rather than being bailed out was voiced by many knowledgeable observers throughout late 2008 and early 2009. See for example Ambrose Evans-Pritchard, “Let banks fail, says Nobel economist Joseph Stiglitz,” London Daily Telegraph, Feb. 2, 2009 (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4424418/Let-banks-fail-says-Nobel-economist-Joseph-Stiglitz.html).

28. See Jeff Rubin, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization. (New York: Random
House, 2009).

29. See Richard Heinberg and Michael Bomford, “The Food and Farming Transition” (Sebastopol, CA: Post Carbon Institute, 2009) (http://postcarbon.org/food).

30. See Bernard Lietaer, “White Paper on All the Options for Managing a Systemic Bank Crisis” (http://www.lietaer.com/images/White_Paper_on_Systemic_Banking_Crises_final.pdf). JAK in Sweden is a cooperative, member-owned bank that operates without interest (http://en.wikipedia.org/wiki/JAK_members_bank).

31. See Richard Gilbert and Anthony Perl, Transport Revolutions: Moving People and Freight Without Oil (Gabriola Island, BC: New Society, 2009).

32. The Passivhaus Institute pioneers construction methods that reduce energy input to buildings in many cases to zero. Roughly 20,000 Passivhauses have been built in Europe, only about 12 in the U.S. (http://www.passivehouse.us/)

33. See websites of Population Media Center (http://www.populationmedia.org/issues/), and SUSPS (http://www.susps.org/overview/immigration.html).

34. The organization Redefining Progress has developed a Genuine Progress Indicator (GPI) that incorporates many such indices ( http://www.rprogress.org/sustainability_indicators/genuine_progress_indicator.htm).

35. See, for example, “Understanding Human Happiness and Well-Being,” The Sustainable Scale Project (http://www.sustainablescale.org/AttractiveSolutions/UnderstandingHumanHappinessandWellBeing.aspx).

36. The burgeoning Transition Town movement (www.transitiontowns.org/) proceeds from the premise that “life can be better without fossil fuels.” YES! Magazine (www.yesmagazine.org) is a publication of the Positive Futures Network and highlights examples of low-impact ways of living that bring personal and social benefits. And the Simple Living Network (www.simpleliving.net/) provides “resources, tools, examples and contacts for conscious, simple, healthy and restorative living.”

37. See Jared Diamond, Collapse How Societies Choose to Fail or Succeed (New York: Viking, 2005); Joseph Tainter, The Collapse of Complex Societies (Cambridge, UK: Cambridge University Press, 1988); and John Michael Greer, The Long Descent (Gabriola Island, BC: New Society, 2008).

Richard Heinberg is a Senior Fellow of the Post Carbon Institute and author of five books on resource depletion and societal responses to the energy problem. www.richardheinberg.com, www.postcarbon.org.

This piece was also published as Richard Heinberg’s Museletter #208. To subscribe to the Museletter visit http://richardheinberg.com/Museletter.html. Interestingly it was also picked up by Business Week.

Just being around green products can make us behave more altruistically, a new study to be published in a forthcoming issue of Psychological Science has found.

But buying those same products can have the opposite effect. Researchers found that buying green can lead people into less altruistic behaviour, and even make them more likely to steal and lie than after buying conventional products. Buying products that claim to be made with low environmental impact can set up “moral credentials” in people’s minds that give license to selfish or questionable behavior.

“This was not done to point the finger at consumers who buy green products. The message is bigger,” says Nina Mazar, a marketing professor at University of Toronto’s Rotman School of Management and a self-admitted green consumer. “At the end of the day, if we do one moral thing, IT doesn’t necessarily mean we will be morally better in other things as well.”

Mazar, along with her co-author Chen-Bo Zhong, an assistant professor of organizational behaviour at the Rotman School, conducted three experiments. The first found that people perceived green consumers to be more cooperative, altruistic and ethical than those who purchased conventional products. The second experiment showed that participants merely exposed to products from a green store shared more money in a subsequent experimental game, but those who actually made purchases in that store shared less. The final experiment revealed that participants who bought items in the green store showed evidence of lying and stealing money in a subsequent lab game.

But are people conscious of this moral green washing going on when they buy green products and, more importantly, the license they might feel to break ethical standards? Professors Mazar and Zhong don’t know – and look forward to exploring that in further research.

The complete study is available at:

http://www.rotman.utoronto.ca/newthinking/greenproducts.pdf .

What if you woke up one day to find that humans eventually did make the right decisions, and those decisions had all the right effects and, well, the world turned out to be a pretty cool place.

For a while, it looked as though everything would fall apart. There was the triple crunch of the global credit crisis, declining oil supplies, and the threat of runaway climate change driven by massive overconsumption by rich countries and the elites in poor countries.

In 2008, humanity overshot its global biocapacity on September 23. It was the world’s earliest “ecological debt day” since humanity first started going into the environmental red in the mid-1980s. We were pursuing economic growth for its own sake, but it was completely unsustainable, and the people it was most supposed to benefit -the poorest-were getting a shrinking slice of the benefits. Perversely, because of the way the world economy worked, to get tiny amounts of global poverty reduction required massive amounts of destructive overconsumption by those who were already rich.

In the face of inescapable economic chaos and ecological upheaval, we finally woke to find that we already had most of the solutions under our noses. This is what a day in our lives looks like now, after things turned out right.

On waking
With less time spent working, the choice is yours-sleep in, go for a run, read a novel. Having rediscovered the real meaning of a good life, previously overconsuming rich countries have now cured most cases of work addiction. In this “downshifted” world the phrase “rush hour” has become a half-remembered curio. Our society has begun to get the hang of how computing and IT can make for smart work, rather than generate slave work.

Those choosing the early morning run enjoy fresh air and clear paths as dramatic reductions in traffic have transformed city air and streets.

Breakfast
No need to sweat over every shopping decision: socially and environmentally sustainable trade are the (carefully checked) norm. The weekly food bill has gone up-but so has the quality, and the damaging consequences of cheap food systems have gradually been rolled back. This is sustainable consumption universalized-no more scanning labels. A few deft moves in boardrooms and government chambers helped to make food markets fair and sustainable.

For an international meeting-step onto your balcony: video-conferencing and networking are so slick and intuitive that you rarely need to travel for work. The hours gained, backache cured, and wrinkles postponed make you more effective and committed to the work you do. But these changes are about more than work. Social networking software has thrown you together with new people-your desktop gives you a global network, but also connects you in new-live-human ways to the community where you actually live.

Computer connections aside, there are plenty of benefits in the new sense of community that has evolved from the revival of local shops (where the shopkeepers actually remember who you are) and the way that residential streets and town centers have become people-friendly. Streets are safer, with some entirely car-free, and many towns have reclaimed central plots of land as public squares. A calmer environment and more opportunities for casual contact between neighbors means people gather and talk to each other more. Even in cities, people, and especially the elderly, feel less lonely.

Take some time out late morning to plan your long-awaited summer trip. While the big increases in the cost of fossil fuels have made international travel a rarer experience, it tends to be much better-and longer-when you do head off on your travels. In the bad old days you might have dashed off a postcard after thirty-six hours in a congested foreign capital. These days it is more a matter of picking out a few choice photos from the hundreds you’ll take on your once-in-a-lifetime three-month trip to India. Travel has returned to being a pleasure and an adventure.

With more leisure time and good cycle and public transport links, low impact local excursions are a much-loved part of life. But with our experience of both cities and countryside transformed by investment in really great public spaces, people feel less need to get away in order to unwind.

Lunch
Need to get out of the house? Take a short stroll to one of the thousands of courtyard and street cafés that are enjoying the cleaner air and quieter streets. Plenty of these are cheap workplace and school cafés that have opened their doors to locals. The combination of a few familiar faces, a random mix of new ones, and a daily changing menu of fresh local food makes food a daily pleasure.

Afternoon
A journey to work? Problems are as big as you make them: it used to be said that people wouldn’t give up their cars. But instead of denying people their cars, the big breakthroughs were made by offering people really appealing alternatives. Some of these were alternatives to travel (like the conferencing tools). But we all want to move about.

So, by raising revenue from polluting and inefficient fossil fuel-run cars, governments completely transformed people’s experience of cities and towns. Owning and driving cars to meet most of your mobility needs has come to seem simply eccentric. Lifespan and quality of life have dramatically increased as a result of cities being redesigned around people-and walking and cycling-not cars. Transport options range from trains, streetcars, and quiet clean buses, to on-demand rural shared taxis and simple car-share schemes that meet the range of needs we have through a year. The common “ting” of the cycle bell is as much to say “hello,” as to remind you that you’re stepping across a cycle path. And when we do get in a car, the uncongested roads and beautifully designed hyperefficient vehicles remind us what a great invention these things can be.

Perhaps your office is one of the last bits of the building to have a green makeover. In hot weather you’ve got to turn the air conditioning on. It is not as wasteful as the old machines, but you know that some of the electricity is still going to be fossil fueled. You can comfort yourself with the knowledge that the increased costs brought about by carbon taxes have got your finance department talking to your building managers who are talking to the builders about natural ventilation systems. In the meantime the tax raised is salving all of your consciences.

In an idle moment you reflect on where this cash goes, and why that matters. One of a series of breakthrough climate deals between north and south ensures that the inhabitants of Brazil, especially those living in the Amazon, are directly rewarded for their stewardship of the ecological services that the rainforest provides to the whole planet. As we gradually descend from our carbon-fix high we can at least ensure that our habit is funding some security for us all by protecting these key carbon sinks. The bill for your air-conditioning that helps you cope with climate change in your office is, in effect, helping to pay the bill to keep the global air-conditioning running in the Amazon basin.

Dinner
Time released from long working days, and the fact that fast food and ready meals have gone up in price now that they reflect their full ecological costs, has seen a revival of home cooking. With lots more single households there are some twists. More people get together to take turns to share informal meals in a neighborhood. There are delivery services providing decent food in returnable containers for people without the time or inclination for the kitchen or company.

Evening
Stories and music are as old as campfires. For a time we forgot it, but being actively involved in making entertainment made us feel much better than just passively watching others perform. One of the first things taught in school now is the medical evidence that watching TV induces a mental state almost identical to clinical depression. It’s now common in pubs, clubs, and in any available hall to find groups of friends showing films made by themselves on cheap, easy-to-use equipment, and putting on a wide range of music and other performances.

People are intrigued and drawn in by the fact that they can actually get to know the musicians and filmmakers, because they are likely to live in the area. Just as people are happier to go out more locally during the day, because towns have become more pleasant places to be, the same is true at night. In the early evening people of all ages take to strolling around town, just for the sake of it. The increase in spare time means people start reviving half-forgotten festivals and celebrations, as well as creating new ones to mark everything from important global events, to the seasons, local history, people, and important events. There is much more partying in general.

The good life is active, but it’s full in a good way. By pressing all the right buttons it creates its own energy to thrive. So, by the time evening turns to night, most people are still in the mood to press other right buttons on the one they love. Then we’ll settle, tired maybe, satisfied surely, to take stock of how things have gone, round off our day, look forward to the next one, and enjoy our sleep, deeply.

Reposted from yesmagazine.org.

The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.

The economic boom didn’t bring us (or the planet) happiness. So maybe there’s an upside to the downturn.

“The pursuit of happiness.” It’s so American that it’s in our Declaration of Independence, where it’s listed alongside life and liberty as an inalienable right.

But how successful have we been in that pursuit? And now that the global finance system is imploding, how likely is it that we’ll be happy in the coming months and years?

Can’t Buy Love
Since roughly the 1970s, Americans have been buying things madly, whether we could afford them or not. We were promised that a bigger car, a more trendy purse, or a flat-screen television would bring us happiness, and we’ve been acting accordingly. We were promised that an ever-growing economy would make us all rich. But while our gross domestic product increased more or less steadily from the 1970s until the onset of the current financial crisis, most of us did not see a rise in our standard of living or our wellbeing. Wages stagnated, while the costs of basic needs-like homes, medical care, food, and energy-climbed rapidly. Those in the top 20 percent increased their net worth by 80 percent over the last 25 years, while the bottom 40 percent actually lost ground.

Few families today can make it on a single wage-earner’s income, and a health problem or a job loss can send a middle-class family into poverty or even homelessness.

Yet we continue to buy the products that are supposed to make us happy, driving many of us deeply into debt. Families are carrying an average credit card debt of $5,100, with interest rates that often make payoff nearly impossible. In recent years, home equity reached record lows as people borrowed against the value of their homes. In 2004, the most recent year for which Federal Reserve figures are available, debt secured by real property exceeded $290,000 per household, almost three times what it was only 15 years before.

All this debt makes life more precarious. It also increases our dependence on long work hours, which-if we can find work at all-combines with long commutes to eat up the time we might otherwise have for things that research shows actually would make us happy.

It’s easy to fall into the trap of believing that having more stuff will lead to happiness, because there’s an element of truth in the advertiser’s promise. We do need a certain amount of food to live, after all. Shelter is good. We need clothes, tools-a bit beyond the bare necessities can be nice. And having stuff has always been a way to show that you are successful and entitled to respect. But after the novelty of a new outfit or laptop wears off, we’re left with a hole in our wallets and an empty feeling, which-advertisers tell us-we should fill by shopping for yet more new and improved stuff.

Following this advice may keep the corporate economy humming, but has it made us happy?

Many figures suggest the answer is: not really. Broad standards of wellbeing like the Genuine Progress Indicators show that our health, quality of life, economic security, and environment, taken together, stayed flat, although we worked harder. A 20-year study by the OECD found the United States has the highest rate of inequality and poverty among the developed countries, and the income gap has grown steadily since 2000. A recent Gallup poll found that just half of Americans live free of worries about money or health, compared to 83 percent of those in Denmark. When the World Health Organization and Harvard Medical School studied rates of depression in 14 countries, the U.S. topped the list.

How Many Planets Does it Take?
It’s not only Americans who are taking a hit from an economic system that puts money and growth ahead of real wellbeing. People around the world are losing access to their own natural resources and economic sovereignty.

Corporations seeking to profit by stimulating and feeding our appetite for stuff have trampled on the livelihood and ways of life of Mexican farmers, indigenous rainforest dwellers, African miners, and Thai factory workers. When land buyouts or subsidized agricultural imports make traditional lifeways impossible, many of these people arrive in crowded cities with no choice but to work for rock-bottom wages or attempt an arduous migration to a higher-wage country.

Champions of globalization like Thomas Friedman tell us that in a few generations these workers will have a standard of living similar to ours in the United States. But ecological footprint analysis shows it would take more than six Earths to give everyone in the world the level of consumption Americans “enjoy.” Of course, we have only one planet, and this one is overheating.

The Pursuit of Happiness
Is this what Thomas Jefferson had in mind when he substituted “the pursuit of happiness” for the phrase contained in the earlier Continental Congress draft, “life, liberty, and property?”

Jefferson’s ideal was an economy based on small farmers who produced for themselves most of what they needed. Their happiness was not something they trusted corporations to provide for a fee, but rather something they created themselves, through their work and human relationships within a community. The economy of the time was founded, in part, on a slave-owning society built on land often stolen from native peoples, but Jefferson’s ideals had a strong influence on the young country. Freedom, independence, and self-sufficiency were all popular values.

The U.S. has moved a long way from the Jeffersonian ideal. Today, we produce little of what we use. We exchange our work for money, and buy food, clothing, and other necessities from big box stores and purchase child care and elder care from corporate chains.

Since we no longer have the time, skills, extended families, and access to land that were commonplace just decades ago, we have become completely dependent on money. That dependency leaves us at the mercy of those who control the economy and the money supply. And those who accumulate the money have inordinate influence over our government. It is the precise opposite of the Jeffersonian ideal. It’s also a departure from the way humans have lived for most of history.

Life After the Crash
So maybe it’s just as well that the crisis is finally upon us. Maybe this time of creative destruction offers us the chance for a fresh start, a chance to build a society that puts ordinary people first and provides the conditions for their happiness.

After the shock of the crisis wears off, maybe we’ll look around like characters in a Fellini movie who come outside at dawn after a debauched night of excess. We’ll turn off the television, log off the internet, notice the bright colors of sunrise, and speak to the neighbors who we’ve never found time to meet.

We may spend less of our lives working as the cash economy shrinks and companies close their doors.

But maybe we’ll learn to share the work and reclaim time for the aspects of our lives that research tells us contributes to real happiness-time with families and friends, civic involvement, exercise, creativity. It wouldn’t be the first time. During the Great Depression, for instance, the Kellogg Company cut employee shifts from eight hours to six to extend the number who had jobs. Productivity went up so much that the company could afford to pay the same for the shorter shift. Meanwhile, civic organizations, adult education, and family life in Kalamazoo blossomed.

Maybe we’ll find ways to trade among friends and neighbors-some winter squash or homemade pie for some child care or home repair. Maybe we’ll reclaim the skills we used to have, and teach each other how to grow food, fix things ourselves, sew and knit, and pass skills along to our children and grandchildren.

Somehow, in the exuberance of the economic bubbles of the ’80s, ’90s, and ’00s, we lost track of something. Money exists to serve us as a tool, not the other way around. Our lives and society do not have to be turned over to the rulers of high finance and their hired representatives in Washington, D.C. We the people can reject the economic orthodoxy that has served us so poorly, and rebuild our economy on a different foundation.

Rebuilding
What sort of society do we want to rebuild? What will expand our life, liberty, and pursuit of happiness without diminishing the chances for other people, now and in the future, to have the same?

Here are some of the things we’ll need to do:

• Economic policies for the future must assure that everyone is included, and that we lift up those at the bottom. When we allow inequality to burgeon in our society, we create crime and violence and hate, which damage everyone’s ability to find happiness. We can no longer afford nine-figure paychecks for CEOs and double-digit returns on speculative investments. To paraphrase Gandhi, we have enough for everyone’s needs, but not for everyone’s greed.
• The environmental overshoot game is up. The next economy must function within the present production of our environment. We can no longer afford to live off the bounty of the past, like the millions of years of fossil deposits that make up today’s diminishing oil reserves. Instead we must turn to solar energy, wind, and other renewables, and grow food and fiber by building the soil, not by dumping petroleum products on it. We can’t continue to use our atmosphere, oceans, aquifers, and soils as dumps. No amount of “Runs for the Cure” will solve the cancer problem if we continue to poison our food, water, and air. And the climate is reaching a dangerous tipping point.
• We can no longer allow the money economy to grow like a cancer on our society, until it takes over all facets of life. The economy needs to serve people, communities, and the health of natural systems, not the other way around. Instead of relying on footloose unaccountable global corporations, we can turn to local and regional production to serve our needs and provide sustainable employment, including small and medium-sized businesses, co-ops, farmer’s markets, and so on.
• As we do that, we’ll get much clearer on real sources of happiness. Research tells us that the sources of the good life are in loving relationships, mutual respect, meaningful work, and gratitude, and as we discover the power of these qualities, the lure of advertising and materialism will no longer fool us. Overconsumption will take its place alongside other passing fads.

As we begin to relearn the skills and rebuild the relationships we lost in the pursuit of money and things, we will begin to find a happiness that we are in charge of; one that is not dependent on the fluctuations of the stock market or the amount of stuff we own.

Painful as it may be in the short term, we can emerge from this crisis healthier and wealthier, with the sort of wealth that really matters: strong communities and relationships with loved ones, healthy ecosystems, and the skills to make a living and enjoy life.

Reposted from yesmagazine.org.

The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License

Findings could help marketers optimize advertising for the human mind

Fads have been a staple of American pop culture for decades, from spandex in the 1980s to skinny jeans today. But while going from fad to flop may seem like the result of fickle consumers, a new study suggests that this is exactly what should be expected for a highly efficient, rationally evolved animal.

The new research, led by cognitive scientist Mark Changizi of Rensselaer Polytechnic Institute, shows why direct exposure to repeated ads initially increases a consumer’s preference for promoted products, and why the most effective advertisements are the ones consumers don’t even realize they have seen.

It has long been known that repeated visual exposure to an object can affect an observer’s preference for it, initially rapidly increasing preference, and then eventually lowering preference again. This can give way to short-lived fads. But while this may seem illogical, Changizi argues that it makes perfect cognitive sense.

“A rational animal ought to prefer something in proportion to the probable payoff of acting to obtain it,” said Changizi, assistant professor of cognitive science at Rensselaer and lead author of the study, which appears in the online version of the journal Perception. “The frequency at which one is visually exposed to an object can provide evidence about this expected payoff, and our brains have evolved mechanisms that exploit this information, rationally modulating our preferences.”

A small number of visual exposures to an object typically raises the probability of acquiring the object, which enhances preference, according to Changizi.

On the other hand, Changizi says overexposure to an object provides the brain with evidence that the object is overabundant, and is likely not valuable, thereby lowering the individual’s preference for it.

“An individual’s preference for an object based on a large number of visual exposures will almost always take the shape of an inverted ‘U’, with an initial rapid rise in preference based on the enhanced probability that an object can be obtained, followed by a plateau and a gradual decrease in preference as the evidence begins to suggest that the object is overly common and thus not valuable,” Changizi said.

One of the most surprising aspects of visual exposure effects, according to Changizi, is that they are enhanced when visual exposure occurs without conscious recognition.

“This non-conscious mechanism exists because visual exposure information alone, without conscious judgment, has implications for the expected payoff of one’s actions,” Changizi said. “In many natural situations, observers potentially have both exposure schedule information and consciously accessible information about the object, in which case the predicted degree of preference modulations from visual exposure will be dampened, as the visual information is competing with the information from conscious recognition of the object and any subsequent judgment.”

These non-conscious mechanisms for rationally modulating preference are the kind animals without much of a cognitive life can engage in, and Changizi speculates that they are much more ancient.

Advertising that takes the form of apparel branded with company’s names, and products strategically placed in movies and television shows, often go unnoticed by consumers, capitalizing on our brain’s mechanisms to modulate preference based on non-conscious exposure.

Changizi’s research suggests that such advertising tactics work because they tap into our non-conscious mechanisms for optimal preferences, hijacking them for selling a company’s products. The research could hold potential for marketers interested in optimizing their advertising for the human mind, Changizi says.

Changizi conducted his research with Shinsuke Shimojo, professor of biology at the California Institute of Technology. The project was funded by a grant from the National Institutes of Health.

Reprinted from Rensselaer Polytechnic Institute.

The results of the cultural indoctrination stakes are not yet in but there is a definite trend – triviality leads, followed closely by superficiality and mindless distraction. Vanity looks great while profundity is bringing up the rear. Pettiness is powering ahead, along with passivity and indifference. Curiosity lost interest, wisdom was scratched and critical thought had to be put down. Ego is running wild. Attention span continues to shorten and no-one is betting on survival.

It wasn’t supposed to be this way. Half a century ago, humanistic thinkers were heralding a great awakening that would usher in a golden age of enlightened living. People like Erich Fromm, Carl Rogers, Abraham Maslow, Rollo May and Viktor Frankl were laying the groundwork for a new social order distinguished by raised consciousness, depth of purpose and ethical refinement. This tantalizing vision was the antithesis of our society of blinkered narcissists and hypnogogic materialists. Dumbness was not our destiny. Planetary annihilation was not the plan. By the 21st century, we were supposed to be the rarefied ‘people of tomorrow’, inhabiting a sagacious and wholesome world.

Erich Fromm’s 1955 tome, The Sane Society, signalled the début of the one-dimensional ‘marketing character’ – a robotic, all-consuming creature, ‘well-fed, well-entertained… passive, unalive and lacking in feeling’. But Fromm was also confident that we would avoid further descent into the fatuous. He forecast a utopian society based on ‘humanistic communitarianism’ that would nurture our higher ‘existential needs’.

In his 1961 book, On Becoming a Person, Carl Rogers wrote: ‘When I look at the world I am pessimistic, but when I look at people I am optimistic.’ While acknowledging consumer culture’s seductive dreamland of trinkets and desire, he believed that we – those ‘people of tomorrow’ – would minister over a growth-oriented society, with ‘growth’ defined as the full and positive unfolding of human potential.

We would be upwardly driven toward authenticity, social equality and the welfare of coming generations. We would revere nature, realize the unimportance of material things and hold a healthy scepticism about technology and science. An anti-institutional vision would enable us to fend off dehumanizing bureaucratic and corporate authority as we united to meet our ‘higher needs’.

One of the most famous concepts in the history of psychology is Maslow’s ‘Hierarchy of Needs’, often illustrated by a pyramid. Once widely accepted, it was also inspired by a faith in innate positive human potential. Maslow claimed that human beings naturally switch attention to higher-level needs (intellectual, spiritual, social, existential) once they have met lower-level material ones. In moving up the pyramid and ‘becoming’, we channel ourselves toward wisdom, beauty, truth, love, gratitude and respect for life. Instead of a society that catered to and maintained the lowest common denominator, Maslow imagined one that prospered in the course of promoting mature ‘self-actualized’ individuals.

But something happened along the way. The pyramid collapsed. Human potential took a back seat to economic potential while self-actualization gave way to self-absorption on a spectacular scale. A pulp culture flourished as the masses were successfully duped into making a home amidst an ever-changing smorgasbord of false material needs.

Operating on the principle that triviality is more profitable than substance and dedicating itself to unceasing material overkill, consumer culture has become a fine-tuned instrument for keeping people incomplete, shallow and dehumanized. Materialism continues to gain ground, even in the face of an impending eco-apocalypse.

Pulp culture is a feast of tinsel and veneer. The ideal citizen is an empty tract through which gadgets can pass quickly, largely undigested, so there is always space for more. Reality races by as a blur of consumer choices that never feel quite real. We know it as the fast lane and whip ourselves to keep apace.

Rollo May described it accurately in his 1953 book, Man’s Search for Himself:

‘It’s an ironic habit of human beings to run faster when they have lost their way.’ So it’s largely business-as-usual even as the sky is falling.

Some critics did predict the triumph of the trivial. In his 1957 essay, ‘A Theory of Mass Culture’, Dwight MacDonald foresaw our ‘debased trivial culture that voids both the deep realities and also the simple spontaneous pleasures’, adding that ‘the masses, debauched by several generations of this sort of thing, in turn come to demand trivial cultural products’.

Today, the demand for triviality has never been higher and our tolerance for seriousness has never been lower.

In this dense fog the meaningful and meaningless can easily get reversed. Losers look like winners and the lofty and ludicrous get confused. The caption under a recent ad for men’s underwear read: ‘I’ve got something that’s good for your body, mind and soul.’ Fashion statements become a form of literacy; brand names father pride and celebrity drivel becomes compelling.

Not even God has been spared. Once a potent commander of attention and allegiance, God has been gelded into a sort of celestial lapdog who fetches our wishes for this-world success. Nothing is so great that it can’t be reconceived or rephrased in order to render it insubstantial, non-threatening or – best of all – entertaining.

The age of trivialization has left its mark on marriage, family and love. In a recent AC Nielsen survey, when asked to choose between spending time with their fathers and watching television, 54 per cent of American 4-6 year-olds chose television. The same study reported that American parents spend an average of 3.5 minutes per week in ‘meaningful conversation’ with their children, while the children themselves watch 28 hours of television a week. To which we can add cellphones, computer games and other techno-toys that are inducing a state of digital autism in our young people.

Out of this cock-up comes the most pressing question of our age. Can a highly trivialized culture, marooned between fact and fiction, dizzy with distraction and denial, elevate its values and priorities to respond effectively to the multiple planetary emergencies looming? Empty talk and token gestures aside, it doesn’t appear to be happening.

Some of the great humanists felt that there are limits to a culture’s ability to suppress our higher needs. They assumed that we are ethical creatures by nature and that we’ll do the right thing when necessary – we will transcend materialism given the freedom to do so. That seems far-fetched given the ethical coma in which we now find ourselves. Yet the ultimate test is whether or not we can do the right thing by the planet and for future generations.

Ethics and politics have never sat well together. When ‘citizens’ changed into ‘consumers’, political life became an exercise in keeping the customer happy. The imperfect democracies we have today have never been tested with planetary issues like global warming and climate change, which demand radical and unsettling solutions. In the race against the clock, politicians appear almost comical as they try not to disturb the trivial pursuits propping up our dangerously obsolete socio-economic system.

Global calamity is forcing us into a post-political era in which ethically driven individuals and groups race ahead of the political class. Soon centre-stage will belong to culture-change strategists who are able to inspire leaps of consciousness independently of hapless follow-the-leader politics. One such person is Jan Lundberg (http://www.culturechange.org/). Lundberg is an environmental activist and a long-standing voice for pre-emptive culture change. He understands that hyper-consumerism trivializes reality and numbs people, even to prospects of their own destruction. In his essay ‘Interconnections of All in the Universe’, he writes: ‘Unless we broaden and deepen our perception of both the universe and our fellow members of society, we all may perish in persisting to manipulate each other and our ecosystem with materialism and exploitation.’

Culture-change strategists all agree about the urgent need to promote ‘global consciousness’ or ‘cosmic consciousness’ – a broad worldview with a high awareness of the inter-relatedness and sacredness of all living things. It is thought that such a universality of mind leads not only to intellectual illumination, but also to heightened moral sensibilities, compassion and greater community responsibility.

Behind the scenes some noteworthy organizations are working toward the goal of global consciousness, including the World Commission on Global Consciousness and Spirituality (http://www.globalspirit.org/), whose members include Nobel laureates, culture theorists, futurists and spiritual leaders like the Dalai Lama. The group points out the huge backlog of positive human potential that is ready to unleash itself once we assume control and carve healthier cultural pathways for people’s energies. According to their mission statement, the fate of humankind and the ecosystem lies in our ability over the next couple of decades actively to revise our cultural blueprints in order to foster global consciousness and create new, more ‘mindful’ political and economic models.

Even in the formal education system, a small but growing number of teachers are incorporating a ‘global awareness’ perspective into the curriculum, aimed at dissolving cultural barriers and building a sense of global community (http://www.globalawareness.com/). Some are even encouraging a ‘global grammar’ that links students both to other human beings and to the entire planet.

In the war against trivialization some groups speak of ‘planetization’ – an expansive worldview that can slow our cultural death march. It was the French philosopher, palaeontologist and Jesuit priest, Pierre Teilhard de Chardin, who coined this term in calling for a global mind that fused our ecological, spiritual and political energies, and thereby paved the way for harmonious living and lasting peace. The organization Planetization Rising (http://www.planetization.com/) sees this next phase as the only means by which we can ascend to a higher knowledge and thereby find a life-sustaining path for ourselves and the Earth: ‘It’s the next watershed mark in our evolutionary journey which alone can provide us with the empowerment and insight needed to overcome the gathering forces of ecological devastation, greed and war which now threaten our survival.’

The cultural indoctrination race is not over. The losers are still winning and the odds for a revolution in consciousness are no more than even. But is there an alternative – other than to drown in our own shallowness?

John F Schumaker is a US-born clinical psychologist living in Christchurch, New Zealand/Aotearoa. His latest book is In search of happiness: understanding an endangered state of mind (Penguin, 2006).

Reprinted from New Internationalist (NI)

This article is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 License.

Washington, D.C. (August 21, 2008) – The FDA announced today that it will allow food producers to start irradiating fresh spinach and iceberg lettuce in an attempt to kill E. coli O157:H7 and other bacteria that cause food-borne illnesses, despite scientific and consumer concerns about the use of irradiation.  The move comes in response to a petition filed by The National Food Processors Association, a trade group representing major food companies.

“Irradiation is not the solution to food-borne illness,” said Bill Freese, Science Policy Analyst at the Center for Food Safety.  “In fact, it serves to distract attention from the unsanitary conditions of industrial agriculture that create the problem in the first place.”

In 2006, California spinach contaminated with E. coli O157:H7 sickened over 200 people, and killed three.  A field investigation by FDA and the State of California identified the same strain of E. coli O157:H7 in cattle feces from a ranch close to where the spinach was grown. 

Besides being the source of 3/4ths of the nations spinach, California is home to nearly 5 million cows which produce 15 million tons of manure every year – manure that often ends up in nearby waterways, including the ditches and channels of irrigation water for crops like spinach.  Dried manure can even blow onto neighboring fields in clouds of dust.

“Irradiation kills some bacteria in our foods, but it is no substitute for measures to clean up the huge animal operations that pollute our waterways and irrigation water with the raw manure that often carries pathogenic bacteria,” said Freese.

Contamination of leafy greens is not a new problem.  According to the California Department of Health Services, in the last 11 years, 20 E. coli outbreaks have been linked to “leafy products” grown in California, including two related to spinach. 

“Food companies are also seeking FDA permission to label irradiated foods as ‘pasteurized’ - an obvious attempt to conceal from consumers the fact that foods are being irradiated,” added Freese.

Food irradiation uses high-energy Gamma rays, electron beams, or X-rays (all of which are millions of times more powerful than standard medical X-rays) to break apart the bacteria and insects that can hide in meat, grains, and other foods. Radiation is one of the more destructive forces in nature, and scientific studies have documented that irradiation can dramatically lower the nutritional content of foods, particularly vitamin A and folate, an essential B vitamin.  The FDA’s proposal concedes that irradiation will make spinach less nutritious.

“Fresh spinach is extremely nutritious, as every mother knows.  Irradiation will rob it of some of those essential nutrients, all to avoid tackling the problem at its source,” said Freese.

The Center for Food Safety is national, non-profit, membership organization founded in 1997 to protect human health and the environment by curbing the use of harmful food production technologies and by promoting organic and other forms of sustainable agriculture.

On the web at: http://www.centerforfoodsafety.org/

Off to buy a new handbag and fabulous red shoes, or how about overalls and a riding lawnmower? Before going, a mood check for signs of despair and gloom might be in order because how a person feels can impact routine economic transactions, whether he or she is aware of it or not.

So says a team of behavioral scientists from four major U.S. universities, whose research study finds that sadness impacts spending. Specifically, people who feel sad and self-focused pay more money for goods than those in neutral states, even when purchasing the same item.

“The tendency is to focus on oneself when sad drives this effect,” says the study’s lead author Cynthia E. Cryder, a doctoral student at Carnegie Mellon University, Pittsburgh, Pa. “Our studies revealed the more self-focused people were in the sad condition, the more money they spent.”

“More research is needed to determine whether participants are deliberately trying to improve their sense of self by acquiring goods,” adds study co-author Jennifer Lerner, an experimental social psychologist at Harvard University’s Kennedy School of Government in Cambridge, Mass.

The study, “Misery is not Miserly: Sad and Self-Focused Individuals Spend More,” was funded by the National Science Foundation and was presented at the Society for Personality and Social Psychology annual meeting in Albuquerque, N.M. in February of this year. It will be published in the June 2008 issue of Psychological Science–a premier journal for scientific experiments in psychology.

In one experiment, primarily conducted by researchers at Carnegie Mellon and Harvard University, test subjects viewed either a sad video clip or one devoid of human emotion. The video clips included either a sad scene from the 1979 movie “The Champ” or neutral scenes from a National Geographic documentary on coral reefs.

Afterward, participants could purchase an ordinary commodity, such as a water bottle, at various prices. Participants, randomly assigned to view the sad video clip, offered almost 300 percent more than the “neutral” participants to buy the same product.

Interestingly, in a prior, similar study led by Lerner, participants who viewed the sad video clip typically and incorrectly insisted the emotional content of the film clip did not affect their spending. The finding showed that people can lack awareness of how feelings impact their own economic decisions.

Research team members speculate that self-focus coupled with sadness causes people to devalue both themselves and their current possessions. The result, they believe, is increased willingness to pay more for new material goods, presumably to enhance the sense of self.

“Self-focus helps explain the spending differences between the ‘sad’ and ‘neutral’ groups,” says Lerner. “Sadness tends to increase self-focus, making the increased spending prompted by the combination of sadness and self-focus difficult to avoid.”

The “misery is not miserly” effect may be even more dramatic in real life, as the low-intensity sadness evoked in the experiment likely underestimates the power of intense sadness on spending behavior.

Moreover, say researchers, the effect could extend to domains beyond purchasing decisions. It may cause people to engage in increased stock trading or to seek new relationships without conscious awareness that they are being driven by their emotions.

According to Lerner, the research could also be “scaled-up” to factor in events for groups or communities and not just individuals.

“If a sad event happens in a community, for example a school bus accident,” she says, “people in that community might be willing to sell their homes for less money than the actual value and buy homes for more than the new home’s value.”

She says the study’s results lend weight to the contention that policymakers may want to build emotional factors into disaster recovery models.

“It is important to increase understanding of how emotion and economic decisions interact,” says Cryder. “The relatively new field of behavioral decision research is increasingly moving in that direction.”

Professor James Gross from Stanford University, Palo Alto, Calif. and Professor Ronald E. Dahl from the University of Pittsburgh, Pa. also co-authored this study.

-NSF-

The National Science Foundation (NSF) is an independent federal agency that supports fundamental research and education across all fields of science and engineering, with an annual budget of $5.92 billion. NSF funds reach all 50 states through grants to over 1,700 universities and institutions. Each year, NSF receives about 42,000 competitive requests for funding, and makes over 10,000 new funding awards. The NSF also awards over $400 million in professional and service contracts yearly.

‘The trouble with normal is it always gets worse,’ sang the Canadian guitarist Bruce Cockburn back in 1983. Seems he was on to something. Normal doesn’t seem to be working any longer. The new Holy Grail is happiness. At every turn are ‘how-to’ happiness books, articles, TV and radio programmes, videos and websites. There are happiness institutes, camps, clubs, classes, cruises, workshops, and retreats. Universities are adding courses in Happiness Studies. Fast-growing professions include happiness counselling, happiness coaching, ‘life-lift’ coaching, ‘joyology’ and happiness science. Personal happiness is big business and everyone is selling it. Being positive is mandatory, even with the planet in meltdown. Cynics and pessimists are running for cover while the cheerleaders are policing the game with an iron fist. Only the bravest are not being bullied into cheering up or at least shutting up.

But a society of ‘happichondriacs’ isn’t necessarily a healthy sign. No-one is less able to sustain happiness than someone obsessed with feeling only happiness. A happy and meaningful existence depends on the ability to feel emotions other than happiness, as well as ones that compete with happiness.

‘Happiness never appeared to me as an absolute aim,’ said Einstein. ‘I am even inclined to compare such moral aims to the ambitions of a pig. The ideals that have lighted my way are Kindness, Beauty and Truth.’

If we’ve become pigs at the happiness trough, it’s understandable. As higher systems of meaning have withered, life purpose has dwindled to feeling good. Innocence, the lifeblood of happiness, is obsolete. We live on cultural soil perfectly suited for depression.

Other happiness blockers include materialism, perpetual discontent, over-complication, hyper-competition, stress, rage, boredom, loneliness and existential confusion. We’re removed from nature, married to work, adrift from family and friends, spiritually starved, sleep deprived, physically unfit, dumbed down, and enslaved to debt.

Health professionals face new epidemics of ‘hurry sickness’, ‘toxic success syndrome’, the ‘frantic family’, the ‘over-commercialized child’ and ‘pleonexia’ or out-of-control greed. Too much is no longer enough. Many are stretching themselves so far that they have difficulty feeling anything at all. At its heart the happiness boom is a metaphor for the modern struggle for meaning.

We laugh only a third as often as we did 50 years ago – hence the huge popularity of laughter clubs and laughter therapy. We make love less frequently and enjoy it less, even though sex is now largely deregulated and available in endless guilt-free varieties. Yet we’re the least happy society in history if we measure happiness in terms of mental health, personal growth, or general sense of aliveness.

A society’s dominant value system dictates how happiness is measured. The native Navajos in the southwest of the US saw happiness as the attainment of universal beauty, or what they called Hózhó. Their counterpart of ‘Have a nice day’ was ‘May you walk in beauty’.

Personal satisfaction is the most common way of measuring happiness today (via something called the Life Satisfaction Scale). This mirrors the supreme value that consumer culture attaches to the romancing of desire and the satiation of the self. When measured this way, almost everyone seems pretty happy – even if it’s primarily false needs being satisfied. A high percentage of depressed people even end up happy when ‘personal satisfaction’ is the yardstick.

By the middle of the 19th century, social critics were already noticing how happiness was losing its social, spiritual, moral and intellectual anchors and becoming a form of emotional masturbation. In his classic 1863 work, Utilitarianism, John Stuart Mill scorned this trend: ‘Better to be Socrates dissatisfied than a fool satisfied,’ he opined.

Total satisfaction can actually be a major obstacle to happiness. Artist Salvador Dali lamented: ‘There are days when I think I’m going to die from an overdose of satisfaction.’ To preserve the ‘rarity value’ of life one must resist wrapping heaven around oneself. Keeping paradise at a distance, yet within reach, is a much better way of staying alive. People who have it all must learn the art of flirting with deprivation.

The highest forms of happiness have always been experienced and expressed as love. But happiness is being wooed in increasingly autistic ways that lack this vital dimension. In a recent survey only one per cent of people indicated ‘true love’ as what they wanted most in life. Our standard of living has increased but our standard of loving has plummeted. The backlash against today’s narcissistic happiness is rekindling interest in the ancient Greek philosophers who equated happiness with virtue. Especially celebrated by them were loyalty, friendship, moderation, honesty, compassion and trust. Research shows that all these traits are in steep decline today – despite being happiness boosters. Like true love and true happiness, they have become uneconomic.

When author John Updike warned, ‘America is a vast conspiracy to make you happy,’ he was referring to the superficial mass happiness that prevails when economics successfully conspires to define our existence. I profit, therefore I am. To be happy, gulp something. Pay later. Novelist JD Salinger was so unnerved by the happiness conspiracy that he confessed: ‘I’m a kind of paranoiac in reverse. I suspect people are plotting to make one happy.’ The wrong type of happiness is worse than no happiness at all.

Governments are the biggest players in the happiness conspiracy. Any political action aimed at a more people-friendly or planet-friendly happiness is certain to be met with fierce resistance. The best consumers are itchy narcissists who hop, skip and jump from one fleeting desire to the next, never deeply satisfied, but always in the process of satisfying themselves. Our entire socio-economic system is designed to spew out this type of ‘ideal citizen’. Contentment is the single greatest threat to the economics of greed and consumer happiness.

Our ignorance of happiness is revealed by the question on everyone’s lips: ‘Does money make us happy?’ The head of a US aid agency in Kenya commented recently that volunteers are predictably dumbstruck and confused by the zest and jubilance of the Africans. It’s become a cliché for them to say: ‘The people are so poor, they have nothing – and yet they have so much joy and seem so happy.’

I never knew how measly my own happiness was until one day in 1978 when I found myself stranded in a remote western Tanzanian village. I saw real happiness for the first time – since then I have learned that it has vastly more to do with cultural factors than genetics or the trendy notion of personal ‘choice’.

So it didn’t surprise me that an African nation, Nigeria, was found recently to be the world’s happiest country. The study of ‘happy societies’ is awakening us to the importance of social connectedness, spirituality, simplicity, modesty of expectations, gratitude, patience, touch, music, movement, play and ‘down time’.

The small Himalayan nation of Ladakh is one of the best-documented examples of a ‘happy society’. As Helena Norberg-Hodge writes in Ancient Futures, Ladakhis were a remarkably joyous and vibrant people who lived in harmony with their harsh environment. Their culture generated mutual respect, community-mindedness, an eagerness to share, reverence for nature, thankfulness and love of life. Their value system bred tenderness, empathy, politeness, spiritual awareness and environmental conservation. Violence, discrimination, avarice and abuse of power were non-existent while depressed, burned-out people were nowhere to be found.

But in 1980 consumer capitalism came knocking with its usual bounty of raised hopes and social diseases. The following year, Ladakh’s freshly appointed Development Commissioner announced: ‘If Ladakh is ever going to be developed, we have to figure out how to make these people more greedy.’ The developers triumphed and a greed economy took root. The issues nowadays are declining mental health, family breakdown, crime, land degradation, unemployment, a widening gap between rich and poor, pollution and sprawl.

Writer Ted Trainer says before 1980 the people of Ladakh were ‘notoriously happy’. He sees in their tragic story a sobering lesson about our cherished goals of development, growth and progress. For the most part these are convenient myths that are much better at producing happy economies than happy people.

When normality fails, as it has today, happiness becomes a form of protest. Some disillusioned folks are resorting to ‘culture jamming’ and ‘subvertisements’ to expose the hollow core of commercial society. Others are seeking refuge in various forms of primitivism and eco-primitivism. Spurring this on is intriguing evidence from the field of cognitive archaeology suggesting that our Paleolithic ancestors were probably happier and far more alive than people today. The shift toward ‘Paleo’ and ‘Stone Age’ diets also reflects the belief that they had happier bodies.

There is an exquisite line by the philosopher Friedrich Nietzsche which touches on one of the keys to happiness: the need to appreciate ‘the least, the softest, lightest, a lizard’s rustling, a breath, a moment’. Paradoxically, happiness is closer when we kneel than when we soar. Our own nothingness can be a great source of joy.

We usually hitch our emotional wagons to ego, ambition, personal power and the spectacular. But all of these are surprising flops when it comes to happiness. Today’s ‘success’ has become a blueprint for failure.

Visionaries tell us that the only happiness that makes sense at this perilous juncture in Earth’s history is ‘sustainable happiness’. All worthwhile happiness is life-supporting. But so much of what makes us happy in the age of consumerism is dependent upon the destruction and over-exploitation of nature. A sustainable happiness implies that we take responsibility for the wider contexts in which we live and for the well-being of future generations.

Sustainable happiness harks back to the classical Greek philosophies in viewing ethical living as a legitimate vehicle for human happiness. Compassion in particular plays a central role. In part it rests on the truth that we can be happy in planting the seeds of happiness, even if we might miss the harvest.

Some argue that as a society we are too programmed to selfishness and over-consumption for a sustainable happiness to take root. Democracy itself is a problem when the majority itches for the wrong things. But if we manage to take the first few steps, we may rediscover that happiness resonates most deeply when it has a price.

The greatest irony in the search for happiness is that it is never strictly personal. For happiness to be mature and heartfelt, it must be shared – whether by those around us or by tomorrow’s children. If not, happiness can be downright depressing.

John F Schumaker, a US-born psychologist currently living in Christchurch, New Zealand/Aotearoa, is the author of In Search of Happiness: Understanding an endangered state of mind (Penguin).

Reprinted from New Internationalist (NI)

This article is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 License.

In a new study that links contemporary science with the classic philosophy of William James, a research team finds that people feeling sad and self-focused spend more money to acquire the same commodities than those in a neutral emotional state. The team’s paper, “Misery is not Miserly: Sad and Self-Focused Individuals Spend More,” will be published in the June 2008 edition of Psychological Science and will be presented at the Society for Social and Personality Psychology’s Annual Meeting on Feb. 9.

The new study follows up on earlier research that established a connection between sadness and buying. Researchers Cynthia Cryder (Carnegie Mellon University), Jennifer Lerner (Harvard University), James J. Gross (Stanford University), and Ronald E. Dahl (University of Pittsburgh) have now discovered that heightened self-focus drives the connection — a finding that expands understanding of consumer behavior and, more broadly, the impact of emotions on decision-making.

In the experiment, participants viewed either a sad video clip or one devoid of human emotion. Afterward, participants could purchase an ordinary commodity, such as a water bottle, at various prices. Participants randomly assigned to the sad condition offered almost 300% more money to buy the product than “neutral” participants. Notably, participants in the sadness condition typically insist, incorrectly, that the emotional content of the film clip did not carry over to affect their spending.

Self-focus helps to explain the spending differences between the two groups. Among participants “primed” to feel sad, those who were highly self-focused paid more than those low in self-focus. Notably, sadness tends to increase self-focus, making the increased spending prompted by sadness difficult to avoid.

Why might a combination of sadness and self-focus lead people to spend more money?  First, sadness and self-focus cause one to devalue both one’s sense of self and one’s current possessions. Second, this devaluation increases a person’s willingness to pay more for new material goods, presumably to enhance sense of self.

Notably, the “misery is not miserly” effect may be even more dramatic in real life, as the low-intensity sadness evoked in the experiment likely underestimates the power of intense sadness on spending behavior. The effect could extend to domains beyond purchasing decisions, causing people to engage in increased stock trading, for example, or even to seek new relationships– without conscious awareness that they are being driven by their emotions.

The study is an early step toward uncovering the hidden impact of different, fluctuating, and what would otherwise seem irrelevant emotions on our day-to-day decisions.

The paper is co-authored by a multi-disciplinary team of scientists. Cynthia E. Cryder, a doctoral student at Carnegie Mellon University, studies behavioral decision research. Jennifer S. Lerner, a professor at Harvard Kennedy School, specializes in the study of emotion and decision making. James J. Gross, an associate professor at Stanford University, studies emotion and personality. Ronald E. Dahl, a professor at the University of Pittsburgh Medical School, specializes in brain maturation and emotional functioning.

The article is available at several websites:

Carnegie Mellon: http://www.contrib.andrew.cmu.edu/~ccryder/miseryisnotmiserly.pdf

Lerner Lab: http://content.ksg.harvard.edu/lernerlab/papers.php