Well, it’s been two months since I last posted – and it’s been a hell of a stretch. Among the highlights: first African American President, global economic meltdown, the end of Wall St, $700 billion bailouts, looming collapse of the Big 3, we got to go to Bioneers, the AASHE conference and Greenbuild, IPCC researchers gave up on safe climate scenario as we haven’t acted fast enough, Greenspan found “a flaw” in his thinking… It is this last one that I think may be the most significant.
I’ve seen some attempts to articulate how this meltdown is another symptom of “un-sustainability” – not separate from all of the other symptoms – climate change, toxins in the soil, air, water, and breast milk, erosion, terrorism, the wealth gap, etc… I’ll try to give my own here, but given the complexity of it all, it’s no easy task.
The story, and Greenspan’s own thinking about the “flaw” – that the banks would keep this from happening (wouldn’t take on so much risk) to protect their own self-interest – has been presented in the old “free-market” vs. “regulation” dichotomy. I think this is a false dichotomy and misses the point. It’s not a big “I told you so” moment for those who favor strong government regulation – though it should be a significant opportunity for “no regulation at any cost” crowd to take pause, and rethink the assumptions on which that theory (much abused and misrepresented overtime and when put into practice) is based. It’s that blind faith to a theory – a construct of human thought – unwavering in the face of significant evidence to the contrary is dangerous.
In his testimony Greenspan said “I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.'' And indeed that evidence was there, but only if you only look at the evidence you want. Of course, standards of living rose, technology developed, we are able to have more stuff and (theoretically) more leisure time (although we ironically have less). But at the same time we’ve been responsible for mass extinctions, an unthinkable plummet in cultural diversity, spreading toxins throughout the globe and our own bodies, and a breakdown in the social fabric. Our economic system is too complex to let run wild towards a goal that doesn’t necessarily improve our lives (GDP growth). It’s also too complex to simply regulate this and that as problems arise.
But if we step back, and look at how the system operates on the principle level, it’s impossible not to see the evidence that this is just a minor foreshadowing of what’s to come if we don’t make some fundamental changes to how our global society operates. Our population is growing exponentially, our technological prowess is growing exponentially, our demand for more stuff is growing exponentially (site China and India, or Wal-Mart death stampedes), and to drive this economic engine in our foolish pursuit of a false goal… we systematically weaken the natural systems we depend on – physically destroying them and flooding them with foreign substances (from the earth’s crust, or that we produce) at rates far faster than they can handle…. And undermine the social systems we depend on through abuses of power that create barriers to people’s capacity to meet their needs. This is a very big flaw. I don’t think Greenspan really saw the light, or appreciated the magnitude of the flaw in our way of thinking, but he saw a hint of it.
The underlying assumptions were further revealed through this defense: “We cannot expect perfection in any area where forecasting is required,” he said. “We have to do our best but not expect infallibility or omniscience”…“If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time. Forecasting never gets to the point where it is 100 percent accurate.” This reliance on forecasting dismisses the notion that we have self-determination, that we can create the future we want. It says that because we built such a big and complex society, we’re stuck riding this rollercoaster – even as we see the end of the tracks hanging over the canyon. And this type of tinkering – changing interest rates, adjusting money supply – is like trying to make little steering corrections to stay on the tracks. Of course the answer isn’t to instead create a giant regulator for the rollercoaster. It’s to get off the rollercoaster. And to backcast – to be realistic about where we are and intentional about where we want to end up. Then we can get to work together to get there.
What was amazing was to see the “shock” – he obviously believed it to be true, absolutely. His worldview was shattered (a little bit). And he didn’t try to hide it – he showed us how strong our blind-spots can be, and how when we recognize them, we can acknowledge that (and hopefully start thinking differently). I give him great credit for getting up and stating it plainly.
Representative John Yarmuth called Greenspan, Former Treasury Secretary Snow, and SEC Chairman Cox “three Bill Buckners” for letting this slip by. Hopefully we will all find the big flaw before all of humanity experiences the proverbial '86 Series on the global scale. Stay going…