Environmental Engineering Reference
In-Depth Information
It's not hard to recognize a self-reinforcing feedback loop at work here. A shrinking economy
means declining tax revenues, which make it harder for governments to repay debt. In order to avoid
a credit downgrade, governments must cut spending. This shrinks the economy further, eventually
resulting in credit downgrades anyway. That in turn raises the cost of borrowing. So government
must cut spending even further to remain credit-worthy. The
need
for social spending explodes as
unemployment, homelessness, and malnutrition increase, while the
availability
of social services
declines. The only apparent way out of this death spiral is a revival of rapid economic growth. But
if the premise above is correct, that is a mere pipedream.
Both of these scenarios lead to unacceptable and unstable outcomes. Aren't there other possib-
ilities? Well, yes. Here are two.
C. Centralized provision of the basics.
In this scenario, nations directly provide jobs and basic
necessities to the general public while deliberately simplifying, downsizing, or eliminating expend-
able features of society such as the financial sector and the military, and taxing those who can afford
it—wealthy individuals, banks, and larger businesses—at higher rates. This is the path outlined at
the start of the essay; at this point it is appropriate to add a bit more detail.
In many cases, centralized provision of basic necessities is relatively cheap and efficient. For
example, since the beginning of the current financial crisis the US government has mainly gone
about creating jobs by channeling tax breaks and stimulus spending to the private sector. But this
has turned out to be an extremely costly and inefficient way of providing jobs, far more of which
US federal policy of increasing the public's access to health care by requiring individuals to pur-
chase private medical insurance is more costly than simply providing a universal government-run
health insurance program, as every other industrial nation does. If Britain's experience during and
immediately after World War II is any guide, then better access to higher-quality food could be en-
sured with a government-run rationing program than through a fully privatized food system. And
government banks could arguably provide a more reliable public service than private banks, which
funnel enormous streams of unearned income to bankers and investors. If all this sounds like an ar-
gument for utopian socialism, read on—it's not. But there are indeed real benefits to be reaped from
government provision of necessities, and it would be foolish to ignore them.
A parallel line of reasoning goes like this. Immediately after natural disasters or huge industrial
accidents, the people impacted typically turn to the state for aid. As the global climate chaotically
changes, and as the hunt for ever-lower-grade fossil energy sources forces companies to drill deeper
and in more sensitive areas, we will undoubtedly see worsening weather crises, environmental de-
gradation and pollution, and industrial accidents such as oil spills. Inevitably, more and more fam-
ilies and communities will be relying upon state-provided aid for disaster relief.
6
Many people would be tempted to view an expansion of state support services with alarm as the
ballooning of the powers of an already bloated central government. There may well be substance to
this fear, depending on how the strategy is pursued. But it is important to remember that the eco-
nomy as a whole, in this scenario, would be contracting—and would continue to contract—due to
resource limits. Think of state provision of services not as utopian socialism (whether that phrase
is viewed positively or negatively) but as a strategic reorganization of society in pursuit of greater
efficiency in times of scarcity. Perhaps the best analogy would be with wartime rationing, a practice
