Understanding Growth: Part 1
Dec. 4th, 2021 04:53 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
ysabetwordsmithThere's a series on Strong Towns about understanding growth. Read Part 1, Part 2, Part 3, Part 4, Part 5, and the Conclusion.
Part 1
"We have become over-obsessed with the idea of growth. We are not exactly sure what we are growing toward, but we compensate for this shortcoming by accelerating."
-Tomas Sedlacek in Economics of Good and Evil
Infinite growth in a finite system is the philosophy of the cancer cell. We all know how that ends. And it's not an accident for that particular problem to be so prevalent in today's world. We are all part of one biosphere, and if that's the prevailing pattern, then it's going to manifest in a lot of different ways. The more involved you are in those activities, the higher the chance it will manifest in you personally (e.g. the modern diet contributes to many diseases including that one) but even avoiding as much as you possibly can will only somewhat lower your chances because the whole system is contaminated. Not a good situation.
Speaking during the darkest days of the recent European economic crisis, Sedlacek argued that our economy is not depressed but is more correctly described as manic-depressive. The mania we collectively experience is both on the way up and the way down, although we only choose to treat the latter. The former we embrace.
This is a really good description. Now, there are various ways of managing bipolar disorder. These include, but are not necessarily limited to:
* Use medication to flatten the peaks and valleys. Some people hate both, and really like staying at moderate intensity all the time with only small swings. Other people feel that life isn't worth living without its highs and lows, and the meds make them feel like they're sleepwalking through their own life. Or the meds interfere with some other aspect of life, like creativity or sex, which makes the cure worse than the disease for them.
* Use lifestyle changes, community support, etc. to buffer the swings enough to avoid major problems, without losing the variability of emotional experience. This is considerably more work for more people, but yields much better results for some. Not everyone can make this work for them.
* Quit trying to micromanage your moods, accept that they swing wildly, and arrange your life to accommodate those swings. This is most popular among creative people, who may write or paint during the manic phase and then flop in bed for 2 weeks. It can be handled more-or-less safely with good support, but there's always a risk of something going seriously wrong.
* But pushing only one side tends to result in even worse imbalance, a life wracked by either mania or depression. This does not end well.
Me, I look at economics like the predator-prey cycle. What goes up always comes down. Many years of economic records show that this is true of economics as well as ecosystems. Except that economists don't believe it, while ecologists do. If an ecologist sees a sharp rise in population, they know a drop is coming after it. If their job is to manage that ecosystem, they will try to prevent the peak from getting too high and making the drop more dangerous, because post-peak drops can cause extinctions. Economists, however, believe that what's going up will keep going up forever even though that can't happen. So they tend to push it higher as best they can, which makes the inevitable crash even worse. The "extinctions" in this case range from individual bankruptcies through city and big business bankruptcies to societal collapse. That's not good.
I want to contrast a growth economy with a resilient economy. The idea of a resilient economy is that we sacrifice some growth in order to gain stability. During the good years we would not grow quite as much and, in turn, during the bad years things would not decline so precipitously. Forgoing debt, buying insurance, fully funding your pensions and prioritizing maintenance are all ways to pursue a resilient strategy.
Resilience isn't just about avoiding extremes. It's also about preventing problems, acting on early problems to stop them getting worse, and providing resources to bounce back from hardships. Local-America sucks at all of these. Let's consider some examples:
* Ideally, insurance is supposed to make life safer by protecting against insurmountable losses. In practice, it's too expensive for many people to afford, the high costs make other less financially stable, it often fails to pay enough to protect against bankruptcy -- and "that's uninsurable" or "insurance is too expensive" prevents more and more things from happening at all.
If we cut out the middleman, however, then people could pay into a fund and all that money would be available for buffering losses. We might not be able to fix all the things we wanted, but we could fix more of them than if someone was siphoning off money to line his own pockets like now. This is how public health systems tend to work.
* Ideally, college is supposed to increase someone's earning power. In practice, it has gotten so expensive that it's a debt trap. But it has become almost impossible to earn enough to live on without a college degree; it's not easy even with one. Damned if you do, damned if you don't.
Previously when educational requirements went up, the free public school system simply expanded to include first junior high and then high school. That hasn't happened with college, but making college free would solve a lot of problems.
However, we also need to acknowledge that not everyone is an academic and those who aren't deserve a decent life as much as nerds do. That means either ensuring there are jobs for a wide range of personalities and skills, or finding some other way to meet people's survival needs other than employment.
* Housing is essential to health and stability. Losing it is life-wrecking. It doesn't necessarily have to be sessile -- some people's home is on wheels, and that's okay -- but they need some sort of base. Ideally, society would respond by exerting maximum effort to keep people housed, so as to prevent subsequent problems of homelessness. In practice, many factors increase the chance of housing loss.
A more resilient approach would activate as soon as someone starts struggling to make rent or mortgage payments, to help them get back on their feet. There would also be supports activated by any home-threatening event such as a fire or job loss, to make sure one problem didn't start a domino effect.
* Ideally, a society should have reserves and fault tolerance. In practice, these are classified as waste. The tendency is to run everything at maximum all the time. This leaves no room for even ordinary surges in demand, let alone a real emergency.
Resilient steps would include things like food reserves, some extra housing, storm shelters stocked with emergency supplies (also useful for many other disasters), a little extra capacity in important industries, programs supporting households in saving 3-6 months worth of income, etc.
Let me contrast both of these approaches with a Strong Towns approach, embodied in Nassim Taleb's concept of antifragility. An antifragile economy is one that gains from disorder. Such a system will experience growth during the good years, although not nearly as much as the growth economy or the resilient economy. However, the antifragile approach will continue to experience some success during the bad years. As it is stressed, it grows stronger.
I am dubious of any claim to avoid the lows, that a system can keep growing even in crappy conditions. "Some success" doesn't mean you never get your ass kicked. It means you get your ass kicked less.
What is harder to understand -- and harder yet to forgive -- is the way we accelerated our debt during those good years in order to grow just a little bit more. We traded stability for growth until now we find that we have neither.
People also traded freedom for security, and wound up with neither. Both cases involve a failure of problem-solving methods, in that people did not implement the "evaluate results and make necessary changes" step.
"People say Greece is behind. It is actually the other way around. Greece is ahead. They just went bankrupt twenty years before everybody else."
- Tomas Sedlacek
Nailed it. In America, that's Detroit.
If you want to create a society that has fewer problems, and bounces back from them better, then look for ways to enrich resources and buffer to avoid big fast changes. Identify extractive processes and replace them with generative processes. Plug the leaks where you're losing resources or people. Emphasis prevention and early intervention over crisis actions. Build in plenty of fault tolerance.
Part 1
"We have become over-obsessed with the idea of growth. We are not exactly sure what we are growing toward, but we compensate for this shortcoming by accelerating."
-Tomas Sedlacek in Economics of Good and Evil
Infinite growth in a finite system is the philosophy of the cancer cell. We all know how that ends. And it's not an accident for that particular problem to be so prevalent in today's world. We are all part of one biosphere, and if that's the prevailing pattern, then it's going to manifest in a lot of different ways. The more involved you are in those activities, the higher the chance it will manifest in you personally (e.g. the modern diet contributes to many diseases including that one) but even avoiding as much as you possibly can will only somewhat lower your chances because the whole system is contaminated. Not a good situation.
Speaking during the darkest days of the recent European economic crisis, Sedlacek argued that our economy is not depressed but is more correctly described as manic-depressive. The mania we collectively experience is both on the way up and the way down, although we only choose to treat the latter. The former we embrace.
This is a really good description. Now, there are various ways of managing bipolar disorder. These include, but are not necessarily limited to:
* Use medication to flatten the peaks and valleys. Some people hate both, and really like staying at moderate intensity all the time with only small swings. Other people feel that life isn't worth living without its highs and lows, and the meds make them feel like they're sleepwalking through their own life. Or the meds interfere with some other aspect of life, like creativity or sex, which makes the cure worse than the disease for them.
* Use lifestyle changes, community support, etc. to buffer the swings enough to avoid major problems, without losing the variability of emotional experience. This is considerably more work for more people, but yields much better results for some. Not everyone can make this work for them.
* Quit trying to micromanage your moods, accept that they swing wildly, and arrange your life to accommodate those swings. This is most popular among creative people, who may write or paint during the manic phase and then flop in bed for 2 weeks. It can be handled more-or-less safely with good support, but there's always a risk of something going seriously wrong.
* But pushing only one side tends to result in even worse imbalance, a life wracked by either mania or depression. This does not end well.
Me, I look at economics like the predator-prey cycle. What goes up always comes down. Many years of economic records show that this is true of economics as well as ecosystems. Except that economists don't believe it, while ecologists do. If an ecologist sees a sharp rise in population, they know a drop is coming after it. If their job is to manage that ecosystem, they will try to prevent the peak from getting too high and making the drop more dangerous, because post-peak drops can cause extinctions. Economists, however, believe that what's going up will keep going up forever even though that can't happen. So they tend to push it higher as best they can, which makes the inevitable crash even worse. The "extinctions" in this case range from individual bankruptcies through city and big business bankruptcies to societal collapse. That's not good.
I want to contrast a growth economy with a resilient economy. The idea of a resilient economy is that we sacrifice some growth in order to gain stability. During the good years we would not grow quite as much and, in turn, during the bad years things would not decline so precipitously. Forgoing debt, buying insurance, fully funding your pensions and prioritizing maintenance are all ways to pursue a resilient strategy.
Resilience isn't just about avoiding extremes. It's also about preventing problems, acting on early problems to stop them getting worse, and providing resources to bounce back from hardships. Local-America sucks at all of these. Let's consider some examples:
* Ideally, insurance is supposed to make life safer by protecting against insurmountable losses. In practice, it's too expensive for many people to afford, the high costs make other less financially stable, it often fails to pay enough to protect against bankruptcy -- and "that's uninsurable" or "insurance is too expensive" prevents more and more things from happening at all.
If we cut out the middleman, however, then people could pay into a fund and all that money would be available for buffering losses. We might not be able to fix all the things we wanted, but we could fix more of them than if someone was siphoning off money to line his own pockets like now. This is how public health systems tend to work.
* Ideally, college is supposed to increase someone's earning power. In practice, it has gotten so expensive that it's a debt trap. But it has become almost impossible to earn enough to live on without a college degree; it's not easy even with one. Damned if you do, damned if you don't.
Previously when educational requirements went up, the free public school system simply expanded to include first junior high and then high school. That hasn't happened with college, but making college free would solve a lot of problems.
However, we also need to acknowledge that not everyone is an academic and those who aren't deserve a decent life as much as nerds do. That means either ensuring there are jobs for a wide range of personalities and skills, or finding some other way to meet people's survival needs other than employment.
* Housing is essential to health and stability. Losing it is life-wrecking. It doesn't necessarily have to be sessile -- some people's home is on wheels, and that's okay -- but they need some sort of base. Ideally, society would respond by exerting maximum effort to keep people housed, so as to prevent subsequent problems of homelessness. In practice, many factors increase the chance of housing loss.
A more resilient approach would activate as soon as someone starts struggling to make rent or mortgage payments, to help them get back on their feet. There would also be supports activated by any home-threatening event such as a fire or job loss, to make sure one problem didn't start a domino effect.
* Ideally, a society should have reserves and fault tolerance. In practice, these are classified as waste. The tendency is to run everything at maximum all the time. This leaves no room for even ordinary surges in demand, let alone a real emergency.
Resilient steps would include things like food reserves, some extra housing, storm shelters stocked with emergency supplies (also useful for many other disasters), a little extra capacity in important industries, programs supporting households in saving 3-6 months worth of income, etc.
Let me contrast both of these approaches with a Strong Towns approach, embodied in Nassim Taleb's concept of antifragility. An antifragile economy is one that gains from disorder. Such a system will experience growth during the good years, although not nearly as much as the growth economy or the resilient economy. However, the antifragile approach will continue to experience some success during the bad years. As it is stressed, it grows stronger.
I am dubious of any claim to avoid the lows, that a system can keep growing even in crappy conditions. "Some success" doesn't mean you never get your ass kicked. It means you get your ass kicked less.
What is harder to understand -- and harder yet to forgive -- is the way we accelerated our debt during those good years in order to grow just a little bit more. We traded stability for growth until now we find that we have neither.
People also traded freedom for security, and wound up with neither. Both cases involve a failure of problem-solving methods, in that people did not implement the "evaluate results and make necessary changes" step.
"People say Greece is behind. It is actually the other way around. Greece is ahead. They just went bankrupt twenty years before everybody else."
- Tomas Sedlacek
Nailed it. In America, that's Detroit.
If you want to create a society that has fewer problems, and bounces back from them better, then look for ways to enrich resources and buffer to avoid big fast changes. Identify extractive processes and replace them with generative processes. Plug the leaks where you're losing resources or people. Emphasis prevention and early intervention over crisis actions. Build in plenty of fault tolerance.
On trading freedom for security
Date: 2021-12-05 02:22 am (UTC)