Critical need for a global system that's better, not bigger

Andrew Simms
guardian.co.uk, Wednesday November 26 2008 00.01 GMT

The public face of finance once appeared set with a permanent, self-satisfied grin. Then, abruptly, it cracked. So what else that we currently take for granted could suddenly collapse?
In August 2000, farmers and truck drivers, angered by rising fuel costs, blockaded fuel depots across Britain, paralysing the critical infrastructure. Britain's biggest supermarkets told ministers that their shelves would be bare within three days.
Shock waves reverberated internationally. The Canadian government concluded that "the impact of the protest was much deeper than anticipated because it struck at a particularly vulnerable point of the UK economy - the oil distribution network, which had been organized along just-in-time delivery principles". These are the same delivery principles, we should note, that our food system is now organised around.
Increasingly, what we face is a combination of the global peak and decline of oil production, and a global food chain in crisis due to multiple stresses, including global warming. These interacting dynamics are complicated by yet another: a rich-world debt crisis.
The UK's reliance on external supplies of energy is steadily growing. In April, a strike at the Grangemouth oil refinery in Stirlingshire halted a large proportion of the UK's North Sea production. And our gas supply lines from Norway and the Netherlands are just as vulnerable.
Like the systemic weaknesses introduced by reckless credit creation, unrealistic fossil fuel use has leveraged many into unsustainable lifestyles. The sudden withdrawal of easy oil could trigger equally dramatic consequences. Today, fossil fuels, food and climate change are impossible to separate.
Our national food self-sufficiency is in long-term decline, and has fallen by over one-fifth since 1995. We are increasingly dependent on imports at precisely the time when the guarantee of the rest of the world's ability to provide for us is weakening. In April, 37 countries faced a food crisis due to a mix of climate-related, conflict and economic problems. Stocks of rice, on which half the world depends, were at their lowest level since the 1970s. Around the same time, US wheat stocks were forecast to drop to their lowest levels since 1948.
Intensive farming's big weak point is its dependence on fossil fuels. And, against the background of terrifying long-term projections for global drought from the Met Office's Hadley Centre, a single extreme weather event can overturn any season's global food cart.
Financially and ecologically, we are overextended. We have taken for granted, and abused, our underlying operating systems - the biosphere and our social fabric - by privileging finance and over-consumption. Yet, it is the core economy of society and a biosphere in equilibrium that really holds things together, not the banks. A massive transformation is needed to compress global income inequality, raising the incomes of the poor and lowering the consumption of the rich. We need an economic system that builds strong human and communal relationships and steers us towards living within our environmental means.
In practice, this means a new economics, one that environmental economist Herman Daly describes as "a subtle and complex economics of maintenance, qualitative improvements, sharing, frugality, and adaptation to natural limits. It is an economics of better, not bigger."
• Adapted from Nine Meals From Anarchy: Oil Dependence, Climate Change and the Transition to Resilience, the 2008 Schumacher Lecture delivered by Andrew Simms, policy director and head of the climate change programme at the New Economics Foundation. Full text at neweconomics.org/gen/