written 23 July 2023
published 30 July 2023
Last week saw lethal flash flooding in northeastern US, Kentucky, Pennsylvania, and South Korea. Very large hail, three to five inches in diameter, was reported in Missouri, Minnesota, and Italy. Western China hit 126°F, a new national record, and severe heat advisories were issued in 16 Italian cities, with temperatures approaching 120°F. Phoenix has experienced three weeks with highs over 110°F, and 10 days with lows over 90°F. Wildfires rage in Canada, Greece, and Switzerland.
As mentioned last week, the ongoing climate crisis is an extreme symptom of a deep cultural flaw: the illusion of separation. After centuries of religious indoctrination that everything is "us versus them", rather than a unified whole, it is no surprise that our economic systems should also express "siloed thinking".
These days, money has little real-world tangibility, a concept with no inherent value, and easily distorted. Money is therefore a confidence game, in all the meanings of the term. Loss of societal confidence expresses as inflation. With misplaced confidence, economic dealings become fraudulent activity, such as Bernie Madoff, who stole $65B over 39 years before being caught.
Enron was a posterchild for this foolishness, changing from a darling of Wall Street to complete bankruptcy in a matter of weeks, as honesty in accounting was sacrificed to the goal of narrow short-term profits. Another example is the accounting practice of discounting the value of the future in cost benefit evaluations, because the quantification is uncertain. Consequently, killing the planet for short term profit seems "justified".
In the last few years, the growth of exclusive gain by the ultra-rich (the top 0.004 percent) captured almost two-thirds of all the world’s new wealth, creating a wealth inequity higher than it was before the crash of 1929. Over the last century, the "purpose" of a corporation has shifted from including consideration of workers, suppliers, customers, and social good, to become exclusively focused on short term profits for executives and shareholders.
Insurance helps the economy manage risk, but insurance companies set rates using the past to predict the future, assuming a stable environment. As climate conditions are rapidly changing, models dependent on past data have become unreliable. The California wildfires of 2017 and 2018 resulted in $29 billion in insurance claims, but insurance premiums generated only $15.6 billion. Texas had three 500-year floods in five years and Florida hurricane damage keeps increasing. US insurance companies are abandoning areas which risk financial ruin, which currently includes California, Texas, Louisiana, and Florida.
Focusing on short-term profits, banks perpetuate and accelerate the climate crisis by suppling fossil fuel companies with the cash, credit, cover and counseling to sustain and grow their operations, underwriting bonds, offering loans, and advising on mergers and acquisitions. JPMorgan Chase, Citi, Wells Fargo, and Bank of America have financed the industry with trillions of dollars, capitalizing the profits for themselves while socializing the risks for everyone, because degrading the climate eventually degrades the entire economy.
Fossil fuels have been the backbone of the economy for so long that people chose to deny the climate problem rather than considering changing their economy. Coal, the dirtiest of the fossil fuels, is on the decline world-wide, being outcompeted economically by renewables, yet entire regions and states deny any problems exist. Parts of Wyoming and Montana developed large coal deposits and electrical production facilities, funding entire communities. For the most part, the stockholders don't live locally, so, at some point, they will take their profits, declare bankruptcy, and leave vast areas economically destitute.
In America, land of rugged individualists, economic separation belief manifests in the demonization of anything "socialist", believing everything should be privatized, making the maximum profit possible. The reality is that collective ownership, especially for essential services, are more cost effective, as the primary goal is quality of service, not maximizing profits, ensuring a healthier society by including everyone.
What is missing in our dominant economic model is whole systems thinking. Difficult problems are simplified by breaking them down into smaller parts, and solving those parts. But the whole is more than just the sum of the parts. Without including consideration of the whole system, over long time frames, even the most brilliant partial solutions will fail. The climate crisis results from ignoring the fundamental global interconnection of our physical reality. Humans are now too numerous, and too technologically powerful, to survive much longer living the suicidally ignorant illusion of separation.
