The plastic prison

by Geoff Olson

In a 2007 Saturday Night Live skit, a book-selling huckster appears before a couple sitting at a kitchen table, picking through their credit card bills. “You’re not the only ones,” he tells them. “Did you know millions of Americans live with debt they cannot control? That’s why I’ve developed this unique program for managing your debt. It’s called “Don’t Buy Stuff You Cannot Afford!”

illustration: James Steidl

The couple struggles with the concept and find it too confusing, even though the book is only a page long. Apparently, this comic confusion is shared by millions in both the US and Canada. In 2007, according to Laurie Campbell, executive director of Credit Canada, the average Canadian over the age of 18 was $80,000 in debt, mortgages included. In 2004, that figure was below $70,000. Since 1990, debt loads have increased sevenfold over income in Canada.

Credit cards are the single biggest factor in all of this increase in debt. While roughly 50 percent of Canadians pay off their credit cards every month, it’s the other 50 percent, the ones who do not pay on time, who are of interest to the pound-of-flesh crowd. You could say the bulk of their profits depend on people behaving like Steve Martin’s dopey, debt-ridden Saturday Night Live character. In both Canada and the US, the avarice of the credit card industry meshes nicely with consumer ignorance. It’s a predator-prey relationship of almost Jurassic perfection.

The ignorance is understandable, given our failure as a culture to instruct our youth in personal finance. Young Canadians, who have the least familiarity with high interest rates, are also the most vulnerable to lifestyle sales pitches. Increasing numbers of them use credit cards for impulse purchases, along with groceries and other essentials. The attitude is with the credit card companies offering points, why not put everything on plastic?

Campbell describes the situation as a “tipping point.” Students are graduating with thousands of dollars of student loan debt. Unable to pay cash for both essentials and impulse buys, they’ve turned to credit cards, following their elders’ lead. In a telephone interview with Common Ground, Campbell noted that, according to figures from 2006, students are coming out of school with an average of $5,000 to $10,000 in credit card debt, on top of $30,000 in student loan debt.

“Our young people are completely uneducated when it comes to financial issues,” Campbell says. “They’re graduating from college and university with the highest debt loads that graduates have had and they’re entering the workforce at incomes they thought would be much higher. Their ability to move forward in life is completely compromised.”

Young people can’t plan their future, Campbell explains. They can’t think about getting married or starting a family or buying a home or even purchasing a car because of debt load. And once young workers start paying with plastic, all it takes is a few missed monthly payments for their credit card interest rate to rise from 18 to 24 percent, in addition to onerously large, added fees. “The ones who can least afford it seem to me to be the ones who are getting hit with these kind of charges,” Campbell says.

It sounds like a perfect storm for young consumers. They’re at risk of becoming a generation of indentured servants, working to service the God of compound interest, a mysterious being that communicates through invoices and threatening reminders.

And how many readers can say they’ve even read the contract that comes with their credit card? How many readers can even understand it, for that matter? In the 2004 PBS Frontline investigative report, The Secret History of the Credit Card, after struggling with the fine print of one such form, Harvard law professor Elizabeth Warren gave up. “I’ve read my credit card agreement and I can’t figure out the terms. I teach contract law and the underlying premise of contract law is that the two parties to the contract understand what the terms are,” Warren stated.

Frontline discovered that the terms for some cards include the right of the credit card agency to reset the interest rate at any time. That includes the late payment on any unrelated loans. Stunned credit card holders in the US have discovered a late payment on a car or other purchase can result in a sudden spike in their interest rate.

A grassroots movement in the US is stumping to reign in the credit card agencies’ rates and predatory billing practices. In contrast, Canadians simply take their lumps and expect Ottawa to look out for them. Until recently, the Canadian criminal code had capped interest rates to 60 percent annually, but that was abolished in 2007 by the Tory government. The federal government had no intention of enforcing it, “so it decided there was no point in having it in the Criminal Code,” Campbell told Common Ground. The responsibility was left with the provinces to determine their own caps to interest rates and to apply their own enforcement. Today in Quebec, there is a 35 percent cap; incredibly, Ontario has no cap.

This doesn’t mean credit card rates will necessarily rise. It’s quite likely the big banks have already used their supercomputers to gauge the sweet spot on the spreadsheet where profit and consumers’ ability to pay are maximized.

Investor and financial commentator Ben Stein, a guy who expresses great fondness for credit cards, told Frontline that credit card companies hate people like him, who pay their bills off every month. “And I know that because I ran into a fellow I went to high school with on the street and he told me he worked for a credit card company. And I told him about how much I use credit cards and how I pay them off every month, and he said, “Oh, we hate you. We hate you guys. We call you deadbeats.”

Frontline examined how this bad craziness began back in the late ‘70s in Sioux Falls, South Dakota, “a modest town of 140,000 known for its cattle auctions and meat-packing industry.” Today, the little town boasts a huge post office, far bigger than its communal needs, but it serves the credit card industry’s interests just fine.

South Dakota once had a historic cap on interest rates, known as usury law. To encourage banks to make loans, the state decided to suspend the law completely. New York-based Citibank took notice. At the time, its credit card division was “haemorrhaging money” and New York’s usury laws prohibited banks from charging more than 12 percent on most consumer loans. Yet interest rates had gone up 20 percent. “And if you are lending money at 12 percent and paying 20 percent, you don’t have to be Einstein to realize you’re out of business,” Walter Wriston, then chairman of Citibank, toldFrontline. The bank saw a big opportunity in South Dakota’s elimination of the usury law, particularly with a surprisingly well-timed Supreme Court decision that said a bank could export its interest rate to other states. Other US states eliminated their usury laws and more big banks joined the gold rush.

This is why the return address on your credit card bill is often some Midwestern US locale. And the rest, as they say, is history. Or rather, the rest is usury.

Merriam Webster defines usury as an “unconscionable or exorbitant rate or amount of interest – specifically: interest in excess of a legal rate charged to a borrower for the use of money.” The key word here is legal. If the banks do it, and regulators are AWOL, then it’s not illegal or immoral by definition. It’s just sound business practice, for the lenders at least.

Yet it’s remarkable how Christians, including those on the boards of major banks, forget that scripture condemns usury in no uncertain terms. There are a half-dozen passages in the Bible damning the practice. For centuries, Christendom got the message. The church outlawed money lending for the flock, leaving it to the Jewish community. This presented a win-win situation for pious Christians, who could condemn the moneylenders even while accepting their loans.

The rise of the mercantile class during the Protestant reformation put a stake into the heart of medieval restrictions on usury, widening the scope for more lenders to join in on the fun. But condemnations of the practice continued. Lexicographer Samuel Johnson noted, “The synonym of usury is ruin.” Joseph Addison echoed his words. “A moneylender. He serves you in the present tense; he lends you in the conditional mood, keeps you in the subjunctive and ruins you in the future.”

Indebtedness, whether it is personal credit or national debt, always involves a reckoning somewhere down the line. And there is an intriguing connection of the credit card agencies’ lending practices to recent events on Wall Street. To explain this, we have to take a trip through the looking glass into the US housing market bubble.

The collapse of the financial houses of Bear Stearns was the first major indication that the US financial/speculative complex is built on sand. The US government recently “bailed out” the bottomless hole that is Freddie Mac and Fannie Mae, to the tune of $250 billion. With the subsequent bankruptcy of the Lehman Brothers investment bank, and Bank of America’s buy-up of brokerage house Merrill Lynch, the free market “shakeout” is turning into a rout. Mainstream economists are now speaking in words more suited to the Book of Revelation than BusinessWeek.

On his blog, Global EconoMonitor, the highly regarded New York University professor of economics Nouriel Roubini insists “this will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades.”

Unlike Vegas, what goes on in Washington and on Wall Street doesn’t stay there. In a financial version of the “Butterfly Effect,” the stroke of a hedge fund manager’s pen in New York can cause riots in Thailand. So what does this bode for Canada? Although there are still some regulatory differences between Canada and the US, particularly in the housing market, the economies of the two nations are tightly coupled. And the secret is wide open in financial circles that the entire US credit card complex, holding some $12 trillion in debt, is in danger of going down with the ship.

The credit card industry is intertwined with the subprime mortgage market. For more than half a decade, subprime loans were made to US citizens with shaky credit and marginal ability to pay. As long as the real estate market kept rising upwards, everything was fine. But the loans were ticking time bombs if the housing market went south, which it did.

Once again, avarice meshed with ignorance. The subprime vultures coached naive homeowners into believing they could have something for nothing – they could refinance by taking out home loans based on their equity and pay off their credit cards at the lower interest rate. What this did was effectively hide trillions of dollars in US credit card debt in the ruinous subprime mortgages. By refinancing bad debt as “good debt,” it hid how precarious the situation had become for millions of homeowners. From 2000 to 2007, the loans were bundled into securities and sold across the world to unsuspecting buyers, effectively making the subprime problem the world’s problem.

When you combine a $12 trillion credit card debt with the billions in subprime mortgages set to reset at higher rates over the next few years, and the trillions in funny money floating around in derivatives and other cryptic financial instruments, you don’t have a bubble. You have a black hole.

In retrospect, it’s been one hell of a ride around the black holes’ event horizon. On both sides of the border, predatory lenders whipped up the mania for household wealth formation, encouraging homeowners to think of their homes as ATM machines, or better yet, time machines set for an upscale future. Whether it was a sup prime mortgage or a more transparent loan, every other homeowner wanted in, in a bull market that appeared to have the blessing of the Federal Reserve, if not the Almighty Himself.

In an investment stampede that rivalled the Dutch tulip mania, homeowners never twigged to the original meaning of the word “mortgage.” It’s from the French for “death pledge” – a financial arrangement until you die.

But in the speculative Never-Never-Land of the last five years, who had time for scepticism? Pop culture got into the act with a whole new genre of reality television, focused on home renovation. Although these cheery, gyprock-smashing entertainments seemed to be about reaping the rewards of hard work, they always had a whiff of petty bourgeois desperation to them. The home flippers were always working fast, praying they hadn’t mistimed the sacred housing market.

Interestingly enough, not long after the debut of the home reno shows, a new kind of reality television appeared themed around high personal debt. Shows like Till Debt Do Us Part feature financial nannies who counsel couples buried in bills. The ignorance of these folks, many of them weighed under by mortgages and paying for essentials with multiple credit cards, is astonishing, but not untypical. They seem to have virtually no understanding of how compound interest works. They are part of the 50 percent the banks love – the sheep that can be calmly fleeced with usurious rates and exorbitant late payment fees.

Financial advisor Robert Manning, author of Credit Card Nation, put it succinctly in an interview with CBC Radio’s The Current: “The best client used to be someone who could pay off their debts. Today, the best client is someone who can never pay off their debts.”

For the lenders, debt is the gift that keeps on giving. In fact, the same practice that is applied to credit card borrowers has been applied, on a larger scale and with even greater opacity, to loans made by the IMF and World Bank to Third World nations.

Beginning back in the ‘70s, Arab sheiks found themselves flush with credit from OPEC’s oil deals. They had literally more money than they knew what to do with and they invested billions of it in US banks. The bankers now had a problem. To whom could they lend this windfall, and make money themselves? They looked around and saw an opportunity for huge mega projects in the Third World: dams, pipelines and all the big-money infrastructure associated with capitalism’s good life.

The fact that some of the lendees were corrupt dictators, who pocketed significant chunks of money for themselves and their cronies, was outside the banks’ interests. All they wanted was the money back at some point, with interest. So began the great Third World debt crisis, across Latin America, Africa and Asia, with successive governments unable to even service the interest on their interest. This necessitated further rounds of loan arrangements, and often the gutting of social services, along with the privatization of state industries. As Joseph Stiglitz revealed after his tenure as World Bank vice president and chief economist, this miserly misery-creation was simply business as usual for the global loan sharks.

In any case, once you know that the odds are stacked in favour of the house, your attitude to plastic changes. Credit cards aren’t just useful in today’s highly connected world; it’s almost impossible to get by without them. If you make your payments on time, and don’t spend beyond your means, they offer no great risk. But if you fall behind, which is damnably easy to do, you are no longer a “deadbeat” to the credit card industry. You are Argentina, Bolivia or Thailand.

In the end, Henry David Thoreau’s thoughts on debt still apply today: “That man is richest whose pleasures are cheapest.”

www.geoffolson.com

Let me share a secret

documentary screenings at the Vancouver Internationlal Film Festival

FILMS WORTH WATCHING by Robert Alstead

cene from Lie of the Land

Among the 100 or so documentaries at this year’s Vancouver International Film Festival (September 25-October 10) is the first-rate Secrecy. The film looks at how, under the auspices of national security, US state secrecy has expanded to the point where it has undermined the democratic process and is hollowing out constitutional freedoms.

Marshalling a high-calibre line-up of interviewees from myriad backgrounds, including government, military, CIA and academia, Peter Galison and Rob Moss tackle this multi-headed and opaque subject with equanimity and balance. Poignant interviews with relatives from a landmark case that occurred over a half-century ago place state secrecy within its historical context, with commentators explaining why the “need-to-know” system of the Cold War is less secure today than an open system where information is more freely distributed. The intelligence failure of 9/11, where compartmentalized intelligence services couldn’t see the full picture, is contrasted with the breakthrough that followed the Unabomber’s screeds being published in the media. Information is power, but which information should be shared and with whom? And who should decide what should be kept secret?

Former CIA chief in Jerusalem, Melissa Boyle Mahle, icily suggests that secrecy is needed to shield people from things they wouldn’t normally condone. In contrast, we have Lieutenant Commander Charles Swift’s account of how his defence of Osama Bin Ladin’s driver led him to challenge the legitimacy of Bush’s military tribunals. Swift’s chronicle offers some much needed hope for the necessary checks and balances of the executive’s excessive use of the State’s secret card.

Apology of an Economic Hitman is thematically similar, although less effective. At the centre of the film is the self-titled “economic hitman” John Perkins, who claims his job was to advance US economic interests in Ecuador through bribery and extortion. The thrust of Stelios Kouloglou’s documentary rings true: the US got what it wanted by yoking South American countries with insurmountable debt burdens, and when economics failed, covert CIA operations came into play. Unfortunately, the film is undermined by over-sensationalized film noir recreations and thinly substantiated accusations.

In The Lie of the Land, British director Molly Dineen paints a raw, warts’n’all view of conditions for small and struggling English livestock farmers. It’s not pretty. Farming in Britain has been left reeling after a succession of crises – diseases like “mad cow” and “foot and mouth” and “bird flu” – and for those farmers who have not cashed in their land for property, financial pressures have created a tough, new reality. Two of Dineen’s subjects are shown routinely shooting new calves because there is no market for them. “We were not brought up to shoot healthy animals,” one farmer says unhappily. The farmers blame government and poorly regulated factory farms. The ban imposed on fox hunting with hounds is seen as another attack on “traditional,” rural life. True perhaps, but there’s no comment in the film from anyone who might challenge this one-sided picture.

In Addicted to Plastic: The Rise and Demise of a Modern Miracle, Ian Connacher goes in search of plastic and finds it everywhere: sucked into an oceanic vortex, in a seagull’s gullet, festering in Indian landfills and strewn across Hawaiian beaches. In spite of dire conclusions about how we are poisoning ourselves and our planet, this first-person, fun videolog offers encouraging examples of how entrepreneurs are recycling the plastic mountain. The doc flits quickly through its subject matter, so if you’re wondering, for example, how safe compost made purely from garbage waste is you’ll have to do your own research.

Finally, among the fiction films on my must-see list is Mike Leigh’s latestHappy-Go-Lucky, which was praised on its UK release as a wonderfully optimistic character study of a young, London teacher. More next month.

 

 

Robert Alstead made the Vancouver-set bicycle documentary You Never Bike Alone, available on DVD at www.youneverbikealone.com

Eat the light – the fourth age of solar is on the way…

by Geoff Olson

In a 2000 interview on CBC Radio’s Ideas, ethnobotanist Wade Davis recalled a “horrific book that came out called The Secret Life of Plants.” One of Davis’ plant-gathering colleagues, Tim Ploughman, was “infuriated” with the book’s thesis that houseplants respond emotionally to human voices and the music of Mozart. “I remember Tim saying to me, ‘Why would a plant give a shit about Mozart?’ And then he said, ‘And even if it did, why should that impress us? They can eat light. Isn’t that enough?’”

Whatever the merit of the slab of compressed pulp that so annoyed the two ethnobotanists, there’s no denying that light-eating is a very impressive trick. In fact, it’s evolution’s greatest routine, the foundation for the pyramid of life. Every cell of algae and every humble weed chows down on photons, as a matter of course.

That’s real magic. Let’s see David Copperfield and Kris Angel sit down for a tray of rays.

Human beings may not be able to “eat light” as directly as plants do, but our fossil-fuel addicted civilization is beginning to taste the possibility of reducing its steady diet of dirty energy sources like coal, oil and nuclear. With the explosive growth of renewable energy, we are now on the cusp of the fourth age of solar (see sidebar).

Tavis Bradford, an industry analyst for The Prometheus Institute, predicts that within a short time, production of solar panels will double each year. The price per volume savings will inevitably follow, as production scales-up and becomes more efficient. The price of solar panels could drop as much as 50 percent from 2006 to 2010, Bradford adds.

According to futurist and inventor Ray Kurzweil, solar power will be the dominant form of energy source within the next 20 years. With the use of solar power doubling every two years, it is following the exponential growth of previous technologies, Kurzweil says. The futurist has seen similar kinds of patterns in the past and has correctly predicted the outcomes. He foresaw the explosive growth of the Internet and wireless systems and also predicted the downfall of the Soviet Union.

With wind factored in, the possibilities are even sunnier. The Pacific Northwest National Laboratory in Richland, Washington – one of the U.S. Department of Energy’s 10 national laboratories – estimates that, as wind power drops to competitive levels, it could quickly supply 20 percent of the US’ electrical needs. With the proper infrastructure implemented, some researchers put the figure at 30 percent. (For the purposes of this article, I include wind power as a subset of solar power because the sun’s electromagnetic energy is the prime driver of the atmosphere’s thermal engine.)

The pace of research is tracking the pace of production. It seems that a week can’t pass without another technical or market breakthrough. Passive solar heating, solar ovens, solar-powered trash compactors, solar-powered UV water treatment, hyper-efficient LED lights and building-integrated photovoltaics – the present state of the art has dizzying possibilities for social change, even without the projected technical advances and plunging costs.

The entry of big players like Wal-Mart into solar power indicates energy security is as much of an issue as good business practice. Corporations aren’t going to wait to take their cue from the Jurassic oil dynasty counting out its last few months in the White House. Geneticist and entrepreneur Joel Bellenson points out that the founder of Wal-Mart has invested $250M in First Solar, which now has a market capitalization larger than GM and Ford combined. The founders of Google funded NanoSolar, which just shipped solar panels at $1/W, making it cheaper than coal. And while General Electric is losing its appliance division, it’s going big time into renewable energy via wind and LED lighting.

Other big players include Phillips, Sharp Electronics, Boeing, Peterbilt, Intel, Hewlitt-Packard and IBM.

“Silicon Valley/Stanford on one coast and MIT on the other coast are driving solar advancements at breakneck speed,” Bellenson notes in an email exchange. “Clearly, the principal countries and their industrial capitalists in the EU are hell bent to switch to renewables. The United Kingdom plans to get all of their residential electricity from wind by 2020.”

The game has gone global and North America is playing catch-up. Germany and Denmark are far ahead of us in working renewable technology into their infrastructure. One of the largest wind companies, India-based Suzlon, is going gangbusters; China-based SunTech, one of the largest solar panel companies, is doing the same. At current rates of production, the solar industry worldwide will be producing enough solar panels in 2009 to power nine Vancouvers, Bellenson claims.

Nonetheless, there have been two persistent bugaboos of solar power: it doesn’t work when the sun goes down and storing power is expensive. This is why solar still supplies only a small percentage of the world’s electricity. Off-the-shelf batteries are still too big and expensive to compete with other options. In comparison, fossil or renewable fuels act as their own storage, making for ease of use and transport.

That nut may finally have been cracked, however. In August, researchers at the Massachusetts Institute of Technology (MIT) claimed to have found a radically inexpensive way to store solar power. Eoin O’Carroll described the feat in an article published in the Christian Science Monitor: “Daniel Nocera, a chemistry professor at MIT, and Matthew Kanan, a postdoctoral fellow in Mr. Nocera’s lab, have developed a catalyst made from cobalt and phosphate that can split water into oxygen and hydrogen gas. When used in conjunction with a photovoltaic solar panel, their system can use water to store the sun’s energy.”

Cobalt replaces electrodes made of platinum, which is more expensive than gold, thereby reducing costs by a huge margin. Nocera describes his catalyst discovery as a solar power “Nirvana,” with the inference that we can now “seriously think about solar power as unlimited and soon.”

In a Forbes magazine interview, Nocera enthuses about his battery’s replication of photosynthesis. “Once you put a photovoltaic on it, you’ve got an inorganic leaf,” he says. The chem prof figures he’s managed to match wits with Gaia. “For six months now, I’ve been looking at the leaves and saying, ‘I own you guys!’”

The MIT press release includes a sanguine estimate from James Barber, a biochemist at the Imperial College London in the UK. “This is a major discovery with enormous implications for the future prosperity of humankind,” Barber says. (That was so last month! As this magazine goes to press, Green Car Congress (greencongress.com) announces that Australia researchers have developed a “bio-inspired, photo-oxidizing catalyst for solar water-splitting to produce hydrogen.” The researchers use manganese, as plants do – and thereby may have gone a step further in replicating photosynthesis.)

This all may sound too good to be true. Are Kurzweil’s prognostications too sunny? Is Nocera’s leaf-mimicry a revolutionary turn for alternative technology or just a minor riff on nature’s grand banquet of light? Besides, the MIT battery still has a long way to go before market testing. And weren’t there promises in the past from the press about some new technology that would liberate us all, from the rotary telephone to the Internet?

The difference this time around is that the enthusiasm isn’t limited to journalists and public relations flacks. It’s rare for scientists to speak in superlatives, but solar seems to have lit a fire under the thinking class.

Joel Bellenson is convinced solar will introduce massive changes into society, on a global scale. A typical conversation with the 43-year-old polymath ranges from the genetics of human scent to Big Bang cosmology to the politics of sub-Saharan Africa. It’s like talking to a bipedal Library of Congress or a jovial Wikipedia. The Vancouver resident describes himself as a “serial entrepreneur at the intersection of life sciences and information technology.”

Bellenson co-founded Pangea Systems/DoubleTwist, which in 1999 was the first to annotate the human genome and make it available to academics for free to prevent it from being patented by Celera. He is currently the CEO of Upstream Biosciences, which investigates new drugs for Global South infectious diseases, such as Malaria, Black Fever, Sleeping Sickness, Chagas and TB, utilizing artificial intelligence and chemical data.

The Stanford graduate relates the current thinking among solar power researchers: “Based on a mid range of 25 percent efficiency, solar panels generating 90 Terawatts of power – ~6X the planet’s current energy consumption of all types: electricity, heat, transportation – would require no more than 360,000 square kilometers.”

The whole planet, including the projected population growth by 2050, could be powered at North American levels for electricity, heat and transportation by sunny land smaller than the state of Montana, he says. “One hectare of sunlit land surface area, covered with a 15 level, LED-lit, hydroponic greenhouse with solar panels on top, will produce the equivalent of 150 outdoor, arable hectares of food, assuming LED and solar panel efficiencies expected within the next five to 10 years. Costs of sufficient solar panels and, most importantly, LED lights will cross over with the price of arable farm land in five years.”

Bellenson isn’t troubled by concerns of a shortage of wild spaces given over to solar power collectors. He believes the main impact “…will be on enabling more rational economic organization,” which includes rational use of the landbase and freshwater.

Who will be the big losers in this? The big oil companies, for sure. “In general, we are already entering a period where the King CONG – coal, oil, nukes, gas – companies are nervous about investing in any step in the process, since the payback is over 20 to 30 years. They are not stupid, and see that the complete triumph of renewables will occur in about 10 to 15 years, with almost 100 percent of all electricity converted over and probably 50 percent of transport to plug in hybrids by then. Even oil rich Middle East countries from Algeria to United Arab Emirates are jumping on the solar bandwagon,” Bellenson states.

The geneticist notes that the primary material that goes into producing solar panels is silicon. The Earth’s crust is one-quarter silicon, the seventh most abundant element in the universe. You could say the cosmos is just about screaming at the clever monkey to crank out solar panels.

It all makes for a wonderful vision of civilization turning its face to the sun. Anyone who can work an Excel spreadsheet can drag the simple formula of 45 percent compound annual growth rate for solar down 20 years of rows and see what happens, Bellenson insists. Last year, worldwide solar investment grew 92 percent. A mix of lower solar prices, higher oil prices and geopolitical tension will drive solar power further up Kurzwell’s exponential growth curve.

Bellenson foresees a time when solar generates enough power that all agriculture can be brought indoors into “multilevel urban greenhouses,” thus saving 90 percent of the 70 percent of the world’s freshwater devoted to agriculture, while also radically reducing the amount of herbicides, pesticides, fertilizers and associated runoff.

Solar is already being produced at $1 to $1.25 a watt, and in the past few months there have been announcements noting solar panel production prices dropping to $0.40 a watt. Coal plants cost $1 to $2 a watt to build. Engineers working on quantum dots are claiming that it will cost on the order of $0.05 a watt by 2017. “In other words, it would cost $200 to build solar capacity – roof or on large solar farms – for a big single family home (4kW),” Bellenson says. “At that price, the Global South’s pent-up, desperate need for electricity will be able to be addressed quite easily.”

Some of the sunniest places on Earth, including Africa for example, are also the places with the greatest need for electricity. Bellenson’s interest in Africa and the Global South is more than academic. He recently founded the AfricaFreeMAN project to set up free wireless broadband intranets with free local telephony in metropolitan area networks. He is also involved with the Presidential Investment Roundtable of the President of Uganda, an initiative focused on biotechnology, forestry, agriculture, IT/telecom and renewable energy.

Solar power is truly empowering for the Global South, the geneticist insists: “The power source, the Sun, is plentiful and democratically distributed. No geopolitical games. No need to sell cheap labour intensive agro products on unfair global markets to purchase expensive petroleum. No ability for the oil curse to corrupt social, economic, political and military life…For those motivated to improve the environment to prevent horrors from climate change, subsidizing solar panels in Africa and other places in the Global South not only makes for a better future, but radically improves people’s lives right now, far, far more than adding renewable power sources in rich countries. Affordable electricity is the core necessity of modern civilization. Without it, life is a needless nightmare of suffering.”

Solar and wind have long been the bastard children of energy production, dismissed as bit players in petroleum and coal’s rich pageant. There’s little doubt that the oil lobby has kept alternative energy research and development on the fringe for years. But with the horses out, there is little point in trying to shut the barn door. The question is not how widespread renewable power will be in our future. The question is will its reign arrive in time? With resource wars raging in the Near East, and the planet in the midst of its sixth great extinction period, one expression comes to mind: the power of now.

Bellenson believes a transformation is already in the works, as humanity moves away from its obsessive dependency on non-renewables: “This shift will occur over the next 15 – 20 years and will be more massive than the development of agriculture itself 10,000 years ago.”


The fourth age of solar

The story of life on Earth is ultimately about a long-term relationship between light and matter. In the first age of solar, plants evolved the capacity to transfer the electromagnetic energy of sunlight into the high-energy chemical bonds of sugars and carbohydrates.

In the second age of solar, a few hundred million years later, the monochrome, brownish-green world of the late Jurassic gave way to an explosion of colour with the emergence of the angiosperms – the flowering plants. The plants directed some of the photosynthetic energies of their green-coloured tissues into the production of lurid landing pads, alerting insects through their brilliant hues. With the symbiosis of insect pollination, evolution took a whole new direction, giving the wilderness a coat of many colours in the process. (Charles Darwin called flowers an “abominable mystery” because they appeared so suddenly, and spread so quickly, in geological time.)

The third age of solar began 10 thousand years ago, when several populations in the Near East abandoned their nomadic way of life for year-round settlements. These small settlements, the seeds of future city-states, were made possible through the use of domesticated animals and seasonal stockpiles of grain. The energy of the sun, bound up in the chemical bonds of plant carbohydrates, was deposited in silos and granaries like money in a bank. A cascade of cultural consequences followed, with institutional mechanisms for measuring, allocating and protecting the stockpiles: cuneiform script, local governance, taxation and standing armies. We are still in the third age of light, but now the vast bulk of our energy comes from fossil fuels. These fuels also began as organic material and they hold the energy of ancient sunlight in their chemical bonds.

Civilization is now on the cusp of the fourth age of solar. We now have the opportunity to abandon the unsustainable, finite resources of fossil fuels for a truly abundant, freely available form of energy. We’re doing it by following the evolutionary example of the plants.

www.geoffolson.com

Caesar’s last breath

by Geoff Olson

Breathe in. Breathe out. Now consider this: every breath you take contains at least one air molecule exhaled by Julius Caesar in his last breath. With your every breath, at least one of these molecules makes its way into your lungs. This pop-science factoid may sound dubious, but it actually began as a thought experiment by nuclear physicist Enrico Fermi. It’s been a chem class standard ever since.

Mathematician John Allen Paulos took another look at the numbers for his 1988 book Innumeracy. He began from the assumption that two thousand years have been enough time for the carbon dioxide molecules in Caesar’s last breath to mix evenly in the atmosphere. “Thus there is a 1.8% chance that none of the molecules you are (still) holding in your lungs came from Caesar’s last breath. And there is a 98.2% chance that at least one of the molecules in your lungs came from Caesar’s last breath,” Paulos noted.

This counterintuitive calculation strikingly illustrates how interconnected our lives are, across vast stretches of time. The traffic of molecules between our bodies and the environment is the ultimate in “free trade.” As Zen philosopher Alan Watts once observed, human beings are like the whirlpools and eddies seen at the edge of running streams. We’re dynamical systems that maintain recognizable form while exchanging matter and energy with our environment.

We are inseparable from the larger patterns in which we’re embedded. The great lesson of twentieth century science, from quantum physics to ecology, is that we cannot understand the separate components apart from the whole. Yet there are places in the world where they apparently haven’t heard the news yet, and I don’t mean the refugee camps of Sudan or the jungles of Borneo; I mean the university faculty clubs in the First World.

Post-Keynesian economic theory is stuck in a Newtonian era rut – a push-pull paradigm – and it’s about to hit a wall, both intellectually and practically, in Earth’s carrying capacity.

It’s not as if there hasn’t been plenty of time to catch up with the non-reductionist worldview. In 1866, German biologist Ernst Haeckel coined the term oekologie, or “ecology,” defining it as “…the comprehensive science of the relationship of the organism to the environment.” By the early twentieth century, poverty-stricken New York collector of scientific oddities Charles Fort had a grasp of where the new sciences were heading. “If there is an underlying oneness of all things, it does not matter where we begin, whether with stars, or laws of supply and demand, or frogs, or Napoleon Bonaparte. One measures a circle, beginning anywhere,” Fort stated.

In 1961, when weather scientist Edward Lorenz was programming a computer to predict weather patterns, he entered the decimal .506 as a shortcut, rather than the full sequence of .506127. The result was a radically different weather scenario. Lorenz remarked on this finding in a 1963 paper: “One meteorologist remarked that if the theory were correct, one flap of a seagull’s wings could change the course of weather forever.” Appearing before the American Association for the Advancement of Science, Lorenz gave a talk entitled, Does the Flap of a Butterfly’s Wings in Brazil Set off a Tornado in Texas? The title has since become a shorthand expression for nature’s interconnectedness.

Lorenz’s findings kick-started the 1980s academic cottage industry of “chaos theory.” Aided by the personal computing explosion, scientists plumbed the bizarre, psychedelic landscapes of fractals and “strange attractors,” mathematical forms that appeared to underlie some of nature’s most persistent themes. Suddenly, it became possible to see links between seemingly unrelated things. From dripping taps to the collapse of caribou populations, from the whirlpool of cream in your coffee cup to the pinwheel of stars in a galaxy millions of light years away, chaos theory supplied the connections. Charles Fort was right: you could measure a circle beginning anywhere.

The disciplines of chaos theory and complexity theory have both had a strong influence on the physical sciences and in some of the life sciences, as well. Urban planners and social scientists have also seized upon the new ideas. Yet, as far as neoclassical economics is concerned, it’s as if the discoveries of Lorenz and his colleagues never occurred. The disconnect between rhetoric and reality has alerted some of the silverbacks within the financial-speculative complex that something is very wrong with their profession. Among them are Joseph Steiglitz, former senior vice president and chief economist of the World Bank, former hedge fund financier George Soros and University of Bologna professor of political economics Stefano Zamagni.

David Suzuki is another skeptic and he offers a great anecdote about economic thinking. While at the University of British Columbia, he figured it would be a good idea to supplement his academic background in biology with an understanding of economics. When he attended his first class, the instructor stood at the blackboard, drawing lines in chalk to show the flow from the resource base into the market, with subsidiary industries adding value and creating wealth for investors.

Suzuki pointed to the side of the blackboard that was empty of equations, the resource base, and asked whether the calculations took into account the effect of human activity on the environment, the diminishing reserves and growing waste that Suzuki reasonably regarded as a cost mortgaged into the future. “That’s an externality,” the instructor responded dryly. In other words, the environment is something external to the grand human workings of the market and not worth factoring in. Suzuki left the class on the spot.

According to Stefano Zamagni, prior to the 1900s, economics was referred to as “the science of happiness.” By the late twentieth century, it bore the ignominious title, “the dismal science.” In a lecture in Vancouver in 2004, Zamagni described the crisis facing economic science. Economists identify the common good with the sum total of individual goods, the professor says, which doesn’t work, as it ignores “the good of every individual in all the dimensions of a human being.” What Zamagni calls the “original sin of economics” is the reductionist idea that economic relations are reducible to the exchange of equivalence: I give or do something for you and you give or do something for me of the same value.

Yet there is another dimension to exchange, based on the principle of reciprocity, and as Zamagni noted, “…the principle of reciprocity is completely different from the exchange of goods.” Reciprocity is closely tied to trust and both variables are entirely missing from economic equations. In fact, they are extremely difficult or impossible to quantify, yet immensely important for sustaining fair economic relations. Enron, anyone?

Zamagni connects several decades of materialistic economic philosophy, with its reductionistic disconnect from the real word, to the deterioration of North American civic and family life. The “instrumental rationality” of economic thinking, he says, has ventured far beyond its sphere of applicability, justifying a dog-eat-dog paradigm for both interpersonal and international relations.

Steve Keen, associate professor of economics and finance at the University of Western Sydney, describes conventional economic theory as “autistic.” “What passes for ‘normal’ in economics barely deserves the appellation ‘science,’ he asserts in his 2001 paper Economists Don’t Have Ears.

Keen writes: “Most introductory economics textbooks present a sanitized, uncritical rendition of conventional economic theory…the courses in which these textbooks are used do little to counter this mendacious presentation. Students might learn, for example, that ‘externalities’ reduce the efficiency of the market mechanism. However, they will not learn that the ‘proof’ that markets are efficient is itself flawed.” Keen also assails the economics, as taught at an undergraduate level, as “profoundly boring,” and those who move from the discipline into accountancy, finance or management learn just enough to walk away from the classroom with a warped view of the world.

Although there is a vast body of literature critical of economic thinking, the students aren’t exposed to any of it. Most students end up swallowing the axioms of economic science because, as Keen notes, “…their training leaves them both insufficiently literate and insufficiently numerate.” Neither are they given the historical context for economic thinking, making it seem as if some bearded prof had delivered it from on high, reading from inscribed tablets.

Economics has persevered with mathematical methods that professional mathematicians have long ago transcended, Keen writes. “This dated version of mathematics shields students from new developments in mathematics that, incidentally, undermine much of neoclassical economic theory.”

In particular, applying the findings of chaos theory to real-world market behaviour involves an understanding of “ordinary differential equations.” Yet this topic is taught in very few courses on mathematical economics, notes Keen, and where it is taught, it is not covered in sufficient depth.

“Economics students therefore graduate from Masters and PhD programs with an effectively vacuous understanding of economics, no appreciation of the intellectual history of their discipline and an approach to mathematics, which hobbles both their critical understanding of economics and their ability to appreciate the latest advances in mathematics and other sciences.

“A minority of these ill-informed students themselves go on to be academic economists, and then repeat the process. Ignorance is perpetuated,” Keen claims.

Bill Rees, professor at the School of Community and Regional Planning at the University of British Columbia, is best known for his concept of the “ecological footprint.” He received a PhD from the University of Toronto in population ecology in 1969 and when UBC’s forward-thinking School of Planning went looking for someone with a background in the biological science, Rees fit the bill. He began to ponder the relationship between the carrying capacity of the environment and economic activity, subsequently developing “a simple little model” showing that the human carrying capacity of the Lower Mainland was less than half of the population of the time. In a 2006 article by Robert Alsted in the Vancouver Courier, Rees discussed the response from colleagues:

“One of them, a prominent Canadian resource economist, took him to lunch and with genuine concern told him that if he continued to pursue his research interests as expressed in that little paper, his career at UBC would be ‘nasty, brutish and short.’ Didn’t he know? Carrying capacity as a concept had been demolished long since –trade, technology and human ingenuity could make up for any regional resource shortfalls.”

In recent years, there has been some noodling with “the economics of happiness” along with the emerging new science of “behavourial economics.” But as long as GDP calculations can factor a heart attack, a divorce or an oil tanker spill as economic pluses, the rot goes to the core of the discipline.

“The mad rantings of men in authority often have their origins in the jottings of some forgotten professor of economics,” said John Maynard Keynes, himself a largely forgotten professor of economics. As journalist Naomi Klein demonstrates in her most recent book The Shock Doctrine, the economic theories of Milton Friedman were put into practice in Chile immediately following the 1972 coup. Friedman’s dangerous, destructive ideas became the intellectual foundation for the subsequent neocolonial domination of Latin America, under the so-called “Washington consensus.”

From the corporate-backed war of attrition on the pubic sector, to Canada’s proxy war in Afghanistan, with its perpetually-undefined “mission,” to the Iraqi debacle and the American’s current sabre-rattling with Iran, surely part of the problem resides in the education of the advisors and handlers who surround our leaders. These people suffer from a serious thinking problem. Their blinkered, one-size fits all vision of a world monoculture, of democracy at gunpoint, is about what you’d expect from anyone whose worldview is post-Enlightenment, but pre-Einsteinian.

I’m sure many of these highly educated sorts would fail to see the full relevance of the anecdote about Caesar’s last breath. But I’d like to think a few of them would be stirred by the words of the late Italian author Primo Levi. In his book The Periodic Table, Levi tracks the path of a carbon atom as it escapes from a block of limestone and travels into the airways of a falcon. It fails to penetrate the bird’s bloodstream and continues whirling about in the atmosphere for another eight years, before being inhaled by the author himself. The carbon atom makes its way into Levi’s bloodstream and into a brain cell that, as he says, “…guides this hand of mine to make this dot upon the page: this one.”

Levi’s scientific lyricism underscores the message of Caesar’s last breath. Our lives are intimately interwoven with all things, living and nonliving. It’s hardly a radical notion: most of us get it by now. “The Butterfly Effect” is well known enough that it became the title of a Hollywood film. Yet the idea that human beings are rational free agents, with no allegiance to anyone or anything other than their own self-interest, remains a given in neoclassical economics. It’s not a workable recipe for dealing with a finite planet with real-world limits, but it works just fine as a philosophy for psychopaths.

Like former chemist and Auschwitz survivor Primo Levi, we’re all co-authors in the universal process of creation. This is demonstrably true in market economics. Our collective capacity for reality construction is demonstrated by the gyrations of stock exchanges. The value of stocks are no more than what we collectively believe them to be, arguably making market economics a branch of social psychology.

The world as we experience it is a weird amalgam of world and worldview, of expectation and external relations. Werner Heisenberg, one of the architects of quantum theory, held that “…what we observe is not nature itself, but nature exposed to our method of questioning.” As scientists penetrate nature to smaller and smaller scales, all they find are ghostlike entities that evaporate into abstract clouds of probabilities. And the deeper they go, they find only the relationships between things, which themselves are only relationships between other things, whether we call them quarks, strings, “virtual particles” or some other conceptual will-o’-the-wisp.

Recent physics experiments in Vienna on “non-locality” have confirmed that all parts of the universe appear to be in instantaneous connection with all other parts. This is reminiscent of the Buddhist notion of “mutual arising” or the Vedic myth of Indra’s net, composed of an endless web of jewels that reflect one another.

Through its recursive retreat into endless layers of pattern, it seems the universe forever hides its face from us, hinting that our self-image as independent beings isn’t the whole story. It’s more like a game of hide and seek between observer and observed.

Ultimately, we are no more “rational utility maximizers” in a “free market” than we are sacks of chemicals disconnected from the air we breathe. We are creative patterns, whirlpools and turbulent flows, inseparable from all the other patterns in the river of being. This is what ecology and the sciences of connectedness have been telling us for decades. And as the frogs, songbirds and honeybees continue with their vanishing acts, the time is running short for the wizards of the dismal science to get it.

www.geoffolson.com