Addressing the Economic Roots of the Climate Emergency
The climate emergency that we’re facing is big enough, yet it is a manifestation of something even bigger. It is the culmination of hundreds of years of a mindset of domination and mastery, as well as the belief in the power of technology to save us, and in human exceptionalism, which separates us from the rest of the web of life and from the life of the Spirit. As we seek to address this essentially amoral framework, our faith values are a critical part of what we bring to the search for solutions.
John Woolman advised us to “Dig deep. . . . Carefully cast forth the loose Matter and get down to the Rock, the sure Foundation, and there harken to the Divine Voice which gives a clear and certain Sound.” Walter Wink, a twentieth-century theologian, held that Spirit is at the core of every institution (or “power”), but the spirituality of institutions can become diseased. The task of the church is to identify these powers; discern whether they are continuing to contribute to the common good; and, if not, redeem them and call them back to their original divine vocation.
If the divine vocation of our economy is to attend to livelihood, ensuring that our common needs are met, the signs of disease are glaring. Just consider our testimonies. We value integrity, yet our economic system has no place for conscience. We value simplicity, yet our growth economy requires ever-increasing consumption, stretching earth’s capacity to the breaking point. We value equality and community, yet we see economic inequality increasing dramatically and poor people, mostly of color, bearing the burden of climate change. We value good stewardship, yet are running through resources, soil, clean air, and water at an alarming rate. We value peace, yet the violence and devastation caused by our economic system’s exploitation of people and the planet is tragic.
Applying Woolman’s admonition, we hear no clear and certain sound. That tone has been muffled; what comes through is jarring and tinny. Clearly we are faced with the challenge that Wink holds out: of calling our economy back to its divine vocation.
We might think this is a job for trained economists, but they are mostly busy keeping the system that they know working. The world does not need more insider guardians of the status quo. The world needs people gathering others around values that resonate deeply, and finding a place of integrity on which to stand.
Photo by William Gibson on Unsplash
I think of the time when a Friend who was active in counseling young men to write statements of conscientious objection challenged me to write my own statement. I sat down to this task, asking myself this question: to what do I conscientiously object? The words that came out were not about peace but about the immorality of an economic system that glorifies greed, breeds injustice, and threatens life on earth. I’m not a trained economist, but how can I be silent in the face of conscience?
To address the climate emergency, the world also needs people willing to dig down to the roots, as we listen for what rings true, and keep in mind the divine vocation of our institutions. I would suggest that one of the biggest roots of the climate emergency is our economic system’s bias toward capital. This bias is problematic in several ways: the social goods that are left out of the equation in production, the built-in imperative for growth, and the privatization of money.
If the most prized resource is financial capital, then the goal will always be to increase it. Other forms of wealth, such as humanity’s natural and cultural resources, get degraded in that process while by-products, such as waste and pollution, are accepted as necessary. A look at the example of industrial agriculture can illuminate this dynamic. Through the lens of traditional cost accounting, this is an efficient system. It provides low-cost food to lots of people and profits to agribusiness. The logic of the system would indicate that more should be better for everybody.
Yet if we take a closer look, the costs that do not appear on the books are striking. Processed foods that appear on our grocery store shelves contribute to people’s health problems, and their manner of production causes problems of health and welfare for animals in feedlots. There is the destruction of soil health through heavy application of fertilizers and pesticides, which also pollute accompanying waterways. There is the replacement of richly diverse ecosystems with endless monocultures. There is the elimination of family farms and the hollowing out of farm communities. There are the massive carbon emissions from heavy machinery and long transportation routes.
This type of agriculture can only make sense through the lens of an economic model that gives preferential treatment to capital—including massive subsidies to agribusiness and fossil fuel industries—and doesn’t count the overwhelming externalized costs.
With a goal of maximizing capital at the end, we have committed to a linear model of production. We extract, produce, consume, and discard—and repeat. Yet we forget that the economy is completely embedded in the biosphere. The circular nature of the biosphere and the web of life will not change; our linear model of production, with its exploitation of resources in the service of the accumulation of capital, must be the one to bend.
The world does not need more insider guardians of the status quo. The world needs people gathering others around values that resonate deeply, and finding a place
of integrity on which to stand.
A bias toward private capital is also central to the economic growth dilemma. Many of us learned in school about the imperative to continually expand markets in order to keep the economy growing. We can see this growth imperative in our financial system as well. With virtually all our money created when private banks make interest-bearing loans, taking on a loan means taking on debt. Thus, the money supply needs to steadily increase, so that not only the principal but the interest can be repaid.
Thus the requirement for economic growth is baked into the system. Centuries ago, when there were great untapped resources—minerals, forests, topsoil, and easy access to stored sunlight from the past in fossil fuels—such an expansive system could be a rough fit. But it has no future on a finite Spaceship Earth, as Quaker economist Kenneth Boulding so eloquently pointed out. The contradiction of trying to fit an expansive linear model into a closed circular environment is ultimately irreconcilable. Moreover, since receiving interest gives lenders more, while paying back interest leaves debtors with less, inequality steadily grows.
It should be noted here that it’s possible for loans to be non-exploitative, allowing a person or business to create value that is greater than the cost of the interest, and easily repaid. But the growing predatory lending and debt servitude that we are witnessing are systemic and deeply problematic.
An additional concern is the growing tendency of capital to move away from productive activity altogether. I think of the producers of a brand of juice, lamenting how they had imperceptibly transitioned from a focus on making juice to a focus on making money. Now higher profits can be made from investment in financial instruments than investment in productive work.
Photo by Pat Whelen on Unsplash
Yet we need our money to be working for the common good, now more than ever. The transition that is needed as we face a growing climate emergency will require a tremendous amount of investment: to build out a clean energy infrastructure, to green our built environment, to transform our industrial agriculture system and sequester carbon back in the soil, and to finance a just transition that includes new jobs for folks who have been marginalized in this economy and those in the fossil fuel industries. Some of that investment may come from private sources, but it turns out that paying back the interest on long-term investments tends to nearly double the costs of a project. Thus projects with enormous social benefit but low short-term monetary return may be hard to fund without public support.
One option is to continue running up our federal debt. In a way this is not problematic, since it can just sit on the books indefinitely. But paying the interest on that debt is a constant drain, as resources flow from public revenues into the private banks that hold those treasury bonds. So this is a time to think more creatively about public money, and about alternatives to having our money created by private banks.
What if we treated our money as a public utility in the United States? With that new frame, many possibilities open up. Nonprofit banking would be good for individuals, especially those who are currently unbanked. This could mean not only credit unions but basic banking services through the postal system, as is done in many other countries and was common in this country till the 1960s. There is also intriguing talk of setting up individual accounts at the U.S. Federal Reserve.
Thinking beyond individual needs, there are a variety of opportunities for public money as well. We have the model of the Reconstruction Finance Corporation, a public investment program that got the United States out of the Great Depression and WWII. Public banks that can hold and invest public revenues for the benefit of local economies are another model. Putting municipal or state taxes and other common funds into a public institution allows us to keep both capital and interest in house, and to lend and relend those resources for the public good, as has been done by the state bank of North Dakota for over 100 years. This way money can circulate slowly in the local ecosystem, serving as a resource to many parts of the community in the process, rather than being drained off quickly and efficiently to Wall Street.
To respond to the climate emergency, the banks must be challenged directly. Between 2016 and 2020, private banks poured $3.8 trillion into the fossil fuel industry, the dominant cause of climate change. Thus campaigns to pressure them to change their investment strategies are an important step. But a system that treats money as a public utility is a more foundational solution. The understanding that the government can create and spend money directly into the economy is a critical element of a green and just transition. Public money could also be used to buy out fossil fuel industries, in a similar way that it has been used to bail out financial institutions.
With a goal of maximizing capital at the end, we have committed to a linear model of production. We extract, produce, consume, and discard—and repeat. Yet we forget that the economy is completely embedded in the biosphere.
Of course, this is not the only way to respond to the climate emergency. We need to replace fossil fuels with renewables. We need to pull carbon out of the air where it causes harm and return it to the soil where it is needed. We need to pursue all the ideas in that great book Drawdown edited by Paul Hawken. We need to address overconsumption. We need to make sure that the impacts of colonialism and racism are centered in whatever we do. But at some level, we will continue to be treating symptoms until we get to the economic roots of the problem.
This may feel way too big and complicated. We’ve been told that economics is for the experts: that the details are too complex for ordinary people to understand. But the role of economics is critical, and going back to the roots once again, I’m heartened. The Greek roots of the word economics mean “management of the home.” This is something we all understand, something we all can think about. And our faith values may have more power than we know. They can help us imagine a new thing, and imagination is a scarce ingredient that will be critical as we face the challenges ahead.
I keep coming back to the words of Walter Wink about the role of the church in calling our institutions back to their true vocation. This is something we are called to, and it is something that is within our power. As we face the climate emergency, let’s be willing to step boldly into the public arena, armed with our faith values and prepared to talk about economics, finance, and a future for us all.
Environmental science needs to become a core subject in schooling equivalent to reading, writing and arithmetic.
Money needs to be connect to it’s natural root in the value of completed exchanges. New money that results from purchases by credit card should be the only new money allowed into circulation. Such new money gets it’s value affirmed when the credit card debt is settled by the card holder. If we want an honest currency this is the way to go. No institutions should be authorised to produce new money in other way than this.