Consumption, greed and collapse. Or why the Credit Suisse punishment is a step into the right direction.

Credit Suisse must pay $2.6 billion in penalties for assisting wealthy Americans evade taxes. While the elites grumble over this verdict, human society should be thankful. It could save us from collapse.

Not long ago I have mentioned a study that is well worth reading – even for people who don’t care much about the environment. What I didn’t mention about the “collapse model” developed by Motesharrei, Rivas and Kalnay is that there have been others who tried to simulate rise and fall of societies. What is different in the HANDY[1] model is the fact that it’s the first to be capable of actually reproducing collapses of ancient empires. Another novelty is that the HANDY model is the first to introduce distribution of wealth as a relevant factor. Adding up two and two one can likely guess what follows: namely, that it’s the factor inequality that helps to explain why societies collapse.

But let’s go back to the basics of the model. Ecologists are quite familiar with ups and downs, because in nature everything comes in cycles. Studying animal populations one can observe so called predator-prey cycles[2]. The difference between human and animal populations is that animals cannot accumulate resources. That’s why they generally[3] can’t over-consume till collapse. Interestingly enough, the HANDY model suggests that even a human society based on egalitarian principles will not collapse, because while sharing resources, an over-consumption can be felt by everyone and humans start to adapt (e.g. by consuming less).

The whole story changes with unequal societies. In those societies, elites – that is, people who dominate and live from the production of others – can accumulate wealth in a disproportionate way. It is this accumulation of wealth that in turn helps them to over-exploit natural resources. Given that the accumulated wealth helps them to push their boundaries they do not feel the impact of over-consumption as much as “lower-class” people. Hence, even if the masses complain about the consequences of over-consumption, the elites do not want to change – and this behavior marks the first (or last) step into abyss. Now, does this ring a bell? Have you ever wondered why we don’t do more about climate change even if we know that it will be fatal?

Maybe a quote from Dieter Helm’s investigation into climate change[4] policy and the often criticized discounting rate applied in the Stern Review can help: “why then should we apply them [the claims to equality] into the future when we clearly do not do so for current people?” Analysing why the climate change mitigation process has (so far) only been a mere farce, Helm brings the problem to the point: the Kyoto Protocol, drafted by elites, has been set up in such a way that while governments pretend to be doing something about climate change, the elites can in fact keep consuming. What’s worse, they fill their pockets with more wealth in order to prepare for the collapse.

So, when the moment comes that the masses start drowning, the rich will bring their evaded taxes from some island in the Caribbean into a “dryer” tax haven – maybe to the Swiss Alps, where their assets are safe from sea level rise. And no, don’t worry about Credit Suisse and Swiss banks: as you might know by now, everything comes in cycles and Swiss banks will recover as they did in the past. The bad never dies – not in the movies, nor in real life.

[1] HANDY stands for Human and Nature Dynamics

[2] Known as the Lotka-Volterra Equations.  The most often used is that with rabbits and foxes: if there are many rabbits, the foxes have a lot to eat and hence the fox population grows. However, while it grows, rabbits are (over)-decimated. What follows is that there is not enough feed for the foxes and the fox population starts to decline. This in turn helps the rabbit population to grow again. The cycle starts anew.

[3] If not for other factors

[4] See: Dieter Helm (2008). Climate-change policy: why has so little been achieved?

 

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About blaubear

Born in 1973 in a small village in rural Switzerland and into a society largely dominated by cows (not only was the human population of one-hundred-and-forty outnumbered by them, but politics driven by unreasonable subsidies for diary products) I was connected with nature from early age on. Observing nature on one hand and the deficiencies of a dysfunctional Swiss agricultural policy with farmers that had lost connection to the land that provided their income on the other, I soon started to question society and the meaning of life. Suffering also under a farcical public education I developed curiosity to discover on my own. That was how I soon learned that little of what I had been taught was true. Skepticism and interaction with people from for me new cultures fostered my interest for the world and eagerness to leave a life shaped by federalistic layman-ship. At the age of twenty-three I hit the road for the first time, an event that later translated into passion. Traveling between cultures has since become part of my life. At the age of thirty-three I finally realized my dream and did a degree in Environmental Engineering from which I graduated in 2009, only to leave Switzerland once more for my "real home" Spain. Unfortunately, the stay was a short one: a couple of months later I was offered a job in Southeast Asia, where I worked and also lived (with some interruptions, e.g. I live in Melbourne since late 2012) ever since. Having worked for a Japanese company earlier in my life, I soon felt captured again by Asian culture and thinking which makes a lovely contrast to my European heritage. My journey through different countries and cultures has taught me that regardless of how different our thinking and values are, no matter what approaches we take, we all can learn from each other. And if we are open enough to see the common instead of pointing out the differences, then we have a chance to live in harmony and peace: Life is all about integration, not exclusion! It's an old wisdom that "knowledge is power", as such I never get tired of being around new people, having interesting talks, and reading lots of good books. I hope that my blog can contribute to the conversation.
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One Response to Consumption, greed and collapse. Or why the Credit Suisse punishment is a step into the right direction.

  1. Justin R-Sondergaard says:

    Interesting argument…I wonder what would happen if the $2.6 billion was invested in SMEs or the businesses of poor people. No not a freeby – they would apply like all commercial enterprises but would not face the current discrimination they face trying to access capital from mainstream banks – hell do the math: 1 billion at the bottom (Collier: The bottom billion) of the equality pile able to access finance for their livelihoods…more money than they see in a lifetime of toil.

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