Paul Gilding

As Tom Friedman recently wrote in the NYT, “There’s Something Happening Here”. There sure is. The market system that has delivered so much to the world over the last century – brought great technology, alleviated so much poverty, produced a better life for billions – is now destroying itself.

Some say this process is now inevitable. That like an empire in decline, the system is deluded by its grandeur and historical power and thus fails to see its weaknesses – so is unable to respond.  I disagree. The crisis is certainly inevitable, indeed that is well underway. The ecosystem is breaking down, and the economy is in hot pursuit in the collapse stakes. But the path into and through this crisis is a choice we get to make. The future doesn’t just happen, we create it.

But who gets to make these choices? Some argue it’s “the 1%” and that the victims of their decisions are “the 99%” – that the rich beneficiaries of the current system control it, and do so in their own interests. This analysis says that’s why we have low taxes, bailouts of wealthy investment banks, lack of action against those who caused the financial crisis and a failure to deal with climate change – because the rich 1% want it that way. But is that correct? And if so, are they making the right decision even for themselves?

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It’s going to hit hard and it’s going to hurt – made worse because most aren’t expecting it. They think the world is slowly returning to our modern “normal” – steadily increasing growth, with occasional annoying but manageable interruptions. After all, the global recession wasn’t so bad was it? Sure there was pain and things got shaky but Governments responded, bailed out companies, stimulated economies, got things back on track.  While it’s still a bit bumpy, Greek wobbles, US debt, extreme weather, high oil and food prices etc, it’ll work out. It always does….

If only it were so. In fact we are blindly walking towards the next in a series of inevitable system shaking and confidence sapping crises, deluded in the belief that the worst is behind us.

Each crisis will be a little worse than the last. Each one will shake our denial a little more. This is what happens when systems hit their limits. They don’t do so smoothly, but bump up against the wall, hitting hard, then bouncing off equally hard. It is the behaviour of a system trying to break through. But if the limits are solid, as is the case with our economic system hitting the limits of the planet – defined by unchangeable physical capacity and the laws of physics, chemistry and biology – then it can’t find its way through. So eventually, when the pain of hitting the wall gets too much, it stops.

Then it will hit. Like a grenade in a glasshouse, shattering denial and delusion and leaving it like a pile of broken glass on the floor of the old economic model. Then we’ll be ready for change.

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Economic growth is slowly but surely coming to an end, not for a few quarters or years, but to an end. It will still take some time given the mighty momentum behind it, as well as the power of our denial, but the signs are clear that both processes have begun.

Let me be clear that I’m not talking here about the long philosophical debate on the relative merits of growth – that rich countries getting richer does not improve their quality of life. What we face now is not a political choice – it’s too late for that. We have put in place the processes that will force the end of growth and nothing can now be done to change course.

China is perhaps the best example, exaggerating all that is good and bad about the growth model. We have seen spectacular rates of growth in recent decades and with it, many hundreds of millions of people being brought out of poverty. These people are now enjoying the fruits that global growth has delivered to many of us over the last century in technology, health and easy access to food. On the other hand China has paid an enormous price for this growth, in air pollution, degraded soil quality, spoiled waterways and longer term risks to food supply. It is now even taking from the USA the ignominious title of being the world’s largest current contributor to climate change (though we mustn’t forget China’s per capita emissions are still dwarfed by the pollution rate in the OECD countries).

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Why didn’t more of us see it coming? After all, the signals have been clear enough – signals that the ecological system that supports human society is hitting its limits, groaning under the strain of an economy simply too big for the planet. But we didn’t and, as a result, the time to act preventatively has passed.

Now we must brace for impact. Now comes The Great Disruption.

It is true that the coming years won’t be pleasant, as our society and economy hits the wall and then realigns around what was always an obvious reality: You cannot have infinite growth on a finite planet. Not ‘should not’, or ‘better not’, but cannot.

We can, however, get through what’s ahead – if we prepare. I wrote my forthcoming book, The Great Disruption, to help us do that. My conclusion in writing it was this:  not only can we make it through, we can come out the other side in better shape.

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We all know the argument; Governments are inherently ineffective at guiding markets and will always screw it up when they try to. Markets, the argument goes, are inherently more efficient at picking technologies and responding to constraints, so should be left to do their thing.

People who want to resist change, for any number of reasons, latch on to this argument as another excuse to avoid action on climate. After all, even if climate is a problem, government will surely get it wrong if they try to fix it. It is this argument, along with climate scepticism and the over-riding priority given to economic growth, which has, in various combinations, been used against climate action since the threat became clear in the late 1980’s.

Yes, we forget how long this problem has been in the mainstream debate. It was back then that the pro-market, conservative British Prime Minister Margaret Thatcher argued: “The danger of global warming is as yet unseen but real enough for us to make changes and sacrifices, so that we do not live at the expense of future generations.”

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