Wild Earth Economics:
Rethinking the Economic Evolution of Humans
The Land Institute Prairie Festival
September 28, 2013
Lisi Krall
The iconoclastic vision of the Land Institute is that agriculture needs to be informed by the ecological
wisdom of the earth; “the genius of place” to use Wes Jackson’s words. This is a vision that recognizes
that we have taken a wrong turn and that we are now required to figure out how to change course.
Unfortunately time is not on our side because we have landed ourselves on the upper neck of some
profoundly problematic exponential growth curves. So we gather here in celebration of ecological living
and love of the Earth but also because each of us feels the weight of our historical moment.
I’ve been asked to talk today because I am an economic heretic and because I have a reverence for the
sanctity and magic of the Earth. Aldo Leopold had it right and wrong when he said: “It of course goes
without saying that economic feasibility limits the tether of what can or cannot be done for the land. It
always has and it always will.” While economic feasibility may seem an immutable law it is essential
that we now begin to question this limitation. We should not alter our sense of what needs to happen
as a concession to what appears feasible, economically speaking. If we do we are sure to come up short.
It is not imprudent, or unwise, to ask for what seems impossible, every woman knows that. When
Elizabeth Cady Stanton asked for the right for women to vote--- it was deemed imprudent, even
impossible, and she ruffled more than a few feathers, but we are all aware of how that ended.
It seems to me that all we really want is to construct an economic world that honors 1) the wild impulse
and integrity of the earth and the place of other species on it, 2) the importance of ecological living, and
3) human dignity. These are not unreasonable demands for an economic system, but it will be extremely
difficult to attain them if we tether ourselves immutably to economic feasibility which is to say if we are
unwilling to alter our economic order in any fundamental way.
Now I know that many of you have an aversion to economics---I’m sympathetic to that. I get tired and
frustrated with it myself. But this is the thing--- our present ecological and human crisis is, if anything,
an economic matter. So it’s important to be clear about where we find ourselves and how we got here.
If it isn’t oxymoronic to use the words imagination and economics in the same sentence, my hope is to
help to expand your economic imagination so that we can begin to imagine what might seem
impossible, which is to say---what is necessary.
Economic Evolution Part I---Where We Find Ourselves---Our Present Economic Order
1) Our economic world is now ordered by what I (and others) label global monopoly finance capital.
The biggest mistake people make in interpreting this economic fact is to believe this is a
perversion of real capitalism. It is not. It is the real thing.
2) Last time I checked this isn’t an economy of small petty commodity entrepreneurial producers
(small businesses) competing with each other to respond to the desires of sovereign consumers
all the while allocating resources efficiently. Some would say this has never been an accurate
description of our economy. What is indisputable is that in so far as it ever existed, it was gone
before the ink was dry on Adam Smith’s tome: The Wealth of Nations that he wrote more than
200 years ago---unless you consider the infinite pizza establishments and the students who
frequent them in the college town where I live somehow the core of our present economic
system.
3) We may be sentimentally and ideologically attached to this idea of small producers, sovereign
consumers and the magic of the market allocating resources efficiently; we may idealize it; we
may even encourage it by supporting our main street businesses but as an accurate description
of the core and impulse of our economic system this is mostly fantasy and in this business of
changing course, it’s a fantasy that we shouldn’t indulge in.
4) So what then is economic reality? Look around you. I realize that things are not always what they
seem but consider for a minute the possibility that they are. In order to engage in this exercise
we must see the economic order for what it is -- a complex and evolving system that nonetheless
has some rather predictable characteristics. This is a system with an inherent dynamic of growth
and with it a concomitant increase in resource demand. It is a system where growth is reliably
punctuated by periods of stagnation and what now appears to be a secular stagnation so
unemployment is a recurring and chronic problem. It is a system with a prevalence of excess
capacity and waste. It is a system where the majority of economic output is produced by
corporations not small businesses. It is a system with an extremely skewed distribution of
economic power with great poverty on the one hand and extreme wealth on the other. It is a
system where externalities are not the exception, not an aberration, but the order of the day. It is
a system with great instability and many destructive positive feedback loops. It is a system of
relentless domestication of the planet. And finally it is a system where we depend on the
information given to us by prices but the prices that really matter fail to provide us with the
information we need.
I don’t think it’s stretching the truth to say that these are reliable attributes of our economic system. If
we are committed to the reasonable goals I laid out previously-- we must move this economic system in
a direction it has never seemed inclined to go. And so it seems perfectly reasonable to ask whether this
is possible.
I think we might be better off entertaining the impossible; that is, to more fundamentally alter the
system, but I don’t think we know how to do that. Let’s try this—let’s start with a skepticism about our
experiment with domestication, because we’ve been on this path of living in an expansionary system
that imperializes the natural world, demands ever greater amounts of energy and resources and lends
itself to inequality and environmental degradation for at least 10,000 years
Economic Evolution, Part II: Where it began.
Since settled agriculture, some 10,000 years ago we have moved away from an embedded relationship
with the natural world and toward a relationship of domination----in the words of Wes Jackson---“We
became a species out of context.”
For the vast stretch of our history we homo-sapiens did not have an economistic bent. We did not have
a system inclined toward expansion; we were not interested in accumulating things; we did not toil from
dawn until dusk doing alienating work; we were not locked into an imperialistic use of the non-human
world to endlessly expand our numbers and the material manifestations of our existence. We were not
enamored with ourselves and our entrepreneurial and inventive spirit. Instead we discovered ourselves
in a rich interchange with a complex and numinous natural world. This is how we came to be the
species we are. We lived this way, not for 1000s of years but for 10s if not 100s of thousands of years.
When we made the shift to agriculture and discovered as Wes puts it, “the ghost-like quality of carbon”
a profoundly different human social and economic dynamic was set in motion. We became
expansionary, the division of labor deepened and extended, the production of surplus became an
imperative and a way of economic life and we began an altogether different relationship with the
natural world. We were no longer an embedded species. We did not begin the exponential growth
curves and the rift with nature that now define our economic experiment here on earth with the onset
of the Industrial Revolution and capitalism, we began them with the onset of agriculture.
Now I happen to believe that the path of economic evolution that began with agriculture is not that
different than what happened to what biologists call eusocial insects. Some species of ants and termites
that practice agriculture exhibit the same pattern as we do. We call them superorganisms. Their
populations grow, their colonies expand, the entire organization of their colonies revolve around the
production of agricultural output---in the case of leaf cutter ants for example it is the cultivation of fungi
that has co-evolved with the ants and they have an elaborate and extensive division of labor that makes
them wholly interdependent---individuals cannot go it alone---they are part of a larger functional whole.
I don’t want to belabor this point, because it is controversial, except to point out that it ought to be
somewhat sobering for us to recognize that our social and economic evolution, what we have labeled as
progress and civilization, mirrors in disturbing ways insects that became superorganisms. I might say
tongue and cheek--so much for progress… For all of us with agrarian dispositions it is important to
remember that the altered economic dynamic that began with agriculture predisposed us to ecological
overshoot and hierarchy. This legacy is still with us only now it is organized in a more pernicious form: It
is organized through market society.
As those here at the land institute understand, the purpose of remaking agriculture is not simply to find
a more ecological way of feeding ourselves, it is to find a way back to the wisdom of the earth, to
recapture something of what it means to be an embedded species. In the realm of economic
organization, this is a far-reaching and revolutionary proposition because it demands that we figure out
how to disengage this complex economic system, our superorganism if you will, that now moves us in
this untenable direction.
We have to begin by appreciating and understanding the complexity of our economic system, rather
than making it opaque, or worse still simplistic, with our economic ideologies and almost banal notions
of sustainability. Indeed there is an imperative to do so because it ought to be clear by now that the
Earth is not infinitely forgiving of this project of infinite and mindless expansion.
I’m about to live up to your every expectation that economics is indeed the dismal science and I
apologize for that. To be honest with you I struggled with what I might say here today because I wanted
to deliver an uplifting message, a message of hope. But I’ve come to believe if there is hope to be found
it will only be found by looking into the black hole of progress and forthrightly sizing up our situation.
So in that spirit, let me being by sketching out some of the contradictions and complexities of the
system, as I see them. My hope is that this might help to clarify the economic challenge that lies ahead.
Employment: We have a wage labor system and in a wage labor system, labor markets allocate jobs and
the majority of people depend on their ability to work for wages to support themselves. Everything
about the demands of our system now tend toward the elimination of jobs faster than we can create
new ones and eventually, I suspect, this will be as true in China and India as it is here. Much of
computer software development is now directed toward the growth of efficiency primarily through the
elimination of jobs. Some manufacturing is now returning to the US but it is anything but a labor
intensive process. The system also has a tendency to deskill workers and pay them less rather than
more. So meaningless work, low wages and unemployment are the result of sound business practices.
The obsolescence of labor in a wage labor system is a problem not simply for the people who can’t find
jobs (or good jobs) but also in terms of the stability of the system. If the system is super-productive and
efficient, but people are underemployed or unemployed and don’t have sufficient income to buy what’s
produced the system stagnates; under-consumption plagues the system. To date our solution for this
problem is primarily to encourage ‘growth’ through a variety of policies.
Growth: Now, we can argue about how best to ensure growth where it falters (government fiscal and
monetary policy, tax breaks to businesses, reduction of regulation etc.) but in the end the objective is
growth. Growth is both a natural part of the system and necessary to prevent stagnation. And herein
lays the problem. It is difficult to have growth without simultaneously increasing resource use. Many
economists call for development without growth; that is to say an increase in GDP without increasing
unsustainable resource demand. I don’t think there’s any question that we can become more efficient in
our resource use (energy is a good example), ----if we become more efficient but use more resources
overall despite that efficiency, then we will not resolve our problems of overuse of resources with
efficiency alone and the whole prospect of development without increased resource use goes down the
tube. This is called Jevons paradox. Becoming more efficient in our resource use is one thing, using
fewer resources in our globalized economic system that continues to expand, indeed must expand for
people to find jobs, is another thing.
Stagnation and Instability: Although growth is a natural part of our economic system so is stagnation.
This is a contradiction in the system that’s been with us for a long time. Profits and savings need to find
outlets in this system to prevent stagnation but finding sufficient investment outlets is always a problem
in part because the tremendous productive capacity of the system has meant that we are plagued with
overcapacity. In a sense our problem is not that we can’t produce enough it’s that we produce too
much. In a mature capitalist system this problem is exaggerated because innovation that brings about
investment opportunity is not infinite. Add to these the problem of under-consumption previously
mentioned and it is easy to see there is every tendency toward stagnation in this system. The basic
proposition of the circular flow of income and spending is that the income generated in the system must
be spent.
In order to counteract this tendency a couple of things now happen---wasteful expenditure (military
spending and planned obsolescence are just a few examples) --government intervention to stabilize the
system and encourage growth (through classical monetary and fiscal policies) and finally the expansion
of debt and advertising to nudge along consumption. The growth of the financial sector is not some
aberration of the system simply explained by greed---it’s a logical outcome of a mature capitalist system
with formidable problems with the distribution of income and a need to keep spending going.
Energy and Climate Change: We need cheap energy to keep the economy running smoothly and this is
more true now than it’s ever been. Yet we are running into energy problems on both the supply and the
externality fronts. We have been given a temporary reprieve from the specter of supply constraints
because technology has allowed horizontal drilling, fracking, offshore drilling, the mining of tar sands--the nonconventional production of fossil fuel. In addition we still have lots of coal. These are the
dirtiest, most socially and ecologically disruptive technologies around but they are nonetheless
providing enough energy to keep the wheels of commerce going in its present form. So we continue to
pump carbon into the atmosphere and there is no escaping the effects of this except the time lag
between what we do and the result.
Energy is brokered through global energy markets and governed by the precepts of private property and
profit. In some cases it is state owned but even so state ownership still entails participating in global
markets. These are what I call ‘the vested interests’ in energy. It is these interests and the system that
governs them that are presently in charge of our energy transition. The economic interest of those who
control energy is to get the best return on their investment. It is unlikely they will give up on their
tremendous investment in fossil fuel when it is so profitable and when it isn’t clear we can manage
without it.
It is well and good to consider how our energy transition might take place given this economic
environment. It is likely that the vested energy interest will eventually take control of the renewable
energy sector because it will be in their business interest to do so---a horizontal consolidation of
economic power in energy. They will clearly have the money to do so. The transition to renewable
energy will be timed according to the dictates of good business, not according to the ppm of CO2 in the
atmosphere. And before it’s over the business interest in energy will be encouraging conservation and
greater efficiency in the use of energy because in a world economy that demands ever greater amounts
of energy managing demand will become part of good business too. Believe me, the oil and gas industry
doesn’t object to people drive Priuses. While it might be technologically possible to disengage from
fossil fuels (there are many optimistic physicists who believe this is so), it is economically unlikely.
Food: Green revolution technology and highly processed and packaged food make perfect sense in this
economic system. Market expansion is necessary to the economy and agriculture has been
accommodating with the demand for farm equipment, seeds, fertilizers, pesticides and the rest. And
like cheap energy, cheap food is also important in this system. The low price of basic food products
leaves more room for making money in the value added of processed food and it leaves consumers with
more money to buy more of everything. It also helps to bolster profits.
The 50 year farm bill proposed by Wes and others offers a map for ecological agricultural production.
The proposal obviously stands in opposition to the demands and impulse of our current economic order.
These demands have, if anything, become more pronounced over time. If making agriculture
sustainable means downsizing the agribusiness industry and likely making food more expensive we can
count on the fact that it will not be embraced by most consumers or the vested interests in agriculture.
So I look at this somewhat disheveled economic landscape and this list of recalcitrant problems and I
think we have on our hands what I (and others) call a failed growth economy. In a sense it demands
exactly the things we don’t want if we want to avoid ecological collapse: growth and expanding markets,
waste, cheap and abundant energy, cheap and highly processed food, and a continued ability to slough
off costs through externalities. And at the same time its inclination is to reliably generate ever
increasing inequality. Quite frankly I’m not sure how much more information we need before we see
the picture clearly. Our economic denial is far worse than our climate change denial that’s for sure.
Economic Revolution: Part III: Imagining the Impossible—A Wild Earth Economic Future:
At a time when our economic and political discourse is so limiting perhaps it’s important to try to change
the conversation. We now have a failed growth economy so we need to begin by calling it what it is and
couching our discourse about what needs to be done in this context and not some illusory image of the
system. It is not consumers with a moral bent or inventive entrepreneurs or our ability to internalize
externalities that will determine our future, it is whether we are willing to question the reach of the
market. Our agenda should not be to engage the market in solving our problems but to disengage from
the market. With this is mind I offer few suggestions for how we might start to think about change.
1)
There will never be enough growth to take care of our problems of unemployment in a failed
growth economy. So if we are committed to human dignity we have to figure out alternate ways of
getting people what they need. We can begin with redistribution as long as we understand that
redistribution is not revolutionary; that is to say, it doesn’t change the underlying dynamic of the
economy, it simply makes it more just and it can moderate its worse impulses. There are endless
ways to think about how redistribution might take place. For example, we might spend less on
military spending and more on public sector employment. We might employ higher taxes on
corporations that grow and profit but create few jobs. We might increase the taxes on the rich. As
I said there are endless ways in which this might be done. Redistribution is always bound to the
system.
If we want more fundamental change we must begin to think about whether there are sectors of
the economy that are now governed by private enterprise that might be better brought into the
public domain. Implementing nonmarket ways of organizing production and distribution would
require planning and rationing which unfortunately are now considered four letter words in our
economic lexicon.
2) A timely energy transition in a failed growth economy will never occur as long as this transition is
organized by market forces. Rather than couching our energy discussion around subsidies, carbon
taxes, ill-conceived ethanol credit markets, divestiture and the rest of market based approaches to
push along a transition to renewable energy, why don’t we talk directly about the fact that the need
for cheap energy in a failed growth economy and the rights of the vested interest in energy to profit
from their investment converge to extend the life of fossil fuels. For these reasons we don’t hold out
much faith that ‘the market’ will manage this transition. Why don’t we simply stick out our necks
and say we don’t think it’s in the best interest of society for ‘the market’ to be responsible for this
transition nor do we want energy production and distribution to be mediated by the market. If
there was ever a place where the belief that private enterprise leads to social welfare is most
damaging, it is here because energy is a place where it decidedly does not.
If markets are no longer ‘in charge’ of energy then we need a different model of producing and
allocating it. Decentralized, regionally managed and publicly owned renewable energy is a possible
framework. People, grounded in communities needed to be able to speak to their vested interests
which, among other things, include the desire not to have wild rivers dammed and wind mills and
photovoltaic cells on every horizon and in every inch of open space that surrounds them. If there
was ever a place where the ideals of democracy, a sense of the sacred and the limits of economic
expansion converge it’s here.
3) It’s actually not that hard to begin to question the sanctity and reach of ‘the market’ because the
market gives us ample moral high ground to do so. All we have to do is to become just a bit more
radical in our approach to what we do with markets when they become especially speculative,
destabilizing and destructive. Rather than calling for re-regulation maybe we should call for their
elimination. The truth is that we are reticent to do this because we understand that the distinction
between sound business investment and speculation is not as clear as we’d like to believe.
Economic ideology capitalizes on this ambiguity and we are all held hostage by it.
We now speculate in everything from ethanol credits to commodity futures to sliced up risky loans
and the many deviations that emanate from them. Those who engage in these markets call them
sound investment strategies. If the money made here is any indication they are right. Many of
these investment strategies end up in speculative bubbles that are horribly stabilizing for the system
and often distort important prices like food and energy. Think about investment in the oil futures
market----we don’t need commodity futures market in oil to tell us that oil will be scarce in the
future---do we? We have all sorts of alternate ways of garnering this information. We don’t need
poorly constructed ethanol credit markets to transition us out of fossil fuel for heaven’s sake. I
daresay our problem isn’t the 1%, it’s the inability to confront the 1% with a good dose of economic
heresy.
Now I want to conclude by saying this----it is inevitable that we are going to get to the end of this
economic experiment. Our problem is not simply that we are running into biophysical limits it’s that
we’ve been resolving the internal contradictions of the system with ecological overshoot and ever more
growth for a long time and now it’s not so easy to do that. We are into a horribly destructive phase of
the evolution of this system because in order to engage in what seems an increasingly futile effort to
save the system from itself we must further compromise the integrity of the Earth. This is the ultimate
zero sum game.
Perchance we humans were given the great gift of the Earth. We were chiseled body and soul out of its
wisdom. But we have clearly come to a great divide as we reach the waning days of this economic
dynamic. The only question we must ask ourselves is how we choose to participate in its closure, and
this is a question of great magnitude. Will we choose to orchestrate a responsible and dignified end or
will we simply engage in a wholesale trade of ‘the so-called magic of the market’ for the magic of the
Earth? Do we dare to walk out of this cage of domestication and question the authority and sanctity of
‘the market’? Do we dare to rethink our economic evolution in this way? Do we have enough of the wild
left in us to do that?