There is a joke that there are two kinds of people: those who divide people into two kinds, and those that don’t. I submit that there are two ways of looking at a system: as a sustainable one, or as one to be exploited.
Physical laws forbid energy or mass from being created from nothing, and ensure that the overall disorder of everything must increase. What this omits is the situation where there is something to be exploited. A system that is far from equilibrium can create order, can create energy, by exploiting that disequilibrium and in effect using some of its energy to do so.
A green plant sitting in sunlight can create sugar and oxygen, a definite source of energy. The disequilibrium comes from having a large nuclear reactor, the sun, pouring photons into chlorophyll molecules. The green plant exploits the sunlight with no thought for renew-ability. The herbivore eats the plant with similar aplomb, and may be eaten in turn by carnivores, scavengers, or bacteria. Nobody worries about where the energy comes from.
It is possible to put a snail and some algae inside a sealed test tube containing some water and air. It is possible for this micro-ecosystem to become stable: sunlight turned to plant turned to snail excrement turned to fertilizer; carbon dioxide returned to oxygen burned back to carbon dioxide. In this ultra-simplistic system, nothing gets lost: not a single atom of phosphorous, for example, can escape. The system does still need the sunlight to make up for losses and to power it overall.
I submit that a society should be run more like the sealed-in snail. The sunlight of civilization appears to be funding, so the society should know where it comes from and use it accordingly. It should not encourage snails to grow faster than the algae can keep up. It should not expect the algae to recover the phosphorous faster than the snails can process it and give it back.
Put it in real terms: the fees a society collects should reflect the lifetime costs of the reason for charging the fees. If development fees are not going to continue forever, they should not be used to support infrastructure – property taxes would make more sense. If tobacco taxes are not spent on health and related costs, the government risks being dependent on tobacco taxes to pay other bills. In this case the society can not afford to have people quit smoking – a ridiculous outcome.
The system of taxation we now have appears to be one of, tax whatever you can, as limited by lobbying, then, put all the money into a bucket and spend whatever your special interest groups are lobbying for. The potential for imbalance is obvious. What is less obvious is the potential to greatly benefit the few at the expense of the many: all that money collected without tying it directly to what it is going to pay for. All that money available to be spent on whatever those of influence think would be pleasant for them.
I submit that an economy is a system that can either be run as sustainable or not. If you have oil underground, you can treat that like sunlight – a free input that can be used to create wealth or energy or status. This works until the oil runs out or becomes unpopular due to arcane hazards such as climate change. (The continuing denial of climate change is a topic for another blog entry, eh?)
Another way to run an economy is to be blessed with the ability to levy the equivalent of a handling charge. Switzerland with its banks, Panama with its canal, Caribbean vacation destinations, are all examples of this. Money will come so long as the outside economy still is willing to pay the handling charge. These are all in some degree of doubt today: some of the lure of foreign bank accounts is diluting due to more (tax) disclosure; alternate shipping routes (northwest passage will be open during our lifetimes) and alternate products (more electronic, less physical) can lower the value of a canal between two oceans; a recession can cut down on the volume of tourists lining up to sprawl on a beach.
A very clever way to run an economy is to get all nations to agree to enforce your patents and copyrights. Then you can make your electronic device anywhere, under license, doing virtually none of the work except design and patenting. I put a pointer to a Noam Chomsky article in an earlier blog, see “A Planned Failure”. What Chomsky points out is that the off-shoring of jobs was always part of the plan, and the rich are still getting richer while the rest of North America is getting poorer.
The beauty of this system is that it can pump so much money out of the general population, until they are essentially all unemployed. If my tablet or phone or PC is made offshore, where does my purchase price go? A small part to the actual manufacturers, and a larger part to the patent holding company that contracted the tablet or phone or PC to be constructed. In short, a third goes offshore and two-thirds goes to the rich. Nothing goes to my neighbour, who may now be laid off.
The mistake in this selfish grab for the last of the wealth of the continent is in the perpetrators’ failure to do a complete, systems, analysis of their own lives. It will soon be necessary to live in a gated community (of your rich peers). It will soon be necessary to have your own militia. You may need your own generator to keep your building cool against global warming. If you need a good haircut, you may have to have your own barber on staff.
The rich still do live on the same planet as the rest of us. How will that work out when the majority have no funds, no homes, no futures, and nothing to lose?
The current system depends on the rich forever taking more from the poor. It depends on higher taxes for everyone but corporations and the rich. The latest push for austerity will be borne almost exclusively by the lower classes. None of this is sustainable.