The Green Gap

In the Cold War, we feared a Missile Gap was a strategic weakness. Nowadays, we must awaken to the fact that the Green Gap is true strategic weakness: the nations whose economies will thrive in the coming years will not be those with the biggest factories, but those with the most sustainable, efficient, and ecological markets. What we require is a Strategic "Green Reserve" of ecological design to weather the coming changes that both climate and resource scarcity will force on the international economy.

Saturday, 19 March 2011

Life Support

Back in the Cold War, there were just two megaregions: "Capitalism and friends" and "Communism and friends". There are a few more major political systems operating in the world today, chief amongst them being that of the USA and its close allies - the ostensible winners of the Cold War. Nowadays, we can add to that the EU, India and environs, China and environs, the Gulf and Maghreb, and those few outliers who dabble their feet in two or more ponds. I recognise other groupings such as BRIC and the Nonaligned Movement as political forces in their own right, but (unlike a Political Scientist) I won't find some methodological sleight-of-hand to remove them from my analysis. I'll simply say that I don't think they are that important to the discussion of politico-economic systems. They seem more like coalitions of convenience than genuine blocs.

The United States (and friends) won the Cold War, which, for many, validated its economic and political system. As a matter of fact, people still backhandedly compliment China on being an autocracy that can actually function economically. It appears that to many people, the outcome of the Cold War had ended discussion on the matter: you need to be a democratic free-market to survive. It's clearly not true now, and it wasn't true then. The Gulf has proven you can be a rich kingdom without any trace of real democracy. India, confusingly, is one of the oldest democracies and yet has generally failed to get particularly rich. What gives? Shouldn't this have been decided long ago?

Well, in a word, no. The Cold War wasn't a battle of which system was "better". It wasn't a competition to determine the best way to run a country. It was much more like a drinking contest. The last nation left standing wins. It doesn't mean that nation doesn't leave the contest dead drunk... it just means it walks away as opposed to being carried. Another analogy might be a pair of aging siblings who have named one another executors of their wills. The one who lives longest gets the spoils... but is still close to becoming topsoil themselves. The battle between systems is a game of who dies last, not who is correct.

Certainly, over a long period of time, one could argue that systems undergo a form of Darwinian selection that winnows out the ineffective and allows the effective to propagate. Perhaps that is true to a degree. But if we accept a Darwinian answer to the problem of the propagation of political systems, then what traits does it appear the ecology of nations privileges over others? Historically, it seems that the capacity to produce (food or rubber duckies or what have you) seems to be a major determining factor. Agrarians had the advantage of population over hunter-gatherers. The factories of England had material advantages over the artisanal manufacturing processes of the Zulus. The economic engine of the United States had more feedbacks and self-regulating processes than that of the Soviet Union, and ended up being far more productive in every sense.

But this fact presupposes something. If we accept that systems are promoted to the ranks of posterity by Darwinian processes, and then accept that the ability to be productive is one of the chief (if not the single) reason that nations tend to succeed other nations... then we are admitting that the Realists were right. This is simply because the ability to out-produce someone is only a useful trait when competing with them. If the overarching arena in which systems and nations compete was not zero-sum and competitive, the capacity to outproduce would not be a primary factor for selection. It might, for example, be the capacity to cooperate... if that is what we as tribes of humans had evolved to do.

I suppose we have selected systems that allow nations to cooperate, but seldom is it that the overarching systems themselves cooperate with one another. To be more specific, they may cooperate initially, but they don't cooperate with one another for long. Eventually, the worm turns. The USSR wasn't terrible... until after WWII. Prussia wasn't a problem... until it unified and built a fleet. Sometimes a system is comfortable coexisting with another system... up to a point. Eventually, the systems diverge on something, and all hell breaks loose. That's when the ability to outproduce the other guy comes in useful. At some point, you're going to have to lay it on the table.

So now we have several nations competing within blocs of - generally - similar systems. Again, I'm purposely ignoring the countries with different systems who get together, mainly because I believe they join together opportunisticaly rather than systemically. OK, fine, it's a sleight-of-hand, but it sounds right to me. These systems are not really competing to prove which is the most effective through some kind of footrace analogy. The system that is left standing will be that which survives, not which reaches X GNP per capita. Nations within the systems that are competing are expending massive amounts of energy for a competitive advantage. Typically, that competitive advantage comes from production, and production relies on access to primary resources.

Chief among the primary resources are those that produce energy: oil, coal, and yellowcake; those that produce food: arable land, fresh water, and coastline; and those that nourish industry: iron, copper, nickel, coltan, platinum, and gold. Of these, only the first two are hard limits. That is to say that production of stuff can occur without the raw materials I noted above. Resources and food themselves can be sold for a profit, and simple products can be made without the need for large supplies of metals or chemicals. Food and energy, however, are game-changers. Without either, the economic engine of the nations - and therefore the system - hits a brick wall.

Everyone is with me so far: without energy or food, a nation basically bows out of the contest and takes up, at best, a supporting role in the Great Game. Worse still, it may take a bit part as an extra in someone else's hinterland. No wonder that China is seeking oil concessions wherever it can get them. It's why China is active in the Marshalls and in Africa, the places where it might be able to get a marginally secure source of oil. It's the reason for China's interest in the Senkaku Islands. This is equally true in the inverse: the systems competing against China's are all interested in the denial of this same resource to her. As a matter of fact, China was looking for a route for a Caspian pipeline before 2001. A seemingly random act of warmaking intervened when several western nations entered Afghanistan. The USA signed on a bunch of other 'Stans - you know, the ones that happen to be between China and the Caspian Sea - as allies. That Caspian pipeline ended up taking a lot longer than China expected to get going.

A problem with today's food stocks is that their existence is more or less predicated on the existence of fossil fuels. Fertiliser is affected by potash and urea prices, but a major component of fertiliser manufacture is methane. Ever since the Green Revolution, this has been the case. So really, energy is perhaps even more important than food itself. It not only helps us make, move, and sell our products... we eat it, too. But there is a further problem with this situation. Fertiliser, as I have said before, is becoming less and less effective as time goes on. We are losing topsoil year on year, areas of the very limited arable land on the planet are becoming deserts. Like it or not, the application of further fertiliser will not increase yields, and as the biota of the soil are strangled out of their once diverse and rich habitat, yields will only get worse. The world has already been through a food shock, and we will likely do it again this year.

So, who will be the one who survives? Oddly enough, the one that can feed itself will probably end up being the winner this time around. Europe and North America can thank their governments for keeping farmers subsidised and yields high enough for export. While I am not a fan of farm subsidies, they certainly have proven themselves strategic investments. As for China, she is feeling the pinch of rising food prices. But then again, so is Europe and North America. So what would be the competitive advantage that would set one system above the others? One would be the elimination of fossil fuel inputs in the agricultural stream so output can remain high without relying on a product with a price driven by gas. The other would be the adoption of efficiency measures to make all energy inputs go farther. In short, the competitive advantage is sustainability.

The interesting thing about sustainability, as a practice, is that it's intrinsically non-competitive. It is a concept that envisions reversing the tragedy of the commons and instead has nations competing to take less stuff as opposed to more. It avoids more and steeper competition for natural resources. Through Darwinian selection in a competitive zero-sum system, it could be that the answer to this entire dilemma is completely counterintuitive: cooperation is actually the most effective key to survival.

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