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 shattering denial and delusion and we’ll be ready for change.
I’ve been arguing the inevitability of this moment since 2005 mostly inside the business community. Before the 2008 financial crisis hit the idea was almost universally rejected with a belief in the indomitable power of globalised markets to overcome all challenges and keep growth on track. Most audiences believed that while markets always wobbled they also always recovered. My suggestion that this level of arrogance was the hallmark of empires before they fell landed on deaf ears. They were the masters of the universe and markets and growth would always reign supreme.
Now the response is different. The financial crisis saw many break off from the pack and start to ask the difficult questions. The previous confidence in the inevitably of growth has become shaky and the group asking the challenging questions is rapidly expanding.
The fundamental cause of what’s coming is resource constraint and environmental breakdown which when combined with an overstretched financial system and high levels of debt puts unbearable tension into the global economy.
The continued level of denial still surprises me especially given the pressures driving this are not esoteric and can be measured in clear economic indicators.
Hitting the wall is inevitable – limits are not philosophies they are limits.
Debt itself becomes an enormous additional tension in the system as argued by Richard Heinberg in his important forthcoming book The End of Growth. With the global economy and ecosystem now both burdened by unmanageable debt effective global default is only a matter of time.
So we’re living in a glass house with the grenade sitting there for all to see. Who knows what will pull the pin. It could be any number of other triggers. But it’s coming.
The question to ask yourself is simple. Are you ready?
Paul Gilding