The Great Simplification with Nate Hagens - Reflections on 'Beyond Growth' | Frankly #31

Episode Date: May 19, 2023

On this Frankly, Nate reflects on the Beyond Growth Conference held at the European Parliament, including the stunning public acknowledgement by EU President that a growth model based on fossil fuels is now obsolete. In the context of this growing and relevant conversation, Nate unpacks what the degrowth movement is getting right, but also what is missing from the conversation. Is it possible to purposely navigate from our current system to one with lower energy and material wealth? How does a large and growing global debt overhang impact this possibility? Is a transfer of wealth between nations feasible or even desirable based on realistic outcomes? In any case, as to the inevitability of a post-growth world, the degrowth conversation needs to be expanded.  It's the primary movement mapping out what a desirable destination might look like as we move through a Great Simplification.   Watch on Youtube: https://youtu.be/JYbIsXoBg70 For Show Notes and More: https://www.thegreatsimplification.com/frankly-original/31-reflections-on-beyond-growth

Greetings. In between watching presentations at the Beyond Growth Conference today, I went out with my dogs in the woods and I found Morcella mushrooms, finally. So it was a good day. Back to the degrowth presentation, kicked off by no other than the president of the European Commission, and she had this to say. I want today to concentrate on one point. And that is a point that the report got right beyond any doubt. And that is the clear message that a growth model centered on fossil fuels is simply obsolete. I wouldn't have believed that the head of the EU Commission would have said this five years ago, even three years ago.

COVID in the Ukraine war has allowed some partial story of our truth to be able to be politically spoken. Of course, notice she did not say that growth is obsolete, but that growth and fossil fuels are obsolete. So I wanted to have a few reflections on degrowth and beyond growth. At least eight of my former podcast guests were in that room. Van Damme's Shiva, George Oscalis, Timote Parique, Olivia Lazard, Simon Mischoe, Kaye, Rayworth is soon going to be on the show. This is my tribe. These are the humans that I relate to, and I have a lot in common with them. I do not consider myself a degrowther because I think there are some fundamental flaws in the logic of how they look at financial and energy systems. But that doesn't mean that I don't relate to them and they are caring about a better future,

more equality, environmental protection, well-being of citizens instead of outsourcing our decision-makings to the market and de facto destroying the planet. So when we approach these issues, there are three things. One, we have to care and understand. Two is we have to have a destination. nation, something that's sustainable, something that's feasible, something that's desirable. And I think that's a lot of what the Beyond Growth Conference and the degrowth movement is about. The third, and this is what's really lacking, in my opinion, is a map of how to get there from

here in a very over-leveraged financial system, in a fragile geopolitical system, in a consumption-addicted, polarized society, anything that hits the system of any magnitude, de-dollarization, an escalation, including nukes in Russia, game moves by China away from pricing things in U.S. dollars. any exogenous event triggers this 350 to 400% debt to GDP rubber band snapback. The U.S. alone, even though we're over 90% energy independent, we now have $32 trillion in debt and we have almost $200 trillion in unfunded pensions and Social Security. We are insolventant. as a global system.

And so the first problem I have with the degrowth movement is they don't integrate the Wiley Coyote financial overhang that exist in Europe, in the U.S., the UK, and Japan, the total global north. We are growing our debt way faster than we're growing our GDP, which is the income stream, needed to support the debt. Any number of things could trigger this rapid. reduction in the complexity built because of our financial claims on reality. That needs to be more incorporated because otherwise it's just this is what we wish to happen. Secondly, is the idea of

instantaneous contraction and convergence of a global wealth transfer. Global wealth transfer could happen in two ways from the global north and global south. And again, I am not dismissing the necessity and the moral state of this occurring, because the global north is responsible for 80% of the emissions and the environmental destruction and historical, uneven, unfair colonial practices, et cetera. I get it. But to just naively say that we're going to transfer this wealth to the global south

is, first of all, politically and practical. It's just not going to happen. There are already riots in France because of extending the retirement age as one example. But let's just assume it was politically possible. Number two is a trillion dollars of money moving from the United States to Bangladesh or Madagascar, for example, has a much different impact on the world than that trillion staying in the U.S. It will not be spent on Netflix subscription. So in the same way that in the wealth and income inequality in the United States, the top 1% of income earners spend 7% of their income. The bottom two quintiles, the bottom 40% of earners in the United States spend 104% of their income. They spend everything.

So, for example, a trillion dollar wealth transfer to the Global South would be an immediate call on more coal, more oil, more copper, and more infrastructure. So that is already a drain on the ecology and the scarce resources in the planet. But perhaps more importantly, is a functional wealth transfer beyond a couple percent can't physically happen. It would be like having a car has a lot of components, like an engine and a gas tank, and an admission. And you can't piecemeal that out because if you have a half of a car, the entire car doesn't work. So in our global system in Europe and the United States,

you can't send a material amount of wealth without running into something called a functionality threshold. Beyond a few percent, the functionality happens to drop from 95, 94, 93 to 20 or zero. So there is a metabolism. There is Kleber's law, power laws, the maximum power principle, these things, natural biological scaling laws, these things can be applied to human systems, and you can't just disrupt that volitionally. Lastly, my comment about the degrowth movement is as intense and scary. it sounds is those countries that do have to de-grow first because of unaffordability or systemic risk or the natural gas pipelines from Russia don't come in the winter of 23, 24, that's going to be

painful. That's going to be chaotic. But it may be an opportunity to be resilient first. And those nations that have to figure this out, while the rest of the global citizens, system stays intact, may have like a tortoise and hair sort of advantage relative to the United States, which is more energy independent, but perhaps less resilient, more polarized, addicted, et cetera. So degrowth is what should happen. Post growth is what's going to happen. those countries that have to deal with the end of growth first may have first mover advantages in a weird sort of way. Lastly, I would just like to congratulate and support the people at this conference because despite some of the naivetes I've pointed out, it's the only game in town.

They are exploring this. They are trying these things. And I think the degrowth movement needs to be integrated with a systems ecology movement that looks at the entire human system, finance, energy, metabolism, human behavior, aggregate political systems, governance, etc. And widen the conversation. So I'm in support of my friends that are in Europe right now in Brussels talking about beyond growth with some caveats that. I don't think it's going to manifest the way that they are describing.

But the conversation is happening. And I am very happy about that. And we're going to have more on this channel discussing this. I got several emails from people who sent me pictures. Nate, I'm at the Beyond Growth Conference. There's a guy in Poland next to me and he says he listens to your podcast. I got like a bunch of those. So let's continue this conversation.

Thank you. I'll talk to you next week.