Umair Haque: Compendium Of Writing By The Only Columnist I Always Read
Excerpt: Just like America, the world needs to double its rate of investment. It needs to hit 50% of GDP invested in public goods and social systems. How do I know? Again, because Europe. Europe is the only place in the world which has reduced carbon emissions by now…ever. It’s also the only place in the world where middle classes have grown alongside democracy, where living standards have risen alongside trust and happiness, while pollution and violence and brutality and ignorance and despair have all declined.
2020 is Such a Terrible Year Because Our Civilization is Beginning to Collapse
2020 is a Turning Point — the Collapse of Our Civilization is Becoming Inevitable
How’s your year been so far? Surreal, weird, catastrophic is probably an honest answer.
2020 is one of those years. Those years. The kind history will remember. It is the beginning of the end of our civilization. I know how that sounds, outlandish, impolite, arrogant. And yet — isn’t there a part of you that, deep down, knows it? Your intuition is right. Righter than all the pundits and politicians put together.
We’re only half way through 2020. But it’s already impossible not to see it as a year of desperate wake-up calls to human civilization. In January, megafires swept America and Australia. In February, Asia flooded. In March, a new pandemic erupted. And here we are. Month after month, 2020 made a dystopian future suddenly feel real.
Like there was no escape.
I have some good news, and I have some bad news.
This is in fact the beginning of the end of our civilization. We now face three to five decades of relentless catastrophe. The 2030s will be the decade that climate change goes catastrophic. The 2040s, when mass extinction begins to cause life on planet earth as we know it to collapse. The 2050s will be the age of the Final Goodbye — when the earth’s great ecosystems come finally and irreversibly undone. When the limbs, lungs, breath, and blood of the planet is finally turned to ashes.
As they die, so do we. Because we depend on all those for everything from our secondary systems — shopping, finance, jobs, employment, consumer goods, “money” — to our primary ones, like water, food, air, energy, and medicine. Many of those systems that we take for granted are already reaching their limits — thanks to just six months of a pandemic. Those six months have stretched to breaking point, among other things, our healthcare systems, our employment systems, our social contracts and safety nets, our social bonds, our economies, politics, and cultures, how we feed and shelter and nourish ourselves. All those are stretched to the limit by just six months of pandemic.
So how about decades of climate catastrophe? Of mass extinction? Of the rivers turning to mud, the oceans to acid, the skies to dust, the soil to ashes? Good luck. No civilization can survive the death of the primary resources which fuels its primary systems. The results are — as we should all know all too well — everything from flood to famine to depression to plague to brutality to barbarism. Take a hard look at America to see much of that last list. Many civilizations, from South America to Rome to the Indus Valley, have ended this way — through primary resource depletion causing a catastrophic failure of systems which provide the basics to people — and ours will just be another entry on that list.
As our systems hit their limits, optimism, trust, and faith are just a few the things dying with them — maybe not if you’re lucky enough to be in Europe, but certainly elsewhere, from America to Russia to China to beyond.
Why am I becoming increasingly certain that civilizational collapse is now more or less unstoppable?
Simple economics lead me to a devastating conclusion. One that, if I’m honest with you, keeps me up at night. Because the deeper I peer into them, the more clarity they reveal: there’s no going back now. 2020 was the year it all became unstoppable, this age of catastrophes, which is simply going to rip our civilization apart.
Like I said, they’re simple: enough that anyone can follow, decipher, understand them, so let’s look at them together.
Let me begin with an example. Joe Biden recently announced a $2 trillion plan for green investment in America. Good, right? It’s excellent. Unfortunately, it’s also not enough. How do I know? America’s GDP is about $20 trillion. America’s problem is that its economy is deeply imbalanced: just 25% or so is public expenditure, and that’s a generous estimate. 75% is private. That means that America spends just $5 trillion per year on public goods, which is why it has such poor ones. You can’t have a decent healthcare, education, retirement, childcare, etcetera system on just 25% of GDP. It’s impossible. Can’t be done.
How much do you need? Europe gives us the answer: it’s about 50% of GDP. That means America would have to spend $10 trillion per year — double what it does now. Biden’s plan for green investment barely pushes the needle on American investment north from $5 trillion. Like I said, not enough. Remember, America has to double it’s spending every year. An additional $2 trillion over a decade is a figure small enough so as to be almost meaningless. You can’t do it on that little.
This isn’t to slam Biden — quite the opposite. He’s doing what he can. The problem is that what he has to work with isn’t enough.
America is a poor country now. How can it raise an extra $5 trillion a year to pay for the social contract it needs if it isn’t to fall apart?
Think of how having no real healthcare system in place left it massively vulnerable to a pandemic, and almost instantly resulted in the world’s highest death toll and infections.
That’s what being poor is and does. Now think of having a decrepit energy grid, a banking system that doesn’t provide, a factory food system that churns out malnourishing junk, a water system that’s already hitting its limits — think of how fast, hard, and badly all those are going to snap the moment climate change and mass extinction go catastrophic. Bang! They’re simply going to implode, like America’s almost nonexistent healthcare system did the instant a pandemic hit.
The story is: fragility. Underinvestment creates massive system fragility. That’s why Corona ripped America to shreds — decades of underinvestment in healthcare, in employment insurance, in safety nets, and so forth.
But America is now too poor to find the $5 trillion a year it needs to fix itself. Go ahead and ask the people formerly known as the middle class if they can afford more in taxes. They’ll laugh at you. Sure, go ahead and tax Apple and Google and so forth. That’ll only get you about three to five years of a working society. Go ahead and borrow even more. There’s no way out for America now. It let a vicious cycle of poverty kick off — the middle and working class imploding — and now it’s too poor probably to ever fix itself.
A technical way to put it is that widespread poverty and precarity even amongst those who should be affluent — 80% of American live paycheck to paycheck — means its fiscal base has been destroyed. People can’t afford to fund the systems they need most now. Whether healthcare, retirement, education, pensions, childcare. Bang! Game over. No way out. The tipping point has been reached for America — it was probably around 2010 or so.
America’s an example, and a warning. I know your head’s probably spinning already. Take a breath, take a break. Now let’s do the thinking above for the world.
The world’s GDP is about $80 trillion or so. Just like America — eerily — we as a human race invest just 25% of what we make. That’s too low.
We’re investing about $20 trillion or so a year in our critical systems, the primary and secondary ones both, whether healthcare, energy, food, water, and so on. It’s not enough.
Just like America, the world needs to double its rate of investment. It needs to hit 50% of GDP invested in public goods and social systems. How do I know? Again, because Europe. Europe is the only place in the world which has reduced carbon emissions by now…ever. It’s also the only place in the world where middle classes have grown alongside democracy, where living standards have risen alongside trust and happiness, while pollution and violence and brutality and ignorance and despair have all declined.
Europe tells us the bar human civilization must meet if it’s to survive. That’s the good news, by the way. We know. We have an answer to the question: what must our civilization do if it’s to survive. The answer is: it must double it’s rate of investment to 50%, just like Europe. That’s the threshold at which you can do things like cut back emissions, provide healthcare to protect from pandemics, build and renew the critical systems of subsistence and prosperity for all.
If you don’t hit that threshold, though, if you stay at just 25% — you end up like America. Destroyed, ruined, broken. Undereducation creates idiots, under-healthcare pours fuel on the fire of pandemics, underinvestment in everything makes everything fragile, easily broken, ready to fall apart at the slightest pressure or stress. And maybe everyone, too.
Let’s put some hard numbers to that.
The human race has to double it’s investment level, from $20 trillion, to $40 trillion, in order to hit the critical threshold of 50% of what it produces invested back in itself. My father in law, the farmer, understands the logic of that threshold — if you don’t put back half of what you make, you eat away your future, ultimately. That’s what we’ve done.
But like America, the world is too poor to make that investment. Where is that $20 trillion a year going to come from? That’s the equivalent of the entire American economy, which is the biggest in the world. All of it. You can tax the rich, you can tax the corporations — even if we assume that the world could cooperate to do such a thing. Not going to work. The money does not exist. It is simply not there.
There is one way out — which is for us, as a human race, to understand that “money” is just a polite social fiction. We can create the money, and just start spending it. Who are we “borrowing” it from? Technically, from the future — from our grandkids. But if we invest it in all the things above, from clean energy grids to basic income for every human being to an education for every child on planet earth so tomorrow’s Trumps don’t have idiot armies, right down to nourishing the trees, rivers, reefs, oceans, and creatures great and small — not spend it at a casino, or on designer sneakers — I’m pretty sure they’ll thank us. Because they’ll have a planet, life on it, democracy across it, and a civilization to live in.
That’s the only way out now. It’s not likely to happen, because, well, nobody much really understands 21st century economics. Our leaders and politicians and pundits don’t — they’re still bickering about “deficits,” while the planet burns, and new plagues erupt. Who are you going to pay that money back to, when we don’t have a civilization anymore? Goldman Sachs? LOL. Give me a break. And the average person has been indoctrinated to think that “debt” is a real thing, not a fiction, not an investment, which must always be repaid as soon as possible. They don’t understand — maybe even you don’t — that those false, ancient, capitalist-age economics are now killing us. Probably — I’d bet — even you think that “debt” is real, and we have to pay it off as soon as possible, that you don’t understand the crucial conclusion.
We must invest now, on a scale never before seen in human history. We need to add the equivalent of the biggest economy in the world to the world economy. The scale of this wave of investment is something like creating a whole American economy out of thin air — in a decade or two.
Can that happen, even if the will is there? I doubt it. Because the money isn’t there. We as a civilization simply don’t have enough of a surplus to invest. We’re too poor. We don’t have that money in the bank.
And too many of us believe that we can’t simply invest, anyways, making investments on behalf of everyone who comes after us forever.
Catch-22. No escape. Bang! Game over. That is all why, increasingly, I’m forced to conclude:
This is it. Our civilization is now beginning to collapse. 2020 wasn’t an anomaly. It was a taste of the future. Megafires, megafloods, pandemics? They’re what happens when a civilization invests too little in its critical systems, letting risk spiral out of control.
But we now face three to five decades like the catastrophic year 2020. We need to invest, but we don’t have the colossal amount we need in the bank. And we don’t seem to understand that we can form our own bank. So we can find the money to invest to fix all the existential threats which are now overwhelming critical systems, from healthcare to air, water, food, energy, and medicine. Implosion and collapse is becoming more certain by the day.
“We can’t find the money in the bank to save the world” deserves one further point of discussion. We thought so, many of us, arrogant, conceited, puffed up — but the shattering truth is that we were never a rich civilization, my friends. We had only ever become a slightly less poor one. One that squandered away what little surplus it had created, through all those centuries of brutality and violence, on trinkets and toys, never quite understanding how much more we needed to invest to keep things going. We never understood that being truly rich? It’s being able to invest, as much as you need to, so that life gets better. So that your potential expands and unfurls. So that everything around you comes roaring to life. So you don’t live in and on a dying husk of a country, planet, civilization, in the end. So your garden blooms, instead of withers.
That is where we are now. That is what 2020 has been. A turning point. A point of no return. The probable beginning of the end of our civilization.
Umair
July 2020
July 2020
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