The Greater Fool

"The overdeveloped countries are raising generations of gamblers."

  All ecosystems, including the human variety, move through stages of succession from very simple to very complex until there is a disturbance that causes a shakeout or a reset.

A system that has grown in complexity to the point where it is “supermediated” by tiny organisms (or organizations) trying to squeak in the spaces between older groupings and exploit exchanges to draw off their own existence becomes brittle at some point. Fluctuating diversity is more robust for the whole ecosystem but more fragile for the individual members. Just as an evolutionary innovation may dislodge long-residing stalwarts, a small disturbance may disintermediate recent interlopers.  

Global technoculture — we almost said “western culture” but a quick glance at India, China, or Japan would show that concept to be outdated — has been fostering lots of intermediation. The tech boom — rapid evolutionary innovation — is partly responsible. ‘Higher’ education vacillates between the stalwart model of molding students into consumerist cubicle rats, learning to push the correct buttons to get fed, and the disruptive counterpart — the next-gen, wired, tech-savvy entrepreneur class attempting to pay back outsized student loans by developing a killer app or discovering a hitherto unexplored niche for intermediation. By and large, the overdeveloped countries are raising generations of gamblers while the underdeveloping countries are herding masses of enslaved vassals deeper into debt.

This makes a lot of sense if you have to grapple with an explosion of 15- to 25-year-olds entering the workforce. In 2016 there were 963,981,944 males and 898,974,458 females in that category, the greatest portion entering from China, India, USA, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh, Russia and Japan (in that order).

Boom and bust is an emergent property of social organization at civilization scale. Some would blame capitalism, but in our view that is mere scapegoating. True, by lending with interest one places the onus on the borrower to produce enough surplus to pay the interest, and in many ways that can resemble a game of musical chairs, but the principle of being able to borrow to establish and then repay from the new production of that establishment is not unsound. That is how many life forms regenerate themselves — “lending” seed that they produce in overabundance in order to endow next season’s replacement for themselves.

We have been in an expansion phase of human society since the end of the last glacial maximum. Since the discovery of first coal and then oil and natural gas, and the means to industrialize their extraction and use, we have been expanding at some multiple of our natural fecundity rate because fossil fuels have allowed a post-natural expansion of food supply and global trade.

If we want a way forward that can seriously address the real challenges, it would have to begin with deescalation. Beyond getting population under control, we need to find an economic model involving satisfaction of needs, including productive and internally-rewarding employment, without continuing to feast on the seed corn as if that did not matter. To gain adherents, any proposed change has to offer a lifestyle that is no less attractive than the old ways, although we also have within us hero genes that can be stimulated to get us to make sacrifices and feel good about it.

Since the 1980s, that expansion has been on steroids. Each year we add another 30 million humans worldwide. We double our population every 30 to 40 years. If we were to continue with business as usual until, say, 2050, we should expect to have 14 billion people sharing Earth. Of course we can’t do that, for several good reasons, not the least being the food supply. Right now food security for most depends on securing 2000 calories of oil to produce 1 calorie of grain. Each year fewer and fewer of us will be able to do that and will have to find other means, or perish.

In the early stages of our expansion we borrowed from our savings to start productive enterprises that produced more than enough to repay the loans and expand further. That is self-liquidating debt as we climb a ladder of constant growth. In the later stages, marked by contraction, with declining resources and unfulfilled demand, we have been substituting sophisticated debt instruments — fiat currencies, fractional reserve banking, adjustable rate mortgages, credit default swaps, the list goes on….

Those imaginary assets are not backed by anything but the expectation of speculative profits, but as long as everyone agrees to overlook the emperor having no clothes, the parade goes on. There is no actual income being produced to repay the debts, just proxy poker chips.

In any speculative bubble, we lose the connection between price and value. It is short sighted — based on assuming that speculative value will always trump real value. This sets the stage for the inevitable bust, as we saw in the debasement of metals in coins in Ancient Rome, Tulip Mania in Holland in the 1630s, and the Stock Market Crash of 1929. As Nicole Foss explains (at 32:17):

They think that the supply of greater fools will be limitless. Unfortunately it isn’t. Eventually you’ve found the greatest possible fool and no one will pay more than this person did. At that point everything just dries up and the price just absolutely collapses.

The simple living movement in its various names and forms has been trying to grapple with that idea for a long time. The computer design aesthetic of Steve Jobs was a form of simplification — merging music players and hand calculators with mobile phones in ways that kept the device user friendly and ergonomic. You didn’t have to carry both a boom box and a brick phone. 

Another strain of voluntary simplicity is individuals, in the style of Tolstoy and Gandhi, who are satisfied with what they have rather than want.  These experiments — extending back to Epicurus and up through Thoreau, to Daniel Suelo and Freeskilling Mark Boyle who renounce money entirely — shows that happiness comes from carefully considered choices, not by acquisition of stuff or brute force.

We are not condemned to Consumerist Armageddon. There are alternatives. Consider the 100 Thing Challenge — to whittle down personal possessions to one hundred items. Consider co-housing, tiny houses or the natural building movement. Living more simply in communities of like minded people produces a much higher quality of life than most people have now in both the underdeveloping and the overdeveloped world.

Author Ted Trainer asks:

“How would you like to live very, very comfortably working only one day a week for money? Most people are trapped into a worried, 30-year period of trying to pay off the mortgage, fearful that if they lose their job they’ll lose their house, and having to work too long hours, causing stress, depression and anxiety — our biggest health problems now — in a fiendish rat race….

“I know people who live in alternative communities who live very nicely in ways I envy with one or two days work a week. Firstly they cut their expenses by not having a big house, not having a lavish wardrobe, and having alternative sources of leisure… and secondly and probably more importantly, living in a community that is highly supportive, with lots of musicians and weekend concerts and stuff, and sources of local food and shelter — build your own little mud brick house with the help of the community. And so you are living in an economy that doesn’t require much money … a non-monetary economy.”

Given these kinds of choices, we have to ask, why still seek the greater fool?

This post is part of an ongoing series we’re calling The Power Zone Manifesto. It is a series of building blocks that describe our existential climate dilemma and the only possible way to escape it. We post to The Great Change and Medium on Sunday mornings and 24 to 48 hours earlier for the benefit of donors to our Patreon page. Albert Bates offers ecovillage apprenticeships, including Cool Lab trainings, this year at The Farm in Tennessee April through July. He is teaching a full permaculture course in Ireland in August and will be on speaking tours in Brazil, Germany and India in late 2017.