The Spiritual Dimension of the Economic Crisis
"The worst financial crisis in a century." In his victory
speech on election night, that’s how our
President-elect, Barack Obama, described the financial crisis which
has swept across the country and the world this fall with breathtaking
depth and rapidity.
Did I hear that right? The worst financial crisis in a century?
This is 2008, a hundred years ago it was 1908. That hundred year period
covers not only the oil shocks of the 1970's, but
also the Great Depression, when we had an unemployment rate of 25%.
At first it may sound as if Obama made a rhetorical slip; things aren’t
that bad yet, are they? But basically, he’s right. The reason is that
this economic crisis is not fundamentally about housing speculation,
interest rates, or anything like that. It’s about the environment:
we have hit the limit of the abilities of the earth to support our
profligate lifestyle. With that, the era of economic growth — based on
fossil fuels — is about to come to a crashing close, in a more or less
apocalyptic fashion depending on our response.
We might ask a corresponding question: is this the most serious environmental
crisis in a century? Actually, it’s the most serious environmental
crisis in 65 million years. That’s how far back we’d have to go in
earth history to find a parallel to the extinctions going on today. That
was when a gigantic meteorite hit the earth, kicking up a cloud of dust
into the atmosphere, leading to a global cooldown and the extinction of
the dinosaurs, and about 75% of all other species as well. Estimates
vary about current rates of extinction: some estimate that every
40 years 10% of all species go extinct, others say that within
100 years, 50% of all species now here will be extinct. All of this
is a symptom of how massively and destructively humans have dominated
almost every square inch of the earth.
What can spiritual groups do about this? In this country, this
question applies primarily to Christianity, since that’s the dominant religion in this
country, but it also applies to Buddhist, Hindus, Jews,
Moslems, whoever. This is not a crisis about "how do we get the
economy to work." It is not even at its root an environmental
crisis, although resource depletion is the immediate reason that the
economy isn’t working. It is a spiritual crisis that goes to the heart
of what it means to be human.
Simple living is one of the most fundamental teachings of Jesus.
Jesus says "you cannot serve God and money"; tells the rich
young man to sell everything he has, give it to the poor, and follow
Jesus; and advises us not to be anxious about what we will eat, drink,
or wear. The early followers of Jesus shared everything in common
and "there was not a needy person among them."
Is the meaning of life just about accumulating more and more material
possessions? Does this mean that we ought to loot and pillage the
environment to do so? The answer seems obvious: of course not.
Surely this does not require profound philosophical thought. But
not many people propose a way of implementing it. That’s the problem, and it is a problem that few
political leaders can touch without encountering public wrath. I am not
faulting political leaders as such; but there are practical limits to
what a political leader can do. The last President to ask for meaningful
sacrifices from the American public was Jimmy Carter, who was run out of
office in a Reagan "it’s morning in America" landslide.
It has something to do with oil
Environmentalists have been warning for decades that our
unsustainable use of irreplaceable fossil fuel resources cannot go on
forever. But the day of reckoning was always thought to be comfortably
in the future — something our children or grandchildren would have to
deal with. Well, surprise, surprise, that day is here. Despite a
dramatic surge in oil prices, eventually leading to $147 a barrel this
summer, oil production barely budged. It has remained essentially flat
since 2005, despite every economic incentive we had to produce more.
This is because we are near the limit of human ability to extract oil
from the earth; there’s only so much oil to go around, and at some
point we will reach the maximum point of oil production for the entire
world — "peak oil."
In 1956, M. King Hubbert predicted that U. S. oil production would
peak in the year 1970. He was widely ridiculed, but turned out to be
right on the money — U. S. oil production did peak in 1970. Will the
world oil production also reach a peak some day? There are many
respected petroleum geologists who are now saying that the world oil
production will peak by 2015. Chris Skrebowski, editor of Petroleum
Review, says it will be in 2011. Ken Deffeyes says that it already
arrived, in 2005.
Because there are different definitions of "crude oil" and
statistics are being revised, whether 2005 is still the current peak is
unclear. But the differences between 2005 and 2008 are so minimal
that for most practical purposes it doesn't matter; oil production has
been essentially flat during this time. The day when supply cannot
meet demand has already arrived, and the result has been "demand
destruction" — people are not consuming oil just because the
economy is in the tank.
The important thing is that we are hitting the geological limits of
oil supply very soon, and that already it hasn’t been able to keep up
with what people wanted. That is what is behind the current
People will object, "what about the housing mortgage crisis?
What about predatory lenders? What about bank failures and the $700
billion bailout? Doesn’t this have something to do with the current
economic problems?" Certainly they do. But, in the first place, the
economic loss from the rise in energy prices probably has had more of an
immediate impact on the economy than the housing loans gone bad. Jeff
Rubin, chief economist at CIBC World Markets, stated that
"By any benchmark the economic cost of the recent rise in
oil prices is nothing short of staggering. A lot more staggering
than the impact of plunging housing prices on housing starts and
construction jobs, which has been the most obvious brake on economic
growth from the housing market crash. And those energy costs, unlike
the massive asset writedowns associated with the housing market
crash, were borne largely by Main Street, not Wall Street, in both
America and throughout the world."
In the second place, the housing crash was in large part caused by
the escalation of oil prices. Bankers made dubious loans, and people
bought oversized houses, because they thought the housing market was
going to go up forever. They thought that the housing market was going
to go up forever, because they thought that the economy was going
to expand forever. But the economy can’t expand, at least as long as
it has hit the edges of resource limits.
Others may object that the price of oil has now come down
significantly — it has shed over half of its value of just months ago.
That, however, is a product of the recession (or depression) that we’re
entering into. Oil
consumption in the United States has dropped 9% in the last 12 months.
If this had happened in 1998, the world would have gasped in amazement
at the environmental consciousness suddenly emerging among Americans. Of
course, this drop has nothing to do with environmental consciousness: it’s
because the economy has collapsed. When the economy starts to recover
again, we will once again encounter this upper limit on the ability of
supply to meet demand.
It has to do with the rest of the environment, too
There is no clear path out of this downturn. We probably needed
to act 30 or 40 years ago, but we didn't. If we try to restart
the economy by stimulating further use of fossil fuels — and notice
that most of our economy is based on fossil fuels — this is just going
to make the ultimate economic collapse even worse, because the supply of
oil is not getting any more plentiful.
We could change our source of energy, but that is considerably more
difficult than it sounds. The world is burning almost 1000 barrels of
oil a second, and it is going to take a lot of wind and solar
power to make up for that. U. S. energy is 85% from fossil fuels; and
most of the remaining 15% comes from nuclear, hydroelectric, and wood,
none of which can be easily expanded. We hear a lot of talk about
solar power and wind power; but solar PV, wind, and geothermal combined
today still come to less than 1% of U. S. energy. Even with a command
economy, a conversion could take decades; with a chaotic economy subject
to a public that doesn’t understand the seriousness of the crisis, it
is not clear that it can be done at all.
Moreover, oil is only one of the many environmental constraints we
face. Oil is what we’re starting to encounter shortages of first,
because it’s so marvelously useful and so widely used. In a way,
we are blessed that it is oil that we are encountering shortages of and
not some other more critical resource.
Our lifestyle also wastes water, coal, natural gas, wood, forests, metals, and indeed all
the natural resources humans rely on. "Peak
coal" could be in another 15 or 20 years, "peak natural
gas" is probably closer than that. So we shouldn’t think that
even if we can find some "substitute" for oil (which would be
quite an accomplishment in itself), that this is the end of our
problems. And if that substitute turns out to be another fossil
fuel, the consequences of global warming could be even worse than that
of declining oil supplies.
Soil erosion may be the most serious obstacle to human expansion:
soil used by humans for agriculture typically erodes 10 times faster
than it is formed through natural processes. It is even worse than
this in much of Africa and Asia. Because human population has been
less than 10% of what it is today for 97% of the history of agriculture,
this has not really mattered that much until today, when humans cover
Livestock agriculture is tremendously wasteful; 90% of all
agricultural land in the United States goes to livestock agriculture
(all of the grazing land, and about 2/3 of the crop land). It
takes 5, 10, or more times as much land, water, and energy to produce
meat as it does to produce an equivalent amount of plant food.
Spiritual groups are in a unique position to contribute to this
discussion. They do not have to run for reelection. People need to know,
and indeed want to know the truth. Churches and other spiritual
groups can say simple and important truths such as:
1. The current crisis is caused by overconsumption, environmental
destruction, and depletion of natural resources.
2. We have in fact hit the limits to physical and material growth.
3. The situation demands that we will have to make sacrifices in our
standard of living, which will in fact decline.
Does this mean that we are faced with gloom and doom? It may be gloom
and doom for the economic system, but that does not mean it is gloom and
doom for us as human beings. While we certainly should be concerned
about people who will lose their jobs or go hungry -- and while we
should certainly do something about it -- in fact there is some good
news here. Here are a few ways in which our world should get better:
1. The environment will breathe a sigh of relief as industrial
If industrial civilization slows down and contracts, the animals and
plants on the earth will breathe a huge sigh of relief. Humans, and
human activities, now blanket the planet. Humans almost regard it as a
sin if they are not productively using every last square inch of the
planet. The collapse of industrial civilization has to be regarded as
good news for every non-human species on the planet.
2. We’ll have a reduced work week.
If the United States had made the 1939 standard of living the goal
point of material wealth, then between 1939 and 1964 we could have used
our increased productivity and technology to reduce the work week from
40 hours to 20 hours with no cut in pay (John Kenneth Galbraith, The
New Industrial State, second edition 1971, pages 272, 365). We could probably have made
further reductions since then. The 1939 standard of living in the U. S.
was one of the highest in the world at the time, and in fact is still
one of the highest in the world. We need to shift to an economy where we
work less and consume less.
3. We’ll be healthier.
One of the expected results of a contraction in industrial activity
is the decline of industrial agriculture, which today relies on high
inputs of energy, water, and land, to create meat and animal products
for the more affluent people in the world. If this supply were
restricted, we’d probably be a lot healthier. In Denmark in the First
World War, because of the Allied blockade of the continent, food
supplies were restricted. The entire country went on a lacto-vegetarian
diet. The result? Mortality dropped by 30%. When the war ended, people
went back to their old ways of eating, and the mortality rate went back
up. The same thing happened in Nazi-occupied Norway in the Second World
War, when death due to circulatory diseases dropped by 40%. This is
because many, or most, of the diseases which Americans face are the
"diseases of civilization" such as heart disease, cancer,
stroke, obesity, and diabetes — mostly caused by too many animal
4. We’ll have more friends.
Any kind of future in which we consume less and have more time on our
hands will most likely mean that we’ll have more friends. Since there
won’t be as much to go around, we’ll have to work together and share
5. We can recreate what it means to be human.
Is the meaning of life (in the mundane, everyday sense) just to
accumulate as many toys as possible? Are the churches really going to go
along with this? Isn’t the message of Jesus precisely the opposite?
It’s impossible to turn on the TV without being bombarded by a
whole way of consciousness that emphasizes consumption and material
wealth. It’s not just the advertisements, which have been continually
increasing ever since it was "deregulated" — it’s also the
programming itself, which shows what wealthy people do, how they spend
their time, and what their problems are — and how much happier they’d
be if they just had a few more things. Our infrastructure encourages
consumption as well. If I want to drive my car to church, someone will
be there to sell me the car, loan me the money to buy it if necessary,
build a parking lot at the church, and provide gas stations all along
the way in case I need to buy gas or repair the car. If I want to ride
my bicycle, I will have to dodge cars in traffic, fix my own flats, and
be in shape. Society does not encourage simple living, and in fact makes
it as complicated as possible.
Some Practical Things to Do
We are social creatures and there are limits to what we can do at
once. The example of how to get to church sustainably, which I
just cited, is one example. Here are some suggestions for
1. Ride a bike or take the bus. I'm not expecting
everyone to bike to church, but we should be thinking about it, and
examining practical ways in which we could make this easier for everyone
2. Become a vegetarian. This is probably the easiest way
for an individual to have an immediate and significant effect.
Again, I'm not expecting everyone to become a vegan overnight.
There are a range of possibilities, either eating less meat, being a
"conscientious carnivore," lacto-vegetarianism, all the way to
veganism. But at the least we should be thinking about it and
asking ourselves, "what, in a practical way, stands in the way of
this, and what can we do about it?"
3. Go solar, and superinsulate your house. Again, this is
pretty expensive, so I'm not expecting everyone to do this, but if you
can, you probably should. We need to reduce the carbon footprint
of our houses if we are going to have a hope of coping with this crisis.
We could also adopt other
solutions, like moving in with each other, which would decrease the
"ecological footprint" of our houses.
4. Help your friends. As the economic crisis deepens,
we'll see an increase in homelessness. I'm not expecting everyone
to take in strangers in off the street. But most of the homeless
are not the mentally ill, permanently homeless people that we often think
about (and who should be taken care of), but people who are in an uncomfortable transition. We need
to take care at least of our friends. Again, we should ask,
"what, in a practical way, stands in the way of this, and what can
we do about it?"
And here are some suggestions for societies and governments.
This is not a complete list or a definitive list, but summarizes some
key points. Obviously, we need to stop building a high-energy
infrastructure and start building, quickly and massively, a green
infrastructure. This probably means raising taxes among other
that also means drafting everyone in the country into civilian service so
that we can feed and shelter everyone and build renewable energy, then
that's what we need to do.
We need to acknowledge that we're all in this together. You can't implement massive social changes
with a top-heavy, elitist economic structure; and that means most likely
a steep progressive income tax. The difference between the highest and
lowest salary in the nation probably should not be much more than 10 to
W e need to shift to electric power, and strengthen the grid; land
should be mostly rail and mostly electric, unless it's bicycles. Al Gore's proposal
to go to a 100% renewable electric grid in 10 years is a good starting
point, but it needs to go further, because we need to shift a lot of
transportation to electric. We should quickly shift most transportation
of goods from trucking to rail, which should be electrified.
Bicycling should be encouraged. People can also be transported by
light rail within cities, and by "heavy rail" between
cities. Where's Amtrak?
Shift towards an organic, vegetarian agriculture. Three
reasons: (1) Livestock agriculture is tremendously wasteful of natural
resources; 90% of all agricultural land in the United States goes to
livestock agriculture. This would dramatically reduce our
footprint on soil, water, and forest resources and human dominion over
the earth. (2) This will also do wonders for our
health care system, people are sick mostly from "diseases of
civilization" from eating high-fat animal products and processed
and refined plant foods (corn syrup, trans fats, etc.). (3) We may
need to prioritize agricultural exports for the rest of the world
some of which may be in an even worse mess, instead of feeding it to our
own cattle. (Probably not fruits and vegetables, but things that can be
efficiently shipped like grains and beans).
Control population. This means putting an emphasis on
nonviolent birth control. Everyone's reproductive habits,
unfortunately, do affect what happens to the rest of us.
As soon as we figure out how to do all of the above, export
whatever know-how we have to the rest of the world. The rest
of the world is going to be in a mess and they will need our
agricultural exports, which is one reason why we need to move towards
vegetarianism and be helpful in this respect. Information is free
and if we've got any, we should make it available for everyone.
This fairly short and probably over-simplified list of "things
to do" is daunting enough. But the key problem does not lie
with how to do any of them. The key problem is our idea that
humans are happier the richer they are.
As long as we do not deal with this idea of what it is to be human,
we will never know peace. If we persist in encouraging consumption, then
even if we replaced oil with lots of renewable electricity and electric
cars, we’d still face insurmountable problems. It would be soil
erosion, lithium shortages, deforestation, or something else, that would
be the next crisis.
Our fundamental problem is neither economic nor technical. It
is spiritual. It’s not a question of either "when will peak oil
hit?" or "how can we build more wind turbines and solar
panels?" Rather, it is a question of what do we want out of life?
Do we want to accumulate more and more material possessions? Of course
many of every generation have rejected materialism in different ways,
whether it was the "beats" of the 1950's, the "simple
living" movement of today, or those who, disgusted with the
materialism of the churches, fled to the deserts to start the monastic
movements of the fourth and fifth centuries.
But today "simple living" is not just a lifestyle choice:
we have to live not only with the consequences of our own actions, but
the actions of those around us. Even if we choose simple living, if
everyone else chooses a materialistic lifestyle, it is our shared
environment which suffers catastrophic degradation. The need for the
message of Jesus has now achieved apocalyptic proportions; saving the
planet is not a question of individual salvation.
There are a lot of religions, ethical systems, and philosophies on the planet, and many people (even if
nominally religious) do not pay that much attention to religion anyway.
The message of simple living is not peculiar to Jesus; it can be
found in many traditions — Buddhism, Islam, Judaism, Hinduism,
whatever. So go forth and preach your own tradition.
It is also true
that we need scientists to help out. We'll need economists, ecologists,
physicists, just about everyone. We cannot ignore the secular realities.
But just to have science on your side is not enough, as the prophets of
global warming have discovered — we’ve known the science for a long
time, and we’ve disregarded it.
The essential problem that we face is
a spiritual one.
November 12, 2008