It is stupid to not build on the orders and organizations that already exist and has been proven to be good at listening to what people want and indeed to use peoples greed to get things done.

Finding a whole new order for our society adds numerous new ways to fail and a lot of them were tried and failed during the 1900:s.

This thread will probably end up being purely political.

Larger societies need central control.  Perhaps a king whose advisors can keep tabs on the entire kingdom, so he can see the big picture even though his subjects cannot.  The king derives his wealth from the entire kingdom, and wants his heirs to do the same, so it's in his interest to protect the whole kingdom.  

Neither system works for middle-sized societies (and possibly large societies with weak central control).  If the society is not large enough to support a central government, but too large for everyone to have a stake in everything, it collapses in internecine fighting.    

It's worrying, because it suggests there might be some issues with democracy as a method of government.  An elected leader may not have the same incentive to protect the entire nation that a king has, since his time in office is limited.  In theory, that might encourage looting the nation while you can. In practice, we've seen it happen exactly that way, time and again.  

And with our level of technology, the "society" must be global if we hope to protect the commons.  Limiting our emissions will do little good if China decides to burn all the cheap coal they can get ahold of.  A nuclear war that breaks out in the Middle East could rain radiation on the entire world, or worse.

I think Newman is right.  Capitalism is a great system for quickly exploiting natural resources, but it won't work in resource-limited world.

Damned if I know what will, though.

Calls for central control are really a thinly disguised excuse for dictatorship, usually by those calling for the control.

History shows that once you give up control to a central group, they expand that control and abuse it for their own betterment.  Were you asleep during the 20th Century?

Capitalism is really the ecology of economics - a lot of individual experiments and adjustments.  Some work and prosper and some fail and die off.  Economic biology, if you will.

This is one major problem with both global warming and peak oil - leftists seize on valid topics of concern to push their own authoritarianship.  Some of the commenters here are more interested in their ideology than in human welfare.  Most of the public is deeply suspicious and is on to the leftists' hidden agenda.

Seeking power through fear is demagoguery.

Our 'discount rates', or how much we value the present moment over the future, are therefore genetically very steep - long range thinkers were outproduced by those in power who grabbed resources while they were available (like Niall of Nine Hostages. (Animals discount rates are infinitely steep - ALL they care about is the present - ours are slightly less steep perhaps due to the sunk cost of our infrastructure.)

In any case, a world where we 'cognitively' recognize that global warming and peak oil 'might' have a negative impact on our lives, our neocortex thoughts are trumped by the deeper drives in the limbic and reptilian systems of our mind for immediate wants. Furthermore, the zen master of the neurotransmitters which regulates discount rates, serotonin, is massively suppressed in a society where ubiquitous offerings of sugar, alcohol and caffeine create chronic maladaptive 'wants' that can never be satisfied. (I am trying to live without sugar, and while difficult I find I can access my longer term thinking without pressing needs or anxiety better than before - sample size of one but I think Im on to something...)

Bottom line - for us to care about the 'possibility' of societal/individual collapse, we need to either a) reduce our genetically derived steep discount rates or b)increase the perceived 'present-value' impact of potential disastrous events to activate our impulses to fend for the moment. DDT, ozone depletion, leaded gas, all were examples where the public was concerned about immediate negative quality to their lives - global warming and peak oil are presently too far away. 3 degrees Celsius higher by 2050. Pass me another beer - let me show you my new condo...

Alas, a cold winter might have done it.....

So what's to replace capitalism?  Knee-jerk capitalists like to claim that the only alternative is communism, and that has been tried and failed.  But capitalism is failing too, and there are more than those two choices.

What we need is a steady-state economy.  Indeed, that is the only economy that can be called "sustainable".  Read the books of Herman Daly.  There is at least one chapter of one of his books on the web: http://dieoff.org/page88.htm - but that is a debunking of the growth fallacy, not a good explanation of the steady-state one.  In the books he explains why it's inevitable, how it can work, how it widely incorporates a market mechanism - but with some restrictions, and how it differs from a failed (non-growing) growth economy.  The essential elements of making it work, he says, include stopping population growth, limiting income inequity, and rationing the scarcest essential resources.  

If we're going to get rid of capitalism, we're going to have to replace it with something. So what's the alternative? Socialism? China is socialist and they don't seem particularly environmentally-friendly. The USSR was communist, and it sucked down resources and polluted with the best of them. So what's the "new system"? Can somebody even give me a ballpark idea of what were going to morph into? Tribal villages? Hunter/Gatherers? North Korean style "self-reliance" (juche)? Unless the anti-capitalists can produce a credible alternative, this whole line of thinking is just navel-gazing.

I have an open mind, but it seems to me that there is no viable alternative to capitalism.

I fear what's likely to happen is that capitalism will devolve into feudalism.  The middle class will disappear, and the poor will become serfs.

But that's not what I want to happen.  What I want to happen is for a new political system to arise.  One that works in the new, low-energy world.

It may be something so different from our current system that we can't imagine it, any more than people of Jesus' time could imagine a world where everything is paid for with a plastic card, and people routinely pay 20% interest.

I read an essay once proposing a system where money is never inherited, loaned, or exchanged.  You earn it by working, so there would be incentive to work.  But when you spend it, it disappears.  It's just deleted from your account.  When you die, your account is zeroed.  No need for an ever-expanding economy (as long as population is controlled), no accumulation of all the wealth in a few hands.  

It would put a lot of power in the government's hands, but I think we're looking at that scenario anyway, if we're serious about protecting the "commons."

Environmental arbitrage takes many forms: rapid depletion of a limited resource for immediate gain, pollution of an important ecosystem to avoid costs, weak environmental standards in one area of the globe as a means of enticing business away from an area with stronger environmental standards.

Each of these forms is in play today.  In all cases, they mean a more profitable bottom line, at least in the short term.  In the long term, they mean disaster.  In all cases, they are part of the ethos of market place.  Profits are what economists measure.  When they speak of free trade and the market place, they follow short-term activity, not long-term costs.  Let the market do its thing; corrections will occur.  I suggest that in some cases, the market cannot provide a corrective action.  It will be too late for any possible action.

To illustrate my point, consider two instances of environmental arbitrage in action.

The first is the Chesapeake Bay, now polluted almost beyond recovery.  The economic cost of returning it to a viable ecosystem is perhaps beyond us.  Watermen have exploited the resource close to the point of exhaustion.  As a consequence, crab houses on the Eastern Shore where Bay crabs were once peeled now must import crabs to stay in business.  Oysters, the lungs of the Bay, which once kept the Bay's water clear and which once sustained a thriving industry, are now near depletion.  Environmental arbitrage.

The pollution from the Bays tributaries and its shoreline has created massive dead zones where nothing can live.  And all this from a country that is among the leaders in protection of the environment. Environmental arbitrage.

The second is China.  Here we have not only pollution on such a massive scale that it will affect us all, we also have arbitrage that pits country against country, affecting not only trade but the economic health of us all.  A brief look at the policies of the WTO reveal what is happening.

Each country, according to the WTO, is allowed to set its own environmental standards, as long as the playing field is level among all participants operating within that country. What this means is that countries with strong environmental standards compete with countries with weak environmental standards.  Following the rules of the market place, many business will thrive because of weak environmental standards.  Does it really surprise us that China will become an economic powerhouse, at least in the short run?  Has any economist complained about this kind of economic arbitrage?  Not a whisper.  Will a revaluation of the dollar correct this economic arbitrage?  I doubt it.  Environmental arbitrage is not a factor in economic theory.  

Economists keep the keys to the bank, not to the health of the planet.  They keep an eye on short term interest, not the long term interest of us all.

And what of the long-term consequences to the planet itself?  China's belching factories affect us in just the same way that the coal-burning planets in Ohio acidify the lakes of Canada.  The pollution from its rivers affect not only Russia but also the health of the oceans we all share.  And what about the effects on global warming?  Economists are mum on its economic cost, except when they see possible trade routes being free of ice.

We all share this planet together.  We all are aware of what is happening.  All us of have a role to play, economists included.  Following GDP is fine; following its true cost is even better.  Economists can no longer work with tidy spreadsheets, graphing business activity this way and that.  Nor can they be apologists for a system that is wrecking slow and inexorable damage year after year.  

Projecting China's economic growth out to 2040 based on economics is an exercise in futility.  Instead, project environmental degradation, global warming, and energy needs out to 2040 and you might gain some insight on exactly where China will be in 2040

Capitalism versus socialism?  Humbug.  Ideology is a discussion for fools late at night, deep in their cups.  We need a new paradigm, a new way of thinking.  Grasping at old shibboleths will not do.  

How we do business, its ethos, is of concern to all us.

And how we, personally, conduct business is of equal concern to everyone else.

There can be good corporate citizens.  The above documentary is very enlightening.

http://c4cr.org/  

A good group which has connected well with the makers of "The Corporation" movie and book by Joel Bakan.  Info here:

http://www.thecorporation.com/  

I'd also recommend "The Divine Right Of Capital" by Marjorie Kelly.  Info here:

http://www.business-ethics.com/TDROC-PBACK.htm  

Finally, ZNet contributors have been working on an alternative economic paradigm for some years. It is called "participatory economics" or "parecon."  Michael Albert wrote a book to describe it.  Wikipedia has an article on it, but ZNet's info is here:

http://www.zmag.org/books/pareconv/parefinal.htm  

What we call "capitalism" today is a far cry from anything Adam Smith would have approved of -- that much is obvious if you've read Adam Smith or anything about his life or opinions.  What we today call capitalism is more accurately called "corrupt crony capitalism" and very lately has devolved into open "corporatism" or "fascism."  Not a bright future there.

Permaculture actually expresses and embodies true capitalism as far as I am concerned.  Permaculture is a way of doing things so that one lives from the interest harvested from capital, while not depleting capital.  Permaculture is complex, but may contain principles which would help us to evolve a capitalism which incloproates the kind of self-regulation we see in some natural systems.

Permaculture is largely a grassroots movement, but is finding expression in some political discussion as well as discussion of peak oil.  A good summary is here:

http://www.holmgren.com.au/html/Writings/essence.htm#Opps  

EnergyBulletin ran permaculturalist David Holmgren's recent article on the topic here:

http://www.permaculture.co.uk/mag/Articles/The%20End%20Of%20Suburbia.html  

To summarize:  what we have today is a terribly corrupted form of capitalism.  We will not be able to solve the problem we have created with the same kind of thinking we used to make our (resource depletion, global climate change) problem.  Call it permacapiculture or permaparecapiconoculture or whatever you like, just don't call me late for dinner!

Harvest a yield of energy and material to thrive on without messing with the capital. Care for earth and others.  Understand more so as to destroy less. This is the direction we must go.

My hypothesis is that our species-as-experiment will demonstrate soon that we have dramatically overshot the population constraints of our "capital" or resources, and so a big "correction" is coming up. The challenge will be to create a new model of our household (oikos, greek, partial root of economics, means "Household") which transcends capitalism, communism, and such.

Since capitalism is based on unending economic growth, it requires unending increases in total energy supplies for all forms of economic activity.

Even a "plateau" in energy supplies, as opposed to a peak  followed quickly by a decline, will not support continued economic growth.

Population growth is similarly incompatible with sustainability. The US currently imports about 60% of its oil, another way of saying that it only has enough oil for about 40% of its population. So, the US could be energy independent today if it had a population of roughly 120 million people instead of 300 million. In fact, to remain energy independent, its population would need to be decreasing at a rate comparable to the decline in its domestic oil production. A 2% annual decline rate would mean that its population would need to halve every 35 years continuously in order to remain energy independent at unchanged per capita use rates.

World population is sustained by food produced with fertilizer made from natural gas, and herbicides and pesticides made from oil. If gas production peaks and then declines at just 2% annually, then population would need to decrease by a factor of 2 each 35 years until it reached a level that could be supported without commercial agriculture based on fossil fuels. The big problem is that this rate of population decrease would not occur in normal circumstances.

In the U.S., with 300 million people and in this world of well more than 6 billion people, I invite change that must be a cumulative result of hundreds of millions, even billions, of value and goal-oriented decisions. Among these values and goals, I envision:

1. Millions of learners who embrace authentic (not rote) learning as individuals and in groups, and who value processes and embrace changes that support authentic learning;
   
2. Millions of learners learning creatively, seeking one another out, and supporting one another across all traditional boundaries;
   
3. Millions of enterprising people making enterprise decisions to grow down and grow better -- in other words, to discriminate in their energy and resource expenditures by (on the whole) seeking to reduce throughput and increase quality.
   

I think of this as "constructive creativity."

There is insight in complexity theory that simple rule sets can generate unimaginably complex organization. We see in chaos theory how small events can trigger great non-linear changes. In the wisdom of crowds and in the synergy of wholeness (the whole is more than the sum of its parts) we see benefits of fruitful connection.

If these insights are not reasons to be optimistic about society's long-term future, they are at least initial pretext for hopefulness, I think.

Maybe others who participate here have ideas about organizing values or goals.
 

But none of this happened overnight, or in simple steps. Every country has passed thru a fair number of variations on the socialism-capitalism theme in last two centuries, with change not really even being cyclical, let alone linear or binary.

Thus I twitch every time someone says "which..", because it assumes that the future involves some choice between a small number of discrete alternatives, often not terribly dissimilar (eg. capitalism and communism, which both eternalise costs to the nonhuman systems).

So screw the name games, i think we have to replumb our existing systems and decide what to call it later.
Is your country leaking wealth to currency speculators? Smear a Tobin Tax all round the joints. http://www.ceedweb.org/iirp/
Is too much wealth accumulating in fatty deposits? Apply demurrage and rediscover what money is for! http://www.feasta.org/documents/moneyecology/chapterfour.htm
Are you running out of planet? Try taxing ALL consumption, instead of effort!
Your legal conveniences (corporations) become a nuisance? revoke their charters, mandate transperancy for misdemeanors, execute their executives.

None of these are very new ideas, they've just never made it because not enough people got it and gave a sh*t. Now more and more people are seeing that giving a sh*t might perhaps be in their best interests, the dashboard is ablazed with blinking warning lights.  
Then why is fixing what is broken still seen as radical? Because so many who think they're awake are really still asleep, unable to comprehend the consequences of the decision we're making with business as usual.

Are Capitalism and a Habitable Planet Mutually Exclusive?

Money is created and issued by banks in the form of loans. These loans are the source of the money that circulates in our economy. The interest charged on loans is a key part of the growth economy.

Imagine a situation in which 10 people each borrow $10 from a bank. These 10 people form their own closed economy and money system. The terms of the loan are that each person has to repay the $10 at the end of one year, plus one extra dollar in interest, for a total of $11. Since there is only $100 in the system (10 people x $10), it will be impossible for 10 people to pay back $11 each - that would equal $110, more money than exists. The ten people must compete fiercely for money to repay the bank, and at least on of them will not be able to repay her loan. If 9 people each pay back the $11 they owe, that would equal $99 and there would only be $1 left for the last unfortunate person, who would become bankrupt.

Now imagine that six months into the year, 10 more people join the economy, each with a $10 loan. Suddenly there is $200 in the economy and only $110 of it will be due at the end of the first year. There is enough money to satisfy short term requirements, but still not enough in the long run. The amount of debt still exceeds the supply of money.

The money system of a growth economy is based on credit that is issued under the assumption that tomorrow's economic expansion will be able to repay today's loans. But what if tomorrow does not bring expansion?

Peak oil and global warming are not just commons, they are commons with deferred penalties.  It's quite possible that many of us here will live out our lives consuming oil and generating CO2 ... without any noticeable penalty.

On a "cynical day" I tend to think that difference is insurmountable ... that economics (or any other intellectual discipline) will be playing catch-up forever to human behaviors and exchanges rooted in the "now."

Lets say that Capitalism brought us the industrial revolution and cheap things, at a cost of environmental degradation and child labour. Labour unions and socialism brought us a bit of balance between the two. Maybe now we need the balance to swing more to European ideals of socialism (say, Sweden) vs the american ideal of capitalism. As someone living between the two ideals already, up here in canada, I don't see this as radical, or impossible. We need to alter the balance of power to the needs of the people, not corporations and shareholders.

Our basic problem, as several people have noted, is that our whole economic system is based on rapidly depleting nonrenewable resources.   The advantage of changing our tax system is that it would unleash the forces of free market capitalism against petroleum fuels.  I would abolish all forms of subsidy for alternative energy, because taxing the hell out of most fossil fuels would do a terrific job of making alliterative energy sources vastly more competitive (wind is already more competitive in a lot of areas).   One question is whether or not to raise taxes on coal and natural gas.

I realize that most of us feel powerless, but I think everyone in the Peak Oil/Alternative Energy/Environmental communities need to coalesce behind the simple straight forward idea of changing the tax code.   If anyone else has a better idea, I would very much like to hear it.  

I suggest that you start trying to organize symposiums regarding Peak Oil and the tax code in your own areas.  My wife and I came up with the idea for a joint symposium featuring Matt Simmons and Jim Kunstler.   After a lot of hard work and a lot of help from Southern Methodist University, the Greater Dallas Planning Council and corporate underwriters, the symposium was a reality, here in Dallas on November 1st of last year.  Any of you can do something similar.   The basic theme of "The Tipping Point," is that "There is nothing so powerful as an idea whose time has come."

Do you want to just talk about the problem, or do you want to try to do something about the problem?

Jeffrey J. Brown
Independent Petroleum Geologist

Ironically, one place that capitalism already works well, in theory, is in management of privately-owned scarce resources. Peak Oil is a perfect example of a situation which is best managed by a pure capitalistic society. In such a society, people are motivated by greed to extract maximum profits from every drop of oil. As oil becomes scarce, the price rises exponentially and it can be proven that society extracts the maximum total social good from the oil, even though the sellers are individually motivated only by greed.

If oil resources are uncertain, capitalism provides the best known mechanisms for motivating people to discover the true situation and to disclose private information about oil resources. This happens through markets, where the prices of products and of futures reveal consensus estimates of resource scarcity.

That's the theory: how does it work in practice? Well, a big problem is that most oil these days is not sold by capitalists! Ironically, for this Peak Oil discussion board, not many people have noted that the biggest problems with lack of transparency and opaque motivations in the oil business come from governments. We have much less visibility into the workings of Saudi Arabia than we do into Exxon. And it's not (just) because of government regulation of Exxon, but rather because Exxon stockholders will demand to know what their investments are worth. Imagine if you were invited to invest in Saudi Arabian oil. You'd have no idea what the resource situation is; everybody says something different. Private companies that extract natural resources are forced to provide considerable visibility into the state of their assets - otherwise no one will invest.

Largely for this reason, there is still a lack of consensus within the capitalistic community about Peak Oil. Futures prices are high by historical standards but not any higher than today's prices. The straightforward interpretation is that the oil market will remain much as it is today, with just barely enough oil to meet demand, implying that we do not face a near-term peak. Based on that interpretation, oil prices, which are being set by market mechanisms, are not unreasonable.

As the situation becomes clearer and an oil production peak comes into sight, prices should rise - at least, if everyone involved starts acting look a good (i.e. greedy) capitalist. This is exactly what we should hope for, that Saudi Arabia and Russia and other major oil producers start thinking like capitalists, and manage their remaining stock of oil so as to maximize profitability. This will ensure that oil prices rise as they should and that the world will follow an optimal path as it drains the remaining oil from the reservoirs.