Accumulating wealth is useless on a dead planet
The current system, based on accumulation, has placed us in a dynamic of destruction of life. The recent ecological, sanitary, economic, social, and political crises demonstrate that this system has reached its limits. The wealth and products we accumulate will be of no use to us on a dead planet, but there is no fatality: awareness is growing and efforts to transform are starting. It is up to us to accelerate and build the future!
The current system is based on accumulation.
The current economic system is based on the search for short/medium term profit and the accumulation of wealth. For fear of running out, we save. These are the foundations of capitalism: to increase capital.
In this race to accumulate, humans are at the service of the economy. As Nigel Marsh says: “ There are thousands and thousands of people out there leading lives of quiet, screaming desperation, where they work long, hard hours at jobs they hate to enable them to buy things they don’t need to impress people they don’t like”!
We are in a dynamic of destruction of life.
By satisfying our abuse of consumption and production, we are destroying the conditions of habitability of the Planet
Between 2008 and 2016, more than 20 million people had to flee their homes each year because of weather conditions that became extreme. In 2017, 40 million people had to flee, four times more than the populations affected by armed conflict (e.g., 4 million Syrians since the war began in 2011). Some analysts predict that heatwaves could kill 150,000 people a year by 2100, compared to 3,000 today, and that the world map could be dramatically reshaped.
The advancement and increasing consumption of technology is likely to lead to shortages of raw materials. Oil is no longer the only commodity in decline. Some other ones, notably those used to build computers, telephones, or electronic chips, are doomed to depletion if current levels of extraction continue. Copper, zinc, nickel, aluminum, cobalt and lithium are now at risk. ADEME analyses that some shortages could occur in the next 10 years.
The Earth Overshoot Day, calculated by the American NGO Global Footprint Network and representing the date from which humanity has consumed all the resources that the planet can regenerate in one year, is getting closer and closer, at an ever-increasing speed. This day was set on December 29 in 1970. In 1990, it was on December 7. The 2000s marked an acceleration: November 1 in 2000, August 21 in 2008, August 1 in 2018.
The planet’s resources are limited. We must realize that humans and their activities cannot grow infinitely in a limited world. We must stop seeing the Planet and Nature as a commodity. It is above all our habitat.
The globalized system is showing its limits.
The current system is showing its limits by dragging the world into a major ecological crisis, by increasing inequalities, by blocking social mobility and by focusing investment and innovation on the short term.
Successive recent crises (the subprime crisis in 2006, the bond crisis in 2010, the Covid-19 pandemic in 2020) have shown that the globalized system presents not only limits, but also risks: the planetary propagation of crises in a very short time, the systematization of risks and exacerbated competition to hold one’s own, leading to diplomatic difficulties between States, and even conflicts.
In the face of a major crisis, this system has extremely low resilience. Financial circuits collapse rapidly, often dragging the real economy down with them. Unemployment rises massively in a matter of weeks and business failures are numerous. The Covid-19 crisis has raised problems of state sovereignty in the event of stress in the supply of strategic materials and major difficulties for health and social protection systems.
For each crisis, the main solution is to put this globalized system on life support: Quantitative Easing policies, lowering interest rates to sometimes negative values, massive and uncontrolled indebtedness of States to finance recovery plans or to avoid corporate bankruptcies.
The short time between each crisis since the beginning of the 2000s has made these solutions the norm. The financial and economic systems, as well as certain companies, remain permanently under perfusion, creating a structural bias in the reading and analysis of their fundamentals.
And with each new crisis, the range of possible solutions for governments is increasingly limited.
We are dragging the world into a major ecological crisis.
In the 14th century, an overpopulation of humans compared to the carrying capacity of the planet at the time and the bubonic plague virus spread by maritime trade and urban development, led to the disappearance of one third of the European population. This massive wave of deaths in a short period of time allowed a readjustment of the carrying capacity and the improvement of production techniques.
In addition to the similarities between the Covid-19 pandemic and the Great Plague of 1346, we are currently observing all the factors favoring a major ecological crisis according to the criteria put forward by scientists: atmospheric evolution, degradation or even disappearance of certain habitats, degradation of water availability and quality, increase in the number of wastes, modification of ecosystems with the arrival of non-endemic species, sustained rate of disappearance of species and recurrence of sanitary crises.
Scientists agree on the fact that all these factors are largely favored by human activity and consequently, economic activity. In addition to the health crises, the consequences are a global warming that could exceed the +2°C bearable, the exceeding of the carrying capacity of the Planet in relation to its population and a latent, but major energy crisis.
It is scientifically accepted that without a change in lifestyle in the short term and on a global scale, allowing for long-term scientific progress, this ecological crisis will lead to the breakdown of food chains, to unprecedented social conflicts, and even to wars.
This system of accumulation increases inequality and blocks social mobility.
According to a UN report of January 21, 2020, the increase in inequality affects more than two thirds of the Planet. The introduction of this study is: “Inequality is growing for more than 70 per cent of the global population, exacerbating the risks of divisions and hampering economic and social development”.
The richest 1% got richer between 1990 and 2015 while the poorest 40% got poorer. This phenomenon increases disparities in access to employment, healthcare, education, culture, and technology. In such a model, people living in poverty are likely to be stuck there for several generations.
One of the elements affecting this increase in inequalities is the climate crisis: the most vulnerable populations are the first victims, and the poorest countries are becoming even poorer due to lack of access to resources.
A second element is the urbanization of the planet. It creates a hyper centralization of economic development to the detriment of rural regions, which are essential to growth and to agriculture. At the same time, it accentuates the feeling of inequality by putting rich and poor side by side, facilitating social conflicts.
The third element is international migration, insofar as it concerns mainly low-skilled jobs that a larger number of people are competing for, mechanically generating lower wages and higher unemployment.
Investment and technical progress remain too focused on the short term.
Technological innovation is necessary for growth and to provide answers to the current challenges of the Planet. But paradoxically, it increases inequalities.
Today’s innovation generates many opportunities in the fields of education, health, culture, finance, communication, or productivity. This offers strong prospects for economic growth and provides some solutions to current problems. On the other hand, if these innovations in biotechnology, artificial intelligence, learning machines, genetics, robotization… create new jobs, they also destroy entire categories of low-skilled jobs, thus depriving the most vulnerable populations of opportunities that have already become rare.
The companies or startups behind these innovations are subject to the laws of the market and the current economic organization. While we are seeing the emergence of impact funds, traditional investors are still asking for an internal rate of return (IRR) of 10% on average, and even 26% for the most successful. Venture capitalists have a target of about one tenth of the companies they invest in generating this profitability, which forces innovative companies to have only one major objective: profitability. Often to the detriment of impact.
In the short and medium term, innovation, in addition to destroying jobs, creates, by construction of the current model, only a tiny proportion of impact for the benefit of financial performance. This reduces the probability of long-term impact.
But there is no fatality.
We have a World to rebuild, new models to put in place, respectful of the limits of the Planet.
The awareness that our accumulations of wealth or products will be of no use to us on a dead planet is growing. The efforts of transformation are starting. We must accelerate the pace and rely less on governments whose room for maneuver is limited.
It is up to us, citizens, and entrepreneurs, to stand up, to come together, and to build the future!
