MOST PEOPLE in the industrial world believe that the future is, by definition, supposed to be better than the past, that growth is normal and contraction is not, that newer technologies are superior to older ones, and that the replacement of simple technologies by complex ones is as unstoppable as it is beneficent. That’s the bedrock of the contemporary faith in progress. This faith remains unchallenged by most people today, even though the evidence of our everyday lives contradicts it at every turn.
Most of us know perfectly well that every software “upgrade” these days has more bugs and fewer useful features than what it replaced, and every round of “new and improved” products hawked by the media and shoveled onto store shelves is more shoddily made, more loaded with unwanted side effects, and less satisfactory at meeting human needs than the last round. Somehow, though, a good many of the people who witness this reality, day in and day out, still manage to insist that the future will be, or at least ought to be, a paradise propped up by perfectly functioning machines, in which all the latest clichés about the future will inevitably come true. That the rising tide of technological failure might be something other than an accidental roadbump on the way to utopia — that it might be trying to tell us something that, by and large, we don’t want to hear — has not yet entered our society’s darkest dream.
Meanwhile, as problems mount and solutions run short, the contemporary faith in progress drives a common insistence that it’s never too late to save the world. No matter how troubling the signs on the horizon, no matter how many predictions of impending trouble have turned into descriptions of troubles we’re facing here and now, it’s astonishingly rare for anyone to notice that we’re past the point where it makes any sense to sit around talking about how somebody ought to fix things one of these days.
The events of our time, though, show no particular interest in waiting until we get around to dealing with them. At least three factors at work in today’s world — peak oil, and more generally the peaking of global production of fossil fuels; the ongoing failure of alternative energy technologies to replace fossil fuels; and the accelerating pace of anthropogenic climate change — are already having a major impact on the global economy and, increasingly, on other aspects of human and nonhuman life as well.
Those issues could have been faced and dealt with as soon as it became clear that they were going to be problematic. In every case, there were straightforward fixes available, and if they had been put into place as soon as the facts showed that trouble was on its way, the necessary changes could have been made gradually, without overturning the whole structure of society. But that’s not what happened. Instead, obsolete policies stayed frozen in place while the opportunities for constructive change slipped past.
Now the bill is coming due.
This doesn’t mean that action is useless, much less that we should huddle down, close our eyes, and wait for the end. It means, rather, that business as usual will not last much longer, no matter what we do about it. In the decades ahead, many things that people in the industrial world consider normal will go away forever. That’s going to be profoundly difficult, but it’s also profoundly liberating, because the struggle to maintain the status quo has been a massive force blocking the way to constructive change. As the familiar landscapes of the industrial age give way to the unexpected vistas of the near and middle future, the focus of meaningful action will have to shift from preservation to remediation, from “How can we keep our familiar ways of doing things?” to “Now that the familiar things are gone, what can we put in their place?”
THE LAW OF DIMINISHING RETURNS
I’m well aware that asking people in the early 21st century to doubt the omnipotence and eternal goodness of progress ranks right up there with suggesting to a medieval peasant that God and his saints and angels aren’t up there in heaven any more. There are nonetheless two crucial reasons why cumulative technological progress, of the sort that’s reshaped the industrial world over the past three centuries, was a temporary, self-limiting process that often imposed costs that outweighed its benefits.
The first is the law of diminishing returns — the principle that the more often you repeat a given action, the fewer benefits you get from each successive repetition and the more the costs mount up. Nearly everything in the world of human experience is subject to this law. The process of extracting petroleum from the earth is a good example: the first oil wells made huge profits for very little expense, while the hunt for the last scrapings of the bottom of the planet’s oil barrel that occupies the petroleum industry today has extraordinarily high costs and meager returns.
Is technological progress subject to the same principle? Believers in progress like to insist that this can’t be the case, but the evidence suggests otherwise. Consider the way that energy technologies have become more and more expensive to develop over time. The steam engine, the first major energy technology innovation in modern times, was invented by working engineers in their off hours, using ordinary pipefitting tools. The internal combustion engine and the electrical generator required more systematic effort, but were still well within the reach of a single inventor working in a laboratory. Nuclear fission required an expenditure of money and resources so huge that only a handful of relatively rich nations could afford it. Commercial nuclear fusion power is turning out to be so costly that nobody anywhere can afford it at all.
In exactly the same way, and for many of the same reasons, the first advances in health care — basic sanitation, antiseptics, and vaccination — cost very little and brought immense benefits. With every passing year, costs went up and benefits went down, until current health care research is investing billions of dollars in projects that may benefit only a few people, if any. The low-hanging fruit got picked first, leaving more difficult projects for later.
The same is true in every other field. This is why, as a detailed study of patent records has shown, the modern world hit its peak of innovation in the last quarter of the 19th century, and the pace of technological progress has actually decreased steadily since that time (“A Possible Declining Trend for Worldwide Innovation,” by Jonathan Huebner, Technology Forecasting & Social Change 72, 2005). This implies that, at some point, the benefits of continued technological progress will no longer equal the costs and progress will grind to a halt because it no longer pays for itself. Thus there can be such a thing as too much technology, and a very strong case can be made that in the world’s industrial nations we’ve already gotten well past that point.
In a typically cogent article titled “Three Limits to Growth,” maverick economist Herman Daly sorted out the law of diminishing returns into three interacting processes. The first is diminishing marginal utility — that is, the more of anything you have, the less any additional increment of that thing contributes to your well-being. If you’re hungry, one sandwich is a very good thing; two is pleasant; three is a luxury; and somewhere beyond that, when you’ve given sandwiches to all your coworkers, the local street people, and anyone else you can find, more sandwiches stop being any use to you. When more of anything no longer brings any additional benefit, you’ve reached the point of futility, at which further increments are a waste of time and resources.
Well before that happens, though, two other factors come into play. First, it costs you almost nothing to cope with one sandwich, and very little more to cope with two or three. After that you start having to invest time, and quite possibly resources, in dealing with all those sandwiches, and each additional sandwich adds to the total burden. Economists call that increasing marginal disutility — that is, the more of anything you have, the more any additional increment of that thing is going to cost you, in one way or another. Somewhere in there, too, there’s the impact that dealing with those sandwiches has on your ability to deal with other things you need to do; that’s the increasing risk of whole-system disruption — the more of anything you have, the more likely it is that an additional increment of that thing is going to disrupt the wider system in which you exist.
Next to nobody wants to talk about the way that technological progress has already passed the point of diminishing returns in all three senses: that the marginal utility of each new round of technology is dropping fast; the marginal disutility is rising at least as fast; and whole-system disruptions driven by technology are becoming an inescapable presence in everyday life. Still, an uncomfortable awareness of that fact is becoming increasingly common these days, however subliminal it may be, and is beginning to have a popular culture among many other things.
If you’ve dug yourself into a hole, as the saying goes, the first thing you need to do is stop digging. If a large and growing fraction of your society’s problems are being caused by too much technology applied with too little caution, similarly, it’s not exactly helpful to insist that applying even more technology with even less skepticism about its consequences is the only possible answer to those problems.
There’s a useful word for something that remains stuck in a culture after the conditions that once made it relevant have passed away, and that word is “superstition.” The beliefs that more technology is always better, that every problem must have a technological solution, and that technology always solves more problems than it creates, are among the prevailing superstitions of our time. I’d like to suggest that, comforting and soothing as those superstitions may be, it’s high time we outgrow them and deal with the hard realities of a world in which taking such faith-based notions as a guide to the future may not be sensible, or even sane.
Yet there’s another reason to ask hard questions about where progress is taking us, and it unfolds from the issue of externalities. Externalities are the costs of an economic activity that aren’t paid by the buyer or the seller directly but are pushed off on to some third party. You won’t hear much about externalities these days; it many circles, it’s considered impolite to mention them, but they’re a pervasive presence in contemporary life, and they play a very large role in some of the most intractable problems of our age. Some of those problems were discussed by Garrett Hardin in his famous essay “Tragedy of the Commons (Science magazine, 1968) , and more recently by Elinor Ostrom in her studies of how that tragedy can be avoided (Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press, 1990). Still, I’m not sure how often it’s recognized that the phenomena they discussed applies not just to commons but to societies as a whole — especially to societies like ours.
A simplified example may be useful here. Let’s imagine a blivet factory, then, that turns out three-pronged blivets in pallet loads for customers. The blivet-making process, like all other manufacturing, produces waste as well as blivets, and we’ll assume for the sake of the example that blivet waste is moderately toxic and causes health problems in people who ingest it. The blivet factory produces one barrel of blivet waste for every pallet of blivets it ships. The cheapest option for dealing with the waste, and thus the option that economists favor, is to dump it into the river that flows past the factory.
Notice what happens if the blivet manufacturer follows this approach. The manufacturer has maximized his own benefit from the manufacturing process by avoiding the expense of finding some other way to deal with all those barrels of blivet waste. His customers also benefit, because blivets cost less than they would if the cost of waste disposal was factored into the price. On the other hand, the costs of dealing with the blivet waste don’t disappear; they are imposed on the people downstream who get their drinking water directly or indirectly from the river and who suffer from health problems because there’s blivet waste in their water. The blivet manufacturer is thus externalizing the cost of waste disposal; his increased profits are being paid for at a remove by the increased health care costs of everyone downstream.
That’s how externalities function. Back in the days when people actually talked about the downsides of economic growth, there was a lot of discussion of how to handle externalities, and not just on the leftward end of the spectrum. I recall a thoughtful book by Edwin G. Dolan titled TANSTAAFL (Holt, Rinehart and Winston, 1971) — that’s an acronym, for those who don’t know their Heinlein, for “There Ain’t No Such Thing as a Free Lunch” — which argued, on solid libertarian-conservative grounds, that the environment could best be preserved by making sure that everyone paid full sticker price for the externalities they generated. Today’s crop of American pseudo-conservatives, of course, turned their back on all this a long time ago and insist at the top of their lungs on their allegedly God-given right to externalize as many costs as they possibly can. This is all the more ironic in that most pseudo-conservatives claim to worship a God who said some very specific things about “what ye do unto the least of these,” but that’s a subject for a different time.
THE EXTERNALITY TRAP
Economic life in the industrial world these days can be described, without too much inaccuracy, as an arrangement set up to allow a privileged minority to externalize nearly all their costs onto the rest of society while pocketing as many as possible of the benefits themselves. That’s come in for a certain amount of discussion in recent years (notably in The Power of the Machine by Alf Thornburg, Alta Mira Press, 2001), but I’m not sure how many of the people who’ve participated in those discussions have given any thought to the role that technological progress plays in facilitating the internalization of benefits and the externalization of costs that drive today’s increasingly inegalitarian societies. Here again, our example will be helpful.
Before the invention of blivet-making machinery, let’s say, blivets were made by old-fashioned blivet makers, who hammered them out on iron blivet anvils in shops that were to be found in every town and village. Like other handicrafts, blivet-making was a living rather than a ticket to wealth; blivet makers invested their own time and muscular effort in their craft and turned out enough in the way of blivets to meet the demand.
Notice also the effect on the production of blivet waste. Since blivets were being made one at a time rather than in pallet loads, the total amount of waste was smaller; the conditions of handicraft production also meant that blivet makers and their families were more likely to be exposed to the blivet waste than anyone else, and so they had an incentive to invest the extra effort and expense to dispose of it properly. Since blivet makers were ordinary craftspeople rather than millionaires, furthermore, they weren’t as able to buy exemption from local health laws.
The invention of the mechanical blivet press changed that picture completely. Since one blivet press could do as much work as fifty blivet makers, the income that would have gone to those fifty blivet makers and their families went instead to one factory owner and his stockholders, with as small a share as possible set aside for the wage laborers who operated the blivet press. The factory owner and stockholders had no incentive to pay for the proper disposal of the blivet waste, either — quite the contrary, since having to meet the disposal costs cut into their profit, buying off local governments was much cheaper, and, if the harmful effects of blivet waste were known, you can bet that the owner and shareholders all lived well upstream from the factory.
Notice also that a blivet manufacturer who paid a living wage to his workers and covered the costs of proper waste disposal would have to charge a higher price for blivets than one who did neither and thus would be driven out of business by his more ruthless competitor. Externalities aren’t simply made possible by technological progress, in other words; they’re the inevitable result of technological progress in a market economy, because the more a firm externalizes the costs of production, the more readily it can outcompete rival firms, and the firm that succeeds in externalizing the largest share of its costs is the most likely to survive and prosper.
Each further step in the progress of blivet manufacturing, in turn, tightened the same screw another turn. Today, to finish up the metaphor, the entire global supply of blivets is made in a dozen factories in distant Slobbovia, where sweatshop labor under ghastly working conditions and the utter absence of environmental regulations make the business of blivet fabrication more profitable than anywhere else. The blivets are as shoddily made as possible; the entire blivet supply chain, from the openpit mines worked by slave labor that provide the raw materials to the big box stores with part-time, poorly paid staff selling blivetronic technology to the masses, is a human and environmental disaster. Every possible cost has been externalized, so that the two multinational corporations that dominate the global blivet industry can maintain their profit margins and pay absurdly high salaries to their CEOs.
That in itself is bad enough, but let’s broaden the focus to include the whole systems in which blivet fabrication takes place: the economy as a whole, society as a whole, and the biosphere as a whole. The impact of technology on blivet fabrication in a market economy has predictable and well-understood consequences for each of these whole systems, which can be summed up precisely in the language we’ve already used. In order to maximize its own profitability and return on shareholder investment, the blivet industry externalizes costs in every available direction.
Since nobody else wants to bear those costs, either, most of them end up being passed onto the whole systems just named, because the economy, society, and the biosphere have no voice in today’s economic decisions.
Like the costs of dealing with blivet waste, though, the other externalized costs of blivet manufacture don’t go away just because they’re externalized. As externalities increase, they tend to degrade the whole systems onto which they’re dumped — the economy, society, and the biosphere. This is where the trap closes tight, because blivet manufacturing exists within those whole systems and can’t be carried out unless all three systems are sufficiently intact to function in their usual way. As those systems degrade, their ability to function degrades also, and eventually one or more of them breaks down — the economy plunges into a depression; the society disintegrates into anarchy or otalitarianism; the biosphere shifts abruptly into a new mode that lacks adequate rainfall for crops — and the manufacture of blivets stops because the whole system that once supported it has stopped doing so.
Notice how this works out from the perspective of someone who’s benefiting from the externalization of costs by the blivet industry — the executives and stockholders in a blivet corporation, let’s say. As far as they’re concerned, until very late in the process, everything is fine and dandy: each new round of technological improvements in blivet fabrication increases their profits, and if each such step in the onward march of progress also means that economies go haywire, democratic institutions implode, toxic waste builds up in the food chain, or what have you, hey, that’s not their problem — and after all, that’s just the normal, praiseworthy creative destruction of capitalism, right?
That sort of insouciance is easy for at least three reasons. First, the impacts of externalities on whole systems can pop up a very long way from the blivet factories. Second, in a market economy, everyone else is externalizing their costs as enthusiastically as the blivet industry, and so it’s easy for blivet manufacturers (and everyone else) to insist that whatever’s going wrong is not their fault. Third, and most crucially, whole systems as stable and enduring as economies, societies, and biospheres can absorb a lot of damage before they tip over into instability. The process of externalization of costs can thus run for a very long time, and become entrenched as a basic economic habit, long before it becomes clear to anyone that continuing along the same route is a recipe for disaster.
Even when externalized costs have begun to take a visible toll on the economy, society, and the biosphere, furthermore, any attempt to reverse course faces nearly insurmountable obstacles. Those who profit from the existing order of things can be counted on to fight tooth and nail for the right to keep externalizing their costs: after all, they have to pay the full price for any reduction in their ability to externalize costs, while the benefits created by not imposing those costs on whole systems are shared among all participants in the economy, society, and the biosphere respectively. Nor is it necessarily easy to trace back the causes of any given whole-system disruption to specific externalities benefiting specific people or industries. It’s rather like loading hanging weights onto a chain; sooner or later, as the amount of weight hung on the chain goes up, the chain is going to break, but the link that breaks may be far from the last weight that pushed things over the edge, and every other weight on the chain made its own contribution to the end result.
A society that’s approaching collapse because too many externalized costs have been loaded onto the whole systems that support it thus shows certain highly distinctive symptoms. Things are going wrong with the economy, society, and the biosphere, but nobody seems to be able to figure out why; the measurements that economists use to determine prosperity show contradictory results, with those that measure the profitability of individual corporations and industries giving much better readings than those that measure the performance of whole systems; the rich are convinced that everything is fine, while outside the narrowing circles of wealth and privilege, people talk in low voices about the rising spiral of problems that beset them from every side. If this doesn’t sound familiar to you, dear reader, you probably need to get out more.
At this point it may be helpful to sum up the argument I’ve developed here:
a) Every increase in technological complexity tends also to increase the opportunities for externalizing the costs of economic activity.
b) Market forces make the externalization of costs mandatory rather than optional, since economic actors that fail to externalize costs will tend to be outcompeted by those that do.
c) In a market economy, as all economic actors attempt to externalize as many costs as possible, externalized costs will tend to be passed on preferentially and progressively to whole systems such as the economy, society, and the biosphere, which provide necessary support for economic activity but have no voice in economic decisions.
d) Given unlimited increases in technological complexity, there is no necessary limit to the loading of externalized costs onto whole systems, short of systemic collapse.
e) Unlimited increases in technological complexity in a market economy thus necessarily lead to the progressive degradation of the whole systems that support economic activity.
f ) Technological progress in a market economy is therefore self-terminating, and ends in collapse.
There are, of course, arguments that could be deployed against this thesis. For example, it could be argued that progress doesn’t have to generate a rising tide of externalities. The difficulty with this argument is that externalization of costs isn’t an accidental side effect of technology but an essential aspect — it’s not a bug, it’s a feature. Every technology is a means of externalizing some cost that would otherwise be borne by a human body. Even something as simple as a hammer takes the wear and tear that would otherwise affect the heel of your hand, let’s say, and transfers it to something else: directly, to the hammer; indirectly, to the biosphere by way of the trees that had to be cut down to make the charcoal to smelt the iron, the plants that were shoveled aside to get the ore, and so on.
The more complex a technology becomes, the more costs it generates, since every bit of added complexity has to be paid for. Each more-complex technology thus has to externalize its additional costs in order to compete against the simpler technology it replaces. In the case of a hypercomplex technosystem such as the internet, the process of externalizing costs has gone so far, through so many tangled interrelationships, that it’s next to impossible to figure out exactly who’s paying for how much of the gargantuan inputs needed to keep the thing running. This lack of transparency feeds the illusion that large systems are cheaper than small ones, by making externalities of scale look like economies of scale.
It might be argued instead that a sufficiently stringent regulatory environment, forcing economic actors to absorb all the costs of their activities instead of externalizing them onto others, would be able to stop the degradation of whole systems while still allowing technological progress to continue. The difficulty here is that increased externalization of costs is what makes progress profitable. All other things being equal, a complex technology will be more expensive in real terms than a simpler technology, for the simple fact that each additional increment of complexity has to be paid for by an investment of energy and other forms of real capital.
Strip complex technologies of the subsidies that transfer some of their costs to the government, the perverse regulations that transfer some of their costs to the rest of the economy, the bad habits of environmental abuse and neglect that transfer some of their costs to the biosphere, and so on, and pretty soon you’re looking at hard economic limits to technological complexity, as people forced to pay the full sticker price for complex technologies maximize the benefits they receive by choosing simpler, more affordable options instead. A regulatory environment sufficiently strict to keep technology from accelerating to collapse would thus bring technological progress to a halt by making it unprofitable.
Notice, however, the flipside of the same argument: a society that chose to stop progressing technologically could maintain itself indefinitely, so long as its technologies weren’t dependent on nonrenewable resources or the like. The costs imposed by a stable technology on the economy, society, and the biosphere would be more or less stable, rather than increasing over time, and it would therefore be much easier to figure out how to balance out the negative effects of those externalities and maintain the whole system in a steady state. Societies that treated technological progress as an option rather than a requirement, and recognized the downsides to increasing complexity, could also choose to reduce complexity in one area in order to increase it in another, and so on — or they could just raise a monument to the age of progress and go do something else instead.
The costs of progress are already starting to take an increasing bite out of the global economy. That bite shows up in the fact that none of the twenty biggest industries in today’s world could break even, much less make a profit, if they had to pay for the damage they do to the environment (read more in David Roberts’ article on Grist.com from April 17, 2013). The conventional wisdom these days is that it’s unfair to make those industries pay for the costs they impose on the rest of us. That attitude is exemplified by fracking firms in North Dakota, among many others, who proposed at height of the fracking bubble that they should be exempted from rules for handling radioactive waste from their wells, because following the rules would prevent them from making a profit, as Ernest Schedyer pointed out in a Reuters article (“North Dakota: Oil Producers Aim to Cut Radioactive Waste Bills,” January 28, 2015). That the costs externalized by the fracking industry will sooner or later be paid by others, as radionuclides in fracking waste begin to generate cancer clusters, is not something that our current economic thought is able to grasp.
The crucial point to keep in mind is that externalized costs don’t just go away. They will be paid by someone; the only question is who pays them. That’s the central argument of The Limits to Growth, still the most accurate (and thus inevitably the most reviled) of the studies that tried unavailingly to guide industrial society away from self-inflicted ruin: on a finite planet, once an inflection point is passed, the costs of economic growth rise faster than growth does, and sooner or later force the global economy to its knees, as Graham Turner and Cathy Alexander pointed out in a recent article for The Guardian (“Limits to Growth was Right. New Research Shows We’re Nearing Collapse,” Dec. 5, 2015). The mere fact that those costs aren’t carried on the balance sheets of the companies that generate them doesn’t make those costs go away; it just keeps them from being taken into account by policymakers.
One way in which those costs may already be having an impact is in the phenomenon of secular stagnation, discussed by Samuel Rines in his article “Secular Stagnation: The Dismal Fate of the Global Economy” (The National Interest, Sept. 11, 2015). It so happens that when you subtract the paper wealth manufactured by derivatives and other forms of financial make-believe, the global economy has been stuck in a period of slow, no, or negative growth since 2009. There are plenty of economists, mind you, who insist that this can’t happen, and even among those who admit that what’s happening can indeed happen, there’s no consensus as to how or why such a thing could occur. I’d like to suggest that the most important cause of secular stagnation is the increasing impact of externalities on the economy. The dubious bookkeeping that leads economists to think that externalized costs go away because they’re not entered into anyone’s books doesn’t actually make them disappear, after all. Instead, they become an unrecognized burden on the economy as a whole, an unfelt headwind blowing with hurricane force in the face of economic growth.
Thus the insistence by fracking firms that they ought to be allowed to externalize even more of their costs in order to maintain their profit margin is self-defeating, even if the firms themselves don’t realize that. If in fact the buildup of externalized costs is what’s causing the ongoing economic slowdown that’s driving down commodity prices, forcing down interest rates, and resurrecting the specter of deflationary depression, the fracking firms in question are trying to respond to secular stagnation by doing more of what causes secular stagnation.
In theory, this sort of self-defeating behavior would be recognized for what it is and set aside as a bad idea. In the real world, by contrast, fracking firms, like every other business concern these days, can be expected to put their short-term cash flow ahead of the survival of their industry, or for that matter of industrial civilization as a whole. That’s business as usual — and it’s made even easier than it otherwise would be by certain habits of thought that make it hard to think clearly about technology and progress.
John Michael Greer is an historian of ideas and one of the most influential authors exploring the future of industrial society. He writes the widely cited weekly blog “The Archdruid Report,” and has published more than 30 books on ecology, history, and nature spirituality. Excerpted with permission from his latest book, The Retro Future (New Society, 2017).