Sustainability and the Economic Crisis

How do the goals of sustainability relate to the current economic crisis? There are many opinions about this and the differences that separate them are unlikely to be settled anytime soon.

At Xavier the biggest concern seems to be whether or not the financial crisis will significantly compromise the plans to build the new academic buildings according to LEEDs certification standards. Will we be able to afford the commitment to buildings that truly minimize our environmental footprint and be able to set an example for both students and the community, demonstrating that buildings, like all of our actions, can be teachers not just places within which we teach?

Nationally the debate ranges across the entire spectrum. There are those who say that until we can get our economic system in order, we cannot afford the distraction and expense of commitments to long-term sustainability. The other extreme claims that it is only the commitment to long-term sustainability and the building of a new energy economy that will be able to provide the foundation for a new economic system ensuring a brighter economic and environmental future.

To look at this, we need to briefly examine the economic crisis. The first point is that it is an economic crisis, not merely a financial crisis. Financial systems work as part of economic systems. To date, there has been far too much public emphasis upon the financial system alone and upon the injection of fiscal capital into that system in order to create liquidity so that credit, the grease that makes the economy function, will begin to flow as it did back in "the good old days" of a year or two ago. But there are those who think that it is not the financial system that is the problem but the economic system as a whole and that until we begin to address this more fundamental systemic economic problems no amount of attention to the financial issues can possibly be anything more than the proverbial band-aid on the cancer.

The second point about the current economic crisis is that it is global. Not global just in the sense that many countries all over the world are experiencing some type of crisis of their own, but global in the sense that the economic system is global and when we talk about solutions to the crisis, there will be no solutions to the U.S. crisis without there being solutions to the global crisis. The global technological, economic and political interpenetration is now such that no returns to forms of economic nationalism are any longer possible. Granted we are likely to see these swords rattled and hear the slogans "Buy American" or "Buy French" or "German" or "Chinese" but sword rattling is all that it is. No such economic isolationism is possible. Like it or not, we are all in this together.

The fact that the crisis is systemic and that it is global undoubtedly makes it infinitely more complex. This is why, as we listen to either the current Washington administration or its critics, we need to understand that neither side has a neat and quick solution. There are no neat or quick solutions. We are dangling over an abyss for which we are unequipped economically and for which we are psychologically and socially ill prepared to deal.

But in this economic crisis there is opportunity and that opportunity is that we begin to systemically address the question of sustainability. The root of our economic crisis and the root of our ecological and sustainability crises are the same. In the US and as globalization has "progressed" there has been a predominant guiding principal?expansion. The very notion of "progress" is tied to constant expansion of wealth, of power and of techno-science. An economy is not "good" unless it is growing, stocks are not successful unless they are increasing in value, a good housing market is one in which the prices are increasing. We do not consider ourselves successful unless we are expanding?our wealth, our power, our house or car size, and even the amount of debt we can manage. This obsession with progress as expansion has brought us much. It has been an engine of innovation, it has been a great motivator personally and socially, and it has created the almost wondrous world in which we live.

The flaw with this ethos of progress as expansion is twofold. First, it inevitably hits limits. The idea that we can expand anything infinitely is an absurdity. The problem is that it is an absurdity that few admit and even fewer actively pursue courses to counter. Economically, during the twentieth century, we have built a system based upon demand. Over the last few decades, the demand economy has superheated and become a hyper-demand economy. The whole economic system works only if the demand continues, but maybe more to the point, continues to grow. Without growth in demand there is no need for growth in production, without growth in production, we do not need to grow the workforce, without a growing workforce, people do not have the financial ability to participate in the demand economy. It is this vicious cycle of expansion which has brought us to both an economic and ecological brink of ruin.

The second flaw with the ethos of progress as expansion is that while we might have metrics for economic or scientific or technological progress, progress as expansion not meant "progress" for the environment (which is being decimated), or "progress" for our communities (which are in real decline as communities). It has not meant moral progress or spiritual progress or even progress in achieving whatever our notion is of the good life. Instead, we get the "goods" life of hyper-consumption; lives which studies continually tell us have not brought greater happiness. There is an inherent violence in hyper-demand, hyper-expansion and hyper-consumption which we ignore at our own risk. It is violence against the environment, against our communities, and even against ourselves.

But expansion is what we know, some would say it is all we know, that it is the only way forward. The problem is that we have hit what the Club of Rome and, more recently, Donella Meadows, has called the "limits of growth." We are now, like it or not, moving into what is going to be a protracted period of contraction. And, simply put, we have no idea how to contract.

Contraction does not necessarily mean that there will be no economic growth at all. Rather, what we need is better ways to assess the purposes toward which a "good" economy should be oriented. This is heart of the notions now circulating of "smart growth." The idea of a free market, until relatively recently, did not mean an autonomous market?a market totally detached from any social moorings, purpose or guidance. It is not the free market but the autonomous market which has led to greed becoming such a reprehensible characteristic of the current economic system. It is by tying the economy to conscious social and environmental goals that transforms autonomous growth into smart growth.

Contraction will mean many things. First, it will mean a contraction or deflation from that point of expansion where the bubble burst in the stock market and in housing prices and all the price structures that flow from that. If we ever do get back to those stock and housing prices (and without hyper-leveraging mechanisms, is this likely?), it will take an extremely long time. More importantly, we are facing contraction in employment, either in the number people employed or the hours worked, or both. We will all have to contract our lives accordingly. This is as true for Xavier as it is for the world at large. We will have to learn to do what we do with less.

At the heart of contraction is the demand that we change the patterns of hyper-consumption and hyper-expansion, of living beyond our actual means. Hyper-expansion will be replaced by questions of equitable distribution?distribution of limited resources and of limited work. We are faced with the challenge of changing from a techno-economic system and an accompanying social-psychology all based upon hyper-demand and hyper-consumption into one that works according to an entirely different set of premises and goals. Of course there will be demand, of course there will be consumption and of course there will be capitalism. But maybe we can develop a capitalist system that is shaped by social and communal values rather than individualistic greed.

This analysis could be wrong. It could be that we will find some way back to where we were. But if all we manage to accomplish out of this current crisis is to restore the system of hyper-demand and hyper-consumption; if all we do is return to "business as usual" in which the rapacious greed and esoteric hyper-leveraging carried on in the backrooms of Wall Street, that has created this house of cards that has come tumbling down around us, then, I want to suggest, we have accomplished nothing. We will be the very caricature of those who learn nothing from history and are thus condemned to repeat it.

What I want to argue is that finding ways to respond to this systemic crisis is an opportunity. It is an opportunity to not only change the misguided or unguided fundamentals of the current global economic system but also an opportunity to embark upon a more sustainable path forward?economically, communally and environmentally.

If we embrace this crisis, and use it as a moment of finding ways to suffer through the very real challenges and sacrifices that now confront us, together, then we might emerge a very different nation and even a very different world. Contraction, in the various ways we experience it and learn to understand it, is the key to sustainability. Accepting the limits of growth, redefining our "needs" (what do we genuinely need versus what the market tells us we "need"?), and changing our social-psychology from one of the fulfillment of short-term desires through hyper-consumption to long-term goals that seek to build a new and different world for future generations, is the opportunity.

Facing such systemic change can only happen if we do it together, as communities or even as a world community. The revival of community goes hand in hand with sustainability. The investment in "social capital," a term brought back into current discussion by Robert Putnam's book Bowling Alone, is critical to sustainability. The crisis in social capital in many ways supersedes that of fiscal capital. We cannot raise the question of liquidity within the market without raising the question of the purposes to which that liquidity should be engaged. It was the failure to even ask these questions as social questions that has in part led to the collapse of the financial system. The purposes of our economic system must be fundamental going forward. There is nothing new about this but we seem to have forgotten these types of questions as the market became increasingly autonomous. These purposes must not be simply hyper-expansion, they must be well considered, they must be things we decide as communities (this is the importance of social capital) and they must be sustainable. Based on a rethinking of these purposes, we may now have to consider some truly revolutionary ideas such as, how to live in something approaching a stable-state economy or moving to a 30 hour work week in order to spread the same or even less work over greater populations.

For Xavier sustainability does not just mean the commitment to green buildings, it means contraction. If we are honest about it, contraction frightens us. We don't feel we can contract and at the same time be a "progressive" institution. We certainly don't like the idea that we will have to find ways to provide the same high quality education with ever scarcer resources and probably don't believe it even to be possible. We are still caught in the paradigm of expansion. The only way the quality of education can improve at Xavier is if we expand?the campus, the faculty, the resources we need for teaching and research, the endowment, etc. The thought of contraction, that we might have fewer students, fewer faculty and staff, lower wages, and generally fewer resources and still deliver as good or better education is difficult to even conceive. The truth is that contraction seems unacceptable as a set of premises moving forward, but living as a sustainable institution, economically and environmentally, living within our limits, may well mean contraction. Contraction may be the only way to ensure the long-term viability and excellence of the university.

This will require an attentiveness that has never before seemed necessary. We will have to be attentive to every detail, to every action and expenditure. We will have to be attentive to long-term goals rather than short-term needs. A good example of contraction and attentiveness is in "The Sustainability Pledge." As they say "the devil is in the details." We will be economically and environmentally sustainable in exact proportion to our ability to be attentive to every detail?of resource use, of waste, of process and of impact. The specifics of such systemic changes are the paths of exploration and discovery, and, yes, struggle and sacrifice, that await us. To enter these paths we must first and foremost change the way we think. We must begin to think systemically; we must begin to think long-term; and we must begin to change the psychology of desire which feeds the economies of hyper-demand.

Whether we are talking about Xavier or the world at large, it always comes back to the question raised at the beginning of this piece, namely: what can we afford? Can we afford to invest in long-term systemic changes (to the way our university goes about its work or to our economic systems) in a world driven by short-term demands? Can we afford to invest in a more sustainable future? Can we afford to contract? Can we afford not to do these?

The good and bad news is that the nature of crisis?all crises, and this crisis?is that we may not actually have a choice. This time, we may not be able to avoid the long-term questions. This time, there really seem to be no short-term solutions. Crisis and contraction are here, like it or not, and the real question facing us is how we will deal with them. Will we embrace crisis and find creative ways to redefine our ideas of progress, not as expansion but as sustainability or will we hang onto the old system of endless expansion and hyper-consumption which has been environmentally, communally and, as we are now painfully learning, economically disastrous?

James Buchanan
Edward B. Brueggeman Center for Dialogue