The Wealth of Nature: Economics as If Survival Mattered

John Michael Greer is the author of several controversial books on culture and historical trends. In The Wealth of Nature: Economics - as if Survival Mattered (2011), he lays out the thesis that mainstream economics fails to properly assign value to nature and its resources because nature does not demand payment. He considers it to be the primary economy because everything humans value is ultimately derived from nature. Services and the fabrication of goods (the works of humans) are his secondary economy, and money (since it has no intrinsic value) is considered to be the tertiary economy. Greer asserts that the public – and many economists – falsely equate money with wealth. He regards money as merely an artificial means to keep score as the primary and secondary items - and money itself - change hands or are hoarded. Greer accredits this premise to E. F. Schumacher, whose 1973 book, Small Is Beautiful: A Study of Economics As If People Mattered (notice the subtitle mimicry) was an inspirational guide to the “appropriate technology” movement in the aftermath of the oil crisis of that era. When matters of economic relevance are viewed through the lens he provides for us, the fog is lifted. Greer does not dazzle us with formulas and statistics; the economists have compiled them and repeatedly counsel us with faulty predictions. They seem particularly unable to recognize bubbles as they inflate (2000, 2008).He proceeds to apply his conceptual frame to past, present, and musings about our future. He regards the industrial age as a 300 year anomaly in human history powered by the extraction and use of the potent energy content of buried hydrocarbon reserves. He describes energy as the “ur-resource”, which enables all other resources. Fossil fuels, he contends, are greatly concentrated forms of photosynthetic energy which are running quite low and cannot be replaced by any comparable substitute in the near term. (It could also be argued that climate change demands that humanity consider a deliberate cessation of fossil fuel burning). Greer predicts that the onset of energy scarcity will bring about a prolonged worldwide economic depression. Many prognosticators share that view, but Greer is unique in foreseeing a protracted downward ratcheting of regional societies rather than a total breakdown of civilization. He cites the gradual decline and fall of the Roman Empire –which was eventful, violent, and bloody, but not truly cataclysmic- as precedent. This outlook is in keeping with his professed core belief in the cyclic nature of history.He holds out the possibility that we can eventually emerge from this humbling phase (perhaps after several generations) into a neo-renaissance without needing to re-invent the gains we had made in the enlightenment/industrial ages.Does Greer’s outlook deserve inclusion in thoughtful discourse of humanity’s way forward? The answer is yes, but with two of its aspects treated separately.His theory of economics derives not from the orthodoxy that has grown in recent decades to Nobel Prize status (without measurable gains in shared well-being), but from observation of actual events and trends. This approach is in the spirit of Adam Smith and John Maynard Keynes, whose original concepts did not fit neatly into a consensus framework. Any economic scholar who takes issue with the non-credentialed Greer should attempt to refute him by reasoned argument rather than with barbs from his ivory tower.When Greer proceeds from the turbulent, crisis-laden present into forecasts of a future world, he is in the company of a horde of prognosticators with wildly divergent predictions. His outlook is unique and fills territory that has been largely overlooked. The “science” of forecasting has made no perceptible accuracy gains since the time of soothsayers and crystal ball gazers. Their principal benefit remains the diversion of our attention from today’s action on the ground to consideration and preparation for tomorrow’s challenges and opportunities. Here are some points to consider:• He claims with certainty that alternative forms of energy cannot possibly plug the gap as fossil fuel output dwindles. This multi-variable issue cannot be predicted with any degree of certainty; it will simply have to play out. Popular beliefs and many pundits fall on the side of the appearance of a technological solution saving the day. Corporations and venture capitalists have been working at solutions for at least 50 years, their efforts have scarcely made a dent in the inertia-laden energy delivery infrastructure. This is not to dismiss the remarkable promise of solar energy, but it would be foolish to bank on a clean handoff of the energy baton. His scenario is a clear warning. It is wise to hope for the best and plan for the worst.• Greer minimizes the effects of climate change, both from physical damages and as a retardant to continued extraction. The net effect would likely be to hasten the onset of a depression, and to serve as another reminder of our thoughtless actions during the last days of fossil fuel exuberance.• One of Greer’s core beliefs is the cyclic repetition of eras in the march of history. Apparently he dismisses the concept of an evolving arc of history.• The future scenarios he envisions tend to align with the lifestyle he has chosen for himself: simplicity, minimal use of resources, and localized governance. One must wonder if this is more than coincidence.• Greer’s case is built on common sense persuasion rather than math (which is frequently based on faulty assumptions). Since history, like weather, unfolds in surprising, unpredictable ways, its turbulent trajectory resists such analysis.On one hand, he declares the inevitability of energy shortfall and economic depression, and on the other hand, he surmises that it will not bring about the end times. As he asserts, “The core hypothesis shaping my view of the future is the proposal that our time differs from the past only in the way that one past era differs from another. The notion that the present epoch is utterly unique in history, popular as that is, fails to convince me, and the habit of using that notion as an excuse to project an assortment of utopian and apocalyptic fantasies on the inkblot patterns of the future strikes me as frankly delusional. It makes more sense, I think, to recognize that imperial overstretch is imperial overstretch no matter what technologies the empire in question happens to use, and that trying to make sense of the future on the basis of historical parallels is a more useful strategy than insisting that the future must conform to our desires, our fears, or both at once.”The mainstream of future musing (to oversimplify somewhat) sees a continued ride on the escalator of progress or a freefall into oblivion. Greer’s vision of Things-To-Come stands apart from the others. As such, it opens up a multitude of issues to be confronted which would otherwise be punted down the pike. Crushing hard times would force triage decisions and clashes over authority for those decisions. Forced (or sanctioned) to “play God”, a central consideration is weighing mercy for an imperiled individual versus safeguarding the genetic pool: Eugenics. Coming to grips with mortality, currently shrouded in fears and taboos, could not be so easily avoided.

I’m a student of the Post Carbon, Post Distorted Self and Post 15,000 years of Stable Environment to allow Advanced Societies School of Thought. I consider John Michael Greer one of the great Teachers in the Post Carbon School of Thought. Mr. Greer’s The Wealth of Nature deals with the relationship between Contemporary Economics, Energy and the Post Carbon era we’re entering. Adam Smith’s Economic Theories have been the foundation Industry in the West has used to convert Primary Goods (Natural Resources) into Secondary goods and services that can be brought to the Market place to be sold. His laws of Supply and Demand, the negative feedback loop it creates (Limits that exist on Primary and Secondary goods guarantees that as demand increases so will price, forcing future consumers to find a cheaper replacement good or service) supposedly creates a self Governing Market Place allowing the Consumer to maximize Utility and Industry to not overproduce. Over the last several hundred years of Industrialization there have been numerous cases where Smith and those Economists following him have got it wrong. In the 1970’s Economist E. F. Schumacher explained that this happens because their theories aren’t based on how real world Economies behave. In the real world primary goods allow for the production of secondary goods therefore they should be central to any Economic theory. The most important thing he said as it relates to the Wealth of Nature is that the primary good Energy is the gateway resource that allows us access to all other resources. An abundant source of Energy can make up for a shortfall of other resources but if Energy is in short supply it doesn’t matter how much you have of other resources.Wealth of Nature explains that Industrial expansion, our high standard of living, the innovations in Technology and the transformation of Tertiary Goods a way to measure wealth (money) into abstractions that now define wealth came about because of our access to cheap abundant energy. The concentrated energy source Fossil Fuels. This is a Natural Resource that is non-renewable and we’ve had to extract it at an alarming rate to maintain our way of life. So much so that the easily extractable higher quality fuels Anthracite, Bituminous, Bayou Sweet Crude, Arab Light Crude to name a few are either approaching, have reached or in decline of their maximum yield. We’ve known this for a while and instead of making decision on how to scale back on some of our Energy intensive actions we’ve decided to extract our remaining harder to get lower quality fuels at even higher rates. Wealth of Nature explains as we move forward into this Post Carbon age the decisions will be more difficult. The book concludes by suggesting some steps we can be taking to make the decisions not so difficult.I’ve read several of Mr. Greer’s books. No matter what the subject matter is I enjoy hearing what he has to say. This book should have been titled Wealth of information instead of Wealth of Nature. I started book-marking pages that had information I wanted to remember and after finishing the book I found almost the whole book was book-marked. I hear everything this book is saying, I understand and agree with it. The people who need to understand and agree with it don’t want to hear what it is saying. They believe our problems can be solved when we get those Nations to behave. When we get the Oil producing Nations to play ball. When we elect Politicians that will cut spending and balance the budget. When we convince the nay-Sayers that the Fossil Fuel Industry is our friend because they create jobs. When we can convince the protestors that the pipe lines, the Tar Sands and the Tight Oil/Gas fracking are good things because they’re going to make us energy self sufficient. Problem is we don’t have a problem as C. Martenson says we’re in a predicament. We have a Financial Network that has made debt and Financial Paper in the form of Securities and Derivatives into assets. This paper has so many layers of nothing before there is a tangible Secondary Good that in 2008 the system started to reset. The governments of the world had to step in to stop the reset. Six years later we’re back to business as usual. We’ve dumped more moisture retaining chemicals into our Biosphere than has ever existed before. Watch your nightly news and you’ll see at least one story that let you know the consequences of these actions. We hold Summits pass laws yet as long as there are Fossil Fuels this will continue if not increase. Our basic instinct to eat nutrient rich foods that will give us energy has been hijacked. We now eat altered and modified foods that promote fat storage. We’re becoming sedentary and obese. The Health care cost to treat Metabolic Syndrome related diseases is putting more stress on a system that has too much stress already. Self is no longer internalized we can’t understand or choose not to understand that we are just one of the varied and beautiful expressions of life in this Universe. The Carbon, Hydrogen, Oxygen and other elements that compose us are the same elements that compose everything in this Universe. We are hardwired into this Universe. Just as pre-conditions (the Earth a certain distance from the Sun for a certain amount of time, the Moon a certain size and a certain distance from us) had to be met to bring us into existence so too are there pre-conditions that must be met to maintain our existence. We’re defining ourselves by the external, the material. A Deity above high has given us dominion over this Earth, our testing ground. The name of the game Free Will. The rules are that there are no rules. Dysfunction is the new normal. An individual walking into a Mall, a School or a Theater and killing innocent people is rationalized away as the price we pay to be free. So the Million Dollar Question becomes Do We Have Some Challenging Problems or are We In a Predicament.

I've been a reader of Greer's "Archdruid Report" for a few years now - the blog where he first aired and hashed out most if not all the ideas in this book, so let's say I wasn't surprised at anything I read here.What Greer has done is to synthesise his thinking in the blog and make clear the connections with Adam Smith, E.F. Schumacher and other economists and peak oil thinkers.In a nutshell, the argument is that the "economy" is actually 3 economies: the primary economy, the goods and services that nature produces and which underpins the other two economies, is ordinarily left out of economic thinking and planning. The secondary economy at the goods and services that are created by humans using the raw materials provided by nature. And the tertiary economy is financial goods and services, money which makes money. This is arguably the least important economy in so far as actually enabling humans to live and achieve a civilized quality of life, and yet it is given precedence over the other two economies.This leads to the dysfunctional state of affairs that we enjoy today, bringing in global climate change and peak oil along the way.In addition to well-argued analysis, understandable by any intelligent layman, Greer also posits some interesting ways forward to help correct the current imbalance. From changing the tax regime (to tax primary goods and services, ie. nature's products at the point they come into the human economy stream, and to tax financial transactions, but to take tax off secondary economy goods and services - no more income tax, sales tax, etc), to punishing corporate criminality in the same way as we do personal criminality (i.e. not just fine companies, but metaphorically lock them up by sequestering all their income, and even "execute" them in the case of capital crimes), to taking personal responsibility for reducing our own consumption of energy, this book is fizzing with energy and ideas about the way forward.Highly recommended for anyone who cares about the future.

A very accessible, well-written book about what is fundamentally wrong with our economics and the economy of the modern world. It is non-technical and jargon-free. It explains why we have got into the situation we are in with 'hallucinatory' money having become by far the largest section of the economies of developed countries and how this is becoming disastrously out-of-step with the realities of the resources available from the physical world, in particular the availability of fossil-fuels. He charts the road ahead in a contracting economy after the 'age of abundance' which has effectively come to an end and makes some very sound suggestions for measures that could be taken by governments, communities and individuals to cope with the difficult times we are in and the even more difficult times that lie ahead. Buy this book and buy an extra copy and send it to your MP - this book could help make a difference to our future.

I work in oil and gas.Many of my friends consider me the most sceptical person they know.I still agreed with most of what he had to say.

Epically interesting