Too Big to Fail? American chestnuts once towered over the Appalachian forests. Then in the early 1900s blight, accidentally imported on an Asian variety, devastated the American giants. As a youngster hiking in the Kittatinny Mountains of New Jersey, I saw their ghosts, huge gray-white trunks. The forest, however, did not collapse; other tree species sprang up to use newly available sunlight, water and nutrients. Nature’s biodiversity ensured that even the great chestnuts were not "too big to fail."
Arguably, ecosystems such as forests, prairies, and coral reefs represent the most successful, enduring economic systems on earth. A pound of forest soil contains thousands of bacterial species but also fungi, worms, beetles – gainfully employed, competitive, yet mutually contributing to the forest’s overall health. Ecosystems have no credit card debt, no inflation, no federal deficits and no bailouts. Despite numerous cataclysms – ice ages and asteroid collisions life has evolved, adapted and thrived for 3.8 billion years.
Rather than learning from nature we are assailing it ferociously – depleting fisheries, destroying forests, and uprooting traditional societies whose economies are closely aligned with nature. We are changing climate in ways that will create future displacements and economic havoc.
Resilience: Ecosystems (those escaping human onslaught) are remarkably resilient; they absorb and recover from shocks like droughts and fires. The enormous variety of life forms and their genetic diversity increases the odds that the system as a whole will survive disturbances and adapt to changes.
Our economic systems, including agriculture, have lost diversity. For example, a few large fruit companies dominate the export banana trade. They have cleared diverse tropical forests for large plantations – monocultures, uniform acre upon acre – all genetically identical banana trees. Without diversity there is little resistance to disease, and in 1950, a fungus eliminated the dominant export variety, Gros Michel. According to an NY Times feature by Dan Koeppel, a more virulent strain now threatens the current export, Cavendish. To protect the vulnerable crop, growers resort to heavy airborne fungicide applications with serious ecological and health consequences. Health effects of spraying
Our economic systems, including agriculture, have lost diversity. For example, a few large fruit companies dominate the export banana trade. They have cleared diverse tropical forests for large plantations – monocultures, uniform acre upon acre – all genetically identical banana trees. Without diversity there is little resistance to disease, and in 1950, a fungus eliminated the dominant export variety, Gros Michel. According to an NY Times feature by Dan Koeppel, a more virulent strain now threatens the current export, Cavendish. To protect the vulnerable crop, growers resort to heavy airborne fungicide applications with serious ecological and health consequences. Health effects of spraying
Finances have gone bananas. According to FDIC analysts, only about half of banks operating in the U.S. 20 years ago are still in business; smaller banks failed while mega-banks like Bank of America grew through acquisitions. Deregulation also allowed banks and financial firms to develop new investments including mortgage-backed securities and derivatives without the reserve capital needed to cover their shaky bets. Add the growing dominance of the financial sector (now dwarfs the profits of manufacturing), the high degree of interconnection between financial institutions, massive consumer debt, and trade imbalance and you have a recipe for systemic instability. No wonder the demise of the housing bubble triggered a cascade of collapse that spread rapidly to financial markets and broader economies around the world – despite massive government bailouts.
Nor has the apparent Wall Street "recovery" reached Main Street. Communities, families, small businesses and local banks continue to struggle as unemployment nears 10 %. As Nobel economist Joseph Stiglitz recently observed, the "too-big-to-fail" banks have grown even bigger since the crisis and Congress has yet to enact regulatory reforms needed to prevent further speculation or consolidation.
Win-Win or Winner Take All? Green plants, use photosynthesis to produce sugars (and oxygen) using solar energy, water and carbon dioxide. Plants are called primary producers because they create the biomass (natural wealth) that supplies entire food webs. The biomass distribution forms a pyramid – most biomass is held by green plants at the base; several tiers of secondary consumers (e.g. aphids, bugs that eat aphids, and birds that eat the bugs) hold less biomass. The predators at the top of the food chain e.g. hawks hold the smallest amount. The pyramidal shape occurs because consumers only retain a small percentage of the biomass eaten – most is lost to the atmosphere as carbon dioxide along with waste heat; thus at each higher tier there is less biomass.
The distribution of wealth in the U.S. resembles an inverted pyramid; according to the Federal Reserve the wealthiest 1% of U.S. families own 33.8% of the nation’s family wealth – more than ten times the wealth owned by those families on the bottom half of the distribution.
Both competition and cooperation are vital to ecosystems; competition drives evolutionary innovation, increasing efficiency and reproductive success. Yet some of the best competitors are stellar cooperators. Legumes like beans have roots which shelter Rhizobia; as these bacteria feed they convert atmospheric nitrogen to forms plants can use to synthesize proteins and DNA. The Rhizobia get a home and the legumes and ecosystem get usable forms of nitrogen. Whereas ecosystems exhibit "enlightened self-interest," our economy is trending towards a zero-sum-game with a few big winners and a majority of losers. The wealth gap inevitably breeds instability; the system literally tears at itself.
Waste not: Nearly all nature’s wastes are biodegradable, recyclable, and non-toxic. Thus, countless insects, fungi and microbes can feed on fallen leaves, scat, dead creatures and other "wastes." The decomposed remnants, rich in minerals are "deposited" in the forest "soil bank" for future "investment." Our manufacturing system, however, requires massive amounts of energy, water and minerals and generates large amounts of waste and pollution at every step from mine to landfill. Only a tiny portion of the total wastes in this entire process is actually recycled. Many wastes, such as coal ash and radioactive materials, are hazardous.
Fair Trade: Ecosystems exchange resources with the biosphere. For example, water continuously cycles between oceans and continents, and nitrogen cycles between atmosphere and ecosystems. Ecosystems have mechanisms that prevent resource depletion. For example, root systems form retaining walls and mosses cover bare ground, minimizing soil erosion.
Local economies badly need such mechanisms. Large, nationally owned outlets may offer lower prices, but undercut locally-owned retail. Studies in U.S. cities show that "buying local" keeps a greater share of revenues circulating in the community than buying at the mall. Similarly, as companies relocate to low-wage countries, communities lose jobs. As local spending declines, businesses close, and revenue-short municipalities are forced to reduce services and layoff workers. Imagine if the trillions squandered in the financial casino had been invested in the small businesses which have created most new jobs in the U.S.
The role of governments: Although ecosystems do not have governments, they have many regulatory mechanisms. I once accompanied Canadian wildlife scientists as they tracked migratory caribou on the treeless tundra west of Hudson Bay. From our small aircraft we spotted an enormous rapidly moving herd. Patrolling the herd’s edge was a lone wolf hoping to catch a straggler. This predation helps to prevent overgrazing of the scant vegetative cover on which caribou feed. Overgrazing may temporarily boost the numbers of caribou and wolves. However, diminished vegetation ultimately threatens both predator and prey. Organisms also perform a number of regulatory functions; our bodies have an internal thermostat and an immune system to fight pathogens. Such governance contributes to the remarkable resilience of ecosystems.
The role of governments: Although ecosystems do not have governments, they have many regulatory mechanisms. I once accompanied Canadian wildlife scientists as they tracked migratory caribou on the treeless tundra west of Hudson Bay. From our small aircraft we spotted an enormous rapidly moving herd. Patrolling the herd’s edge was a lone wolf hoping to catch a straggler. This predation helps to prevent overgrazing of the scant vegetative cover on which caribou feed. Overgrazing may temporarily boost the numbers of caribou and wolves. However, diminished vegetation ultimately threatens both predator and prey. Organisms also perform a number of regulatory functions; our bodies have an internal thermostat and an immune system to fight pathogens. Such governance contributes to the remarkable resilience of ecosystems.
The policies of G-20 governments, over recent decades, have created fragility rather than resilience. Rather that foster diversity and healthy market competition, deregulation, privatization, massive subsidies and tax breaks have mainly benefited large and powerful companies, e.g. big oil and agribusiness. The costs and risks of these policies including those associated with the "too-big-to-fails" are passed along to the public.
G-20 policies have been founded on the premise that GDP growth is tantamount to prosperity. However, as Stiglitz and others have argued, GDP fails to account for the negative impacts of growth including resource depletion, environmental degradation, and the displacement of jobs. Nor does GDP correlate with economic well being. Despite an era of positive GDP growth from the 1970’s until last year, the economic security of most American families has fallen while the wealthiest grew wealthier.
Governments begin to protect what no single entity can protect – the commons – the planet’s resources and the basic human services needed to sustain economies and civilization. Change will not come overnight. Eliminating large corporate subsidies, regulating the financial industry, and enforcing anti-trust laws will require heavy political lifting. Yet the rewards will be well worth the effort.
The seeds of change: There are many reasons to be hopeful – examples of enterprises and networks based on ecological models and partnerships with nature. Women in Asian villages use micro-loans to start community-based businesses consistent with local needs, natural resources and culture. Social entrepreneurs in India are helping subsistence farmers create local markets and stay on their land using low-cost, renewably-powered pumps and drip irrigation systems. In the U.S. local farms increasingly provide fresh and sustainably grown produce to nearby metropolitan markets. Entrepreneurs have organized "buy-local" campaigns in numerous U.S cities. The production of wind and solar power is growing exponentially.
The residents of Greensburg, Kansas provide an inspiring model of community-focused economic and eco-efficient restoration. The city, devastated by a tornado in 2007, embarked on a bold plan to rebuild the city sustainably. According to NY Times’ Keith Schneider, these efforts are bearing fruit; 100 recently built homes use 40% less energy than those replaced. The U.S. Green Building Council has given its highest ratings (Platinum LEED) to the new city hall and art center. The city plans to generate all its electrical needs with wind power and has opened an incubator for business start ups. Most importantly these efforts have energized the city with a vision of sustainability and a reason for young people to stay.
Henry S. Cole, Ph.D., an environmental earth scientist, is president of Henry S. Cole & Associates, Inc., a firm which provides scientific support to a variety of community and corporate clients
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