I've commented more than once in these essays about the
cooperative dimension of writing: the
way that even the most solitary of writers inevitably takes part in what
Mortimer Adler used to call the Great Conversation, the flow of ideas and
insights across the centuries that’s responsible for most of what we call
culture. Sometimes that conversation takes place second- or third-hand—for
example, when ideas from two old books collide in an author’s mind and give
rise to a third book, which will eventually carry the fusion to someone else
further down the stream of time—but sometimes it’s far more direct.
Last week’s post here brought an example of the latter kind.
My attempt to cut through the ambiguities surrounding that slippery word
“progress” sparked a lively discussion on the comments page of my blog about
just exactly what counted as progress, what factors made one change
“progressive” while another was denied that label. In the midst of it all, one
of my readers—tip of the archdruidical hat to Jonathan—proposed an unexpected
definition: what makes a change qualify
as progress, he suggested, is that it increases the externalization of costs.
I’ve been thinking about that definition since Jonathan
proposed it, and it seems to me that it points up a crucial and mostly
unrecognized dimension of the crisis of our time. To make sense of it, though,
it’s going to be necessary to delve briefly into economic jargon.
Economists use the term “externalities” to refer to the
costs of an economic activity that aren’t paid by either party in an exchange,
but are pushed off onto somebody else. You won’t hear a lot of talk about
externalities these days; it many circles, it’s considered impolite to mention them,
but they’re a pervasive presence in contemporary life, and play a very large
role in some of the most intractable problems of our age. Some of those
problems were discussed by Garret Hardin in his famous essay on the tragedy of
the commons, and more recently by Elinor Ostrom in her studies of how that
tragedy can be avoided; still, I’m not sure how often it’s recognized that the
phenomena they discussed applies not just to commons systems, but to societies
as a whole—especially to societies like ours.
An example may be useful here. Let’s imagine a blivet
factory, which turns out three-prong, two-slot blivets in pallet loads for
customers. The blivet-making process, like manufacturing of every other kind,
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 load 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 as a result of this choice. The blivet
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 vanish like so
much twinkle dust; they are imposed on the people downstream who get their
drinking water from the river, or from aquifers that receive water from the
river, and who suffer from health problems because there’s blivet waste in
their water. The blivet manufacturer is 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 work. 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
titled TANSTAAFL—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 pseudoconservatives, 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 pseudoconservatives claim to worship a God who said some
very specific things about “what ye do to the least of these,” but that’s a
subject for a different post.
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 much as possible the benefits themselves. That’s
come in for a certain amount of discussion in recent years, 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, an 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 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 likely to be 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 operate 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
externalizing the costs of production is in most cases the most effective way
to outcompete rival firms, and the firm that succeeds in externalizing the
largest share of its costs is the most likely to prosper and survive.
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 open-pit 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 totalitarianism, 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 working class jobs are eliminated or offshored, 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
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 on 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 economists use to determine prosperity show contradictory
results, with those that measure the profitability of individual corporations
and industries giving much better readings 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.
Now of course there are plenty of arguments that could be
deployed against this modest proposal. 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.
For reasons that are ultimately thermodynamic in nature, the
more complex a technology becomes, the more costs it generates. In order to
outcompete a simpler technology, each more complex technology has to
externalize a significant proportion of its additional costs, in order to
compete against the simpler technology. In the case of such contemporary
hypercomplex technosystems as the internet, the process of externalizing costs
has gone so far, through so many tangled interrelationships, that it’s
remarkably difficult 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. As just noted, all other things being
equal, a complex technology will on average 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 their benefits 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.
