Climate Change, Trade Wars And The Networked World

| November 15, 2018 | 0 Comments

complex systemsThe increasing connectedness of the global economic system has long been touted as the path to greater prosperity and peaceful relations among nations and their peoples. There’s just one hitch: Complex systems have more points of failure and also hidden risks that only surface when something goes wrong.

For example, our dependence on cheap shipping to move commodities and finished goods has resulted in a system vulnerable to environmental disruption, particularly climate change, and to rising political and military tensions.

The extreme drought in Germany last summer, the warmest ever recorded in the country, has resulted in such low water in the Rhine River that shipping has been greatly curtailed. Ships can only be loaded lightly so as to avoid running aground. Consequently, many more barges and other vessels have been pressed into service to carry the lighter but more numerous loads along the river. This has driven up the cost of shipping considerably. In addition, fuel tankers have not been able to reach some river ports resulting in scattered fuel shortages. Some industrial installations along the river have had to reduce operations.

The natural inhabitants of the river have also suffered as die-offs of fish and other marine life have spread along the river.

A world away trade tensions between China and the United States are resulting in an unexpected threat to the preparedness of the U.S. military. The neoliberal program of free trade embraced by one U.S. president after another regardless of party has resulted in curious vulnerabilities for the military.

Because of the hollowing out of American manufacturing—as much of it migrated to China’s low-cost labor market—the military can no longer fulfill certain needs from U.S. or even European manufacturers. Instead, the only place to source certain supplies is China, a country many now consider a potential military adversary of the United States.

Complicating the issue are recent U.S. trade sanctions against the Chinese. This could lead the Chinese to retaliate by withholding crucial goods such as rare earth metals over which it currently has a virtual monopoly and which are essential for modern electronics.

This is a political and military problem. But it illustrates the fact that complexities can trip us up because of both human-created and natural events. (Come to think of it, climate change isn’t really a natural event; but the cause and the effect are delayed and diffuse unlike trade wars and real wars.)

Back in the United States the connectivity offered by the electric grid has become a huge liability for California utilities whose power lines have been implicated in past wildfires and who paid dearly for starting them. The combination of dry trees coming in contact with power lines and high winds which can down lines has forced utilities currently dealing with huge wildfires in their service areas to turn off gas and electric service in some places as a precaution. So frightened were investors about the potential liability facing California utility PG&E Corp. that the company’s shares lost 16.5 percent of their value on Friday. Another utility, Edison International which serves the Los Angeles area, was down 12 percent for the day. Climate change and complex vulnerable infrastructure are intersecting in ways that have far-reaching and costly consequences, both in human and financial terms.

Anthropologist Joseph Tainter explains in his book The Collapse of Complex Societies that young societies solve problems through greater and greater complexity. The success of this strategy becomes so ingrained that the thought that complexity could become a negative is simply not contemplated. But that is what happens, Tainter explains. Returns on complexity diminish and then finally turn negative. The day complexity creates more problems than it solves foretells a decline.

Why does this complexity become a problem? Complexity makes it hard to understand the cause of difficulties. Because complex societies tend to be hierarchical and because those at the top of the hierarchy who make the major decisions also tend to be the most insulated from the problems of their society, they often don’t even notice when important institutions and key environmental indicators are flashing red. They are slow to see and slow to act, often too slow to avert great damage and ultimately collapse.

The precursors of such a collapse are already present. But it takes an alert and aware mind to see the signs and link them to a larger danger. I have written in the past that the chief intellectual challenge of our age is that we live in complex systems, but we don’t understand complexity. The danger signs are telling us something very difficult to hear: It is time to reduce the complexity of our society voluntarily or risk that the forces of nature (nudged in perilous ways by us) will do it for us.

This is a message almost impossible to absorb in an age that touts our increasingly complex and interconnected world as an unalloyed good. But there are experiments, for example, to bring farm and dinner table closer together; to build more energy self-sufficient communities; to live more simply without the largely useless abundance of consumer society; and to focus on the value of our relationships instead of our possessions. We should pay close attention to such experiments and participate in them as we are able.

Note: This article was contributed to, courtesy of Kurt Cobb, author of Prelude, a peak oil-themed novel, and founder at Resource Insights.

The views and opinions expressed herein are the author’s own, and do not necessarily reflect those of EconMatters.


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