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Tomorrow I’ll be talking at NerdNite Wellington. As the title suggests, I’ll be talking to how unprepared we are to confront finite limits.

This article sets out the thinking I’ll be basing my talk on. And here is the Prezi I’ll be using.

This is an article about how we, the human species, deal with finite limits. There are finite resource limits all around us but, because they are large, we tend to ignore them. When we come up against limits we need to find a way to allocate the limited sources. We have a name for the study of resource allocation: economics.

It’s fashionable – and I’ve been guilty of this myself – to rubbish economics as the “dismal science”, or as a collection of fantasies about human motivation that have to be taken as an article of faith. Douglas Adams was merciless when describing a non-existent place as a “fantasy that people tell their children about at might if they want them to grow up to become economists”. Even the great economist JK Galbraith said that “economics is important, but chiefly as a source of employment for economists”. Some economists couch their results in highly mathematical language which, some might say, conceals the underlying fact that people just don’t behave in the way that economists assume they will. There’s little doubt that academic economics has been used to justify ideological prejudices with bad outcomes for many people.

Even so, there are many useful truths lurking in the economics syllabus. One of them is about how we behave when there are a mixture of public and private resources. It’s called the Tragedy of the Commons. Let’s try a little thought experiment: you live in an Scottish village about three hundred years ago. You and all your neighbours are small farmers. You feed your family through agriculture, maybe a few sheep and cattle, and you trade your surplus for the things you can’t grow. You and your neighbours each have a little land that was left to you by your fathers, and there is some common land that is available for all villagers to use as they wish. Which land do you graze your animals on?

A second’s reflection should convince you that you should graze your animals on the common land until it’s completely grazed out, then switch to using your own land. And that’s what happens, of course. Unless some kind of authority – a village council say, or a local lord – regulates access to the commons, that land becomes rapidly degraded and not fit for use. This is the tragedy of the commons – that without some controls, a finite resource gets overused even when other private resources are available.

We have evolved a very natural-seeming concept which deal with the tragedy of the commons. It’s called: “property”. It’s a way of dealing with the problems of finite resources. The notion is that people will look after something they own and depend upon, and that by enforcing property rights they can keep others from overusing it and degrading it. That’s quite important – this only works if you can prevent others from using it. There are other ways – a third party like a state or a local lord can hold the land in trust for all and allocate access to it on some basis it determines. You’ll notice I have just described capitalism and communism respectively – these both stand or fail for other reasons, but they are valid ways of protecting a finite resource.

Returning to our thought experiment – the poor use of the commons was a real problem, and what tended to happen was something called the enclosures, in which subsistence farmers were forced off their land which was sequestrated by big landlords. It happened most recently in Scotland and Ireland, but it also happened in England some centuries earlier. It was horribly unjust, but it did lead to far more efficient use of resources, partly because it allowed land to be better managed, and partly because it gave economies of scale – one tractor can cover a lot of land – and of scope, where it makes sense to grow the things you are good at and trade them for the things that others are better at. Without that, none of us in New Zealand would ever eat a banana.

It also helped us avoid the Malthusian catastrophe. In the mid-nineteenth century Thomas Malthus predicted dire starvation around the world. He did this by projecting the population increase and noting that it would overwhelm the food supply. In fact, the food supply has increased geometrically along with the population, due mainly to improved agricultural technology – and that wouldn’t have been possible without large-scale ownership of land.

There’s a much more brutal example of the tragedy of the commons – Easter Island. Everybody knows Easter as the island covered in stone heads. How they got there is quite amazing. Easter is very isolated. It’s about five hours flying time from anywhere. It’s not a big island – from the top of the largest hill you can see the sea all round.

Easter was settled by Polynesians a few centuries ago. At the time it had a very poor biota, no grass for instance and very few edible plants. The people mainly ate a diet of fish.

As is common in Polynesian societies, the settlers were divided into iwi, each with a ruling family and a chief. They vied with each other for prestige, or mana. The way in which you got mana for your iwi was to construct statues of your ancestors, from the plentiful volcanic rock, and – this is important – move them to the coastline where they could face the sea. The only way to move them from the quarry where they were made was by using tree trunks as rollers.

There are quite a lot of the statues, called moai, on the island – hundreds at least. They are pretty big, ranging from two to four metres tall. Moving each of them would have consumed the trunks of many trees. You can see what would have happened – the islanders used all the trees, which led to a disaster. Suddenly they had no way to build boats which they needed to catch fish. They couldn’t just leave the island for the same reason. There was starvation, warfare and a population crash. When Europeans found the island there were very few people living on it in a poor state of health due to bad diet.

My point here is that people who cut down the last trees would have know what they were doing. They would have known that their action would lead to starvation and chaos. Yet, it was the logical course – the only sensible thing to do. The person who cut down the last tree would have said: if I don’t do this, someone else will, and we will still all starve but someone else will get the mana. Cutting down the last tree was a rational response if you had no way to protect the shared resource.

We are facing resource limits today. Atmospheric carbon, tuna and oil are all examples of things which we can only use a finite amount of per year, or in the case of fossil fuels, a finite amount ever. But, you don’t have to accept anthropogenic climate change to accept my main point: that we don’t have a way, as a species, of dealing with limits. There are lots of limits. Unless that is, you believe, like US Representative John Shimkus that none of these limits threaten us because God has already set out how the world will end and that a flood isn’t part of it. Scary, isn’t it. But he rather proves my point. You only need some, a few, one person or country to break the deal and you are back to the Easter Island situation where the logical thing to do is cheat at the cost of the whole of humanity.

As an aside, there are many resources that are not limited. Ideas, creativity, and software are examples of things that cost nothing to duplicate, to publish, to broadcast widely. Yet we devote a lot of effort into controlling copying. Real resources get consumed trying to prevent copying things that would cost nothing to copy. We use the term “intellectual property” to cover a whole range of constructs from software patents to rights over plant varieties, yet these so-called properties don’t have the main characteristic of property – if I take your idea, instead of you losing your idea we now both have a copy. Something new has been created! In economists’ jargon, intellectual property is “non-rivalrous”. Or to quote Thomas Jefferson: “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.” Calling it property is flat out wrong.

We have negotiated international IP treaties to control illegal copying, but we have failed to negotiate treaties on carbon and tuna. We have a problem.

But, you can say, why didn’t Malthus come true? Because of technology. Technology has got us into these scrapes; it can get us out. Maybe it can, maybe it can’t. We have a variety of limits we are running up against and we don’t have a social or economic mechanism for managing them. People use the term “voodoo economics” – what we are really seeing here is more like “Cthulhu economics”.

What options do we have to deal with the finite limits we are increasingly hitting? Here’s a few:

1. World government – unlikely to be popular just about anywhere. See how even a small transfer of power from the UK government to the EU is resisted. And, can you imagine the US signing
2. Space travel – could be good for two reasons, one because it can bring resources back to our planet, and the other because it can get some people off the planet to start wrecking a new one. Unlikely again because even getting to Mars would cost a quarter of the Iraq war budget and I don’t see anyone paying that.
3. A treaty and a protocol that applies to all resource limits as they become an issue. Good luck with that, but it may be our best hope.

Postscript: to read more about this, start with Jared Diamond’s excellent Guns, Germs and Steel. And think!