In Which Dave Spouts Unhinged Economic and Political Theories Like Your Crazy Uncle at Thanksgiving

In Which Dave Spouts Unhinged Economic and Political Theories Like Your Crazy Uncle at Thanksgiving

Image from Aloban75.

I’ve been trying to explain capitalism and free market economics to a teenager over the past few years, in the wake of Occupy Wall Street, and Bernie Sanders, and the teenager having to get a job and make money. I’ve also been reading books about the collapse of the Soviet Union and the free market experiment that ensued, most notably Svetlana Alexievich’s Secondhand Time. I have a nature writer’s understanding of economics – which is to say limited – but I can sort of wrap my mind around economic systems by looking at them like they’re ecological systems. For example, the composition of products for sale on a store’s shelves came about through a process of adaptive evolution and natural selection that’s not all that different than the one that determined the composition of trees in a forest.

Russian history serves as a great example of all this. Almost 100 years ago, the Bolsheviks overthrew the government and instituted a statist regime that manipulated the economy like a puppeteer. The philosophy behind the Soviet Union was that capitalism was immoral, and well-meaning intellectuals could steer the economy in a more productive and equitable way. But capitalism isn’t immoral, it’s amoral. And humans can’t outthink nature. The Soviet experiment failed because the communists were practicing a kind of economic creationism that was nowhere near as creative, or adaptive, as what you find in a free market system. Picture apparatchiks sitting around a table discussing how to create and run a forest, then deciding on a (red) pine monoculture. They bulldozed the native growth and planted the pine in straight rows according to the best standards of the day, but the plantation, by its very definition, could never become a healthy, functioning forest. They plodded along for 70 years keeping things afloat through sheer force and will – picture big Soviet-era tractors blowing clouds of chemicals onto the trees. But the stand eventually became too diseased and frail to survive.

A better approach – and what we strive to do with our own free-market system – would have been to manage the native forest, understanding that there’s no way we, as human caretakers, can hope to artificially replicate the often invisible symbiotic relationships in a natural system. If the forest wants to grow maple or birch, it’s a dumb idea to force it to grow red pine. That said, we do need foresters to oversee, and at times, nudge things in the right direction. Sort of like how capitalism needs basic parameters to ensure we don’t revert to the old robber baron days. Unfortunately for Russia, their post-Soviet economy featured little stewardship. When their pine monoculture failed, they clearcut it but didn’t pay enough attention to the regen. Raw capitalism filled the void, and while the forest there today has a few well-formed native stems, mostly what grew back was an opportunistic and corrupt mix of honeysuckle, barberry, and buckthorn. They went from heavy-handed management to no management, and suffered through the ill effects of both. These days it’s no wonder that Russia is swinging back towards authoritarian governance. The pine monoculture was diseased and unnatural, but at least the people had some wood. The berries on the honeysuckle bushes are vibrantly colored and prolific, but they provide little nourishment for the native birds.  

You can blur the lines between ecology and economy closer to home, too. If the economy is the forest stand and the ruling class the foresters, then the people and the businesses they work for are what thrives or declines based on a forester’s management decisions. I was thinking about this the other day while sitting in a room full of representatives from the forest products industry. In a healthy ecosystem you need apex predators at the top of the food chain to keep the whole system balanced. Our large wood-consuming companies – the mills, the biomass plants – are our economic apex predators, and like wolves and sharks and large cats around the world, a lot of them are really struggling; with competition from foreign species, with changes in the landscape, with well-meaning but ill-conceived government regulation that forces them into contortion or stasis. Many are in the process of adapting and evolving, but it’s painful. The wolves are being replaced by smaller, nimbler, more omnivorous coyotes, or becoming hybrid coywolves. The one’s who can’t adapt are on their way to extirpation.

At times at that meeting I could see things from this detached perspective – like watching a nature program on television. But, of course, I’m a part of this niche – we’re all a part of the niche. Our fate as tree farmers is tied to what’s happening elsewhere in our ecosystem, so as the mills suffer, we suffer, and as we suffer, the loggers and the truckers and store owners in our niche suffer, and if working forestland can’t pay for itself then it’ll become developed land, which will be great for the stuff in the suburban sprawl niche but not great at all for the forest cohesion and wild animals and rural human ways of life in ours.

Food for thought.

 
Discussion
  1. Jim Dannis → in Dalton, NH
    Aug 05, 2016

    Hi Dave—

    What a fascinating comparison! 

    Unfortunately another analogy from the former Soviet Union may be emerging.  The USSR planning authority designed many “one product” cities.  A soap factory here, a ship-building plant there.

    With the reforms, the inefficient, dinosaur-like city-plants were opened up to foreign and domestic private competition.  Many of the plants failed and so did many of the cities.

    Fast forward to another analogy.  A new name for inefficient, non-economic businesses is “stranded assets”.  Think PSNH’s old generation plants.  Or what many people are saying about oil companies (the oil in the ground will no longer be economic to remove if carbon externalities are priced in, and the companies will have no value).

    Who pays for stranded assets?  For PSNH, the public gets hit with the bill.  For oil companies, losses in value will likely be borne by the owners (shareholders).

    If the Northern New England wood industry proves unable to transform so as to maintain profitability and becomes a stranded asset, where will the loss fall?  Will the losses be socialized and redistributed to any significant extent?  If not, should timberland owners look to the increasing risk of disappearance of many wood markets and cut and sell what they can now?

    The public already supports the industry with biomass subsidies.  Will the public appetite for paying for stranded wood industry costs continue?  Are there any sound proposals for other future paths to avoid USSR-like results?

    Tough questions…

  2. Lynne Fitzhugh → in Fairlee VT
    Aug 05, 2016

    Interesting riff, Dave. I was with you up to paragraph 4, where your analogies threw me off. The apex predators are, as you say, the developers and biomass industries who would liquidate the forests if it were profitable and legal to do so. That’s their job in a capitalist system—short-term profits for investors rather than good jobs or sustainability. It seems to me foresters, with their long-range perspective, deep understanding of forest ecosystems, and appreciation for the importance of maintaining balance in the system, including with harvesting activities, are not so much lords of the manor as gatekeepers—thanks mainly to the regulations giving them a degree of authority within the forest industry. In a true “free” market, you would have neither foresters nor regulations, only robber barons.

    Seems to me our capitalistic ecosystem would work better if we had the equivalent of “foresters” managing all our natural resources for long-term sustainability and economic equity between workers and investors. Instead, all we have is a flimsy patchwork of regulations—but thank goodness for those!

  3. Timothy Dillon → in Connecticut
    Aug 05, 2016

    This is great!  I teach AP Environmental science and plan on using your article as required reading.  I am glad some people still understand.  Capitalism is not politics, it is free enterprise evolution.  Well done.  May I have your permission to use this in my classroom?

  4. Douglas Baston → in Alna
    Aug 07, 2016

    Very good. I’ve never thought of it from this perspective.

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