by Alan Weisman
All these women—young, healthy, and quite lovely—nod in agreement. “Westerners can’t believe it,” says Keiko. “My German girlfriend keeps asking how is it conceivable that we don’t have sex? But I don’t miss it. I don’t feel dried up, but I also don’t feel that desire when I see my husband or any other attractive man. I’m very satisfied with my life. It’s enough just for us to sleep together.”
Again, no one argues. “My male friends say sex is just a form of recreation,” says Junko. “Like going to a baseball game or the movies—in this case, to a bordello. Once a guy has a family, he doesn’t see his wife as a woman anymore. She’s family, like his mother or sister. Guys don’t have sex with them, either.”
A 2011 Japanese government survey showed that 36 percent of Japanese males aged sixteen to nineteen were either not interested in, or actually “despised,” sex. A term for young men more enamored of animated video games than live female humans is “herbivores”—the implication being that, by comparison, dynamic Japanese career women are “carnivores.”
“Japanese men are getting weak,” says Junko. She glances out the picture window, where Japan’s most blatant phallic symbol, the Eiffel-shaped Tokyo Tower, is spewing potent radio and TV signals. “And women don’t have as many needs as men.” More nods.
She laughs. “Our German girlfriend wouldn’t agree.”
ii. Growth-free Prosperity
Environmentally attuned Western economists have been mulling an economy of prosperity without growth for decades, especially since publication of The Limits to Growth and Paul and Anne Ehrlich’s work. To the University of Maryland’s Herman Daly, the dean of steady-state economists, it’s simply the law of diminishing returns: produce too many goods, and they’re not so good anymore.
“We then have uneconomic growth, producing ‘bads’ faster than goods—making us poorer, not richer,” Daly, a former senior economist at the World Bank, has written. “Once we pass the optimal scale, growth becomes stupid in the short run and impossible to maintain in the long run.”
Long before him, Thomas Robert Malthus, John Stuart Mill, and Adam Smith warned that economic growth, like everything else on Earth, was subject to resource limits. But identifying what doesn’t work is one thing; figuring out what will, and how to transition to it, is another.
There’s already an excellent model for the steady-state economy that Daly and his ecological economist colleagues have long espoused: the Earth itself. “Neither the surface nor the mass of the Earth is growing,” Daly continually reminds people. On Earth, inputs and outputs have always cycled and recycled ad infinitum, transforming one into the other. Things only got out of whack when one species—ours—started demanding more stuff than ever before, requiring more concentrated energy for that stuff’s manufacture than nature had ever accommodated all at once.
We’re not the first instance of that happening in the planet’s history. From time to time, there have been other exaggerated inputs—like the asteroid strike that knocked off the dinosaurs and nearly two-thirds of everything else alive. It took several million years for Earth to absorb its dust and spawn a new cast of characters to be fruitful and multiply. To avoid bringing something comparably drastic upon ourselves, the ecological economists propose we rethink the way we provision civilization—starting now.
It’s a big job. Today’s globalized economy literally means an economy the size of our planet—but as Daly points out, that also means there’s no more room to expand. The addition of more fuel reserves than we once thought we had—in the form of gas we free by shattering bedrock, oil we wring from sand and shale, and newly ice-free Arctic deposits—seems impressive from a short-term perspective, such as an election cycle. But the math reveals that they’ll buy us relatively little extra time, and may cost much more than they give. The techniques to harvest them make alarming messes, and burning them turns the skies even more uncontrollable and the oceans increasingly corrosive.
“The closer the economy approaches the scale of the Earth,” Daly told the UK’s Sustainable Development Commission in 2008, “the more it will have to conform to the physical behavior of the Earth.” In a steady-state economy, we wouldn’t be seeking more and dirtier ways to fuel the engine of growth, because we’d live within our planet’s means. But if an economy permanently stopped expanding, wouldn’t that mean it has failed?
No more, said Daly, than it means that the Earth is static—“a great deal of qualitative change can happen inside a steady state, and certainly has happened on Earth.” In a steady-state economy, the population would stay more or less constant at a livable, optimal level, and so would the consumer base. Same with the labor pool, which would make just enough stuff for the consumers to consume. Manufacturing wastes, and products that had passed their useful life, would be continually recycled. Like a terrarium, everything would be in balance…
… which is easier said than done. The transition alone will be daunting, because throughout human history, we’ve been doing exactly the opposite, and nearly everyone alive knows no other way. What worked fine for our ancestors—run out of game, pick up and move to new hunting grounds—doesn’t work when there’s nowhere else to go that we haven’t already picked over. But it’s hard for most of us to see that, because, like Alberta tar sands, we keep squeezing more out of soil and water. The fact that they give steadily less is mainly apparent to a growing fringe at the bottom of the human tapestry: more hungry people than the population of the entire human race before industrialization began blowing the lid off our numbers.
So how do we get those of us at the top of the food chain to comprehend, lest we join their ranks?
The 2008 global financial crisis created a whole new batch of recruits to the world’s chronic have-nots: growing numbers of underemployed and jobless, as the traditional economy fails them. University of Vermont economist Joshua Farley, coauthor of the 2010 book Ecological Economics with Herman Daly, has spent much time since that avalanche began thinking about something that few of us understand: monetary policy.
“That’s the problem: Most people don’t know where money comes from, nor how it’s created.”
Which, he believes, is the reason why our economy today resembles a chain letter based on the fiction of an infinite number of recipients, instead of a terrarium—such as Terra, the Earth itself. Farley, whose boyish looks are belied only by his shock of gray hair, has become adept at explaining it to policy makers who should already know it but don’t, and to college undergraduates.
“Take the United States. There are about 800 billion dollars in actual bills, but that’s a tiny fraction of the actual money we use.” The rest is money that banks magically create whenever checks are written, because a bank only has to keep a fraction—usually around one-fifth—of actual deposits at any time, based on the usually reliable assumption that its customers aren’t all going to simultaneously withdraw their savings.
This is the easy part: If a bank need only keep 20 percent of deposits on hand, it can lend out five times the amount of actual money it has. Which it does. Each time this happens, Farley explains, the economy has just grown again. “Banks virtually loan money into existence—and at interest.” Of the interest it earns, four-fifths gets loaned out again.
Now comes the hard part: “So when I went to the bank and took out a mortgage for $100,000,” says Farley, “the bank wrote me a check that essentially created that amount. As long as I haven’t paid it back, that money circulates through our economy and lubricates the whole economic process. Except it isn’t really money based on anything of value, except my promise to pay it back. It’s debt that they’ve created. All the money in our country right now is debt: about $50 trillion in total interest-bearing debt in the United States alone.”
In the days when money was backed by its face value in silver or gold, there were limits to how much wealth could flow around the world. Today, it’s virtual money that the bank lends into existence on a computer screen. “And u
nless the economy continually expands, there is no new flow of money to pay back that money, plus interest.” Hence the chain letter.
“As it stands now, if banks start loaning money more slowly than they collect debts, the quantity of money in the economy goes down, and it’s impossible to pay back debts. So we get defaults on houses, defaults on mortgages, defaults on loans. We get collapsing businesses. Our economy plunges into misery and unemployment. Under our current monetary system, the only alternative to that is endless growth. So one absolute thing we have to change is the whole nature of the monetary system.”
So how might we do that?
“It’s fairly simple. It’s a change that’s been proposed by economists for centuries. We deny banks the right to create money.”
Instead, Farley says, money creation would go back to where it used to be. “We restore that right to the government. It can spend money into existence on public goods, like rebuilding our infrastructure, our education systems, our sewage systems, and restoring our watersheds and forests. Or it can loan money into existence to state governments and local governments or to central industries, like renewable energy systems—but at zero interest. At zero percent interest, when it’s paid back, the money’s destroyed. So there’s no continual increase in the money supply.”
There’s a challenge with that solution, he admits. “You’re trying to take the right to create wealth away from some of the wealthiest people on the planet.”
That does present an obstacle. And it’s not simply confiscating Goldman Sachs’s or HSBC’s legal magic wands that allow them to conjure substance out of thin air by only maintaining fractional deposits: It also deprives them of vast interest income. The government would no longer have to borrow money, because it would literally create it by spending it on public goods and works. That also means no more needing to raise taxes in order to pay borrowed money back, plus interest.
The wealthiest 10 percent would appreciate the reduced tax part, but they wouldn’t much like the loss of interest. “Since the top 10 percent of the economy is who receives interest payments, and the bottom 90 percent pays them, interest payments today essentially redistribute wealth from the bottom 90 percent to the top 10 percent.”
In a steady-state economy, Farley says, the opposite would happen: Government would spend for things that benefit 100 percent of the people, creating jobs to build and maintain them, and redistributing money more equally throughout society. Taken globally, a fairer redistribution of wealth plus population reduction—either because we gracefully nudge our numbers toward some ecological balance, or because some unpleasant act of nature abruptly jerks us in that direction—are the inseparable sides of the new coin the human race must spend to afford the future.
It all makes sense, and sounds highly unlikely. Picture a world where economic decisions are made not to benefit the cleverest financial whizzes, nor the brawniest companies, nor the most powerful nations, but according to what’s best for the most people and for the planet that sustains us all. Lovely, right?
Now, picture all the interested parties letting it happen. Not so pretty.
The switch to a sustainable economy, wrote Herman Daly in Scientific American in 2005, “would entail an enormous change of mind and heart by economists, politicians, and voters. One might well be tempted to declare that such a project would be impossible. But the alternative to a sustainable economy—an ever-growing economy—is biophysically impossible. In choosing between tackling a political impossibility and a biophysical impossibility, I would judge the latter to be the more impossible, and take my chances with the former.”
To have a world where the majority enjoyed a life that most of us would accept—something like a European lifestyle: less consumptive and energy-intensive than in the United States or China; more secure than in Africa—would require fewer people dividing up the world’s goods, and leaving enough for nature to thrive. “Usually,” says Jon Erickson, Farley’s University of Vermont ecological economist colleague, “people presume that when economists talk about raising everyone’s material standard of living—be it to a European, Japanese, or American standard—they mean for all seven or nine billion people. But mathematically, that clearly won’t work. If we want a more affluent world, we have to drop population size. They go hand in hand.”
The world’s current, chronic economic crisis springs from everyone—from homeowners to entire nations—getting into more debt than we can possibly pay back. The idea of the whole world incurring even more debt just to pay off debts that can’t be met is Ponzi financing in the extreme. That’s where national economies—and even international, such as the European Union’s—approach the brink of collapse. Yet thus far, says Erickson, it’s the only kind of financing we’ve tried.
“We take on more debt, over and over again, assuming we’ll simply grow more in the future and pay it off later. The only way we can possibly pay down that debt without growing is by consuming less.”
There are only two ways to do that. “Either everybody on the average consumes less, or we have fewer people consuming.”
Or both. Getting people to want less sounds tough, though from Farley’s and Erickson’s vantage point, perhaps not impossible. The Gund Institute for Ecological Economics, where they teach, which began at Herman Daly’s school, the University of Maryland, moved to Vermont because, says Erickson, “at Maryland, it was like an outcast institute. Here, it’s more central to what this university, Burlington, and Vermont are about: a transition to a reasonable economy.”
Burlington, Vermont: whose last three mayors described themselves as either socialist or progressive, rather than Democrat or Republican. A city with a community land trust featuring a “ladder of affordability” for housing, offering everything from single rooms to co-op rentals, home ownership, and cohousing. A Lake Champlain waterfront converted mostly to public space. A supermarket-sized, city co-op grocery. Citywide composting. An electric utility that produces fifty megawatts from waste wood products.
Hard to get much more livable, boast patriotic residents. And yet, Erickson says, neither Burlington nor steady-state economics are radical. “It’s good old Vermont conservatism”—and quite similar, he adds, to Akihiko Matsutani’s prescription for Japan, which turns out to be very appealing for fiscal conservatives: If deficit spending is necessary to a growing society, in a shrinking society what’s needed is exactly the opposite. As populations start shrinking—“as they must,” Jon Erickson tells his students, “either by design or by default”—we will have to learn to live with balanced budgets.
Which, whether it likes it or not, Japan is en route to doing.
Yoshimi Kashitani, his khaki cargo pants tucked into black rubber boots, sloshes through the cold water cascading down his terraced wasabi patch. Bending, he inspects some one-year-old plants. “They are doing very well,” he tells Yoshio Takeya, his new helper, who’s watching closely from the next tier up.
Kashitani is a healthy, wiry man of eighty-three. He has been doing this right here all his life, as did his father before him. His wasabi grows high up a steep canyon above the village of Nosegawa in mountainous Nara Prefecture on south Honshu Island. Takeya, fifty years younger, is from Osaka, part of Japan’s Keihanshin metropolitan area that includes Kyoto and Kobe, together home to 18 million people.
Nosegawa has five hundred people and counting—down. In 1975, twenty-three hundred lived here, working in forestry, growing wasabi and shiitake mushrooms, making chopsticks, and hatching amago trout. But mechanization and reusable plastic killed their hand-carved chopstick industry, which employed dozens who scraped and planed standard chopsticks from sugi cedar and fancy chopsticks from hinoki cypress. Mostly, though, the numbers withered away as older generations died off and fewer young people took their place. Nearly half of Nosegawa’s residents are now over sixty-five.
It’s the same throughout the Japanese countryside: fields and farmhouses vacant, elementary and middle schools down to handfu
ls of students, and elderly farmers still working the land because there’s nobody else to do it. “Once we were fourteen wasabi farmers here,” says Yoshimi Kashitani, rain dripping from the bill of his cap. “Now just five of us are left.” He has three daughters, born right after World War II before the short-lived baby boom abruptly ended. They now live in Yokahama and Osaka, and aren’t coming back to grow wasabi. Only one of the five growers had a son, and he, too, left for the city. “So this young man is our only hope.”
In a town where young means fifty years old, Takeya, who’s dressed like his mentor except his rubber boots are white, is truly youthful at only thirty-three. After graduating from Osaka University in agriculture, he found few jobs awaiting in the dying countryside. But wasabi interested him. Despite all its soba and sushi eaters, Japan now mainly imports it from China, where, he says, the mass-produced, pesticided field wasabi barely resembles the native wasabi horseradish grown chemical-free in rivers like Mr. Kashitani’s. Takeya found this place on the Internet: the prefecture’s website described how the Nosegawans were using indigenous heirloom stock, hand gathering and nurturing their own seed. No one else he knew of still did that.
Wasabi growers, Nosegawa, Nara Prefecture, Japan
All around them, springs and waterfalls gush from the canyon walls. The mountain stream where Kashitani built sixteen stone terraces is lined with maple, beech, and Japanese oak, which retain water far better than the cypress and cedar that have replaced much of the native hardwoods in the mountains surrounding Nosegawa. Hinoki cypress and sugi cedar are also native, but in the postwar years the balance of Japan’s deciduous-conifer forests began to tip, as much of its hardwoods were clear-cut by the government to make way for faster-growing cypress and cedar for the construction and furniture industries.