March 8, 2009

2008: The year when the "Great Disruption" started

I returned from my travels earlier this week. While catching up on my readings, I saw Tom Friedman's Op-Ed in yesterday's New York Times, in which he quoted Paul Gilding, a veteran activist and social entrepreneur from Australia, who has always championed the virtues of sustainable development. I follow both of these individuals, so I thought I should share with my readers Friedman's Op-Ed in which he aptly links Gilding's concerns in his article from last July - The Great Disruption - to the global economic and financial meltdown that started a few months later.

Gilding claimed in his July 17th article that 2008 will be a momentous year in the human history - it'll be the year when the Great Disruption began. It'll be marked as the year in history when both Mother Nature and Father Greed hit the wall simultaneously. The events that started unfolding on the global economic scene in September 2008, just two months after Gilding's article, should eliminate any doubt whatsoever anyone might have to his theory.

Friedman encapsulated similar thoughts in his Op-Ed. Few excerpts are below:
"...crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”
"We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese ...

“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows.

“You can get this burst of wealth that we have created from this rapacious behavior,” added Romm. “But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate ...’ Real wealth is something you can pass on in a way that others can enjoy.”
The consumer driven free market economy is here to stay, but the Great Disruption of 2008 in my opinion does not merely represent a typical down cycle that will be replaced by old glory days. It instead represents a reset - a reset in both the nature and composition of economic activity in the western world, a reset in the level of conspicuous consumption, a reset in the wealth gap between rich and the poor, a reset at the Wall Street, a reset in people's priorities, and a reset in the definition of happiness and the manner in which people pursue it.

And the underlying principle of the reset will be a focus on sustainability.

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