There is much that can be said about the events of the last few weeks from a systemic perspective. What has happened should make it abundantly clear to everyone that the global financial system is highly interconnected. There have been examples of runaway positive feedback processes, vicious circles, and above all else, massive systemic failure:
"Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," IMF chief Dominique Strauss-Kahn said."
And we have not seen the end of it yet. So far it has been largely confined to the world of global finance but the effects will begin to appear in all our lives soon enough.
The dynamics of what has happened in the global meltdown are not that different from what has been happening for a long time in our relationship with the environment, but the financial crash has been easier to appreciate because the dynamics have been compressed over a shorter time frame and, for most people, it is easier to perceive. Disconcertingly, most people also probably consider this more important than what has been happening with the environment - something that seems also true of the media.
For this reason this EU-commissioned study deserves to be on all newspaper front pages, displacing stories about the financial crash. The main points in the report are that:
'The global economy is losing more money from the disappearance of forests than through the current banking crisis, according to an EU-commissioned study.
It puts the annual cost of forest loss at between $2 trillion and $5 trillion.
The figure comes from adding the value of the various services that forests perform, such as providing clean water and absorbing carbon dioxide.The study, headed by a Deutsche Bank economist, parallels the Stern Review into the economics of climate change. '
Worthy though this study is it could have the effect of continuing a business as usual approach to the way we understand and manage our economic system. It arises from a line of argument that says we should value all of the ecosystems services provided by 'nature' but ultimately this is not possible in a definitive sense because nature is neither static nor ultimately completely knowable.
It would be good to think that amongst the current chaos and uncertainty smart people are acting to seize the opportunity presented by the financial meltdown to refashion capitalism and international governance regimes so that it is fit for our current circumstances i.e. human induced climate change, environmental and biodiversity destruction as well as poverty and loss of human well-being. For a start we could introduce a global carbon tax, dematerialise much more of our economic activity and throw out distorting measures of performance such as GDP. Perhaps at the same time we could begin to reduce the focus of human ingenuity on developing new financial and accounting products and services of the type that have contributed to the crash as well as advertising of the sort that drives consumerism.
Others are also thinking along these lines including Nicholas Stern, some more radically than others!
A report commissioned by the National Trust (UK) outlines the sort of practical measures that will be needed in the 'new economy':
'The UK's current water policy will fail to cope with extreme weather events that are projected to affect the nation in the future, a report has warned.
A study by the National Trust said the prospect of more frequent droughts and floods meant an urgent rethink was needed to update existing measures.
Paying farmers to restore wetlands or using land to store water were among the ideas suggested by the authors.'These are among the sorts of goods and services we should be paying for in the future.