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Sunday, March 10, 2013

The Sequester and Natural Law


The current budget sequester raises many questions about what America should do reduce our budget deficits and arrive at an ongoing budget scenario that (1) is sustainable in itself and (2) addresses issues that will ensure a healthy and sustainable society for our citizens.   In The Myth of Progress (2006, University Press of New England), Tom Wessels reflects on what the laws of nature can tell us about how we need to care for our societal ecology.  Wessels makes several important points in this concise book:
            First, we need to abandon the linear thinking that has tended to dominate economic theory and practice for the past century.  Linear thinking reflects an industrial approach to the economy:  that the world is like a machine—in which “each part works in a lockstep way with the other parts, so that the system always follows the exact same sequence of interactions between the parts” (p. 6).   In reality, he argues, we live in a nonlinear, complex system that is less predictable because the parts interact in multiple ways, so that the system is much greater than the sum of its parts.  Complex systems, Wessel notes, generate “emergent properties—things that couldn’t be predicted just by examining the parts” (p. 9).  He also notes that complex systems tend to be nested within each other, which helps to maintain system integrity.  
            Second, Wessels argues that, just as natural ecological systems depend on diversity to sustain themselves, our political ecology also benefits from diversity.  “The foundation of sustained progress lies in stable systems that increase diversity through time to resist perturbations” (p. 78).   Systems that lack diversity are more likely to be adversely affected by external changes because they lack means to adjust.  Wessel offers several examples of where the American economy is becoming less diverse and, in the process, less stable:  the rise of industrial farming over smaller family farms, increasing consolidation of the news media under less than two dozen large corporations, and the rise of corporate power that displaces small businesses.  A good example of the last change is Walmart, which has reduced economic diversity by killing small local retailers in communities across the country.
            Third, he notes, “Large-scale change in complex systems never comes from the top down; it always bubbles up from the bottom.  That means that large-scale social, political, and economic change comes from the citizenry, whom elected officials will follow when its collective voice becomes loud enough” (p. 60).
            What does this suggest for how we should deal with the federal deficit and the sequester?  For one, we should be aware of how budget cuts might create unanticipated “feedback loops” within our complex economic and political system.   Across the board cuts could have both positive and negative consequences; either way, we need to be sensitive to the potential for unforeseen consequences.   On one hand, it is essential that there be some discretion about how cuts are made.  On the other, it is important that we use the sequester to make real cuts that result in real change. 
            At the same time, we should use the sequester to eliminate subsidies to activities that work against economic diversity and that create instability.  For instance, this would be a good time to eliminate subsidies to large-scale corporate farming operations and to the oil industry.   We should invest some of the saved funds to support small, family farms and local cooperatives and to support innovation in wind, solar, and other sources of energy in order to diversify our food and energy resources and allow us to be more responsive to climate change and other external threats to stability.  
            I am a firm believer that the final solution will require more than just an across the board cut in expenses.  New revenues should be at least one quarter of the total solution, which assumes closing existing loopholes in federal income taxes.  Beyond that, however, we will need significant cuts, even if the hatchet approach of the sequester can be avoided.   Let’s hope that, in both sides of the process, we keep Wessels’ ideas in mind and find solutions that recognize that our society—and our economy—is a complex, rather than linear, system.