Human System Destabilization

Abstract

The concept of a ‘triple crunch’ was first popularized by the New Economics Foundation (Simms 2008), focusing on high oil prices, the debt-induced credit crunch, and climate change—however, the analysis centered on the interconnected dynamic of what were ultimately symptoms of crisis, rather than identifying their core causal dynamics. The idea of a ‘triple crunch’ encompassing energy, climate and food crises must therefore be extended in the recognition, highlighted by the work of New Economics Foundation, of the role of credit—debt-money (the creation of money through the expansion of debt) as a key instrument used to sustain economic growth through the extension of the ‘financial system.’ While the abundance of cheap fossil fuels played the key role in permitting the expansion of the monetary and financial system—enabling exponential economic growth—from the 1950s onwards, the accelerating reduction in EROI has accompanied an increasing reliance on financialization: the shift from the expansion of money, to the expansion of credit (debt-money). Beginning concertedly in the 1970s, this has been most exemplified in the US Federal Reserve’s post-2008 rubber-stamping of quantitative easing to use money printing or credit creation (debt-money expansionism) as a mechanism to offset economic crises and bailout insolvent banks endangered by mass consumer defaults. The policy’s fiscal twin is austerity—clamping down on state expenditures in the form of public spending on infrastructure, education, health care and other forms of critical social investments and public services, while using state power to protect ongoing debt-based profiteering in the corporate-financial sectors (Smith-Nonini 2016).