Understanding Three Economic Patterns That Make Global Challenges Hard (but Important)- Part 1

Understanding this superorganism and its patterns of behavior, then, is necessary in order to transform it from an invasive species into an organism that is capable of thriving in balance with its environment. There's a lot of different avenues for exploration of this question and for gaining a deeper understanding. In this 3-part paper, we focus on three particular interconnected patterns (or traps) that are very deeply embedded into our global economy, making it extremely hard to break out of this self-destructive trajectory. We also explore the possible ways out and the consequences of breaking or not breaking the patterns. These three patterns are:

1. Addiction: applying solutions that work well in the short term, but in the long term actually make the problem harder to deal with, making us ever more compelled (i.e. addicted) to resort to these quick and easy solutions.

2. Game-theoretic competition: competition can be healthy. But unfortunately, the economic "natural selection" doesn't select for those actors that work in the best interest of the whole (at least not in the short term) - it selects for actors that are most efficient in converting natural and social capital into profit, which usually means exploitation and degradation.

3. Tragedy of the commons: this pattern occurs in situations where many actors share a common resource - like the atmosphere or ocean or rivers... Any one actor can achieve a significant gain by exploiting more of the resource (like catching more fish), while the relative harm from doing that is small and distributed among everyone. The tragedy occurs because all the actors are pursuing the gain and ultimately the accumulated harm ends up destroying the commons and hurting everyone.

For the sake of clarity, we'll address these patterns separately, however it's worth noting that they're intimately interconnected and feed into each other. Let's dive into each of them.

Patterns of economic addiction

The basic pattern of addiction is applying a short term "solution" that eases the symptoms while avoiding dealing with the underlying problem that causes those symptoms. Avoiding dealing with the actual problem usually makes it worse, while getting dependent on the symptomatic solution has the side effect of reducing the capacity for dealing with the problem and/or even causing direct long-term harm. Dr. Gabor Maté, for example, points out that drug addictions are the result of the lack of capacity to deal with some emotional pain or trauma.

This basic pattern is not applicable only to substances or individuals though. It can be an emergent pattern of any system. Addiction is an integral part of the way economic superorganism works and we'll point two most important manifestations of it.

1. The economy incentivizes addiction in consumers

Addiction is good for business. What better way to ensure a good flow of revenue than to make customers addicted to your products? Usually, it's not framed that way - but essentially that's what every business is incentivized to do. Some forms of it are just more obviously harmful, some less.

The way this usually works is by hijacking our hormone circuits. We've evolved all sorts of mechanisms that make us compelled to behave in ways that make us feel good.

• Substances such as sugar are hard to get in nature - so we have developed reward circuits that make us crave those things.

• We do better as societies than as individuals - so we have developed reward circuits that make us seek connection.

• People with high status do better than people with low status - so we seek to appear high status.

• Etc...

There's a catch though...

All those cravings only make sense in the context they were evolved for. Sugar is a healthy source of energy as long as it's packed with other nutrients such as fiber or vitamins. The reward of feeling meaningful connection comes after going through a (often difficult and painful) process of socialization and all the highs and lows of relationships. The reward of high status makes sense if you've earned it by being a valuable member of society and contributing to it.

The way economy works is by offering a shortcut to those feelings while stripping away the context that makes them meaningful. You no longer need to put in the work to get the reward. You can just buy the reward directly.

• Junk food companies make products that are stripped of all the nutritional context and just packed with the stuff that we crave, like sugar, salt and fat.

• Social media allows us to "connect" with thousands or even millions of people while removing the social barriers that are a part of any healthy socialization.

• You can buy status with luxury products without needing to do anything useful for society.

Plug this into the economic equation for profit and it's easy to see that every company is compelled to optimize only for the stuff we crave and ditch all the rest. And now, we have a vicious spiral where the products are getting more and more addictive while losing more and more of their actual value for the customers. It's ironic, for example, that obese people often suffer from malnutrition - they stuff themselves with food that makes them fat but is actually completely depleted of micronutrients.

This doesn't have to be some evil corporate plot. It's a matter of incentives within our economic structures. You do what you have to do to produce business results. You probably don't even know you're creating addiction. Most marketers I know don't sit around thinking how to make people addicted. But most strategies they pull out of their sleeves are doing exactly that. FOMO... Anchoring brands to certain emotions... User experience... Catchy content... Engagement boosters... All of that runs on addiction.

For coherence and clarity, let's just map this onto the basic pattern described at the beginning of this chapter, which described addiction as "applying a short term "solution" that eases the symptoms while avoiding dealing with the underlying problem that causes those symptoms".

The "symptoms" are the cravings or urges that we feel. The underlying "problem" is a certain need. And the short term "solution" is the product. By using the product to satisfy the urge, we don't really address the need in the holistic sense. By filling our stomach we satisfied the feeling of hunger, but haven't necessarily provided the body with nutrients it needs. By getting likes on social media, we feel the dopamine rush of satisfaction, but haven't really made any meaningful connection.

Let's tie this back with the economy. Most of the products, services or "solutions" that can be sold are actually these addictive short-circuits. Most meaningful experiences don't involve paying for anything, but actually putting your own energy into it and going through the slower, harder or less glamorous path towards the ultimate reward. The economic incentives, therefore, are locking us into this toxic pattern of purchasing solutions to achieve momentary satisfaction or "solve our problems" while losing our own capacity to deal with important things in life. So, we need to work and earn more just to get on with life. Obviously this has limits.

2. Economic superorganism itself is addicted

Consider again the basic pattern of addiction - applying short-term "solutions" to ease the symptoms at the expense of avoiding the underlying problem.

This pattern is not only ubiquitous among consumers - it's also present in companies and the entire economic superorganism. And the favorite pill of the day is growth and debt.

The economy optimizes for profit, that's no news. That means that in the case of economy, the "craving" is money. Debt is the easiest and fastest way to get it - no work or investment is necessary, just a promise you'll pay back in the future. That's why it's no surprise that both businesses and governments often solve their financial issues by simply borrowing more. Instead of doing the harder work of gradually building up reserves that you can invest in a sustainable way, you can just borrow and invest right away. And then once you're in debt, you repay that debt by taking more debt. Therein lies the addiction - debt will help you solve short-term liquidity or investment problems, but in the long term puts you in a tougher situation and makes financial problems worse, which will make you even more compelled to take more debt, etc...

Scale that up even further to the entire economy and you see that economies are addicted to growth. Because of the cumulative debt and investments, they need to grow in order to repay it all. If they didn't, the financial system would implode. Addressing the real issue under this addiction would mean slowing down in order to repay debt and then build up the capacity to invest further. But that's an unpopular choice because of competitiveness (we'll discuss that in the next part of this series).

Another thing is important to mention here. Economic growth creates all sorts of problems, from environment destruction to social inequality (not to say it doesn't bring benefits too, of course). A popular narrative is that further growth will solve the problems that previous growth caused. Like, for example, that we need growth to invest in cleaner and more efficient technologies that will ultimately undo the damage growth has caused so far. This is reflected in the idea of Environmental Kuznets Curve.

There are cases where the curve seems to apply. But overall, this narrative doesn't hold up to empirical scrutiny and might only be valid in very narrow contexts. There are a few major problems with it:

• There is no scientific consensus about the validity of the curve - environmental impact is usually a combination of multiple factors and complex contexts.

• Even if the curve holds, there's no guarantee that it will turn downwards fast enough to avoid serious consequences. In other words - further growth might be able to solve the problem, but by the time it does, the problem could have already had disastrous consequences. For example, by the time leaded gasoline was banned, it had already reduced average IQ by several points and caused numerous cases of lead poisoning.

• The curve might hold for one specific metric, but that says nothing about all the other problems the solutions for that metric might have caused. For example, cars were the solution to the issue of horse husbandry and piles of manure on the streets. Development of cars did make the streets cleaner, but caused way more air pollution and greenhouse gas emissions, which is way harder to clean up.

Possible scenarios and ways out of the addiction trap

1. What are the consequences of staying in the same pattern?

Addiction is not a healthy dynamic of a system. Consequences for the overall system wellbeing (the system being either individuals, organizations or the global superorganism) are therefore negative in any case. But the question is just how negative? We can't deny that many people get on with life reasonably well despite overconsuming sugar or binge watching TV shows or smoking. Neither can we deny that the global economy is still well and alive, despite huge budget deficits and mounting debt. So, is it necessarily bad?

This is an interesting question to explore. For sure, weaker forms of addiction can be contained and they don't necessarily have a devastating impact. When they are contained, it means that they are counterbalanced by healthy habits (or high resilience of the system) that prevent the underlying problem from getting worse. For example you can use social media, but if you have a meaningful social life and personal discipline to keep your needs met, it doesn't necessarily eat you up. Also, there's nothing fundamentally wrong with the economy growing - as long as that growth is kept in check and you don't tether your whole social structure to it.

Unfortunately, the addictions we're facing are far from weak, harmless or contained, and there are a few reasons for that:

• The pattern is not static - it's accelerating. Technological development and growing body of knowledge enable companies to develop progressively more addictive products. Combining psychology, biology, neuroscience, AI and other disciplines allows the development of products and content that are getting exponentially harder to resist and exponentially better at exploiting our weaknesses. We're bombarded with hyper-normal stimuli that we weren't evolved for and have no defense mechanisms against. On the level of the superorganism, with every new year of economic growth and accumulation of debt, the pattern gets more entrenched and harder to break. Technological development accelerates this addiction too - better technology means more efficient conversion of resources and labor into economic growth, deepening the addiction. We can very clearly see this in the fact that technological corporations have become way more powerful than governments that were supposed to balance them out.

• We're bumping into ecological limits. We can only overconsume for some time, and that time is up. Continuing this way, we WILL burn through our resources, we WILL poison our own living space and we WILL cause the breakdown of the biosphere. So, whether we will get off the high is not a question. The question is how. A heavy drug addict that suddenly runs out of dope will go through a big crisis and will be willing to do anything to get it - even killing people. So, what kind of crisis will the global society have to go through if we push it to that point of breakdown?

• We're losing the strength to break the pattern. Society is getting weaker exactly because of all the ways we can get satisfaction from the economy. The numbing effect of all the addictions is that we're just too afraid to lose all the comfort. Why resist the system if it allows you to spoil yourself, binge-watch content, be entertained or feel like vigilante after posting on social media.

So, what is all this driving us towards?

• Social disintegration - power games, political polarization, wealth gaps, violence...

• Physical and mental illness - depression, anxiety, obesity, cancer...

• Ecological breakdown - catastrophic global warming, destruction of habitats, toxic agriculture, poisoned air, land and water...

It's time we admit it. Hi everyone, my name is Humanity - and I'm an addict.

2. What are the possible ways out?

Humanity needs a comprehensive rehab programme.

Healing from addiction in any kind of framework starts with acknowledging you have a problem. So, the first step is to start openly discussing it in all seriousness - that we as individuals and the superorganism are caught deep in addiction.

As long as we underplay the problem or keep hoping that progress will solve it, we're denying the true nature of the situation we're in. From that space, no real solution can ever be found.

We need to tackle this both on personal level and on the systemic level. On the personal level we can:

• work on resolving our inner feelings of insecurity, guilt, fear, etc... The emotional burden that we bury inside of us ends up driving our compulsive behavior and underpins many of the superficial ways in which we try to make ourselves feel good. Taking more time in peace allows us to get in touch with our deeper self without being constantly distracted by noise.

• reconnect with our communities and seek support from each other. An important pillar of every addiction recovery scheme is support. We have to face the fact it's going to be hard and sometimes we won't be able to handle it alone. Also, having a close, meaningful community around us satisfies our basic need for connectedness, reducing addictive tendencies.

• build up discipline and healthy habits. In a world where somebody is constantly trying to get you hooked on something, the discipline to resist temptations is becoming literally a survival skill. Working on delayed gratifications is one way to start building this. Also, establishing healthy eating and sleeping habits, regular physical activity, regularly having days without using digital technologies, etc...

• learn to be more self sufficient and live higher quality lives with less stuff. Depression and lack of meaning are quickly becoming the illnesses of the comfortable, developed society. Spoiling ourselves with all the perks of the economy is actually making us miserable. Learn to grow your own food, fix stuff and enjoy life without needing to spend so much.

• change our environments. Everyone who's ever been to any sort of retreat knows the feeling when you get there and your perspective on life changes, but then you get back to your job, emails start flying and you're right back in the same hectic lifestyle. It's tough to make changes in the sme environment that's encouraging you not to make them. You can change a job. Go outside for an hour a day. Arrange your apartment to support habits you're trying to build.

On the systemic level we can (and should):

• keep bringing up the discussion in professional context. Complacency is the biggest plague of the workplace. "Just do your job and don't think too much."

• dismantle the legal structure of a corporation and convert corporations into legal entities such as cooperatives, non-profits or community-owned for-profits. Yes, this is a radical one. But corporation as we know it today encodes addiction to growth in its very legal structure. No matter how many sustainability targets or corporate social responsibility initiatives they launch, it will never make a real difference.

• coordinate the slow-down of the economy and commit to it at the level of international decision making. No company or nation can do it themselves because that would just make them uncompetitive. A joint agreement needs to be reached to get off the high horse. Montreal protocol is a historic example of a successful coordination.

• completely rethink the financial system - the presence of interest, speculative finance, investment funds etc are all drivers of the addiction to growth. If we keep them, they must at least be way heavier regulated than they are today.

• brace for impact. Nobody can probably anticipate the kind of blow all this would cause in the economy. In any case, it won't be easy - getting out of any addiction is hard. But if we don't do it purposefully, the economy, society and environment will collapse in ways we can't even imagine.

• break down most of global supply chains and build a network of locally self-sufficient economic communities with much weaker coupling to the global economy. Along with this comes decolonization of the global south that is today still in the colonial grip through cheap labor and resources.

• encourage open dialogue and celebrate different perspectives - those are the foundations of democracy.

• do many other things too, but not everything can fit into one paper.

To be continued...

We'll end Part 1 here. In part 2, we'll dive into the next economic trap - Game theoretic competition - and explore how that ties into the human predicament.

Environmental Kuznets Curve. Source: https://commons.wikimedia.org/wiki/File:Environmental_Kuznets_Curve.png

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