RE-EMBEDDING THE GLOBAL ECONOMY

Are you surviving the biggest economic crisis in 75 years? Most of us have been watching it unfold from a distance. First it was Lehman Brothers, Bear Stearns, AIG, HBOS, Fortis Bank, and now it’s Iceland, Hungary, Ukraine and Belarus. If these events haven’t yet affected you directly, they will.

If you are a farmer you may find that declining oil prices have reduced the demand for ethanol and lowered the price of corn. The prices of other crops will also fall as speculators unwind their positions. In western Canada, oil and gas exploration will be reduced meaning fewer off farm jobs in the wintertime. As consumers delay discretionary purchases, manufacturing output will fall leading to rising unemployment. Housing prices will fall and jobs will be lost in construction. If you work in the university sector (as I do) you will be faced with hiring freezes as have already been announced by universities in Miami, Boston, New York and Waterloo. If you are a small business owner and you finance your inventory with a line of credit, you may find your bank reluctant to keep lending. Any institution with significant endowment funds, like charities, schools and hospitals will be faced with reduced revenue and foundations will have less money to grant.

Some of these effects are typical characteristics of a recession and so some people interpret this as just another turn of the business cycle. However, normal recessionary cycles respond to falling interest rates and fiscal stimulus by governments. This phenomenon is not responding to such stimulus and the American Federal Reserve Board has reduced interest rates almost to zero. What’s really happening and what can we do about it?

An alternative explanation is that we’re in the middle of a global crash. The roots of the crisis are in the global financial sector and the crash is the direct result of the globalization of that sector. In this process of financial globalization, national financial markets have been linked to form a single global market for credit, debt and currency. This global market has become either unregulated or insufficiently regulated because the corporations that dominate this market are larger than the national governments that used to regulate them and we have not yet invented the new global institutions that will be required to regulate this new market. For example, Iceland has had to be rescued by the International Monetary Fund after its largest banks failed. The largest Icelandic bank had assets 6 times larger than the GDP of the whole country. Could Switzerland rescue UBS, which has assets 484% larger than that country’s GDP? Credit Suisse is 290% larger than its home country’s GDP as is ING in relation to the Netherlands. Three of the five largest banks in the world are headquartered in the UK (RBS, HSBC and Barclays). Britain has already rescued RBS. Can it afford to rescue the other two without help? (For a chart showing the relationship between the assets of banks and the GDP of their home countries, go to this website from the Financial Times).

In my last column I quoted the work of the Hungarian economic historian, Karl Polanyi, whose name is now popping up all over. In Polanyi’s most famous book, The Great Transformation, he described how the Industrial Revolution caused economic forces to become dis-embedded from feudal society. These forces now operate in their own sphere called the economy. The relationship between the economy and society was reversed and instead of society determining the nature of economic relationships, the economy began determining the nature of social relationships. Society was refashioned in the image of the economy and we inherited a market society governed by a market system. This revolution was traumatic because it threatened humanity. The Great Transformation of his book title was humanity’s response of self-protection. In order to survive we had to invent new institutions like trade unions, pension plans, and unemployment insurance. We even invented the modern nation state so that the boundaries of political regulation would correspond more closely to the boundaries of economic activity.

Today, we are living through the same kind of upheaval. The corporate agents of the national financial sectors of our economies have become dis-embedded from the regulatory frameworks of the nation state. They now exist in a new space called the globalized economy. This space is now so threatening to human society that even as prominent a champion of free market capitalism as George W. Bush is prepared to nationalize portions of the U.S. banking sector to prevent further destruction.

When economic forces are becoming disembedded from the restraints of the old society, there emerge champions of deregulation – “let the market decide!”, they cry. In the late 18th century it was Adam Smith who was arguing that if everyone was simply left to pursue their own self-interest, these actions would be guided to achieve the common good of wealth creation as if by “an invisible hand”.

The social upheavals associated with the rule of the invisible hand included market induced famines, periodic shocks of industrial unemployment, dramatic increases in the gap between rich and poor, homelessness and waves of human migration as landless farmers sought to escape their poverty traps.

In the late 20th century, at the time of the globalization revolution, it was Milton Friedman who was arguing that markets freed from regulation were a precondition to human freedom in a modern society. We are currently living through the same social upheavals as before, following once more on the implementation of policies of market deregulation. Unsurprisingly, conservative think tanks like Canada’s Fraser Institute and America’s Heritage Foundation have been celebrating Iceland as one of the freest countries of the world. The deregulation of Iceland’s financial sector was engineered by disciples of Milton Friedman, like Davíð Oddsson the Prime Minister from 1991 – 2004.

The solution to the chaos caused by dis-embedded markets is obviously the re-embedding of those markets in new systems of political regulation. That’s one of the ways an economy becomes a moral economy. The other way is by making society more just. An economy dis-embedded from society is an amoral economy because an economy left to itself has no conscience. An economy embedded in an unjust society is an immoral economy. Society supplies the conscience but in this case it is a bad conscience.

Where might those new systems of just political regulation come from? As I write this, leaders of the 20 largest national economies are preparing to meet in Washington at a global summit to plan a response to the global financial crisis. What’s symbolically significant about this meeting is that it is no longer sufficient for the leaders of the seven largest national economies (the G7) to meet, consider and decide for the world, as they have done so often in the past. It is neither politically, nor economically feasible to make decisions about world trade without China, India and Brazil being at the table – and they will not be silent. Some commentators call this meeting the new Bretton Woods, recalling the meeting in Bretton Woods, New Hampshire in 1944 when representatives of the Allied nations met to establish the institutions and rules required to re-establish world trade after the cessation of World War II. These expectations are too grand for this meeting but the hope is exactly correct. It may be that this meeting will set the wheels in motion and we may, in time, look back on it as the start of a new Great Transformation.

As for Canada, two ways we can respond to the crash and make our society more just at the same time is by strengthening our welfare system and making major investments in social housing. Increasing transfer payments to the poor will address social inequality and boost consumer demand for economic staples. Investing in social housing will boost employment in the construction sector and help make poverty history.

Posted 13 November 2008. For additional reading on the moral economy, visit www.christopherlind.ca

MORAL HAZARD OR MORAL ECONOMY: THE ETHICS OF ECONOMIC BAILOUTS

Another weekend, another financial bailout. Will it be enough? Last week it was Washington Mutual, America’s largest Savings and Loan being packaged up for the government’s favourite financial holding company JPMorgan Chase. Last March the American government intervened to ensure the investment bank, Bear Stearns, was sold off to the same outfit. Who will it be next week? Which pillar of Hercules will come tumbling down signaling, once more, the end of the world as we know it?

On September 7th the government rescued the two largest mortgage insurers, known by the nicknames Fannie Mae (FNMA) and Freddie Mac (FHLMC). Many commentators worried that the March and September interventions created a “moral hazard”. This is an obscure term from the insurance industry that tries to predict how someone insured against a risk may act in such a way as to make the risky behaviour more likely. For example, some people think it is more likely that a house insured against fire is more likely to burn down than one not so insured. In this context, the lack of a mid-September government bailout for Lehman Brothers was said to be an object lesson for investors – the government will not insure you against your own reckless investments. In the light of the subsequent rescue of the insurance giant AIG, a better definition seems to be the privatization of profits and the socialization of losses.

In the Canadian context, there is a different kind of moral hazard at work. For many years now, the Canadian government has been encouraging people to contribute more to their personal Registered Retirement Savings Plans (RRSPs). In 2000 the contribution limits started to increase after years of fixed rates and even cuts in the mid 90s. In 2008 the RRSP limit is 18% of earned income to a maximum of $20,000. This increase typically means an increase in investments in the stock market. Since the percentage of working Canadians with company pension plans has decreased over the last 10 years, this means the federal government is encouraging Canadians to rely on their own private investments to secure their retirement.

Canadians clearly are prepared to do that since approximately 50% of Canadians who file income tax also invest in RRSPs. But Canadians also expect that these government sanctioned and supported investment vehicles are properly regulated to ensure their interests are protected. To the extent that Canadian banks and investment houses have participated in sub-prime and higher risk mortgage pools from an insufficiently regulated American housing market, it appears that these institutions have behaved with less attention to risk than their fiduciary responsibility warranted. Did they believe the American government would bail them out? Do they believe the Canadian government will bail them out? Are Canadian financial institutions exhibiting signs of morally hazardous behaviour? I think they are.

Moral hazard is not just a matter of outright dishonesty. (Extreme versions of it are called fraud.) According to the Insurance Institute of Canada, moral hazard is more likely a consequence of carelessness and poor management. In a political climate where de-regulation and self-regulation is the flavour de jour (see the food inspection industry), Canadians properly expect their government representatives to ensure they are not exposed to the excesses of the cowboy capitalism they see to the south. Government encouragement of private investment to secure the common good of stable and dependable retirements, implies an obligation on the government to ensure those investment markets and managers are not reckless.

However, there is also something going on bigger than issues of moral hazard. The financial crisis is being described as a crisis in the American housing market caused by imprudent lending to homeowners. This is true as far as it goes, but it doesn’t go far enough. The sub-prime mortgage crisis is just the presenting issue. Any number of events could have precipitated this crisis. Rather, the crisis reveals the extent of and risks in the globalization of deregulated financial markets, and it could be worse.

The German government has rescued three banks in the last year because of American mortgages. However, they probably wouldn’t be able to rescue Deutsche Bank, which is so large it has liabilities the equivalent of 80% of Germany’s Gross Domestic Product. The British Government has now rescued two banks, Northern Rock and HBOS, because of their exposure to this debt. They probably wouldn’t be able to rescue Barclay’s Bank, the buyer of Lehman Brothers assets, whose liabilities are greater than Britain’s entire GDP. The largest insurance company in the world, AIG, has needed rescue because it has been selling insurance against this kind of default. The American government has been forced to act not only because it is an election year, but also because they need to satisfy Japanese and Chinese lenders. Foreigners hold 45% of the debt issued by the US Treasury with the largest investors being Japan (13%) and China (10%). If those countries start moving their money into Europe instead, the American dollar would fall rapidly - just as rapidly as interest rates would rise.

So, the world’s financial markets have expanded and integrated. But there has been no corresponding expansion and integration of regulation. Instead, the dominant voice of the last 20 years has been one of de-regulation. In consequence the livelihood of the whole modern world is now at stake.

In the 17th century, Isaac Newton proposed three laws of motion. His third law states that “for every action, there is an equal and opposite reaction.” In the 20th century, the economic historian Karl Polanyi proposed a similar kind of law. He said when market forces under capitalism expand, they are met by a countermovement aiming at the conservation of society, nature and production, using protective legislation and other instruments of intervention. This double movement in the 19th century he called the Great Transformation. It was how modern industrial society was born, complete with trade unions, pension plans, social housing, and healthcare.

We now desperately need another Great Transformation and if we’re lucky, we may be at it’s beginning. It is timely, then, to ask: by what values will this intervention be guided? Let me suggest four.

Matthew’s Gospel (7:26) reminds us to build our houses on a solid foundation, not on sand. That means our financial systems, like our ecological systems, have to be sustainable.

In order for the system to be sustainable, we have to be clear about what is sufficient for our common life. So far we have organized our affairs to achieve the maximum growth possible. What would “enough” look like?

Most people want some basic standards of fairness applied to income and employment, hence the desire to limit CEO pay for companies receiving public financial aid. This is the principle of equity.

Finally, ordinary people are wondering why all the government money is going to rescue private investors when ordinary homeowners are under water. They are looking for some collective support. They are looking for solidarity.

We’ve had enough of moral hazards. It’s time we had a moral economy.

Faster, Higher, Stronger

We‘ve been hearing a lot about excellence in sport recently and it always gives me an uneasy feeling. What do people really mean by it? It sometimes sounds like this: gold means excellent, bronze is close but not very.

I believe in excellence but my excellence includes ethics.

I don’t want to rain on the Michael Phelps or Usain Bolt parade but doesn’t the Olympic movement need them so we will forget about past champions like Canadian Ben Johnson or US track star Marion Jones? Johnson had his gold medal in the 100 M race at the 1988 Seoul Games rescinded because of steroid use. Jones won 3 gold and 2 bronze at the 2000 Games in Sydney. She is not competing in Beijing for two reasons. First, the IOC has barred her from these games and stripped away her medals after she admitted to using steroids before the Sydney Games. Secondly, she is currently in a Texas jail having been convicted of perjury.

The Tour de France is the most famous cycling race in the world. It is currently on the brink of collapse because drug cheating is so widespread. Tour champion Floyd Landis has been discredited in spite of his denials. Several corporate sponsors have refused to back their teams and now whole teams have quit the race after their riders were caught blood doping. The American satirical magazine, The Onion, has started selling versions of the yellow bracelets made popular by cycling champions. Their bracelets read “Cheat to Win”.

Can sports ever be ethical? Let me tell two stories that will say yes. The Velux 5 Oceans yacht race covers 30,140 nautical miles and is held once every four years, just like the Olympics. In 2006, in the middle of the Southern Ocean, British racer Alex Thomson was in 3rd place when his boat overturned causing irreparable damage to his keel. His nearest competitor was Mike Golding, 80 miles ahead of him in 2nd place. Mike Golding turned his boat around and sailed back to perform a very complicated rescue.

Mike Golding’s actions were not unprecedented. This kind of accident is common enough in sailing that assistance is obligatory. Failure to assist is grounds for disqualification. Mutual assistance is part of what it means to be excellent in sailing.

Story #2: In April of this year, the Western Oregon Wolves were playing the second game of their softball doubleheader against the Central Washington Wildcats. The winner would proceed on to the Division championships. In the second inning, with two runners on base, Wolves outfielder Sara Tucholsky hit the first home run of her college career. In her excitement she neglected to touch first base. As she turned around to retrace her steps, he knee buckled and she lay on the ground writhing in pain.

Baseball rules prevent teammates from helping each other to round the bases. Acting on instinct, Wildcat first baseman Mallory Holtman looked at shortstop Liz Wallace and together they carried Tucholsky around the bases, allowing her to touch her one good leg on each one. The Western Oregon Wolves ended up winning the game 4 – 2 and went on to the NCAA tournament.

Most news reports described that as a tale of good sportsmanship. I call it excellence.

Fuel vs. Food

Do you support Bill C33? This is the Canadian legislation requiring biofuels as a percentage of all fuels sold in Canada. The legislation currently before the Senate, allows the Government to require up to 5% renewables in all gasoline sold here or up to 2% of all diesel fuels. I was asked this question recently and my answer is yes, BUT! Here’s why.

Some people claim that converting corn to ethanol is driving up the price of food. Others say it is taking food away from the poor. Let’s deal with the price of food first.

Commodities are enjoying record high prices due to droughts, crop failures, increased demand from China and India, and financial speculation. Some of the increase in the price of corn comes from the diversion of 30% of the US corn crop to ethanol production. The elevated price of corn does affect the price of some other crops and in Canada there is some conversion of wheat as well. However the long term price of wheat and other grains continues to go down not up. If you factor inflation out of the price, wheat sold for $800/tonne in 1918 but that was during wartime. At the end of WWII it peaked again at almost $600/tonne. The long term trend is around $200/tonne except for occasional spikes, like now. When people criticize our government for an ethanol policy that will increase the price of farm commodities, I say hurray because the current high prices won’t last and anything that prevents farm bankruptcy is a good thing.

Now what about the other argument, that biofuels take food away from the poor? This is a more powerful argument but it is confusing if we only look at it from a North American perspective. We think of agriculture and oil both in terms of exports not imports. In Europe, most oil is imported. Europeans want 10% of all transport fuels to be agriculturally based by 2020. According to the UN Right to Food program, Europeans would have to dedicate 70% of all their arable land to this purpose in order to meet this target. Clearly they expect to meet their targets by importing agrofuels from Latin America, Africa and Asia. Not only can they preserve their own farm land but it is cheaper too. Ethanol that costs $1 to produce in Europe costs $0.30 in Brazil.

So, it is in the southern hemisphere where food will be taken away from the poor. Already edible maize is being replaced by industrial maize. Last year the cost of maize tortillas in Mexico increased in price by 400% causing riots by people for whom this is their staple food.

My guess is everyone would agree that the real payoff with this new technology is not the conversion of seeds (food) into biofuels. It is the conversion of waste (used oils like French fry oil) into biodiesel and wheat straw and wood chips into what is known as cellulosic ethanol. My “yes” has to do with my support of a market for biofuels, making the investment in new technology commercially viable and increasing the income of farmers. My “BUT” means I refuse to be indifferent to the hunger of peasant farmers in the global south. Our goal has to be the conservation of fuel, conversion of waste and the guarantee of the right to food.

Speculators Have Two Faces

Speculators are never popular. We associate such people with naked greed. They profit from our misery. No one wants to be known as a speculator.

An alternative word is investor or risk manager. To be an investor is to have confidence in the future. To be a risk manager is to be prudent and wary, concerned about dangers ahead.

These two words can sometimes be two faces of the same activity. When I purchase life insurance, I am managing a risk. I don’t often think about how the insurance company that sells me the policy is speculating on the chances of my death, even though they are.

Farmers invest in the future with every spring planting. They manage their risk by pre-selling their crop. Investors purchase those contracts for future delivery because they are speculating that the price will be higher on the delivery date than the price they have paid ahead of time. In order for this market to work properly, farmers need investors prepared to speculate and investors need farmers prepared to speculate too. When the environment stays stable, this market works, and adds to the stability overall.

The market for managing risk in food commodities has started to become dysfunctional. The futures market for wheat on the Chicago Board of Trade is twice as volatile in 2008 as it was in 2007. How volatile is that? Well, that’s six times as volatile as the price of gold, the Dow Jones Industrial Average or the price of European currency on the foreign exchange market.

What is the explanation? Some people blame the drought in Australia, and some blame the low level of wheat stocks world-wide. After all, world wheat consumption has exceeded production in six of the last eight years. Some blame a general increased demand from China and some blame a spill over effect of tight rice supplies and transferred demand. Some even blame increased ethanol use since 30% of the US corn crop is now going to ethanol production and farmers are switching out of wheat and into corn.

Probably all of these factors contribute to the volatility but drought and changes to supply and demand are factors we have seen before and they haven’t had this level of impact. One of the new features is the dramatic increase in investments made by Wall Street pension and hedge funds. According to the New York Times, as much as $300 billion of new money has been invested in these speculative plays. Although the Chicago Board of Trade has offered futures contracts since 1959, only recently have they also offered options on those futures contracts.

Where have we seen this before? In 1971, when President Nixon took the American dollar off the gold standard, a market was created for foreign exchange. Such a market always existed but the volatility of the market was very low since most currencies were related officially or unofficially to the American dollar and it was pegged to the price of gold at $35/ounce. The market was considered so insignificant, the Swiss based Bank of International Settlements didn’t start measuring it until the 1980s, and then only on an experimental basis. That same institution now estimates that market to handle over $3 trillion dollars daily. The danger of this market is that it is bigger than all of its regulatory bodies. When the market was only a third of its current size it was already larger than all of the reserves of all of the central banks of all of the industrialized nations put together.

There is not yet a consensus on the causes of increased volatility in the commodities markets, but, if I had to speculate (!) I’d say the unregulated increase in speculative investments has destabilized long standing relationships between producers and consumers, increased costs to farmers, and increased risks to us all.

Is Agriculture a Public Good?

Soft fruit growers in Ontario are currently caught between two competing visions of the role of government in protecting the public interest. CanGro Foods (part of Kraft Foods Canada until 2006) recently announced that they were closing their fruit and vegetable processing plants near Niagara-on-the-Lake (St. David’s) and London (Exeter). This closure will put nearly 300 people out of work. It will also leave 150 pear and peach growers without a buyer for their products. The pear harvest of 3,000 tons is worth $1.8 million while 6,000 tons of clingstone peaches are worth $2.5 million. One more plant closure might not seem remarkable except that the St. David’s plant is over 100 years old and is the last tender fruit cannery east of the Rocky Mountains.

The federal government has refused to stop the closure but has offered about $1600 per acre to help with the costs of removing the fruit trees. According to at least one study, the cost of removing trees and replanting for a different crop is closer to $15,000 per acre. It only takes three months to close a processing plant but it takes 10 years to rip out mature pear trees, replant and bring the fruit to a marketable stage. How long does it take to secure the future of domestic agriculture in Canada?

Underneath the question of whether the government should be directly involved in ensuring the viability of domestic agriculture in Canada lies a conflict of visions over the meaning of the public interest. On the right side of the debate is a vision of the public interest as the accumulation of intersecting private activities. They have no meaning as such but they do generate conflict and the role of government is to set the rules of conduct so disputes can be resolved. When modern American style conservatives call for small government, this is what they have in mind. The federal government response to the CanGro closure reflects this vision.

On the left side of the debate is a vision of the public interest as a version of the common good. Some activities contribute to the common good and some do not. Protecting the most vulnerable members of our society would contribute to the common good even though they do not represent a numerical majority. From this perspective the role of the government is to actively contribute to, promote and defend those aspects of our common life that help to define who we are and who we want to be.

Donald Ziraldo is the former President and co-founder of Inniskillin Wines. He thinks another buyer for the cannery could be found if a market for its production could be secured. Since CanGro will be keeping their Del Monte, Aylmer and Ideal brands, even if they’re now filled with pear halves from China, he wants the government to help create a new “Niagara” brand. He then wants the Ontario Government to adopt a “buy local” policy for all its institutions. The Government of Ontario employs 65,000 people and is the second largest employer in the Province after the Federal Government. If the Government adopted a “buy local” policy just for the food services catering to employees, and if every employee spent just $5 a day on lunches and snacks, $6.5 million a month would be directed towards local agriculture.

This is a bold and imaginative vision but it treats domestic agriculture as a matter of the public interest, and the government as its defender. Where we stand on the vision has a direct and practical impact on the future of domestic agriculture in Canada.

Mining Companies Challenged by Demands of Ecojustice

Is social justice compatible with environmental justice? If social justice requires economic expansion and environmental justice requires industrial regulation, aren’t these two concerns moving in the opposite direction? Solidarity is one of the principles of ecojustice but it is also an ethical concept drawn from struggles between people. It is union members that sing solidarity forever, isn’t it?

Another ecojustice principle is “socially just participation”. This makes sense when we are talking about the American presidential primaries; how can it make sense in an environmental sense?

Let’s start with money! Canada’s currency is closely tied to the values of our commodity exports. As oil reaches $100 per barrel, investors look at all the profits being made in the oil patch and bid up the price of Canadian assets. This increases the pressure to eliminate the barriers to resource exploitation. Profits are there to be made now. Ethical concerns for the state of Creation tomorrow don’t calculate as easily.

The logic of the oil patch also applies to the rising price of gold and other minerals. Mining often happens in remote regions and frequently occurs on land where title is disputed by indigenous peoples. For example, the Canadian company Goldcorp, owner of a Red Lake, Ontario gold mine, currently operates a mine in Guatemala in defiance of the wishes of local indigenous communities. When Canadians express their solidarity with aboriginal groups in Canada or Central America, they are expressing their concern for social justice and environmental justice simultaneously.

One of the concerns of the indigenous communities in Guatemala was over the use of cyanide in the mining process. This is also a concern of Canadians. Mining companies routinely use Canadian fresh water lakes as industrial waste dumps (called Tailings Impoundment Areas) complete with toxic chemicals. According to Mining Watch (a Canadian non-for-profit environmental and social justice coalition), there are currently applications to engage in this activity in Sandy Pond, Newfoundland, Bucko Lake, Manitoba and Fish Lake, British Columbia along with 10 other sites across the country. While current figures from the Canadian Mining industry are not available, in 2005 the US mining industry released 530 million kgs. of pollutants. The chemicals released in tailings and waste rock included almost 840,000 kg of cyanide, 1.6 million kg of mercury and 77 million kg of arsenic. It’s no wonder the Canadian Catholic Bishops said “the Cry of the Earth and the Cry of the Poor are One”.

The Canadian Churches have also been reflecting on these issues of social and environmental justice. In a document reflecting on guidelines for biotechnology, the Canadian Council of Churches include the following principles:
• We carefully and comprehensively consider benefits and/or harm to all creation both now and in the future.
• We share responsibility for the common good of all people and creation.
• We pay particular attention to the implications for the poor, the marginalized, the weakest, as we seek to do justice, love kindness and walk humbly with God.
• We advocate and nurture dialogue across the whole community to ensure all voices are heard and considered.

In these guidelines you can clearly see the ethical standards of solidarity and socially just participation being applied. Ecojustice is neither a contradiction nor an option. If we want to build a moral economy in a sustainable society we will require a relationship with all of Creation that has sufficient resources for all.

What if the Earth Could Speak?

What if the Earth could speak? What would it say? Would it laugh with joy or cry out in pain? This is a hard concept for us to grasp. Increasingly people are beginning to realize that thinking of the Earth as the third rock from the sun is a product of old ways of thinking and also a major problem. It is more helpful to think of Earth as an interdependent set of communities that move through cycles of life in fragile ecosystems.

Humans represent one system of life but not the only one. All living things that breathe, share the same molecules of oxygen and carbon. The water that makes up most of the human body is the same water in which fish swim. Earth includes rocks but it is primarily a place of life. That’s why we call it Creation. When the Earth speaks, it is the communities of the Earth that are speaking. As the ancient wisdom of Job puts it:

“ask the animals, and they will teach you;
the birds of the air, and they will tell you;
ask the plants of the earth, and they will teach you;
and the fish of the sea will declare to you. (Job 12: 7-8)

Over the last 50 years, we have been struggling to find language to describe the ecological crisis in which we find ourselves. Rachel Carson cautioned us about chemicals and silence in her book The Silent Spring. Aldo Leopold encouraged us to recognize ourselves as one part of the biotic community in his Sand County Almanac. Increasingly people are using the language of ecojustice to call for a different relationship between ourselves and the rest of Creation.

Ecojustice calls for a right relationship among all the communities of Earth. It takes as its starting point that humans do not stand apart from Creation but are one integral part of a complex system of living relationships. Ecojustice generates standards of sustainability, sufficiency, participation and solidarity that need to be met for justice to be achieved.

How do these standards apply? In Alberta, an area the size of Florida is being mined for heavy oil saturating ancient layers of sand. This is four times larger than Vancouver Island. Much of the oil is mined using steam and processed with water. The oil mining operations are licensed to divert 349 million cubic meters of water from the Athabasca River, twice the amount used by the city of Calgary. The oil companies are required to rehabilitate the mined land to the state of its previous biological productivity but since none of this has yet happened on a large scale, the standard of sustainability has not yet been achieved.

The standard of sufficiency seems the most difficult test to meet. It seems obvious that Canadians are extremely wasteful of both fossil fuels and water. The only country more wasteful is the United States, which is the destination of most of this mined oil. Surely only a radical change in consumption patterns could justify an extraction process that produces five times as many greenhouse gases as conventional light crude.

These are only two of the four standards and so far we are not meeting them. The oil industry is the economic engine of western Canada and nobody wishes for rain during a parade. However, the claims of Creation for ecojustice are serious ones. When Earth catches a fever, everyone gets sick.