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THE CHARIOTS OF PHARAOH AT THE RED SEA. The crises of capitalism and of environment. A modest proposal towards sustainability

  • CIRPS - Sapienza University of Rome
  • Italian Association for Sustainability Science

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The two crises which the title refers to are the two sides of a same coin; aiming to provide a more straight reading, the argumentation has been developed in three different parts. In Part I we recognize that the environmental crisis is generated by the predation and pillage of natural resources, characteristic of the capitalist mode of production and consumption; even more devastating in its current phase of “hyper-liberalism”. While social damages of the economic crisis are dramatically evident to the public opinion, the upsetting consequences of the environmental crisis are struggling to become part of public knowledge and awareness of both the individuals and the human society. It then becomes necessary to spread the global data of this crisis in its severity: from the land grabbing, even for the freshwater resources, to the spreading of drought, to the degrade of coral reef. And, above all, awareness about what has been called the greatest threat of this century, the climate change, or rather, the transition already occurred to climatic instability, is still lagging behind to become common sense. An explicative model of this phenomenon will be given on the basis of the theory of Stability for dynamical systems; because the climatic instability and its dramatic consequences will last for the coming decades, then, can no longer be considered, especially in educational terms, as an emergency. The criticism against the current Economics is the main focus of Part II. Over the past forty years the ecological crisis has never become a relevant variable in the economic policies. Blame the prevailing neo-liberalism, from the "unilateralism" of the US administration to the "fiscal compact" of the EU? Yes, but other economic schools, briefly reviewed in the text, have to be blamed too. The current crisis of capitalism is a crisis of overproduction, whose peculiar quantitative feature, due to technological innovation in the global market, makes insurmountable the contradiction between the increase in supply and the market's ability to absorb the demand: which huge income redistribution would be needed so that the "availability of spending" can match the supply? Neither it is possible, as it has happened in the two previous great crises, the "recourse" to the world war as a possible solution to the problem; the nuclear deterrence denies this possibility. What to do then? The substantial lack of consideration of Economy towards environmental issues stimulates the authors, on the one hand to propose some theoretical elements for an economic "cycle" that combines economic and ecological variables in a "stationary state" model; on the other side to look at the ecological crisis itself as a unique opportunity to change the model, from now, to a sustainable economy in the perspective of the collective well-being rather than of the individual well-having. In Part III data and hints are given in order to support the ecological reconversion of the economy and society: the energy revolution and the circular economy, that is the green economy, constitute with the "third market", the pillars of the modest proposal. If ever Europe could wake from Schäubleian hibernation to play a global political role, so many time advocated, also the sustainable utopia, that the authors here present as a sketch of a dream, could have some degree of reality; a gigantic project for giving energy and water, mainly to African people, and at the same time restoring the “new economic imbalance”, one of the colossal economic distortion characterizing our age. Key words: Environmental crisis, Land grabbing, Climatic instability, Overproduction crisis, Economic cycle, Stationary state model, Energy revolution, Circular Economy, Green economy, Third market, Sustainable economy 1Centro Interuniversitario di Ricerca Per lo Sviluppo Sostenibile (CIRPS), Roma.,, 2 Univesità degli Studi di Palermo, 3Università degli Studi di Salerno,
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The chariots of Pharaoh at the Red Sea
The crises of capitalism and of environment.
A modest proposal towards sustainability
Massimo Scalia*,1Aurelio Angelini**,2Francesca Farioli*,
Gianni Mattioli*, Maria Luisa Saviano***3
* Centro Interuniversitario di Ricerca per lo Sviluppo Sostenibile (CIRPS), Roma.,,
** Università degli Studi di Palermo.
*** Università degli Studi di Salerno.
Part I. The environmental crisis
Introduction p. 7
The data of environmental crisis p. 9
Energy/Climate change p. 15
An instance of global rationality p. 21
Part II. The economic crisis
Economics and nance p. 24
Unilateralism. From “neo-liberalism” to “scal
p. 25
What’s the debt? p. 27
The second road p. 31
The essential contradiction: technological
innovation and globalization
p. 33
From the “White Book” of the EU to the Green
Economy: a new model of development
p. 35
The economic “cycle” and dynamical systems p. 37
Part III. A modest proposal
The ecological reconversion of economy and
p. 48
Also numbers are important p. 52
Notes for an economy of sustainability p. 54
Not only nance. A sustainable utopia p. 57
References p. 60
Part I. The environmental crisis
The present global situation recalls us the two walls in which the Red Sea
had split to allow that Pharaoh follow the people beloved by God. On one
wall stays the economic crisis, that is tout court the capitalist crisis, on the
other wall there is the predicament of environment. Then, it is reasonable to
wonder if the walls will tumble down with severe damages to all the charac-
ters, this time, of this representation; unless a “modest proposal”, of the kind
that we will try to formulate in this paper, be intensively pursued.
Several of the themes here gathered have already been object of reflection
in some previous works ([1a), b) c) d)], [2], [3] and [4]). In this paper we collect
and enrich those ideas, and put a special attention to the so called economic
“cycle” and a stationary ecological-economic model in a sustainability sce-
Some years ago, the financial “bubble”, burst with its destructive and
lasting economic and social consequences, the bloody geopolitics of oil of
the last decades, one sixth of the humankind under the threshold of surviv-
ing, the plunder of the resources of the Earth – from the rare ores up to the
great pluvial forests –, the general environment crisis, dramatic for the cli-
mate change, exemplified in an also too much persuasive way that capitalist
democracies as well as totalitarian States, those which have chosen the free
market economy, were not able to face the two crises of our title.
In front of the socially unacceptable disproportions between the North
and the South of the world, and also inside of the “strong” Countries – the
difference of wages has never been greater, up to one thousand of times
between a top manager and a blue collar –, the conclusion drawn by many
young people rightly motivated by the desire to rebel, and also by several not
young but nostalgic, was that since the global capitalistic system and its free
market are not able to give an answer to these crises then the capitalism has
unavoidably taken the Sunset Boulevard. The task is, therefore, to accelerate
its end, now in sight, in order to open a new phase after the same capitalism.
A so tight consequentiality looks like ingenuous, it is.
Apart from the doubts raised by a kindly ironic title of a book authored
some years ago: Il Capitalismo ha i secoli contati (“Capitalism has only
a few centuries ahead”) [5], it is not convincing why the hated capitalist
system should work as a general rescuer, like it is implicit in the criticism.
It’s already a long time that capitalism has lost the inspiration that guided
the fathers of the theory of the free market, Smith, Stuart Mill and so forth,
even more in this long period of “nancialization” of the economy. They
were thinking of themselves maybe more as philosophers than as econo-
mists, and were proposing the morality of action, the common good and
individual happiness as objectives of the Economy. Today, nothing seems to
be more anachronistic than discussing about an ethic of capitalism. In fact,
we forwarded ourselves in the age of capitalism more antithetical to every
sense of responsibility, moral and ethic: an age hyper-liberalmore than
neoliberal” [1 d), 2].
Starting from the famous report The Limits to growth [6], published more
than four decades ago, the environmental crisis has been initially represented
as dening the physical limits of a growth based on unlimited consumption
of natural resources, but already some years before of that report, the criti-
cisms against the fundamentals of the free market economy had advanced
new and interesting proposals about passing from the “Cowboy’s economy
to the “Spaceship Earth economy”, as sustained by Kenneth Boulding [7].
The researches of Nicholas Georgescu-Rӧgen had tried to extend the laws
of Thermodynamics to rule the economy of the natural resources consump-
tion (see [8 a), b), c)]); and at the end of Seventies, the idea of pursuing a
steady stateof the cycle production-consumption, publicized by Herman
Daly [9], looked like an interesting answer to the “predicament of mankind
denounced by the report of the “Club of Rome” [6].
It was going on and structuring a critique of classical economics, and
environment and nature were no longer identied as pure economic factors
indenitely reproducible and available; it was beginning to shift the focus
from the quantity of goods produced and producible to intangible assets, to
the quality of man life.
The wealth generated by the economic systems lies not only in goods and
services: there are other forms of social wealth, as the health of ecosystems, as
the quality of justice, the degree of equality, the good relationships among the
members of a society, the democratic character of institutions, that is, all the
items listed by Robert Kennedy in his famous speech back in 1968, all items
that do not enter in the GNP. In an only one word: the well-being.
It could seem not too timely to speak about the crisis of capitalism, just when
there are the rst signals, eight years after the “burst” of the nancial bubble,
of a some economic relaunch, mainly in US, not so in China; but, as we try to
show in this paper, the nature of this crisis, in the globalized world, is such that
requires to be faced with a new view. A new point of view that gives role to the
environment and to the careful management of natural resources, not only to
limite predictable heavy damages but also to model a new “stationary state
economy that conjugates economic variables with ecologic ones. On the other
hand, the predicament of environment is worsening and the threat of climate
change has become a reality with which we are dealing now and in the coming
decades. The “newpoint of view is what is echoed in the last four decades
not only by the environmentalists but also from a meager patrol of economists,
unheard, and that claims an ecological reconversion of economy and society.
The data of environmental crisis
A new age seemed to be opened in the early Nineties, when the Confer-
ence of Rio de Janeiro released the great themes of the environmental crisis
out of the enclosure of environmentalism, strongly emphasizing the issue of
climate change. The response of the facts has unfortunately followed another
direction. The consumption of natural resources is carried out besides of all
rationality, with a systematic looting that constantly reduces the biological
diversity and the extension of the great forests – the latter at a rate of tens of
thousands of square kilometers per year – while the desert areas are extend-
ing, the drought increases, the isotherm lines shift towards North in the more
populous hemisphere of the world.
The systematic looting of all the materials of the underground had already
led, according to the report “Opening Pandora’s box” of the Gaia Foundation
(2012), to an increase of 180% of the production of iron ore, 165% of cobalt,
125% of lithium, just in the decade before; the mining industry in China was
increased by a third in the period 2008-2012, and in Peru the mining exports
increased by one-third in 2011 alone.
Any physical entity, including the human population with its cars, its
buildings, its chimneys, cannot keep growing forever. The economy and the
human population depend on a continuous ow of air, water, food, raw mate-
rials and fossil fuels from the earth; and constantly send waste and pollution
to the earth. The limits of growth are the limits of the capacity of the sources
of the planet to provide those ows of materials and energy, and the limits of
the wells of the planet are the capacity to absorb waste and pollution. At the
current regimes, the ows that govern the human economy cannot be kept
indenitely, on the contrary, many sources of critical importance are being
degraded and are running out.
In spite of this, the prospecting for hydrocarbons continues to grow expo-
nentially, due to the ease for oil concessions. The hunt for rare minerals pre-
cious for technological innovation has no district, while the open-air mines
transform territories in huge industrial wasteland, the tops of the mountains
are removed, the land devoured. In Latin America, Asia and Africa more
and more community land, river basins and entire ecosystems are plundered
and the communities are displaced. It’s the land grabbing” [10], [11], whose
data are schematically represented in Fig.1, Fig.2 and Fig.3; by this name the
more critic media have indicated the phenomenon of the constant increas-
ing of low cost transnational acquisitions of farmlands or areas convertible
in agricultural uses – e.g., after a deforestation – in foreign countries, made
by multinationals or States. Land grabbing has reached the peak in the ve
years 2005–2009; it has also implied the appropriation of fresh water, whose
level only recently one begins to assess [11].
Fig. 1 A global map of the land-grabbing network: land-grabbed countries (green
disks) are connected to their grabbers (red triangles) by a network link, considering
only 24 major grabbed countries. Relations between grabbing (red triangles) and
grabbed (green circles) countries are shown (green lines) only when they are
associated with a land grabbing exceeding 100,000 ha [11].
Fig. 2 Distribution of grabbed land (A) and water (B) across continents [11]
Fig. 3 Water grabbing in the 24 most land-grabbed countries. Green water (rain
water) and maximum blue water (irrigation water) grabbing (2012) [11].
The International Land Coalition Conference, held in Tirana in 2011, has
dened land grabbing as: (i)... acquisitions or concessions violation
of human rights, particularly the equal rights of women; (ii) not based on
free, prior and informed consent of the affected land-users; (iii) not based
on a thorough assessment, or are in disregard of social, economic and en-
vironmental impacts, including the way they are gendered; (iv) not based
on transparent contracts that specify clear and binding commitments about
activities, employment and benets sharing, and; (v) not based on effective
democratic planning, independent oversight and meaningful participation.”
[12]. That is, an almost always iniquitous appropriation by the buyers and a
plundering of important resources for those whom, sometimes consentient,
undergo. “...Lands and water grabbing are occurring at a dramatic rate in
all continents except Antarctica...”, the water grabbing exceeds the needs of
food production, as claimed by the grabbers, and would be sufcient
to improve food security and to abate the malnourishment of the grabbed
countries. [11]. It is possible to follow all land deals, current or already
completed, by a dedicated “observatory” online [13].
In fact, is a new form of colonialism, whose upsetting characteristics
have assumed, in the substantial ignorance of public opinion and with the
complacent silence of governments, such dimensions as to make more and
more actual the request made by the philosopher Hans Jonas, in name of an
imperative of responsibility, an ethical commitment towards the biosphere
[14]. The consequences of a such depredation, which impacts on the health
of those who work there and the people so affected, are read in medical bul-
letins of the countries involved and in WHO statistics.
About the consumption of all natural resources, already in the press re-
lease for the presentation of the UNEP (United Nation Environment Pro-
gramme) report 2011, it had been launched an alarm: By 2050, humanity
could devour an estimated 140 billion tons of minerals, ores, fossil fuels and
biomass per year – three times its current appetite – unless the economic
growth rate is ‘decoupled’ from the rate of natural resource consumption.
Developed countries citizens consume an average of 16 tons of those four
key resources per capita (ranging up to 40 or more tons per person in some
developed countries). By comparison, the average person in India today
consumes four tons per year.
With the growth of both population and prosperity, especially in devel-
oping countries, the prospect of much higher resource consumption levels
is ‘ far beyond what is likely sustainable’ if realized at all given nite world
resources, warns this report by UNEP’s International Resource Panel. Al-
ready the world is running out of cheap and high quality sources of some
essential materials such as oil, copper and gold, the supplies of which, in
turn, require ever-rising volumes of fossil fuels and freshwater to produce.
Improving the rate of resource productivity (‘doing more with less’) faster
than the economic growth rate is the notion behind ‘decoupling’, the panel
says. That goal, however, demands an urgent rethink of the links between
resource use and economic prosperity, buttressed by a massive investment
in technological, nancial and social innovation, to at least freeze per cap-
ita consumption in wealthy countries and help developing nations follow a
more sustainable path.” [15].
Further, the unrestrained and unlimited plundering of natural resources
has consequences which are not recognized, by the governments nor by the
public opinion, as side effects of that depletion. Only one example, but gi-
gantic; and, not to talk of the so many issues aficting the agro-alimentary
cycle, which have had their spotlight turned on during Expo 2015, let’s look
at the oceans, at the speedy and dramatic decay of the reef system, that has
become an object of study in order to support its resilience [16].
The Australian great reef barrier, the biggest reef system and one of the
marvels of the world with its 1,400 miles of extension, was in the Unesco
agenda for the list of sites “in danger”, and the Australian government
claimed victory in July 2015, since the world Unesco’s heritage committee
decided not to list the reef in danger “...although Australia must report back
on its recovery plans by December next year.” [17]. What is the situation?
There are more than 400 types of coral and 1,500 species of sh and the
tourism income, that has strongly pushed the pledge of Australian govern-
ment, has been estimated 2,6 billions of pounds a year. In the last thirty
years the barrier has lost about half of its coral, the causes are: rising sea
temperatures, increasing ocean acidication, larger numbers of cyclones in
recent years, pollution problems triggered by fertilizers and spillage of sew-
age from farms and cities.
Ocean acidication has become a matter of a quarrel with skeptical “en-
vironmentalists”, but apart from ironies, it has undoubtedly a relevant im-
pact, everywhere in the world, on the health of coral reefs, whose state has
been the object of several global studies. The most recent one gives impor-
tant data on the current conditions of these systems, that are essential for
all the sea life and, just for this reason, undergo the attack of the eets of
industrial shing [18]. More than 800 coral reefs have been examined in 64
different sites in the world, nding that more than 80% of them had lost more
than half of sh, a depletion already begun starting from the Seventies. The
most worrying consequence is the same survival of the coral reefs, inasmuch
deprived of shes which clean up the barrier from invertebrates and algae
“coral killer”. Although protection measures will be adopted to control and
limit shing from now, such as the Australian government has pledged, the
recovery time is evaluated up to sixty years, but an efcient action of protec-
tion could guarantee the survival of sh and coral [18].
Meanwhile, the ice masses of the great glaciers of the Quaternary are in-
creasingly reducing; the Arctic ice cap has split nearly a decade ago (2006),
opening the ght among the countries that already seek to seize the precious
booty of oil, gas and minerals, that has so become accessible. A ght that
has not yet been regulated by an international convention like the one about
the Antarctica. By the way, colossal fracture lines have been revealed on the
edges of that vast frozen continent , prodromal to the release of “iceberg” as
large as the Valle dAosta. And another concern is incoming due a threaten-
ing positive feedback: the melting of permafrost, Siberian or Antarctic, that
could free from ice massive quantities of Methane, one of the main green-
house gases. The extreme meteorological events have become so repeated
to make almost forgotten the hurricane Katrina and the destruction of New
Orleans, that eleven years ago have illustrated the same meaning of extreme
meteorological event.
Water “bombs” have by now become in Italy a media exercise, at least
the word, with their tragic equipment of victims, oods and landslides, that
mark the fragility of our territory and the criminal character of not observ-
ing the laws on soil protection. The “tropicalization” of climate – that is,
the shift toward North of isotherms, the raising of the “thermal zero” above
4000 meters of height, the presence in the lands and in the seas of spe-
cies whose original habitat is much more in South – echoes by now in our
beaches through the mouths of placid householders. Less known, maybe it
seems farest, is the spread of the drought in always larger areas of the world.
The National Oceanic and Atmospheric Administration (NOAA), a Fed-
eral Agency of US, makes available on line an interactive portal, the Global
Drought Portal Data, that each month records data on drought in the differ-
ent geographic areas of the world [19]. Let’s report here, for giving an ex-
ample, the distribution of soil moisture at the upper layer of the soil, Fig. 4, in
August 2015, and the vegetal health index, Fig.5, in July 2015; the different
colours of the represented areas are self-explaining.
Fig. 4 Soil moisture of the upper layer of the soil [19]
Fig. 5 VHI, Vegetal Health Index [19]
The global situation, at the end of July 2015, can be reassumed in the fol-
lowing points:
in Europe, drought is increasing over the major part of the continent, at
most in the Mediterranean areas; in Switzerland, due to the lack of rains,
helicopter transports of water have begun to feed the cattle in the Cantons
of the South
in Asia, drought is concentrated in the South East and around the Caspian
in Africa, drought is covering ever more areas in the equatorial region
and in the North, but also in South Africa is foreseen a 32% reduction of
maize production
in North America, drought is intensifying in the North-West of the conti-
nent; in the United States, it has spread like wildre, burning about 5,5
millions of acres, much more than the mean value of 3,5 millions of acres
in South America, drought, that is rooted in Brazil and in the South of
Andes, is gaining many cities: Sao Paulo has to recur to emergency reser-
voirs of water and is beginning to ration the supplies of water
in Australia, indicators show a light improvement in the North; on the
contrary, drought is spreading in the South, where this condition has
caused a big reduction of cattle.
A little relief has been given to many areas by the outstanding perform-
ance of El Niňo, that has been supposed to last to the end of the year 2015; on
the other side, it seems to be a menace to harvests in Indonesia.
It becomes increasingly clear that the alterations of the great reproduc-
tive cycles of nature, the dramatic global changes which are registered with
increasing intensity and frequency are only the other side of a relationship
of destruction and plunder of the resources of nature, realized in the name
of prot and of a level of consumption that the “strong” countries want to
maintain to the detriment of the South of the world, almost a reproduction
of the inequalities that inside them continue to be deepened among the dif-
ferent social strata.
There really are no more hymns, sung in the name of consumer pro-
duction” and “productive consumption”, as also Karl Marx did. And this
becomes particularly clear in the story of the energy, making true, amid the
fears that Ralf Dahrendorf expressed in his short essay Ecology and De-
mocracy” (2000), precisely that one: “going to take energy, where it is, that
is, in the Gulf, as in fact it is happening over these forty years. Since 1973,
the control of crude oil, its ows and its price is the cause always present
in the three conicts that have taken place in the Middle East; and after,
conicts and clashes have been, more or less directly, the background of
fundamental strategies and projects of adduction of huge amounts of energy
raw materials from the heart of Asia to the West. Nor should we forget that
it is in this background, in the context of the debacles caused by the triumph
of the war behind the screen of exporting democracy and by the despair of
the dispossessed, that it has been fed the jihadist ideology of the war against
the American crusaders and their allies”, to be fought everywhere and by
any means till their retreat.
After the terrorist practice of Al Qaeda – in some way creative, “a soul
without a body”, in comparison with the ancient canons of the “holy” wars,
which in name of the throne-altar alliance have previously characterized,
in the whole Christian world, centuries of genocides and robberies in order
to conquer territories and their treasures – the more traditional founding of
a territorial dominion, a “caliphate”, is coming back; that wants to cast the
shadow of its atrocious power on areas increasingly wide; to it kneel down
ethnic groups, clans or armed bands who had sworn allegiance to Osama
Bin Laden.
Energy/Climate change
The energy has truly become a crucial and unavoidable theme; further-
more, dramatically shows a deadline to the great industrial strategies, to the
policy decisions and the future of the globalized world: the nal outcome of
the attempts to face timely, if it’s possible, the abrupt character of the climate
change, that is caused by the increasingly recourse to fossil fuels, that still
feed the world economies for about 80% [20].
After the alert launched in the Nineties by the reports of IPCC (Intergov-
ernmental Panel on Climate Change), that have led to the entering into force
of the Kyoto Protocol (16th February 2005), a growing attention has been
given to the drastic consequences of the climate change, since when the as-
sessments by the international scientic community were addressed to the
G8’s of Gleneagles (2005) and St. Petersburg (2006) [21 a), b)]. The Acade-
mies of Sciences of the Countries gathered in those summits, plus the ones of
China, India, Brazil and South Africa, emphasized in their assessments that
the global warming is mainly due to human activities (“anthropic cause”);
strongly recommended to give a priority attention to the link energy-climate
change, eventually demanding a prompt actionagainst the global warm-
ing to the most powerful decision makers of the world.
Those addresses have registered a timely answer by the Council of Eu-
rope, that, in March of 2007, launched its three “20%” as targets to be ob-
tained within the year 2020 (-20% of emissions of carbon dioxide, CO2,
with respect to the 1990 level; -20% of total energy consumptions by means
of saving technologies and 20% of total energy consumptions covered by
renewable energies). Some good results have been already obtained by the
EU toward its three “20%”; and the EU objectives to mitigate the effects of
global warming, this is by far the most important issue, have become the
center of the debate and the benchmark for the policies of all governmnts.
We will take again this issue later, here remarking the very signicant
interaction among scientic world (Academies of Sciences, IPCC), decisions
makers at global, national and local levels, great people mobilizations to
urge politics in order to face global warming, that, together, have succeeded
in orienting not only the market but also the preference of consumers.
Now, we have to emphasize the abrupt character of the climate change,
already mentioned before, from which stem the dramatic consequences
which are already taking place from time. To make the international sci-
entic community, so determined in its appeals to the two mentioned G8,
was, in fact, a fundamental change of perspective in the climate science.
The report Abrupt Climate Change, published in 2002 by the National Re-
search Council (NRC) of the National Academy of Sciences of the United
States after a decade of study and eld research, draws the climate history as
made of abrupt changes and asserts that, contrary to the dominant scientic
conviction, the atmosphere is one of the factors of the modication of
climate [22]. This new paradigm explains the reason of the erce scientic
opposition against the role of greenhouse gases; they live in the atmosphere,
the lowest layer, but if the mainstream assesses that the two principal factors
of climate change are the balance of the ice masses and the salinity of the
oceanic currents while no effect can be produced by the atmosphere, how
can greenhouse gases act, since are inside the atmosphere?
But now, the questions rising from NRC report are quite different: the at-
mosphere is one important factor of climate change, can it cause an “abrupt
climate change”? The increase of the greenhouse gases concentration in the
atmosphere acts like a “forcing action”: will there be a value of the intensity
of this action, in correspondence to which a sudden change in the behavior
of climate occurs? Technically, we speak of “threshold value” and “threshold
effect” if a continuous variation of a control parameter of a system generates
a discontinuity in the behavior of the system. Let’s try to better understand
this issue by means of a “simple” model, drawn from [22].
A “simple” model for better understanding the “abrupt change” from the
climate stability to instability
The little sphere is the climate (the set of all climate cycles), the red arrow
is the intensity of the “forcing action” (the global warming). Under a certain
value the effect of the forcing action is to make the sphere oscillate in the
hollow, but at a certain level of intensity the sphere will be pushed from
the hollow up to the peak. Both positions are of equilibrium, what is then
abruptly changed in the behavior of the climate?
The equilibrium is stable in the hollow, while in the peak is unstable
because a whatever little push is able to remove the sphere from that posi-
tion. To a continuous and gradual variation of the forcing action corresponds
for a critical value of that action – the threshold – a discontinuity: beyond
the threshold, equilibrium is “broken”, a sudden change takes place from
stability to instability of all climate cycles. This abrupt climate change,
triggered by the forcing action, doesn’t depends on time, as it is clear when
the forcing action remains over all time under the threshold: no threshold
value, no abrupt change.
Who tells us that the intensity of the forcing action has reached the
threshold, upsetting the stability of the climate? Over the last 650,000 years,
the CO2 concentration in the atmosphere has not exceeded the 290 parts per
million (p.p.m) up to before the industrial age; in 2014 it reached the 400 p.p.m.
level. But is not so much the impressive level acquired, but the fact that the
increase of CO2 concentration in atmosphere over the last 50 years has been
such that had normally required in the history of the climate about 5,000
years! This contraction in the time duration of about a hundred times
is a measure certain of the forcing action, which leads from stability to
climatic instability.
The forcing action, able to dramatically change the climate, lies in the
growth of the concentration in the atmosphere of CO2, the main “green-
house” gas. The switch from stability to climate instability is the transition
that we are already living, countless the tests experimentally veried, some
of which were mentioned at the beginning. Inevitable surprises, as the sub-
title of the NRC report says.
About the “simplicity” of the model. Really, it represents climate, in phys-
ical-mathematical terms, like it was a pendulum under the inuence both of
the gravity and of a “forcing action”. The evolution of this system can be rep-
resented, as any other two-dimensional dynamical system, in an appropriate
two-dimensional space called “phase space. In this plane it is possible to
draw a phase diagram characteristic of each system, a “phase portrait”; i.e.,
a geometrization of the dynamics, which allows us to see “with the eyes” the
evolution of the system and its quality properties like stability, instability,
attractivity and other.
This way of representing dynamics, preferring the qualitative aspects of
an evolution – the stability properties – than the quantitative results such as
an analytical calculus could provide, is given by the theory of stability that
was proposed, separately, by Henry Poincaré [23] and Aleksandr Lyapunov
[24] at the turning of Nineteenth century. It is a useful tool to obtain a lot of
information about a dynamical system without solving the problem of the
differential equations associated to the system, often impervious due to the
nonlinearity of the equations. Born in the context of Mechanics, this method
the qualitative analysis of dynamical systems can be applied and has
been very largely applied to almost any system – physical, chemical, biologi-
cal, demographic, economic – in order to describe its evolution in time. The
stability theory does not explicit, in general, the dependence on time of the
evolution, as could do the analytical calculus, when performable. However,
in many interesting cases the time law can be easily derived by the kind of
trajectories followed by the system; e.g., to the closed orbits in the “phase
portrait” correspond periodic motions.
In our case the phase portrait exhibits areas of stability, areas of insta-
bility and the rising of a chaotic dynamics, determined the latter by the as-
sumption of some threshold value by the parameter that rules the intensity of
the forcing action. The complexity of the dynamics of the “simple” model is
well represented in the gures below (Fig. 6, 7, 8) by the behavior of the so
called “separating curves” – the “stable manifold” (green) and the “unstable
manifold” (red) in the phase portrait; and by the subdivision of the phase
space in stability “islands” and chaotic regions (Fig. 9).
Fig. 6 Fig.7
Fig. 8 Fig. 9
We have taken Fig. 6 - 9 from [25]. They refer to the so called “standard”
map of pendulum, and in Fig. 9 the same phase portrait suggests what are the
“islands” of stability, the ellipses closed around a xed point, and what the
chaotic regions, around the hyperbolic points.
It’s worth to note that a portrait analogous to that of Fig. 7 had been
forecasted by Henry Poincaré in the study of the “three body” problem in
Celestial Mechanics: “…one will be hit by how much this gure is complex,
so much that I do not try to draw it (AT)” [26, p. 389]. Surely, the “three
body” problem refers to a context quite different from our one, but a kind
of “universality” of the chaos, arising from the dynamics of non-integrable
systems, legitimates the comparison between the phase portrait of the two
problems we are talking about. Among a lot of other issues scientically im-
portant, Poincaré has “invented” the chaos, that only in more recent times,
starting from the Sixties, has raised research interest; famous, under this
regard, the Lorenz model [27] and the very lucky quip on the wing beat of a
buttery, that has overowed out of the banks of the science to encounter the
screenplays of movies1.
This digression tries to show, on one hand, that if a “simple” model can
make us meeting chaos, all the more reason one can suppose that this will
be the case when more realistic and more sophisticated models are used, like
it’s veriable on the basis of the more recent researches. Thus, it becomes
more understandable the clear-cut assertion about the earth’s climate as cha-
otic system, given in the NRC report: a chaotic system, such as the
earth’s climate, an abrupt climate change always could occur.
On the other hand is a rst step for becoming familiar, for those who
need, with two-dimensional nonlinear dynamical systems, which will come
to attention also after, when we will talk of economic “cycle”.
Because of the lasting of the CO2 cycle in the atmosphere, the effects of
the climate change will accompany all humanity for the next decades, even
if a strong general action of mitigation were undertaken immediately after
the Paris Agreement, published the 12th of December 2015 at the end of COP
21. Thus, to all human activities, individual and social, it has been thrown
down the gauntlet to learn to live for a long time with the consequences
of the global warming, while many challenging global actions need to be
undertaken to face it. As a matter of fact, all the inconveniences associated
with this condition, including those of public health, they shall no longer be
considered as an emergency.
In this context, the issue of climate change requires an appropriate size
in national as well as in international policies, a general sensibility, a pub-
lic awareness, and proper education and training measures. In his opening
number of 2012, the journal Nature addressed to scientists around the world
so that they would promote knowledge about climate change by all means
made available by the current media network, since the threat has never
been greater”. A sentence that recalls the dramatic picture given by the NRC
report, that surely inuenced the statements of the Academies [21 a), b)] and,
a bit less, the Fifth Report of IPCC (Intergovernmental Panel on Climate
Change), anyway making anticipate the “turning point” of twenty years, i.e.
from year 2050 to year 2030 [28].
It is time that an extensive program of education take the place of the
1 “Does the ap of buttery’s wings in Brazil set off a tornado in Texas?”, this question
is successfully aimed to emphasize the strong sensitivity of the Lorenz model to small
perturbations on the initial state. Really, the model deals with meteorology (high-
frequency phenomena, i.e., few days), not with climatolog y (low-frequency phenomena,
more than seven days), but it is able to exhibit a complex dynamic – a chaotic one
with its “strange attractor”, well known to the scholars – despite that the sensitivity
to small perturbations is only one of the requests for setting up chaos, whose rigorous
characterization goes beyond this note.
An instance of global rationality
Already in 2009, at the meeting held in September in New York among
the heads of government, during the preparing works for COP 15 (Copen-
hagen), Manuel Barroso, EU Commission President, noted: The climate is
changing faster than had been forecasted even just two years ago. Continue
to behave as if nothing was is equivalent to make inevitable a transformation
dangerous, perhaps catastrophic, of the climate during this century”.
But in Durban (COP 17, December 2011) a global agreement has been
postponed to 2015. Of course, it is a deal that has unprecedented worldwide
comparable level, and that, moreover, would require the strongest countries
to expand greatly – at least 100 billion dollars a year – the low budget xed
in Cancun (COP 16).
The dramatic urgency is very clear to the politicians see Barroso or
Bolivian President Evo Morales – but has not found an echo able to activate
the prompt action”, that the Academies of Sciences have required [21 a)].
Politics is also aware of the catastrophic consequences of the scenarios of
“adaptation” a billion and half people of the world, no longer the small
state of Kiribati, to be moved within the next few decades in areas at higher
altitudes – but all considerations about the inertia of the production systems,
of the economic and social issues related to fossil fuels, and the difculty
of the negotiations, do not exempt from detecting a worrying gap between
professed intentions and the evolution of environmental crisis.
On 12th of December 2015, is reached, as conclusion of COP 21, the Paris
Agreement; an agreement that had been in some manner “written before”: in
the conferences held by UNFCCC (United Nations Framework Convention
on Climate Change) during 2015; in the commitments subscribed through
bilateral agreements in the triangle U.S., Russia and China – in the last
four years; in the midway good results obtained by EU with respect to the
three 2020 targets and in the commitment that in 2015 U.S. administration
has assumed of reducing 32% carbon emission within 2030, even though
only referring to the 2005 level and not to the 1990 one. In the Paris Agree-
ment there is not the direct objective of reducing climate-alterating emis-
sions, but the commitment of: “Holding the increase in the global average
temperature to well below 2 °C above pre-industrial levels and to pursue
efforts to limit the temperature increase to 1.5 °C above pre-industrial lev-
els, recognizing that this would signicantly reduce the risks and impacts
of climate change”(art.2 a))2. And the difculties of path to reach the agree-
ment, e.g. on the matter of supplies in terms of nancial and technological
support to developing countries, have a deep track in the nal text where the
2 The referring directly to temperature implies a large gamma of possible global emissions
paths, therefore becomes more complex the monitoring of the phenomenon and of the
results achieved by each Part. Mainly for this reason it has been preferred the assessment
of the implementation of targets voluntarily assumed (INDC), by means of reporting.
implementation of the agreement is remitted to further and future negotia-
tions. Not binding targets about the quantity of emissions but the Intended
National Determined Contributions (INDC), xed in article 3 as to miti-
gation, adaptation and nancial uxes; while procedures become binding,
about, e.g., commitments of reporting, to be controlled, of the greenhouse
gases emissions, strategies for mitigation and the level of implementation of
the INDC [29].
Is not our aim or intention to draw here an analysis of an Agreement
so complex, and mainly of legal character, such as the Paris one, of which
surely is worth to note the very strong legitimation deriving from the large
presence of leaders of State and premiers in the two days nal phase. Our
point of view is very similar to that expressed by Kumi Naidoo, executive
director of Greenpeace International, and by Nicholas Stern, Adviser to the
Prime Minister and the Chancellor of the Exchequer of UK on the econom-
ics of climate change and development, that, with our words, can be said:
Apart from assessments of single aspects, the most important effect of the
Paris Agreement is to mark the beginning of the end of the fossil fuels era.
This forecast can be rely on the number of countries which have assumed
commitments at Paris, 180 which represent the 95% of the global emissions,
in front of the little more of 55% of emissions from the countries adherent to
the Kyoto Protocol at the time of its entry into force (16 February 2005). EU
is already discussing about the quote per each member in order to reach the
goal of 40% reduction within 2030; and a covering of 100% of nal electric
consumptions at 2050, as recently assessed by a Mc Kinsey report3 [30], is
reasonably within the capacity.
Our last considerations do not modify the fundamentals of the frame-
work we have so far constructed. On one hand, following “Abrupt Climate
Change we can state with the strength of the scientic reason that, as com-
mon people say, “the horse has already gone out of the stable”: climate in-
stability is the scenario of the coming decades, because the CO2 emissions
will continue to grow for next years and the cycle of this gas in atmosphere
lasts many decades, with consequences that we are already experiencing and
the need of a general education aimed to overcome behaviors and actions
of mere emergency. On the other hand, there is a difcult path in front of
the massive inertia and enormous consolidated interests characterizing the
giant systems of the fossil energies, the need of modifying our actual way of
production and consumption in order to implement the energy revolution”
and, more general, a new social economic model sustainable.
This path will take place while are continuing the two crises we are talk-
ing about. And, worse, in the presence of the terrible product of these two
crises and their interactions: the increasing uxes of immigration for all
3 The report, realized by a company specialized in market polls, consisted in the analysis
of the answers of many big electric utilities and other economic organizations.
coming decades. To face the capitalist crisis it will be necessary, beside of
the actions needed for a real modication of the economic main-stream, a
deep criticism of the theoretical bases and reasoning on which the neoliberal
model is founded; further, trying to propose the way and the models for the
sustainability scenarios.
Part II and Part III of this paper are aimed just to give a contribution in
this direction, with the double awareness of “invading” a research eld not
of all of us – the economic one – and that the transition we’ll describe re-
ally does not pretend to show how a society marked with the capitalist way
of production and consumption can gradually change in another one, com-
pletely beyond that system.
Since we assess as realistic the position expressed by Giorgio Ruffolo [5],
and think that because even those who more oppose to the capitalist system
and its distortions, loaded of dramatic social effects, are able at the most to
point out options and trends, but not a substitutive framework to be realized
in veriable times, then we retain useful to argue meanwhile about what can
be theorized and practiced in the medium run, but starting from immediate
rst implementations. This will be not “the sun of the future”, but one will
have at least tried to provide the bases for a model more respectful of the
man and the nature, that is a necessary condition to face the urgency of the
environmental crisis and its devastating impending aspects.
Devastating aspects? It is not an exaggeration, but the economic conse-
quences of neglecting climate change were represented at the end of 2006
to Tony Blair, much pragmatically in terms of impact on GDP, in a report
that the English premier had requested to Nicholas Stern [31]: a medium fall
of 5% a year of the world GDP, if actions of mitigation had not been under-
taken4, a fall such as to make a trie our actual crisis!; and the report gave an
accurate description of the different negative issues in the various sectors of
production and consumption and of the probable damages, such as quanti-
ed by the models that the researchers engaged for the draft had used.
So far, there not has been an adequate answer to an instance of global ra-
tionality, of the kind that we are supporting. And the urgencies we have un-
derlined nd a very feeble, or null, echo in the globalized world of Economy
and Finance.
4 “Using the results from formal economic models, the Review estimates that if we don’t
act, the overall costs and risks of climate change will be equivalent to losing at least 5%
of global GDP each year, now and forever… The investment that takes place in the next
10-20 years will have a profound effect on the climate in the second half of this century
and in the next. Our actions now and over the coming decades could create risks of major
disruption to economic and social activity, on a scale similar to those associated with the
great wars and the economic depression of the rst half of the 20th century. And it will
be difcult or impossible to reverse these changes.” [31]
Part II. The economic crisis
Economics and finance
In the global debate the attention about the crisis of the productive and
economic systems has been mainly focused on the nancial aspects, particu-
larly referring to possible interventions to get out of crisis and give a new
stability to those systems, but, at the same time, demanding the relaunching
of the growth as a necessary condition: a condition truly difcult to be satis-
ed, as we can see day by day.
On the crisis of the nancial instruments, the mutation from industrial
capitalism to nancial capitalism, we read, for years now, analysis interest-
ing, commendable efforts of science and useful proposals on nancial trans-
actions, needed to limit the power of the rating agencies, and on the role that
government should play, in particular, by competent European institutions.
Proposals to be surely advanced, but that are not a stable therapy for the
vulnerability of the state budget assaulted by debt and, plus, if you do not
relaunch growth, as it is frequently said. Indeed, pursuing a balanced budget
without a serious prospect of growth - it is claimed now by many - this leads
straight into deation or recession, as indeed happened not only in Italy. And
a revival of growth is difcult in the given situation.
It should rise the suspicion that it is wrong to separate, or relegate to
the “two-stroke policy”, the different aspects of the crisis, that of the eco-
nomic productivity from that of the natural resources, the environment and
the climate change. It has become usual that even in large international con-
ferences on the economy, on economic policies resonate some authoritative
voices to emphasize this inadequacy, “After no more heard”, he would have
said the great bard. In the international debate has come, it is true, the theme
of the green economy, but it soon took over, even for the most sensitive
economists like Amartya Sen, not the prospect of a substantial element for
radical changes to a growth model ruinous, rather only an additional strand,
that could be considered next to the other issues in the usual assessment
of the return of investments (and therefore soon challenged just by the dif-
culty of nding investments). Or, the green economy has been watched
rather as an ideology of progress: our common future, Obama (of long ago),
the UNESCO Decade for Education for Sustainable Development. In fact,
as has been rightly pointed out ironically, a Sunday theme, good for the
We believe that at the basis of this consideration of practical irrelevance
of a possible ecological conversion of the economy and society there is a
substantial lack of understanding of both the terms of the binomial “econom-
ic crisis - ecological crisis”, due to a widespread inability to be appropriately
interested in the scientic questions by the economic and political culture.
Hopefully, the “spotlight” switched on over all the world by the encyclical
Laudato si of Pope Francesco will nally give to the subject of ecological
conversion an effective resonance, and a further boost to intensifying and
speeding up of the actions that need to be done. Laudato si’ meets, half a
century after, the themes raised by two articles published on Science; a very
famous the one by Lynn White, in which the author argues that the Christian
religion is responsible for environmental destruction [32]; and the other, by
Garrett Hardin, which forecasted a future characterized by struggles for re-
sources, while they will be dwindling, due to the Judeo-Christian values that
restrict the principle of liability solely to the human interests [33].
The encyclical Laudato si’, while investigating the theme of the “two cri-
ses” and using analysis and accents of complaint that ever had risen so high
in the Catholic world, draws eminently a spiritual path of great interest and
does not address – nor was its task – a knot economic, and social, that is the
basis of the actual impasse: the essential contradiction between technologi-
cal innovation and globalization. We’ll talk about that later.
The risk to which we are exposed is related to the hybris of venturing
on the eld of economic crisis, partly justied by the caution or reticence of
many great economists, who have found again the enamel since when the
crisis has worsened, after some luster of the domain of the “unique thought”.
Aware of our limitations, we will try to tell our arguments, driven by the
gravity of the situation and the need to cope to it.
Unilateralism. From “neo-liberalism” to “fiscal compact”
We said, “hyper-liberalism” better than neo-liberalism. It ‘s a story
whose start date you can perhaps put in mid-August of 1971 with the uni-
lateral breaking of the Bretton Woods agreement, the statement of the not-
convertibility of dollar by Nixon. An act by which the US hegemony tends
to the domain. Then, with the Yom Kippur War (1973) and the subsequent
explosion of the price of the barrel of crude oil, the US have been able to
overthrow on their Allies, but competitors on the market, the weight of a
large part of their decit.
Milton Friedman, Nobel Prize for Economics, is famous for being the
main exponent of the monetarist school and, much more signicantly, be-
cause the economic theories and the preaching of his Chicago School be-
came in the Eighties the economic policy of the Reagan administration, in
United States, and of Margaret Thatcher in the United Kingdom. And those
theories found another major landing point in the “Washington Consensus”
(1989), with the “Decalogue” of economic policy directives that the interna-
tional nancial institutions based in Washington the International Mon-
etary Fund (IMF) and the World Bank imparted to Countries in crisis.
Again, unilateral acts, real ukase often disastrous for those countries.
The recipe for “less government, more market, preached authoritatively
by Friedman, has had among its most extreme applications the liberalization
of capital, which would have horried Smith and Ricardo. For the founders
of the theory of the free market was in fact totally unacceptable that the
capital, the historic result of a centuries-old accumulation process, material-
ized in a particular country, could itself become a volatile commodity, able
to cross the borders of the country that had produced it.
The liberalization of capital should have led to an era of stability in the
market, according to the gurus of the Chicago School; on the contrary, there
have been twenty years of crises, that followed one more destabilizing than
the other, and it is not arbitrary to place it among the causes of the nancial
bubble exploded in 2008 and the economic catastrophe that followed. What
would have been the results and the degeneration of capitalism opened by
the “hyper-liberalism” phase, even more in the nancial sector, has been
described by a ne book by Jonathan Coe [34], rst and best than the econo-
mists did, confused and uncertain those ones not triumphant.
It is in this context that has matured the disengagement of the nance
support, full of risks in the short to medium term, from the manufacturing
industry and the production of real goods, in order to promote investments
that do not depend on those risks, pursuing the road that, perhaps vulgarly
but certainly effectively, was dened as “make money with money”. A “crea-
tive wind” that has swelled enormously the nance – from the US subprime
mortgages for houses to futures, derivatives, swaps etc. – up to reach a vol-
ume greater than ten times the world GDP, and which, moreover, such re-
mains also in our days.
It’s good to remember that the legislative “mother” of this colossal dis-
tortion and of the endless injustices generated, is the Gramm-Leach-Bliley
Act of 1999 that, over sixty years later, has revoked, with the blessing of Bill
Clinton, the Glass-Steagall act, the heart of all the nancial measures that
the US Congress had made available to the new Deal of Roosevelt in 1933.
The Glass-Steagall Act had required a clear separation between commercial
and investment activities to the banks; and, it is certainly not only our be-
lief that the restoration of that separation is a necessary condition to reduce
distortion, to reduce irresponsible and “job killing” character of current -
nancial trends. Without this, any attempt to an “ecological conversion” will
have to do with the dictatorship of nance without rules [35].
As for the EU, what Mario Draghi has named “scal compact” is the set
of very strict rules with which it is considered to deal with the crisis and
begin to build an economic government of the EU, but without that, ironical-
ly, the European Central Bank has the dynamic” power of the US Federal
Bank. And with a strong expense of national sovereignty: the most bor-
ing suicide note in history?” was wondering an American economist [36].
The transfer of power from the Members would not in itself really bad, but,
too pragmatically, it starts from the economy, worse, from the nance and
budget laws. The exact opposite of what had dreamed the great Europeans:
a federal democracy, a political union based on history and culture, on the
social and economic cohesion, not indeed on a balanced budget, moreover
xed in the Constitution.
A merciless criticism was raised, in its time, from many discussants not
only against neoliberal austerity but also in opposition to the whole strat-
egy of the global economic politics. For instance, Paolo Barnard said that it
had gone on for the last forty years: “A global economic policy, neo-classic,
neo-merchant, neo-liberal” in order to keep the power to the élites: “...élites
knew that States with their own sovereign currency could have produced
full employment everywhere in the world without problems, but this would
have taken away power to them. We were doomed to suffer.[37 a)]. From
here, a hard remark against the euro: If it had been counted in sovereign
currency instead of in euro”, Italian debt “would not have caused anything,
even though it had been at 300% of GNP, and a contemptuous denition
of its standard bearers Angela Merkel, Nicholas Sarkozy, Mario Draghi and
Mario Monti [37 b)].
That transfer of power is so great that postulates a corresponding growth
of an European representative democracy and of an European political gov-
ernment, that is, of a political Europe. Otherwise, beyond the substantial
incorrectness - Germanic style - detected in the economic eld by many
noble fathers of economic theory, the operation results in a historically un-
precedented expropriation, in an unacceptable reduction of democracy and
freedom for all. The drama experienced by Greece in the summer of 2015 is
there to show it. And thinking of the delay of the building of a political Eu-
rope – again, the case of Greece docet [38] – it should be noted that several
countries, France rst, have played, with their no to the European constitu-
tion in 2002, a similar action to that conducted, on the mere nancial plan,
by the Greek governments of the Right with their tricks on the balance sheet,
which at that time were endorsed by the inattentive censors of Brussels.
What’s the debt?
The “scal compact” is however, as it is trivial, a set of measures of a
mere nancial nature, that bears the risks to the democracies and to citizen
we have just mentioned, the premise for an usual promise of a second phase
of economic recovery. Yes, but the economy and its fathers what they say?
“Underdetermined” for almost two decades of hyper-liberalism, they have
taken again the eld, since when the crisis broke out, but with proposals that
seem unmarried of effects. The therapies indicated by Joseph Stiglitz and
Paul R. Krugman, for example, coincide in the fundamentals, and criticize,
even vehemently, the economic shambles operated by the nance, appealing
to a revival of public spending in an “anti-cyclical” key. The austerity of
German brand is untimely and exaggerated because the cuts cause reces-
sion, the recession worsens the debt, that is, the opposite of what everybody
wants, claimed, in a nutshell, the two Nobel of Economics.
And in order to support that economic policies to growth and full em-
ployment can, under certain conditions, produce an increase in the debt
much more bearable than how much the institutional government of econ-
omy is willing to admit, Paul Krugman has intervened as columnist of The
New York Times many times, almost a “serial”, also in recent times, starting
from the maybe more known article [35]. In this column he argues against
the classic example advanced by the conservative economists, who compare
public debt, due to the state budget decit, with that of a family committed
to pay off periodic installments for a hard loan. An analogy false twice, rst
because the families have to refund their debt while governments have only
to guarantee that the debt increases less than scal basis; second, because the
debt of the family is a commitment with an outside creditor while the debt
of the government is money largely due just to the citizens. To those who are
accustomed to foresee a future of poverty for the citizens, as a consequence
of the increase of the public debt, Krugman recalls the example of the last
world war: the colossal public debt incurred in its course was never repaid,
but it has become less and less important with the growth of the economy
and, with it, of the tax base. The taxpayers US were hit by an unprecedented
burden, but the public debt, of which they were also owners through govern-
ment bonds, did not make more poor the postwar Americans, on the contrary
gave them an unprecedented increase in their standard of living [39].
We may add that in Europe the economic miracles” of Germany and
Italy in the years after the Second World War demanded more time – inevi-
tably, compared to the devastation of the two economies, that had the ruins
of destroyed cities as an icon – but that took place always to the sound of
public spending. Among the start-ups there was also the Marshall Plan that,
always a public investment, the American capitalism launched with strategic
foresight to reactivate the so essential European market: a great recovery
program at the expense of the state (roughly, 130 billions of dollars in cur-
rent value).
In fact, it is a source above suspicion like Standard & Poors, that, after
having clubbed Italy at the end of 2011 by the means of a famous downgrad-
ing, assessed, a little time after, the Italian economy at the middle of Nine-
ties as one of the leader of UE economies, in spite of the burdensome and
increasing public debt, by virtue of an average annual growth of GNP better
than 2%, a moderate ination rate, a high rate of savings (15% of GNP) and
a concentration of the debt in national or European hands [40]. And Mo-
ritz Kraemer, analytical manager of S & P, known as “Mr. Scissorhands”
for having cut the credit ratings of nine EU countries, had remarked that
the agreement on scal compact among the 17-UE nations placed too much
emphasis on decits, and the implementation of such rules would not have
averted the nancial crisis had they been in effect earlier; and had outlined:
Spain had balanced budgets for most of the rst 10 years of the Euro’s ex-
istence, while Germany had one of the biggest decits.[41]. However, the
nancial stability of Germany was already at that time much greater than
The Krugman’s arguments against the shortsighted outlook of econo-
mists and politicians who ercely oppose increase of public debt are convinc-
ing but don’t give a logic reason of that shortsightedness, comment Guido
Carandini e Paolo Leon – in an article whose title, “Nobody knows the debt”,
echoes Krugmans one – “[a reason] that, instead, clearly emerges from a
different theory that claims, in opposition to the common opinion, that capi-
talist system is, by virtue of its same nature, perpetually constrained by a
close connection between the private-individual dimension and the public-
state dimension; but this entanglement between those two dimensions can’t
be caught at sight. Because (just as in the case of the two faces of a coin) the
perception of one dimension hides the other one and, then, the individual
vision of the economy – i.e., the point of view of the family that faces a debt
– conceals the outlook of the state intervention – i.e., the view of its conse-
quences on all the citizens.” [42].
In a recent book, Paolo Leon goes further and the main thesis he proposes
is the blindness of the capitalists, that is, the impossibility, deeply rooted
into their essence, of becoming conscious of the effects of their actions on
the whole economy. It is the State, according to the author, the only one that
can realize the capitalist transformations and their effects; in order to see and
understand them the capitalists have the need of the State like a shortsighted
person needs glasses [43].
The austerity throws the baby of the real economy, production and em-
ployment with the bathwater of the rise in spreads. How to get out of this
perverse circuit? By rising up to a collective” size, able to overcome the
dark dichotomy” between those two dimensions, individual-private and
public-state, inherent to the capitalist system, suggest Guido Carandini and
Paolo Leon. But they admit that the dominance of nancial markets glo-
bally could negate the positive effects of an increased use of debt. Financial
speculation in fact it is not willing to grant the necessary time because those
effects can be realized and the economic and political culture is unable to
look up at the collective level and to dominate a prolonged recession, very
dangerous for our democracy.” [42].
Is there nothing between the “decit doves”, like Krugman, Stiglitz and
chums, and the “decit hawks”, the army of the austerians, those for which
government decits are too high, expenditure has to be rapidly cut and the
Government should get out of the way and let the private sector do what it
does best?
Restoring the old Modern Monetary Theory (MMT)5, the “decit owls”
take the eld. They throw themselves with lance in rest against austerity
not only untimely, but counter-productive (pro-cyclical) and sink the
spear against the sacred numbers, defended by the “priests” of IMF or ECB,
declaring them absurd, pure ideology imposed from above. Indeed, what it
is the empirical or theoretical evidence in favor of the 3% as established at
Maastricht, or because the level of public debt sustainability is 60% but in
some cases is 120%?
But, what is a decit owl”? A decit owl believes that the decit is a
result, not a cause, of economic difculty, and that it’s not something policy
should work on directly. In my opinion, the decit is a symptom, not a disease
in itself, answers James Galbraith, yes, the son of John Kenneth and one of the
leading gures of this economic school; and goes on: “This position is nothing
new – it’s only the terminology that is new. The hawks vs. doves language has
dominated the conversation for years now, but in reality it has always been a
more complex, less black-and-white debate than that… The owls go back to a
long tradition, starting with John Maynard Keynes.” [44].
What is the difference between doves” and “owls”, since both are in
favour of decit spending politics? Again, Galbraith: There are two prob-
lems with the doves approach. One, there’s no evidence that the world is
going to have a major problem caused by this question of the decit. That’s
a supposition based on highly unreliable computer programs. And two, if
you wanted to do something today about the future budget, the only way to
do that is cut vital programs like Social Security and Medicare. You can’t
cut things like the defense budget, because that’s decided in the future. So
the doves’ formula is one that leaves Social Security and similar programs
at great risk.” [44], and a nal lunge against the fear of bankruptcy, mainly
aimed to the U.S. government nancial politics: “The concept of bankruptcy
doesn’t apply to a country like us; the U.S. is going to be just ne, long-
term… The U.S. is more resilient than it may look. My message is the nan-
cial position of the U.S. government is far stronger than a great many people
think it is. Recently we’ve been seeing this notion that we’re heading toward
some unprecedented, apocalyptic territory. You saw that with the panic over
the debt-ceiling issue last summer. But the people who were actually buying
and selling treasury bonds weren’t ustered in the least. In fact, bond rates
went down.” [44].
5 Born and developed in the rst decades of the twentieth century, the MMT supports,
against the “orthodox” monetarism, that governments that can issue their own sovereign
currency are always solvent; and due to its faculty to issue how much paper money it
wants – from this derives “Neochartalism”, the other name of MMT –, the taxation is
in reality a tool to rule ination and unemployment rather than a source to nance the
government budget. This theory inuenced also John Maynard Keynes, especially for
what concerns the instruments of nancial and economic policies proposed by Abba
Lerner, one of the exponents of MMT.
In a nutshell, hawks think we should act now to reduce the decit; doves
think we should act later. The problem for the doves is that they agree with
the hawks that there are medium to long term risks; the government decit
aimed to nance public investments would pay, and hardly, with the exposi-
tion of the sovereign debt to the international nancial speculation, with con-
sequences so serious that provide a rational core to the measures of restric-
tion as those that continue to be, despite the proliferation of pronouncements
for growth and employment, the rudder that steers the economic Europe.
Thus it is easy to weaken their point of view with the threats of the burden-
ing our grandchildren or a Greek-style bankruptcy.
Owls, by contrast, think the decit isn’t a problem, nor now neither later;
it’s only a natural part of growth. Bypassing the neo-keynesism of Krugman
and Stiglitz, the owls see in the government decit a positive cornucopia,
provided that the central banks – the Fed, the ECB – nance the decit by an
unlimited buying of the bonds issued by governments. Ça va sans dire that
this monetary lever is to be used in an innovative and daring way.
Theses very similar echoed for some time in Italy, as from owls aca-
demically stationed in Abruzzo; but, also in the case of the more famous
American protagonists, we have not seen specic indications of economic
strategies that realize open-mindedness and innovation in decit spending,
both from doves and owls. Above all, it is dealt with only one of the horns of
dilemma – the economic crisis, the crisis of capitalism – and it is forgotten
the other, the gravity of the ecological crisis. And without this awareness, if
the only economic horn is faced, apart from the observation perhaps ungen-
erous but immediate: “yes, that the public debt of the Euro-zone countries
expand also itself, meanwhile the Standard & Poor’s is based in New York”,
comes to mind that if not for the age of “Milan to drink”, beribboned with
Tangentopoli”, the belief that “the State does not fail” has been one of the
cornerstones of the policies led by Giulio Andreotti. But back then, frankly,
the threat of the upset of climate and its disastrous consequences was the
stuff for esoteric sect.
Anyway, the opportunities presented by the need to take urgent action
against climate change are taken into account by all the aviary hawks,
doves and owls –, at most, like the provisioning convoys in traditional wars:
“they will follow”.
Meanwhile the global capitalist system practices a second road, “locally”
so to speak.
The second road
It’s a reading certainly not original, but, at least to a rst approximation,
quite possible: the Second World War is related to the crisis of overproduc-
tion created, after the Great Depression of ‘29, in the countries that repre-
sented the globalization of the economy at that time. There were not some
giants like today are China and India, not to mention Brazil and Indonesia;
the Soviet Union was behind the failure of the ve-year plans of the Gosp-
lan and the market was therefore a set barely larger than the countries that
entered the war.
The war reduces the income of citizens to levels that otherwise might
never bear, and increases, enormously, the extent of public investment for the
war. Productions, not prots, are in fact nationalized and assume exponen-
tial growth rates, eminently aimed to a colossal destruction in the countries
that become theater of war. There is not only the destruction of buildings,
infrastructures and systems, but also the self-destruction of the same war
products (bombs, missiles, carriers). Producing massive amounts of objects
of destruction, whose fate is realized in the self-destruction, is a way to deal
with overproduction; and the devastation that they bring is the condition for
the growth associated with the reconstruction. A growth supported by the
government decit. This is the cycle triggered by the Second World War,
which led to a dramatic minimum: hunger in Germany but also in Italy and
in Russia, not to mention Japan, the heavy hardships in France and Britain,
and tens of millions of deaths involved in the evolution of the cycle.
Due to its characteristics, the war seems to be an indispensable instru-
ment of the capitalist economy. The tens of thousands of nuclear warheads
legacy of the cold war, the hundreds of open conicts around the world in
recent decades guarantee that, at least in the industry of weapons, there will
never be an overproduction crisis. En passant, it is worth remembering that
in this industry, Italy occupies the 5th place in the world with a noiseless but
resolute protagonism.
In support of weapons and conicts the children soldiers are recruited
in poor countries, but amid genocides, horrors and rapes, budgets of all
states, ethically blind, are strongly determined to maintain the transfer of
public resources to new weapons systems, for the “defense” of course, mak-
ing frankly rhetorical the repeated appeal: “empty the arsenals and ll the
granaries!”. On this sector of the government decit, all decision makers of
budget policies simulate blindness, and in recent years the harsh reprimands
of the European Union or the International Monetary Fund against the PIIGS
have always ignored this issue. The Greeks, although reduced to misery,
must ensure, in their virtuous budget, more than 3% of GDP to the weapons
that they buy mostly from France and Germany.
All this is the sumptuous banquet of the “professionals of arms”, how-
ever, far from responding to the magnitude and severity of the current crisis
of overproduction. Therefore, it would take a new world war, and surely
there are various circuits of powerful men, more or less hidden in the various
countries, who are intensely thinking of it. Reasons “patriotic”, ideological
or political, are found as many as you want.
The deterrence of nuclear weapons has worked for over fty years and
holds today, although the proliferation of nuclear weapons in a world of cru-
el inequalities raises fears of the emergence of a “Sorcerer’s Apprentice”.
Any case, even if not exhilarating, it is somehow legitimate to suspect that
many von Clausewitz of capitalism have perceived, alarmed, the risk that the
atomic war of “theater”, more popular the latter in the Nineties, would no
longer be “the continuation of politics by other means, but could ow in a
global war of quick outcome. After, there would not be more to expect a lot
of prot, and then, to whom never would touch?
Anyway, this reection about the “second way” makes emerging another
constrain to the present situation: the impossibility” to access the war, a
global war, as an instrument of Economics. And the numerous “local” wars
are not enough to resolve the capitalist crisis.
The essential contradiction: technological innovation
and globalization
An over production crisis
Some analyses have indicated a central role of technological innovation
in the story of the globalized world, more and more the theater of a erce
competition among the economies and, of course, among companies. Tech-
nological innovation has played a key role, on the one hand, prompting the
innovation of products to a demand sustained by individual needs, induced
in the consumer, and, on the other, aiming to reduce, in the composition of
the production costs, the most signicant item: labor costs, especially with a
continuous, rapid increase in productivity and consequent reduction of em-
ployees. It is reached so to an increasing gap between the speed with which
increases the mass of the goods, produced and spilled on the global market,
and the speed with which increases the spendability by part of the market.
This role of the technological innovation in the context of globalization does
not seem to us that has been included in an appropriate manner in the reec-
tion of economists.
It is not, it should be emphasized, the saturation of the market: millions of
women and men have never seen a cell phone, but too slow is the speed with
which they enter in the availability of money to buy it! Crisis of overproduc-
tion, therefore: compared to the capability to purchase, compared to needs.
Nothing new, surely; are well known in the capitalist market the crises of
overproduction and, at least in theory, the tools to try to re-absorb them.
Today, however, we must look at the quantitative consequences of the
global nature of the market. The market has ceased to be “punctiform” or
“local” since the Middle Ages; the fairs had a prevalent character, but the
nascent network of banks gave a much wider breath to the exchange of goods
and introduced a signicant role of nance already at the turn of the thir-
teenth and fourteenth century. Italians were at the rst places, as points out
the name of the lombard rate.
But the expansion of the market has assumed since the twentieth century
the pace of a geometric progression, with the tumultuous innovation of the
technologies of preservation and transport of goods, which can benet of
carriers increasingly capable and fast or even intangible via Internet. The
speed with which it spreads the offer of goods increases at measureless level.
The deployment of the technological innovation in the global market gives
the process a quantitative character difcult to recover with the equipment
that is put in place: which gigantic income redistribution would be needed to
meet the insufciency of an effective demand, such as that which has been
determined, moreover with unemployment rising!
What has been highlighted there seems a fundamental contradiction,
without addressing which all the instruments of monetary policy, or the eco-
nomic and nancial measures, appear to miss the target. Hard to believe, in
particular, that austerity can be an effective response to a contradiction that
has at its roots the inadequacy of the demand.
Just looking at that contradiction, as well as at the role of public expendi-
ture and the occurring of nancial bubbles, one can trace the economic story,
for example, of the last decades of our country, Italy: sustaining businesses
in order to support consumptions, thus leaving cash to consumers, the state
taking on the most of the load of the spending on health, education, welfare.
In short, the capital/labor conict was attenuated by that implied agreement
that opened space to advanced social policies. From there, the main factor of
the growth of the debt: what else could they have done, in the framework of
the instruments judged politically acceptable? Although, those governments
have added, on their behalf and at high level, the corruption characterizing
several administrations of the Eighties and Nineties in a context of institu-
tional sloppiness, practiced as custom, and laxity on the tax evasion.
But these issues do not displace the essential nature of the problem that
lies in the compatibility ungovernable – the reality of the globalized market
– between the supply size and the mechanisms that rule the demand forma-
tion, evidently corresponding to the various levels of income distribution.
Fragile then a productive plant, suspended in the uncertainty of the return
on investment and therefore exposed to the bank lender and to the cost of
money; in addition, to the ruthless skill of international speculators. And the
imperative of the good health of the enterprise has increasingly imposed the
accelerated increase in productivity and, consequently, the attack on estab-
lished labor rights and the cuts to social spending: in short, the attack on the
European social model.
Gradually, then, in a second stage, to make up for the lack of liquidity
on the part of potential consumers, there has been an increasing recourse,
by the nancial operators, rst from the United States and later in Europe,
to different forms of loan, thus greatly increasing the role of the nancial
dimension of the economy. In this ctitious way, by virtue of the combined
effect of issuing new currency and securities, was rolled down the risk of
the collapse of liquidity: demand was helped by a false growth (bubbles).
After all, one could understand that was being built a risky mechanism, in its
evident uncertainty and instability: why it has not been blocked or, at least,
corrected by imposing standards and international deterrents? On the con-
trary, it has been able to grow rapidly by virtue of a systematic deregulation,
an absence of control inside the nancial system, stupidity, greed and a true
fraudulent business in damage of the customers6.
From the “White Book” of the EU to the Green
Economy: a new model of development
The process, which links the growth of debt and the role of nance with
the operation of the production, as we have tried to describe it – in particular
with the role of technological innovation – is already clearly visible in the
last decade of the last century and leads Jacques Delors to assess, in the
“White Book” of the EU in ‘93, that revival of the economy (and the employ-
ment) would not come from consolidated manufacturing sectors – tangible
and intangible – but from a new sector, there where it is produced and sold
a new commodity called quality of life [45]. We are therefore at the prospect
of the “Green Economy”. Understood as a change in the structure of the de-
mand, rather than as a sublime ecological instance. Already at the beginning
of this century, the Green Economy seems so a “obliged” reply to the crisis
of the ecological equilibrium – rst, climate change – with positive conse-
quences on the health and on the well living, but it also appears a rational
response to the crisis of the economic system.
Energy efciency and use of clean, renewable energy, urban regenera-
tion, restructuring of industrial equipment with a more efcient use of the
physical resources, pollutant reduction, waste recycling, restructuring of the
transport networks of people and goods, paperless networks, soil conserva-
tion, agriculture as food security as well as control of landslides, ood safety
and protection of minor water networks, preventive health care, restoration
and upgrading of historical, cultural, landscape and environmental goods,
excellence of craft products or niche: these items, the same on which relies
6 The total lack of inside controls on different speculative operations, starting from the
proliferation, as Chinese boxes, of bonds built on house mortgages - exemplary the
placing on nancial market of bonds like COD (Cancellation Of Debt) -, and the frauds
in damage of customers are the screenplay of a recent movie: “The big short”. The movie
is almost a historic document about the explosion of the nancial bubble at the end of
2007, and tells how a few nance operators, who had timely forecasted how things would
have gone – at the basis of the bonds system, entirely private and no more guaranteed
by government, there were titles veriable as “shit dog” – have played against the bank
system and have bet in favor of its default. And have won.
the “circular economy”, represent the transition from the culture of the quan-
tity to the culture of the quality, with productions which in prevalence can’t
be delocalized and for which it is difcult to trigger processes marked by an
exasperate competition among companies in the context of the increase in
labor productivity. With benecial and revitalizing effects on employment,
direct or indirect.
An example is a project of sustainable mobility: public transport peri-
urban, local, long distance, a network pleasant to use and competitive with
private means. Another example: energy savings in buildings. Or, more gen-
erally, urban regeneration: that is, restoration of old buildings and redevelop-
ment of the suburbs, renewal and rehabilitation of existing housing. And all
these interventions are characterized by a high-intensity of work. By con-
trast, the chorus of rite of a relaunch made by a recovery of mass production
of cars, homes, appliances and electronic gadgets appears, in light of the
contradictions described above, a bad recipe.
In Germany the “green” work has activated, since 2000, about 1 million
new jobs, a number equal to ten times that of the employees of Volkswa-
gen, the largest European car industry and among the rst in the world.
In Italy, Unioncamere7 recorded already in 2011 about 220,000 hires in the
green work sectors and announced for the following years a million of jobs.
The “Energy Efciency Plan 2010 - 2020”, presented by Conndustria (the
Italian entrepreneurs organization) in the fall of 2010, shown that a public
investment of 16,7 billion of euro for ten years would have produced, on the
same period, one million and six hundred thousand annual work units – a
quarter in the eld of energy savings in buildings – in addition, at the same
time, of meeting the three 20% of the EU. The plan, since had become a
“common notice” of Conndustria, CGIL, CISL and UIL (the latter are the
acronyms of the major Italian workers’ organizations), was to be presented
to the government for the growth phase. Nothing has been done, mainly due
to lack of employers’ condence towards their own project, but in 2015 the
“Plan” has beaten back a few timid shots.
In proposing the objective of replacing in ten years almost 40% of fossil
fuels with renewable energies the EU states that the challenge of sustainable
energy and development can have a positive response. This change implies
great problems of many kinds: engineering, nancial, organizational and es-
pecially cultural. Will we have time for a changing so signicant, while the
climate change and the energy crisis are pressing everywhere? Even though
the data that we’ll report in a successive section give some hope to possible
positive answers, a question stands: but is it really needed all this energy that
we consume? It is in fact the question whether it is sufcient changing the
ame that has to be placed under the pot or if you should also take a look at
what you want to cook in the pot.
7 National representative of the Provincial Chambers of Commerce.
Again, therefore, the reection: from quantity to quality. Generally
speaking, it comes to achieve a model of development radically alternative
to that neoliberal, responsible, in fact, for the current situation of crisis. A ra-
tional framework, the one offered by the economics of sustainability, which,
however, has failed, so far, to get an effective attention from the policy, nor,
as we have already complained, by the side of the economic doctrine.
The economic “cycle” and dynamical systems
We have used, unwary, the current economic terminology which speaks
of “cycle” and attributes the anti-cyclical” or “pro-cyclical” character to
economic policies, depending on the effects that determine. Most of the poli-
cies proposed and implemented today, around the world, look eminently at
the currency and the nance, as it is now; and to us, a bit naively, seems mere
common sense not to entrust a nance without rules the role of “modulating”
the economic cycle.
But what is a “cycle”? The language of economists about the anti-cyclical
or pro-cyclical policies and also, directly, the word “cycle”, attributed to the
evolution over time of a variable or a whole economic system, is, generally
speaking, misleading. “Cycle” has a specic denition there where it start-
ed, in Mathematics or Physics: a closed curve that describes the trajectory
over time of a system which, starting from an initial state to it returns, while
the most economists, thinking of uctuations in time of the mathematical
functions – sine or cosine – associated with a cycle, actually are referring to
the variations between the maxima and minima of the variables studied by
Economics. These oscillations can be described by periodic functions of the
time, just as in the case of the cycle”, but only for delimited time intervals;
therefore, far from returning the system to its initial state, as would happen
if those functions were of the same period over each time interval, the oscil-
lations become increasingly large, while the minima shift up; as it is evident
if we would model in this way, crudely, the trend of the economic quantities
from the immediate post-war years to the present day. No cycle, then, but, if
anything, an open curve, a spiral, along which there is a continuous growth,
loaded of social and environmental contradictions, and no return to the ini-
tial state8.
Starting from the cycle “predator – prey” of two populations in competi-
tion, that Alfred J. Lotka [46] and Vito Volterra [47] had proposed in the
8 After all, wasn’t the same Marxian “vulgata” reciting that “capitalism repeats its
contradictions to a higher level”? And some commentators had also found a noble
cinematic metaphor in “The Exterminating Angel” by Luis Buñuel, where the failure/
inability of the characters of getting out of an apartment will show itself again, when,
solved their problem, the same syndrome shifts to a large mass of people, the faithful of
the Sunday Mass which aren’t able to leave the church at the end of the religious ofce.
Twenties, the Mathematics has provided to the Applied Sciences Popu-
lations Dynamics, Biology, Health diseases, Chemistry and, in particular,
Economy – a model of oscillations between a minimum and a maximum,
compatible with the existence along all the cycle of both the variables de-
ning the model, because the minima are always greater than zero: a well-
known model, incredibly largely applied, of a dynamical system in two di-
mensions, as many as are the variables.
In the Lotka-Volterra model the two variables are the number of individu-
als of the two species – prey and predator – which, in ordinary conditions,
vary, for the predator, from a minimum, a time after that the number of
preys has reached its minimum, to a maximum, a time after that the number
of preys has got its maximum; the opposite behavior holds for the number
of preys. In other words, the dynamics of the two populations as function
of time is simply represented by two periodic functions, like sine or cosine,
with different amplitudes and a phase displacement in time, that accounts for
the behavior just described (see the below gure).
This behavior in time is a consequence of the existence of cycles in the
“phase space” of the model, such as can be determined starting from the dif-
ferential equations that represent the rate of change of the two populations.
As we told before, when we were speaking about the “simple” model for an
abrupt change of climate stability, the problem of nding analytical solu-
tions of the non-linear differential equations, usually not affordable, can be
bypassed by means of the qualitative analysis of dynamical systems through
the construction, in the phase space, of the phase portrait of the system. In
the phase space every point has the role of a “physical” state, whatever be the
dynamical system that one is representing; thus, the phase portrait provides
a geometric vision of the trajectories – the cycles, in the Lotka-Volterra case
– of the system, as succession of all states along which the system evolves.
What the phase portrait can’t in general provide, except that for cycles is the
dependence on time of the system evolution, that is, the time law.
Also in Economics is contemplated the existence of cycles in the proper
sense of the term; for example, in the Goodwin model, that is an applica-
tion, half a century ago, of the Lotka-Volterra model, where, instead of the
number of “predators” and “prey”, one will replace the “employment rate”
and the “share of the product of the worker”, the latter is a variable linked to
the wage rate [48]. The employed workers have the role of predators, because
the wages reduce prots and hence investments, leading to an increase of
unemployment; and, by this reason, the model is also known as “Goodwin’s
class-struggle model”. The cycles describing the economic activity (output,
unemployment, wages) emerge in an endogenous way, that is, the cycles are
not generated by exogenous shocks as is assumed by the most modern mac-
roeconomic models. In Fig. 10, the phase portrait of the simplest version of
the Goodwin model (see [48]). In Fig. 11 the graphs of economic functions
are represented as depending on time, exhibiting those endogenous uctua-
tions which are at the basis of the cycles of Fig. 10.
Fig. 10 Phase portrait of the Goodwin model: u is the workers’ share in product
and v is the employment rate. The two lines divide the positive quadrant – due
to their meaning, neither u nor v can be negative – into four regions and the
arrows indicate the movement of the economy in each region. For example,
in the north-western region (high employment, low labor’s share in output)
the economy is moving to north-east (employment is rising, worker’s share is
increasing). Once it crosses the u* line it will begin moving to south-west. Each
cycle corresponds to a determined initial state (u0, v0), where u0 and v0 are the
values of the variables at a xed (arbitrarily) time, t0; the shape of the cycles
is an ellipsis centered in (u*, v*) only in a neighborhood of the point (u*, v*).
h = h0
h = h1
h = h2
The cycles, each corresponding to specic initial data (u0,v0), are the level
lines of the three-dimensional graph of a function constructed requiring that
it has to be constant along the evolution in time of the system; for any value
of this constant, h, determined by the initial data, there is a cycle obtained as
a section of the graph with the h-height plane. As it is stated by the theorems
of the qualitative analysis of dynamical systems, this construction does not
require the knowledge of the evolution law; it’s enough that the second mem-
bers of the equations are the part known of the problem.
The cycles of Goodwin model guarantee, we like to repeat that in view
of further observations, whatever be the state of the system from which we
start in that state the system will be back within a nite and determined time.
It’s a typical “stationary” model9: nothing is static, but to each cycle cor-
responds an evolution of the system – uctuations over time between minima
and maxima for both the variables – which shows up and repeats itself with
the same characteristics.
Fig. 11 The Goodwin model can generate endogenous uctuations in
economic activity without relying on extraneous assumptions of outside
shocks, whether on the demand or supply side.
Then, it’s of some interest to check how much the Goodwin model can be
applied to represent real cases. In Fig. 12 are represented, for the U.S., the
curves of the trend in time of wage share and of employment-to-population
ratio. The latter has become a parameter preferred by several economists,
instead of the only employment rate, because gives a better account of how
9 Also the revolution of the Earth around the Sun is, in rst but very good approximation,
a stationary phenomenon. This is not aimed to deny, almost four centuries later, Galileo
and give reason to the Cardinal Bellarmino, but simply to take note that the motion of
the Earth (“yet it moves”) always takes place in the same way, which generates the perio-
dicities and uctuations we know (day and night, seasons etc.)
many are really out of work: is the best measure of labor market condi-
tions” [49].
Fig. 12 Wage share (blue line) as Wages and Salaries as percentage of
Gross domestic product and Civilian Employment Population ratio (red
line) in the USA. According to the Goodwin model the wage share is to be
expected to lag behind the employment rate.
Graphs of Fig. 12 represent a good performance with respect to the reli-
ability of the Goodwin model, despite the notorious not robustness of the
model; robustness, that is, the phase portrait could be strongly altered under
an external solicitation up to the transformation of the cycles in open curves.
This good behavior has suggested for years now many applications in Eco-
nomics, some recent ones resort to Lotka-Volterra dynamics to model the
uncertainty determined by the economic impacts of climate change [50].
Not as an application of the Lotka-Volterra model, but always dealing
with a portrait of phase of a two-dimensional nonlinear dynamical system,
some authors have proposed, in recent years, a new model, relying on the
analysis of the data of different national economies, able to forecast for each
country the most probable economic trend for the future and based on these
two new variables: ‘Fitness” and “Complexity”, where Fitness is a measure
of the competitiveness of countries and Complexity is the level of products
sophistication. Two non-monetary and non-income based metrics, as rightly
claimed by the authors; an invasion of the economic eld by Physicists (see
[51], [52], [53]).
The new proposal and the method of this kind of researches is well syn-
thesized, just starting from the introduction of [51]: Classical economic
theories prescribe specialization of countries industrial production. Inspec-
tion of the country databases of exported products shows that this is not the
case: successful countries are extremely diversied, in analogy with bio-
systems evolving in a competitive dynamical environment. The challenge is
assessing quantitatively the non-monetary competitive advantage of diversi-
cation which represents the hidden potential for development and growth.
Here we develop a new statistical approach based on coupled non-linear
maps, whose xed point denes a new metrics for the country Fitness and
product Complexity… We show that, given the paradigm of economic com-
plexity, the correct and simplest approach to measure the competitiveness
of countries is the one presented in this work. Furthermore our metrics ap-
pears to be economically well-grounded.
Nonetheless, the model can provide indications on the principal goal of
the macroeconomic theories: a quantitative assessment of the time evolution
of economic indicators such as GDP, competitiveness and so on. For every
case? “The answer is: it ‘ depends’: predicting evolution of tness and in-
come is strongly dependent on the regime a country occupies” [52].
Fig. 13 a) A ner coarse graining of the dynamics highlights two regimes for the
dynamics of the evolution of countries in the tness-income plane. There exists
a laminar region in which tness is the driving force of the growth and the only
relevant economic variable in order to characterize the dynamics of countries.
We argue that the evolution of countries in this region is highly predictable. There
is also a second regime, which appears to be chaotic and characterized by a
low level of predictability. In the laminar regime we also nd two different kinds of
evolution patterns for the emergent countries and developed ones respectively.
b) we report a continuous interpolation of the coarse grained dynamics to better
illustrate the two regimes of predictability [53]
The analysis performed in the income/tness plane (Log [GDP per capita]/
Log [F]) distinguishes between a “laminar regime”, where, as in developed
economies, tness is relevant and driving variable for economic dynamics,
and a “chaotic regime”, where, as for the “poverty trap” and underdeveloped
economies, dynamics is ruled by other factors in competition with tness:
high predictability for the rst, low for the latter (see Fig. 13 a), b) ) [53].
The direct comparison of the Fitness with the country GDP gives an as-
sessment of the non-expressed potential of the country. This can be used as
a predictor of GDP evolution or stock index and sectors performances. These
results are also useful for risk analysis, planning of industrial development and
strategies to exit from the “poverty trap” ... The dynamics in the GDP-Fitness
plane reveals a heterogeneous structure and certain areas behave in a laminar
way (high predictability) while others appear turbulent (low predictability). This
situation requires an analysis inspired to the theory of Dynamical Systems and
it is not appropriate to study with the usual Luciano Pietro-
nero, a physicist, founder in 2004 and Director up to 2014 of the CNR (National
Research Council) Institute of Complex Systems based in Rome, and co-author
of the quoted papers presenting this new point of view in Economics [54].
In this heterogeneous scenario for the economic dynamics of coun-
tries, regressions are no more the appropriate tool to develop a predictive
scheme, which instead must face issues which are very close to the prob-
lems of predictability for dynamical systems (i.e. atmosphere, climate, wind,
ocean dynamics, and weather forecast, etc.)” is the comment of the authors
to Fig. 13 a) and b) [53]. And the phase portrait in Fig. 13 a) recalls a rst step
in the analysis by means of the dynamical systems theory: the construction
of the vector eld determined by the structure of the system.
It is the approach called Selective Predictability Scheme, but about predict-
ability authors have previously observed: “Forecasting country growth meets
hurdles not dissimilar to those in weather forecasting[52]. The model, really,
uses patches, and denitions, very similar to those describing, in the phase
space, the uid dynamics regimes (“laminar ow”, “chaotic ow”) with their
abrupt changes, that is one of the main tool for modeling weather. “Physi-
cists make ‘weather forecasts’ for economies” is the title of a news of Nature
(23/2/2015), where is reported the gure below, the same as Fig. 13 b), but one
can now appreciate the different paths as belonging to specic countries.
The new economic paradigm, advocated by physicists, is only a theoreti-
cal game? Not so theoretical, after all, if the international Institute for Econ-
omy Complexity (IEC), promoted by Pietronero, is proposed as a branch of
the Institute for New Economic Thinking (INET), and the latter is willing to
contribute both from a scientic perspective and through a budget sponsor-
ship, with one third of the total IEC budget for an initial period of 5 years.
Who is INET? After the 2007 crisis it has become clear that standard
economic theory is not suitable to meet the challenges of the present, strong-
ly globalized world; and the goal of INET, a cultural non-prot economic
research organization founded by George Soros in 2009, is to build a global
community of new economic thinkers to engage in the crucially important
task of creating new ideas to guide our economic future. To this aim INET
gathers from all countries hundreds of economists, among them several
Nobel Prizes like Krugman, Stiglitz, Sen and so on. In the INET plenary
conference held in Hong Kong in April 2013 [55], George Soros attended to
the seminar in which the “weather models” for economics have been pre-
sented by Pietronero; in a good company, because next to the Nobel Laure-
ates Michael Spence and James Heckman there were global business leaders
coming from anywhere.
Economic models like “weather forecasts” maybe meet, besides the inter-
est of big business men, also nice environmentalist souls, since they recall
the analogy between biological diversication and the growth of countries
with a higher tness; or because the economic models have the avor of nat-
ural ones (“weather forecasts”). Mainly, we suppose, for the radical criticism
against the consolidated ideas sustained by the traditional macroeconomics
theory, often wrong and surely unsustainable.
But also this new and interesting theory doesn’t seem to provide a proper
answer to the issue of an economy sustainable with respect to the environ-
mental crisis, that we are soliciting. Even though it’s surely important the up-
setting of the mainstream theories, according to which: “there should not be
any coupling between nance and economy, and to afrm, on the contrary,
just in these years witnessing the nancialization of real economy: “One of
the cornerstones of the new economic thinking is to acknowledge that Fi-
nance and Economics are two highly connected aspects of the same general
problem and to understand the origin and consequences of the mechanisms
coupling these aspects.” [53].
The prediction of economic trends, when predictable as for a “laminar
ow” (see Fig. 13 a),b)), do not tell us how much those trends will be al-
tered by the environmental crisis, what will be the interference with climate
change; and, obviously, what will be the effects on the “chaotic ow” region.
The “weather forecasts” for economics seem to t only with the brief-
medium term, just as those about the weather. It is surely important to an-
nounce, e.g., that in the next years China’s GDP will increase at the rhythm
about 8% instead of 4% as many monetarists say; but, recalling the dramatic
gures of the “Stern Review on the Economics of Climate Change” [31], it is
more important to alert for possible severe and global damages on GDP – a
5% medium loss by year – due to climate change in the medium-long term,
if adequate policies will not taken to face global warming.
On all this kind of issues we will surely try to attract the attention of our
colleagues, but here and now it could be useful to come back again to the
Lotka-Volterra model and, looking at its cycles, try to dene what would
be desirable happen, e.g., in the coming decade; and what would be, ap-
proximately, the corresponding portrait. In other words, a model of a glo-
bal stationary state for the “eco-economy”, compatible with the growth of
each country but with the constraint of respecting the great natural cycles: a
sustainable economy.
We beg the reader’s pardon if now we try to sketch, briey, some steps
towards this goal.
An immediate remark is about what is the “energy” of a cycle. Thinking
of each of the cycles of Fig. 10 as a trajectory of an economic system, the “en-
ergy”, i.e. the physical quantities necessary to support the cycle, is the area
included inside the closed curve. For each cycle the “energy” is a constant
value, but if the trajectory performs N times the same cycle the energy”
required will be N times that value. By this way it appears immediately that,
also for a closed trajectory, the “energy” consumption can lead, in the time,
to an unsustainable situation when the “energy” is exhausting; a fortiori, for
a not closed curve like a spiral, that requires more and more energy for its
trajectory while is enlarging itself. If we were dealing only with energy in
the proper physical sense, we could overcome this hurdle recurring to the
sun or other “perpetual” forms of energy.
This is not the case for some renewable energies, it’s enough to think of
biomasses, and is not the case for other natural resources – raw material, soil
ore, metals etc. – which we have indicated, in short, with the term “energy”.
Precisely for this reason a rational economic model – a “stationary model” –
has to think of a cycle, or of many cycles in the time, which do not exhaust
in their evolution the resources required to support them. Thus, a rst im-
mediate constraint arises in the perspective of the sustainability: in any cycle
the rate of consumption has to be inferior than the velocity of reproduction
of each natural resource, or has to take into account the availability of that
resource in order to plan its consumption and giving time to science and
technology to possibly nd sustainable substitutes. In this manner, in a rst
but good approximation, an economic evolution would be sustainable by
the Nature. In terms of the model – remembering the “energy” is the area
included in the cycle – all this implies to put mathematical conditions of
conservation for the total area determined by the trajectory.
Another point. The existence of cycles in the Goodwin model depends on
the fact that the model, and all other ones that have been extended and used
for decades by many researchers in many Countries, is based on differential
equations, those of Lotka-Volterra type. This is not an usual practice in Eco-
nomics, for well-known reasons; one for all, the impossibility of performing
an experiment and of reproducing it do not allow to dene a “dynamics” for
the system, in the sense of the celebrated second Newton’s law; therefore,
in general, no differential equations are available to rule the dynamics of an
economic system, so that one can describe its evolution in time.
Really, the success of Lotka-Volterra model and of its so many applica-
tions relies on the hidden Hamiltonian character of that nonlinear two-di-
mensional dynamical system10. Is this feature that provides the “dynamics”:
a generalized “energy” for the system, the Hamiltonian function Heach
cycle is the intersection of a h-plane with the three-dimensional graph of the
function, i.e. the solution of the equation H (q, p) = h11 –, and, by this way, a
very good simulation of a dynamics even though there is no force acting on
the system (as the second Newton’s law requires). Regarding the steps for the
model we are trying to propose, one target is to assess the behavior in time of
several ecological and economic variables, coupled two by two to build up a
cycle, as it happens for the Goodwin model; and check this behavior on con-
crete cases, starting from the simpler case of only one couple of variables.
At this point the problem is to put together couples of economic and en-
vironmental variables, not only the economic ones. The variables of each
ecological-economical couple have to be “conjugate” each other in the sense
of the Hamiltonian formalism10; a research that implies the analysis of the
correlations between economic and environmental data. The condition that
a couple of “conjugate” variables (q, p) generates a cycle in the plane by
them determined – their phase space – has to integrate the constraint on the
“velocities” that we have told above.
Good candidates to be tested could be the couples: “CO2 emissions/Fit-
ness”, in the plane (q1,p1), and “Energy nal consumption/GDP”, in the plane
(q2,p2); with the condition that their oscillations reduce amplitude in the time
– the distance between minima and maxima – and, consequently, the areas
of the corresponding cycles converge to a xed measure set: decoupling
conditions”. The topological product of a cycle A in (q1,p1) for a cycle B in
10 A dynamical system is such that its evolution in time is described by differential
equations, like in the case of the second Newton’s law of dynamics. Hamiltonian is
the dynamical system for which exists a function, the Hamiltonian function H, that
summarizes the information on the “energy” of the system, also when it has no more
the meaning of energy as dened in Physics. In the Hamiltonian formalism each couple
(q, p) of variables, on which the Hamiltonian depends, must satisfy a mathematical
relationship, i.e. they have to be “conjugate” each other with respect to H.
11 h is the constant value of H along the cycle, just like E, in Mechanics, is the constant
value of the energy along the trajectory of a conservative motion; and is also the altitude,
in the three-dimensional space of the graph of H, at which the intersection of a plane
with the graph generates the cycle characterized just by h. For a different value of h, that
is, for different initial values (u0, v0), one obtains another cycle (see Fig. 10).
(q2,p2) gives rise to a torus, a surface like a ring-shaped donut (see Fig. 14 a));
and the evolution of the system would be represented by a curve that winds
the torus, the trajectory (see Fig.14 b)).
Fig.14 a) a torus as topological product of two circles; b) a trajectory on the torus
In principle, one can associate a law of evolution in time to the trajectory
and, therefore, know the state of the economic system at any time, as dened
by the two couples of the eco-economic variables adopted. The comparison
between the values given by the model and the available data would make
sense for countries of the “laminar” region of Fig. 13 b), credited with a high
predictability level.
The model could be extended to a larger number of eco-economic cou-
ples of variables, if this extension resulted in a more realistic scheme. This
approach could lead to a kind of “normative” model, i.e., a model that shows
how the interactions between economy and environment should work in a
sustainable scenario.
In order to obtain a higher degree of realism in the predictability, it would
be also necessary to take account of the perturbations caused by climate
change in the “phase portrait”, internal to the chosen couples of variables or
as an external solicitation to the system. Eventually, also for taking into ac-
count the “chaotic” region, one could resort, as a rst step, to the mathemati-
cal theory of the bifurcation of a torus in another one of a higher dimension;
but all this goes beyond the aim of this reection
Here, one was aiming only to show that is possible to build a stationary
model for a sustainable economy; that is, a model in which the economy is a
“predator” that allows that the “prey”, the nature, reproduce the assets, those
the predator needs; trying to incorporate in the model strong perturbations
induced by the predator himself, mainly the climate change and its social
and economic consequences (e.g., immigration).
A modest proposal
At the light of all these considerations, economic theories we have sum-
marily quoted – doves, hawks, owls and the innovative “meteorologists”
seem labile because don’t pay attention to the “area” of the cycle, that is, to
the availability of the natural resources; and don’t conjugate variables, eco-
nomic and ecological, in an only one global model, like both the economic
crisis and the environmental one strongly require. Sometimes seems that re-
sound the words of an old spell: pure water, air unpolluted, the breath of the
great rainforests will have an economic value only when will be exchanged
as commodities. Equally blindfolded in front of the environmental aspects,
the two extreme wings of the economic discussion, both the austerity advo-
cated by the Germanized Europe and the cornucopia offered by the “owls”,
take for granted, essentially, that the “cycle” of the global economy, unavoid-
ably including the bubbles of an uncontrolled nancial speculation, should
be read as an evolution from one level of government decit to a successive
one, a gap to be drastically reduced, following the austere neo-liberals, to be
increased as allows the cornucopia of the “owls”.
The oscillations between minima and maxima suffer “casualties” (as in
the “predator – prey” cycle) from the social point of view, that would prob-
ably be much less if one applied the decit spending policies, instead of
the neo-liberal austerity. Viva the “owls”, then? Attention, because the two
mainly opposing macroeconomic theories, and the resulting policies, do not
lead to a stationary evolution; on the contrary, they postulate an external
environment that feeds at increasing rates, and unlimitedly, the evolution
over time of the economic system. In both cases, therefore, a growing use of
physical resources of the Earth. But, if we have been clear this possibility,
forty years after the alarm raised by The Limits to Growth [6], is now run-
ning out; further, by this way, we all would be assigned to the “après moi le
délugephilosophy. If we look at the urgency of the climatic instability, a
disturbing echo sounds: “the time is over”. Another ten, twenty years to trig-
ger and operate a new and different economic model that gives us a future, a
livable future for those who come after. No more.
The ecological reconversion of economy and society
The current situation recalls the two threatening walls of water through
which the chariots of Pharaoh were running after the fugitive chosen people.
On the one hand the capitalist crisis: the irrationality of an economic
model with its “cycles”, that, seduced by money and nance, is not able to
perceive the systematic exhaustion of physical resources made by the capi-
talist plundering of nature, and, as in the days of Malthus, “thinks” that na-
ture be indenitely reproducible and therefore limitlessly exploitable by the
mankind. The other hand, the ecological crisis: not only the ruinous effects
on the environment and on humans of that dispossession that the economy
wants to ignore, but the charging gallop of the dramatic switchover into the
climatic instability.
A century and a half after Černyševskij resonates still: “What to do?”
The ecological reconversion of the economy, already proposed for some
decades to correct the destructive irrationality of the dominant economic
model, nds two new elements in favor and cogent: fty years ago it was a
day before the process that we did not hesitate to call the “bloody geopolitics
of energy”; and is less than twenty years that climate change has acquired
the character of peremptory urgency that we have tried to describe.
In terms of global rationality the ecological reconversion of the economy
then appears, in the light of the seriousness of climate disruption and bloody
geopolitics of energy, an obvious choice, necessary and immediate: this is
the new fact.
The way to do this conversion has universal characteristics, although in
what follows we will refer mainly to Europe and Italy. We have already men-
tioned some actions that are at the basis of the ecological conversion; their
complex is what is called Circular Economy, to which is proper to give here
attention because is one of the fundamental requests for an ecological conver-
sion of economy and society; to the other pillars we will give space after.
Circular Economy stems from an idea of Walter Stahel, architect and
economist, of substituting the path “from cradle to tomb” with “from cradle
to cradle”; no more the linear trajectory that leads in industrial societies
from resource to waste, but another, circular, by which the wastes become
the feeding of another processing. Stahel presented in 1976, together Ge-
nevieve Reday-Mulvey, a report to the CEE, the current EU Commission,
showing an economical model that relies on closed loops and assessing the
favourable impact of such a system on job creation, economic competitive-
ness, resource saving and waste prevention; the report was published few
years after [56]. For sake of truth the idea of a circular uxes economy is not
new and can already be found in the essay of Boulding [5], but has struggled
no little to establish itself. After the Stahel’s one, the rst report, that shows
as an opportunity for economics and business the adopting a circular model,
has been commissioned by the Ellen MacArthur Foundation to the McKin-
sey & Company and presented in 2012 [57]. At the end of the same year the
EU Commission publishes a document that argues: “In a world with growing
pressures on resources and the environment, the EU has no choice but to go
for the transition to a resource-efcient and ultimately regenerative circular
economy[58], where the potential of this system is illustrated not only in
terms of new employment and competitiveness but also as a true opportu-
nity for innovation, investments and new models of work. But nowadays,
the attention of EU Commission is focused on the wastes management, the
second part of the life-cycle of materials, and not on the rst one, that is the
ecological design of products.
One of the basic ideas of the circular economy is to draw inspiration
from living processes; this view, no so original, has however created the
Industrial Ecology”, when a positive answer has been given to the question
why an industrial system should not behave like an ecosystem – in which the
wastes of a species can become a resource for another one, generating in this
way great trophic cycles – by Robert Frosch and Nicholas Gallopulos [59].
The industrial ecology has had echo in the scientic and technological
international community, providing study cases and signicant implementa-
tions of strategies able to realize circular uxes in cascade of materials and
energy. The oldest and spread example is the recycling of “wastes”, also in
successive steps, in order to obtain material to produce the same or other
good, thus saving the matter and also the energy, when is possible, needed
to a new one. Another well known example is that of tele-heating networks,
in which the heat that results at the end of a process (electricity generation,
high temperature industrial production) is not released to environment as
uncontrolled waste but employed for home heating in a district or in a city;
or the combustion of gas from waste both for manufacturing activities (e.g.
agro-alimentary industry) and home heating. All actions of this kind are
realized in the perspective of less unwanted by-products and a more efcient
and less polluting economy.
Today the implementation of “industrial parks” is spreading, no longer
limited to the historic case of the Danish town of Kalundborg, where all has
started in the rst Sixties from the electric power plant Asnaes. However,
several criticisms have been advanced against the techno-optimism and the
inadequacy of technology to forecast negative side effects. And someone,
from a point of view almost “ontologic”, has observed that, in the context of
a continuous economic growth, technology is not able to promote sustain-
ability, on the contrary can determine its possible collapse; and claims that
sustainability requires long term visions [60].
Other researchers, wondering if sustainability is the natural context of
the industrial ecology, have recognized the ecosystem metaphor proposed
by Frosch and Gallopoulos as an useful tool; and some have assumed the
metaphor inside the theory of complex systems, together to the old concept
of exergy12, trying to build by this way a framework for a general theory
12 In thermodynamics the exergy of a system is the energy available to the use during
a transformation; when the equilibrium with external environment is reached, then
the exergy is zero. Therefore the exergy is usually expressed as a function of the state
both of the system and the environment, even though can be theoretically dened in an
intrinsic way without referring to the environment, starting from the exergy of each
subsystem that composes the whole system. The exergy measures the irreversibility of
a transformation: it decreases in a proportional way to the increase of the entropy of
the system. Just due to this link with entropy, exergy is a quantity also in the Theory of
of ecology. Exergy has however been a fundamental tool for engineers in
designing the different sectors of a plant or of a productive process, thus
contributing to the huge growth of chemical industry in the XX century.
In the industrial ecology the exergetic analysis has been utilized in order to
optimize the uses of energy with respect to its quality, in particular when
there are material constraints, e.g. a limited area available for a solar plant
(roof, wall etc.).
Without entering in the theoretical debate on the concept of exergy, that
has engaged Chemistry, Physics, Industrial design, Ecology and the same
Sustainability – the assessment of what is meant by “environment” in den-
ing the “state of reference” of the observations is one of the critical point12
– we limit ourselves to notice that the ratio between exergy and energy is a
measure of the quality of energy13 in a process; thus, not only the quantity
like does efciency, i.e. the ratio of the quantity of energy obtained as output
with respect to the quantity of energy given as input to the process.
More general, exergy is suitable to compare production strategies over
consumption of natural resources or assessing different methods on the basis
of how much exergy they require; or, when analyzing goods, directly com-
puting how much exergy a single good contains as well as how much exergy
is necessary for its production.
Where not already for its theories, the circular economy has always been
coupled with the abandon of fossil fuels and the favour of an always more
extended recourse to the efcient use of energy and to renewable energies.
From this view, circular economy is substantially indistinguishable from
what, after, has been called green economy, that, at its turn, nds in the “en-
ergy revolution” a fundamental support.
Coming back to the ecological reconversion of economy and society we
outline below few rapid remarks that are not explicit in the concept and in
the practice of the circular economy because they are much more related to
general political addresses towards sustainability.
There is not to stimulate and support an individual demand, but to al-
locate resources to the needs of the collective well-being rather than of the
individual well-having.
Public incentives should then support the transition of the most important
manufacture towards this kind of production facility. And, for some sec-
tors, the evolution could be almost natural: for example, the passage from
the electromechanical productions, from the car, from the house-building
respectively to the sectors of the new energy, the intermodal mobility, the
13 Following the point of view that characterizes industrial societies, a high quality is
associated to the capacity of energy to be totally converted, at least in principle, in work
useful; as it is true for kinetic energy, electric energy and Gibbs free energy in the chemical
transformations, and in all these cases exergy and energy coincide. Also high temperature
heat is considered, for the same reason, a high quality energy, even though the second
principle of thermodynam-ics does not allow an its complete conversion into work.
retraining urban, the soil conservation and so on. And the above mentioned
transformations, as other similar, cause effects which cut across all the econ-
omy: an evolution accompanied, in all areas, by the full involvement of the
seats of scientic and technological research, inserted in the context of the
restructuring of the economic and productive plant.
The perspective of an ecological reconversion is not able, however, to
take the necessary priority in the public awareness, to establish itself as a
desirable alternative. No one wonders whether this step should be done with
urgency to avoid disasters environmental, economic, political and human
caused by the devastation and the untenability of the current development
Also numbers are important
Here then that the three twenty percent of the EU within the year 2020 –
a real energy revolution that has become a reference for all governments in
the world – is a target and a symbol of that urgency, but at the same time, in
view of a targeted technological innovation, an extraordinary opportunity
for the economy and for a change in the dominant model of production and
consumption: the energy revolution launches the green economy, which is
the industrial context, economic and social of that revolution.
More, suggesting and encouraging the decentralization of energy
consumption in favor of sources locally available, in forms of a greater
control by citizens up to the self-production and the self-management,
gives rise, starting from the energy, to cultures and forms of a society
in a better relationship with all the natural resources and their use by
all people.
This revolution is already under way, in some manner, as evidenced by
the data on the growth trend, exponential, that the renewables have had
worldwide since 2000, despite the economic crisis that, instead, had devas-
tating effects in traditional manufacturing sectors and has also produced a
signicant slowdown in growth rates of primary energy needs.
The numbers say much more than words. Almost all the following g-
ures, if is not specied otherwise, are taken from the annual report “Global
Status Report of 2015” [61], the most comprehensive collection of data and
analysis on the prospects of renewable energy sources.
In 2014 the share of total energy consumptions in the world covered by
renewable sources, including hydro, exceeded 19%, with 9% of “traditional”
biomasses and 10.1% of “modern” renewables; by the end of 2014, renew-
able sources, including hydroelectric, accounted for 23% of global electricity
consumptions (nuclear power 2.6%). At the end of 2014 the total output of
renewables ascended to 1,712 GW (1 billion and 712 thousand kilowatts),
split up as follows: 1055 Hydraulic, 433 from biomass, wind 370, 177 pho-
tovoltaic; to which they must be added 406 thermal GW for heating water
with solar panels.
The growth of the renewables in 2014 has represented 58.5% of the global
power, referring only to what has been added during the year: an incredible
increase that has conned the set of all fossil fuels - oil, coal and gas - to
represent not even 40% of the new energy capacity made available in 2014.
That trend has been marked and made possible, over the past last decade, by
the soaring increase of new investments around the world: from 40bn (40 bil-
lion) US dollars (USD) in 2004 to 279 in 2011 and, despite a subsequent decline
caused by the crisis, again USD 270bn in 2014. But Bloomberg New Energy
Finance (BNEF) gives more favorable gures: USD 328,9bn in 2015 including
also hydropower, 4% more than the previous year [62]; and surely it has to be
recalled that in the course of 2015 the oil price has collapsed about 70%.
In this context the European Union has played a leading role, from USD
23.6bn in 2004 to 120 in 2011; but in 2015 investment fell to the lowest gure
since 2006, with USD 58.5bn, down 18 percent from 2014. UK investment
bucked the trend with a 24 percent increase, while Germany and France saw
their investment levels fall by 42 and 53 percent respectively [62]. The lead-
ing role now has gone to China with over USD 110bn in 2015. In 2014 Asia
and Oceania, excluding China and India, have made more than the United
States; but in 2015 US came second after China with USD 56 bn [62]. Im-
pressive has been the increment of investment rates of 2015 versus 2014, re-
alized in some emerging or developing countries: Mexico up 114%, Chile up
157 %, South Africa up 329%, Africa and Middle East regions up 54% [62].
In early 2015, are 164 the countries that have committed themselves, with
determined targets, in the eld of renewables and 145, compared to 15 in
2005, who have matched with the objectives the policies for achieving those
objectives. “In developing countries, distributed renewable energy systems
offer an unprecedented opportunity to accelerate the transition to modern
energy services and to increase energy access, says GSR 2015.
A consequence of this trend are the approximately 8 million jobs regis-
tered in 2014 in the various sectors of renewables, just under half of them in
solar energy applications. Technological innovation is traditionally “labor-
saving”; this has not been the case for renewable sources, their impact on
employment has no precedent of equal intensity in the history of contempo-
rary work.
In EU - 28 the average coverage of nal consumptions of energy from
renewable sources in 2013 was equal to 15%, making more credible the
achievement of the 20% by 2020. For Italy, renewables accounted for 17%
of nal consumptions, that is, already centered the target by 2020 set for the
country; and 31% of electricity consumptions, that is more than 26%, the
target set by 2020. But the GSR stresses, right from the start of the Execu-
tive Summary: Although Europe remained an important market and a cen-
tre for innovation, activity continued to shift towards other regions. China
again led the world in new renewable power capacity installations in 2014,
and Brazil, India, and South Africa accounted for a large share of the capac-
ity added in their respective regions. An increasing number of developing
countries across Asia, Africa, and Latin America became important manu-
facturers and installers of renewable energy technologies.
Notes for an economy of sustainability
“But – someone objects – this energy revolution, and the green economy
,is a secondary issue, in which capitalism can afford to show the human face.
The true face remains the one, rapacious and irresponsible, of the economic
crisis triggered by a murderous nance.
Capitalism is historically capable of changing skin and innovate or adapt
itself; these prerogatives are the guarantee of a long life, over periods entan-
gled with the most diverse experiences: “Capitalism has only few centuries
ahead”, we said at the beginning with Giorgio Ruffolo. Nowadays capital-
ism is the subject of a profound transformation, that in recent decades is
leading the more “advanced” nations – including India and China – from the
era of the “industrialism” to that of the “informationalization”, as our epoch
has been dened by various scholars: the switch between machines and fac-
tories and informatics and web [63]. The path of this transformation is far
from clear, but it would be wrong to be misled, not recognizing this trend
because of the severity of the current economic crisis.
The energy revolution is very homogeneous and interlaced with the trend
we have just outlined. Hadn’t been the dematerialization” of the produc-
tions (EEC Report by Saint Geours,1979), that had intuited and anticipated,
exactly from the angle of energy, one theme that is increasingly emerging as
the horizon of this century? Because, just looking at the gures of the energy
consumptions and the changes in demand in the sectors of utilization, one
would have had to expect, in industrialized countries, a “lightening” of the
productions, a gradual emerge of “networks” instead of “blocks”, a techno-
logical innovation which would have even more tended to replace machines,
engines and clanking industrial processes with bits of information.
From the product point of view, the green economy is based, anyway,
on an eminently local access to resources or their production, and on the
production and use of sustainable durable goods, on average sensibly less
expensive than the traditional ones, for buyers who moreover are becoming
increasingly more familiar with the credit system. For these reasons then,
the reluctance of investors to the consumption of traditional durable goods,
such as “brick” and car, nds an alternative; in fact, the economic crisis
leaves little money and a lot of justied fear against a nance often in the
hands of greedy criminals. Instead, the sustainable durable goods, combin-
ing usefulness with the moral – let’s think just of the solar panel that, hum-
ble, replaces a fossil fuel – can motivate the consumer, increasingly sensitive
to the environmental issue: a function of “teaching” to the consumer in view
of a rational evolution of what the economists dene “preference”. And this
has already started to happen [64].
A full take-off of the green economy needs and will still need public in-
vestment policies in some sectors, which will be reduced when those assets
will be able to stand on their own on the market. Next to the green economy
there is another lever to be considered for public investment: expanding the
“third market, that one in which the use value counts more than the ex-
change value. This market is already populated by a host of non-prot as-
sociations and of individuals for whom social services, cultural activities,
production and fair trade constitute, at the same time, employment and so-
cial cohesion [64]. And just the social cohesion can become an element of
competitiveness for enterprises, such as it has begun to be observable in
Italy, perhaps for the typical features of the market benchmarks (excellence
of peculiar local productions, tourism, fruition of old and charming tradi-
tions, culture and the immense heritage of arts) [65].
It’s hard to get an overall picture, but the feeling is that these levers are
enabling steps with a growing footprint in the world, mainly in developing
Green economy and third market: a bottom–up economic policy that
nds its protagonists able to valorize resources and local networks, in a
context of a greater intelligence in using natural resources and of a demand
founded on needs and behaviors more collective (groups instead of individu-
als) [64].
An overall effect would be a stronger dematerialization of production
and, in particular, a signicant reduction in fossil fuels. The world, as we
have seen from the numbers, is already more advanced on this road than
previously thought. If reducing fossil fuels consumption and saving tech-
nologies will have more weight over the next decade, if the world will accord
with objectives increasingly stringent, such as those that are being discussed
for a lower carbon society, fossil fuels would drop from the present gure,
as primary supplies of 11 Gtoe (1 Gtoe = 1 billion of tons oil equivalent) to
less than 7 Gtoe, with an impact on employment, technological innovation,
and on the social and cultural dynamics, difcult to quantify in their positive
To insist on energy conservation, and implement the best technologies for
the actions of this kind, it is then a signicant contribution to the education
for sustainability, and not only to the objectives to be achieved or in order to
avoid of going to ll the colander of the world energy system with sources
other than fossil energies. At the basis of any principle of sustainability is
indeed the appropriate and efcient use of all kinds of resources, where “ef-
cient” and “appropriate” benet from strict scientic denitions, not only
but especially from Physics.
The market has moved differently, according to the easiest way that favors
the introduction of new technologies more than the interventions, designed
to reduce resources wasting and optimize the ways of processing energy and
materials, then, more complex and requesting more capabilities and more
clever organizational systems. In fact the market alone, also that which is
self-oriented towards solutions of minor social and environmental damage,
cannot do everything. There is the need of the government intervention in
individual countries, as far as possible coordinated at the same end; there is
the need of a global governance to guide and address the processes14.
This overall action can also be very “weak”, such as that which the Unit-
ed Nations and the various COP’s have in fact carried out, but that, as we
have already seen, it was enough to give an orientation, a drift.
The decisions to take, we hope, as implementation of the Paris Agree-
ment will imply a great transformation – energetic, economic, social and cul-
tural – that has to face to the heavy inertia of giant energy systems – oil, coal
and gas – with their industrial, economic and nancial interests, the colossal
infrastructures and hundreds of millions of workers, employees or persons
involved in that network of activities. The principal steps in order to drive
the requested changes have to be accomplished in a time very tight in com-
parison with the actual dimensions of those energy systems, and, moreover,
while the upset of climate is pressing.
Of course, energy revolution and green economy are not the socialism
next future, if somewhere desirable; and we repeat that is out of our intention
to pretend that our “modest proposal” be a way to a gradual transfer from
the capitalist society to a socialist system, as says the historical illusion of
the “Reformism”: the assumption that an accumulation of reforms can lead
to the emergence of an entirely different socio-economic system with new
forms of democracy. Especially, energy revolution and green economy are
not an adequate response to the imbalances and the growing inequalities
between North and South of the world, within social layers of the same
stronger countries – that seem to be the distressing feature of our time. But
they are a necessary condition to deal with some hope those imbalances, to
face the need of innovative products with low environmental impact and
high social desirability”, to ensure a decent existence to next generations.
To keep alive a democratic perspective of development of civilization.
It’s worth to repeat that the ecological reconversion of economy and so-
ciety will have to face in the coming decades the increasing uxes of immi-
gration, mainly due to the escape of environmental refugees. The latter is a
phenomenon that nowadays is partly concealed by the immigration caused
by wars or by the general concern about the jihadist terrorism, but, evalu-
14 “Global energy sustainability and security will require many vigorous actions at national
levels, and considerable international cooperation. These actions and cooperative steps
will need to be based on a widespread public support, especially in exploring avenues
for increased efciency of energy use.” [21 b)].
ated to have already reached about fty of millions of people, it has intended
to become within the year 2050 a matter of hundreds of millions of people:
a human ood. Nonetheless, and just for this last dramatic reason, the eco-
logical crisis remains an exceptional opportunity for an effective response
to the crisis both of the production system and of the proclaimed binomial
growth/stability, to be pursued in the context of an environmental and social
Not only nance. A sustainable utopia
All this surely does not cancel, in the next days, the trend that the proc-
ess of social and economic crisis has assumed, even less the power of a yet
uncontrolled nance. Some specic measures, albeit if partial, are however
possible: rst of all the restoration of the separation, in the bank activities,
between investment and commerce; and, also, the Tobin tax. About taxes,
the tax burden has to shift from labor to consumption of raw materials, espe-
cially the most polluting, and of soil. The carbon tax has been a paradigmatic
example of this principle, and its application in Italy it was, however short,
the most effective in Europe.
As far as Europe, the Eurobonds, almost disappeared from the debate,
rather than being thought of as nancial engineering instruments may in-
stead become instruments, fully guaranteed by EU, to nance the change of
the production system in favor of the model we have just outlined.
Further, it is crucial to give public support to the settling of the economy
of sustainability, in line with the choices already made in the eld of climate
change and energy, and giving more power to EU economic policy. The
latter certainly cannot be reduced to a “scal compact”, and requires, we
repeat, an Europe that is awakening from the nightmare of the austerity to
become a political Europe. Even, maybe, starting from the formulation of
policies of a sustainable and wide-ranging economics.
Large European public programs have to be developed. Before of the
political and social disruption that has followed the “Arab Springs” of 2011,
it was possible to dream the proposal of a large production of electricity,
from the solar energy coming from countries of the southern Mediterranean
coast, mainly funded by European public investment. A proposal worthy of
attention not only from the point of view of the energy contribution.
Enough it to say that the 5 per thousand of the surface of the Sahara is
able to cover the electricity consumption of all Africa and of all EU, foreseen
in 2030, with solar technologies available today. Several European compa-
nies, well aware of this potential, have created Desertec, a project with
the aim to achieve by 2050 the covering of the needs of the countries of
the MENA region (Middle-East, North Africa), and, in addition, an export
capacity amounting to 100 GW of solar thermal power. It is appropriate to
mention that other immense desert areas in the world, from the Gobi desert
to the Australian one or the Atacama desert (Chile), can be a ground for the
implementation of global policies, aimed to mitigate climate change with
a completely similar valence of transformation of the energy model and of
economic and social development.
We claimed several times in the past that this potential should have sug-
gested to the EU the sponsorship of colossal communitarian projects – fund-
ed through ECB and EIB15 bonds to this end released – to “pick up” the sun
of the Sahara, not just for Europe, but to give, through projects shared from
across the Mediterranean countries, energy, water and food to alleviate the
unacceptable conditions of many African peoples; also at the light of the
increasing masses of people pushed to abandon their territories not only by
war and massacres but also by environmental conditions, Everyone can no-
tice the great difference between “Desertecand such a commitment, that
would constitute the awakening of Europe from its Schäubleian hibernation
for assuming nally an economic and political dimension in place of the
practice of the hegemony of only one country [2].
Should be evident the enormous political difculties, even limiting the
political dimension and focusing mainly on technical, economic and social
value of such a project: from the accounts that the EU should do with the
type of presence of several of its member countries in the context of Africa
and the Middle East, to the problems posed by the projecting of the wing of
the “Caliphate” on the oil and ethnic conicts in the name of an only one
atrocious truth. But already before Al Baghdadi, from the conicts in Mali
and in Chad, from the ephemeral but bloody attempt to impose an empire
Tuareg, the militiamen of Gadda which had left Libya in arms, or the ex-
terminations operated in northern Nigeria by Boko Haram, up to the jihadist
claim to impose the sharia in various regions of the Sahara, Libya rst of all,
as well in Syria or in Iraq, all these “difculties” have not discouraged, if not
to a lesser extent, the interests of large multinationals or the industrial and
nancial joint ventures from going on with extractions and processing, often
making “convergent” to their purpose the policies of any single country.
It’s a political overview and a role of greater responsibility and listening,
to be assumed, especially in the Middle East: it is exactly this kind of capa-
bility, role and synthesis among the different impulses and different national
interests, which, we believe, is the sense of the size and the political presence
requested to Europe.
Today all this seems utopian, when barriers are raised against immi-
grants and the Schengen Accord is breaking up, but so, or worse, was sev-
enty years ago when the “Ventotene Manifesto” was issued. Here we y in-
evitably lower down; but the freedom and the international unity advocated
15 European Central Bank. The European Investment Bank is a “policy-driven” bank
whose shareholders are the member states of EU. EIB is a nonprot long-term lending
institution, the largest in the world, established in 1958 by the Treaty of Rome.
by the Manifesto would nd a base, solid, upon economic and social policies
which, released from the constraints of austerity, could take the size and role
of international public projects such as those drawn by our utopia.
Projects that integrate a dimension of sustainability not only for the
planned outputs, but, more generally, because they could result in a strong
correction of the current “unsustainable” distortions of the market.
In fact, commitments of this size and of this economic impact could act
as a corrective of the new economic imbalance”, as Giorgio Ruffolo has
dened, several years ago, the major distortions of the global market on
the example of the China who buys America[66]. China has made huge
movements of capital to buy assets of the American market, “for an amount
equivalent to 20% of the total American debt”, to the detriment of one bil-
lion of workers, peasants and miners who have not been invested by the
wave of development” as in Shanghai or Beijing. The fact that “two-thirds of
world savings have own towards the most indebted country in the World”,
the United States, represents a new economic imbalance, at which China
contributes so heavily and with deplorable social and ethical consequences
[66]. It’s worth to note that China was still in 2014 the largest foreign holder
of U.S. debt, even though declining, with 1260 billion dollars [67].
On the contrary, interventions of gigantic size and with a politic purpose
as the ones we have outlined, should signicantly straighten the distortions
by directing the savings not to the unearned income and the nance, but to a
production characterizing a global socio-economic model more sustainable;
global, we say, not only for the economic and social consequences but also
for the production of renewable energy, replacement of fossil fuels, in order
to mitigate the upset of climate.
An ecological reconversion of the economy and society should be sup-
ported and accompanied by a change in our lifestyle – many small but im-
portant actions connected together – able to yield a true cultural leap. But
all these aspects, subject by time of a vast literature, cannot be developed
now in these notes.
Here, we have claimed from the beginning an instance of global ration-
ality, that we hope can become an inescapable reference for the economic
theorists and, more, devoutly considered as the highest priority in the agen-
das of the major decision makers. We are not able to dispense moral maxims
or recipes for happiness. We have only tried to show a road along which to
proceed to prevent that the two walls of water ood us like the chariots of
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Massimo Scalia is a well known exponent of the Italian “Scientic En-
vironmentalism” and a leader of the antinuclear movement. As member
of the Chamber of deputies for the Greens (1987 – 2001) he has promoted
the denitive closure of nuclear plants and the laws for saving energy and
renewables. In addition to his scientic papers on Stability and Dynamical
Systems he has a vast number of publications about the themes of the link
energy/climate change and of the ecological reconversion of economy and
Aurelio Angelini, its principal eld of study and research are the sociology
and environmental policies. At the university of Palermo, he is professor in
Sociology of the environment and ecology. He is president of the scientic
committee of the decade for Education with the sustainable development
of UNESCO, director of the Foundation of heritage of UNESCO in Sicily.
Francesca Farioli is Director of the Italian Association for Sustainability
Science and co-founder of the International Society for Sustainability Sci-
ence; she serves on the board of the International Conferences on Sustain-
ability Science. Her research interests focus on science-policy-society
interface, participatory approaches, problem-solving and solution-oriented
transformative research, she has applied with different purposes and in
diverse geographical contexts. Many interesting results generated by this
kind of approach have been published in peer reviewed journals and books.
Gianni Mattioli is a recognized expert in Theoretical and Applied Ener-
getics; more recently, active in the research eld of Climate Changes and
Sustainability. He has been member of the Italian Parliament (1987 – 2001),
and of the Italian Government as Secretary of State for UE Politics and
for Environment. Besides scientic articles on Quantum Mechanics and
Mathematical Physics he has a wide number of publications on the different
aspects of the ecological reconversion of economy and society.
Marialuisa Saviano is associate professor of Business Management at the
University of Salerno, where she is vice director of the Pharma_nomics
Interdepartmental Research Centre. She is also president of the ASVSA,
Association for research on Viable Systems and vice president of the IASS,
Italian Association for Sustainability Science. Her main research interests
include the viable systems approach, service management, sustainability
science, healthcare management and cultural heritage management.
... The contradiction between the increase in supply and the market's ability to absorb it qualifies the present situation as an overproduction crisis, truly overwhelming to overcome: which huge income redistribution would be needed so that the "availability of spending" can match the supply? Neither it is at the hand, as it has happened in the two great crises in the twentieth century, the "recourse" to the world war as a possible solution to the problem; the nuclear deterrence denies this possibility ( [1],