Tag Archives: resource management

Tied to the tipping point

“When philosophy paints its grey in grey, one form of life has become old, and by means of grey it cannot be rejuvenated, but only known.  The owl of Minerva takes its flight only when the shades of night are gathering.” – (Georg Wilhelm Friedrich Hegel, Elements of the Philosophy of Right, 1821)

In this month’s issue of National Geographic Magazine, the cover story entitled “The Super Trees” by Joel Bourne describes the current trends in Redwood forest management.  With only approximately 5% of the old growth redwood forests remaining and under protection, the challenge is now to bring sustainable forest management back to  2nd or 3rd generation growth forests.

The tale of the redwood forests mirrors the tale of most of human resource management.  In a sad irony of human history, the story of earth’s largest trees is a microcosm of the drama still playing out across the globe.  If the current patterns continue we shall only recognize the error of our ways when, like the redwood forests, only a fraction of the world’s ecosystems remain.  Then, with the shades of night upon us, as a species, perhaps we will understand how to begin to restore in some way the planet we have destroyed.

In terms of the history of the Redwood forests Bourne tells the story of Charles Hurwitz who in 1985 with underwriting from Michael Milken, engineered a hostile takeover of Pacific Lumber.  As Bourne goes on to say:

“With Pacific Lumber, Hurwitz inherited roughly 70 percent of the remaining old redwoods in private hands. In his first meeting with the employees, the dark-suited businessman told them—in a now famous quote—that he believed in the golden rule: “He who has the gold, rules.” Hurwitz then proceeded to break up the company and sell its assets…  Most important for the redwoods, Hurwitz adopted a business model of clear-cutting, doubling—and some years even tripling—the annual amount of timber harvested from the company’s holdings, which eventually reached 210,000 acres.”

The application of this business model based on high yield and short term profit pitted loggers against those outraged by the company’s practices.  According to this model the leveraging of junk debt is used to acquire a company in order to extract every ounce of productivity at the expense of its capital resources.  This model functions to the point where the productive capacity of the company is unable to continue to service the acquiring party’s debt.  At this point the company collapses into bankruptcy, its capital siphoned off and exhausted.  The acquiring party then moves on to another “victim” repeating this process ad nauseam.  It’s not difficult to see how according to this model the incentive to sustain both the business and the resources was absent due to the inherent lack of a vested interest in the stable and long term growth of the company.

In 2008 Pacific Lumber ended up in federal bankruptcy court and is now known as the Humboldt Redwood Company, part of the Mendocino Redwood Company. Bourne’s article goes on to detail the efforts now being made on the part of responsible owners of the 2nd and 3rd generation Redwood forests to create a business model based on sustainable forest management.  This example illustrates classic issues with capitalism.  How can society foster the responsible application of capital to the profit of its owners, while at the same time regulating its use in order to maintain a secure and lasting social order?

Year after year, decade after decade we have continued along a path that the vast majority agrees is leading to systematic collapse.  The reliance on regulation of companies and industries whose products and by-products cause harm to individuals and society’s interests has proven to be counterproductive from a systematic perspective.  To maintain a system which regulates the same broken business model allows very profitable companies to pay symbolic fines and allows politicians to claim defense of the public good.  In the meantime business as usual continues, profits are made, and the capital resources of society as a whole are exhausted further and further.

We can see the same dynamic playing out in the debate on American health care, in the response to the financial crisis, and in the response global warming and mass extinction which is underway across the globe.  The question in each of these cases is do we have the collective will to choose to take preventative measures to at least slow the rate of decline, if not to solve the underlying causes in time to avoid the tipping point?  Or will we again claim ignorance and impotence in the eyes of future generations to the dialectic of history?

In each case entrenched opposition on both sides will vehemently defend their vested interests and fight any change to the current model.  The time however is almost past for us to have the ability to choose to move the old dichotomies.  Very shortly we will be faced with the ruin of both the current financial interests and remaining natural resources themselves.  We have the supposed luxury in economics to stave off systematic financial collapse through our ability to change the rules of the game in order to avoid ruin.  But unlike economic systems, ecological systems are not the products of human invention.  Once ecological degradation reaches the point of crisis we will be unable to stop it, and once that occurs the very foundation upon which our economies are based will collapse.

What is necessary is to reorganize the way we quantify natural resources in terms of economic units to better align our measures of economic value to those ecological significance.  The value or liability of a given resource must be able to be measured and quantified in the market place.  In this way standing forests, marshlands, prairie, etc.. could all have an economic value equal to their ecological value.  The current model of resources being economically null in value until such time as they are “harvested” or utilized and transformed into some derivative product builds into the system the incentive to pillage functioning ecosystems in the quest to create wealth and value.  By fundamentally reorganizing the way in which we quantify a given resource’s value in terms of its carbon impact, its ability to provide clean water and clean air, the economic incentive will be built in to not only preserve, but to restore and manage living biosystems.

It is a foolish assumption on our part today that we consider the basic elements upon which our societies and economies are based as given to us from either God or from Nature.  While quantifying the natural world in terms of economic value will be opposed by both classical economics and by traditional ecology, a synthesis of two zero-sum gain problems to create a win-win solution is at the heart of the issue.  It is a question of universal significance as to whether humanity can finally learn from its past and apply those lessons to the present. Can we as a species reach a synthesis with the planet without having the harsh logic of history force change upon us, or will history’s dialectic again force humanity’s hand into reacting to catastrophe?

Redwoods Owl

Redwoods Owl