High in the drainages, the runoff puddles up and begins to ooze. As it seeps downslope, it converges with other runoff, causing the flow to deepen and increase in speed. Every spontaneous flow aligns with the Second Law of Thermodynamics’s direction towards less usable energy, less Possibilities. The rainwater’s potential energy (a gift from the sun’s power to evaporate and distill sea water) transforms into kinetic energy at an increasing rate as it flows downhill, converging with other flows into streams and rivers, sweeping bits of bedrock and soil with it back to the salty sea.
For years, I’ve felt an analogy between the converging flow of water and the tendency of money to converge as it flows. But as wealth in our world concentrates at an increasing rate upon those already very wealthy, I am beginning to think this is more than an analogy. I’ve come to think that the flow of money is shaped by the Second Law, like everything else in the world.
Let me begin with some stories. The first ones are from the August 1, 2017 issue of Hightower’s Lowdown, Our ravenous appetite turns humble sand into an endangered natural treasure, reporting on sand mining. The article begins by describing how sand is the main ingredient by volume for concrete and glass. As he poetically says, our cities are built of sand. As more people move into cities, construction requires usable sand (not all sand is usable) and such sand is often not nearby, leading to sand mining which is a harvesting of The Commons.
“Through the lush forests of the Indian state of Kerala, the Manimala River has flowed for centuries over sand beds, up to 30 feet deep, that have functioned as a permanent aquifer. Since 2002, however, a complex network that villagers dubbed the “sand mafia” has scooped up so much sand that the river is barely a trickle and, as Rollo Romig reported in The New York Times, the water table has dropped for miles around. With no sand to store the monsoon rains, the water whooshes away as quickly as it falls. Ordinary wells have run dry, so people have drilled deep tube wells, some of which are now also are failing. Water-thirsty rice paddies are long gone. And as loss of sand weakens their foundations, several major bridges face collapse.”
(In the article, Poyang Lake in China is mentioned as one of the most intensively sand-mined places on Earth. It’s worth looking at Poyang Lake on Google Earth (29°19’57.77″ N 116°03’36.86″ E). All the barges you see are carrying sand.)
Another story.
“That cost is particularly high on the southwestern coast of Cambodia in the watery province of Koh Kong, where dredging corporations have been stripping sand from the many rivers, estuaries, islands, and mangrove forests. This area had been a timeless, tranquil place where generation after generation lived in stilt houses protruding into the rivers and tidal pools, literally pulling a living from the aquatic abundance. But corporate marauders arrived in 2007 with their arsenal of heavy machinery, and they have now spent a decade scraping out unimaginable volumes of sand. Of course, an entire ecology is connected to that sand, so the dredgers have also been ripping out the roots of mangroves, polluting rivers, collapsing riverbanks, destroying shallows where crabs breed, and ruining fish habitat. As company barges have continuously taken away the sand, they’ve also taken away livelihoods and tranquility. Environmental and human rights journalist Rod Harbinson reported in June that many people forced out of fishing had little choice but to leave their villages and families to seek low-paying, oppressive jobs such as garment factory work in Phnom Penh.
“Where did their sand go? Some 700 miles across the sea to Singapore, the tiny island nation just off the southern tip of Malaysia. Once an outpost of Britain’s infamous East India Company, Singapore is a prosperous finance center today as well as a tax haven for the world’s wealthy, an Asian base for more than 7,000 multinational corporations, and home to the world’s highest per capita percentage of millionaires.
“The city-state’s skyline is framed by hundreds of sand-gobbling skyscrapers, but that is not why it has become by far the world’s biggest importer of this endangered resource. Rather, the island’s corporate and political elites have been expanding Singapore’s physical size by dumping sand into walled-off portions of the sea around it.
“Since this totally urbanized island has little sand of its own, its moneyed powers have been deploying lawyers, flimflammers, and others to exploit the region’s poorer nations. The damage done to so many, simply to build up a few square miles of artificial territory for so few, is such an outrageous waste that three countries–Indonesia (where more than two dozen islands reportedly have been completely hauled away!), Malaysia, and Vietnam–have restricted or banned sand exports to Singapore.”
The next story is from the New York Times.
“One of the World’s Greatest Art Collections Hides Behind This Fence”
By Graham Bowley and Doreen Carvajal, New York Times, May 28, 2016
“The drab free port zone near the Geneva city center, a compound of blocky gray and vanilla warehouses surrounded by train tracks, roads and a barbed-wire fence, looks like the kind of place where beauty goes to die. But within its walls, crated or sealed cheek by jowl in cramped storage vaults, are more than a million of some of the most exquisite artworks ever made.
“As the price of art has skyrocketed, perhaps nothing illustrates the art-as-bullion approach to contemporary collecting habits more than the proliferation of warehouses like this one, where masterpieces are increasingly being tucked away by owners more interested in seeing them appreciate than hanging on walls.
“With their controlled climates, confidential record keeping and enormous potential for tax savings, free ports have become the parking lot of choice for high-net-worth buyers looking to round out investment portfolios with art….”
“Though the audit did not specifically measure the increase in stored artworks, it estimated that there were more than 1.2 million pieces of art in the Geneva Free Port alone, some of which had not left the buildings in decades.”
One container contained more than a thousand Picassos. It’s a way to park a lot of wealth in a form that can slip through different national laws so that the wealth can be changed into forms that escape taxation. If you were to ask people, “what is art? What makes art important?” you would hear many uplifting comments, none of which pertains to items sitting for years in a storage locker. There is a huge disconnect between art as we think of it and art as something that is more and more sitting in the dark representing trillions of tax-evading dollars.
Now hold both of these stories in focus at the same time to achieve a “3D” effect. Hold in focus that Cambodian province before the sand mining. Glacial melt from the Himalayas has slowly built up complex deltas of sand over millions of years anchored by mangroves, providing an intricate surface area for estuary life to thrive, including an indigenous human culture that has been sustained for thousands of years. That is one image.
Now take away all the sand that sustains this and sell it to become a square mile of super-expensive real estate in Singapore. Take all the hundreds of millions or billions of dollars made from that and use that to purchase thousands of pieces of great art and lock them into a storage container in a free port. Focus on that locked-away art as the second image.
Now hold the two images simultaneously in focus and allow the differences to reveal depth. The one can be translated into the other so there is some strange equivalency here. Imagine someone going to those Cambodian people and saying, “You are going to need to leave because we are going to rip up this entire region so that we can lock a lot of art into a storage container.” That sounds absurd on the face of it. And yet, somehow, measured in dollars, the locked-up art is held in higher value than that destroyed ecosystem and its dispossessed people. Money flows from the diffuse wealth of a healthy ecosystem into a storage locker. What does the direction of that flow tell us about money? What is going on here?
Another story. I was invited to a weekend gathering recently where I heard two stories that perfectly bookend the Gradient of Wealth. At one end was a participant’s grandmother who lived in Indianapolis in a black community that was systematically deprived of access to resources. She would iron clothes and receive six eggs in return. She would trade two of those eggs for flour. Only a few of the people had access to cash work. The cash was circulated within the community for as long as possible. This was a cash-poor economy in service to the people.
At the other end of the gradient is Bitcoin mining. Hundreds of millions of dollars buying hydro-electric dams, the cheapest form of electricity in much of the world. Many of these dams are in economically poor regions. Instead of being used to electrify rural areas, the dams powers thousands of computers that are specifically designed to compute answers to extremely difficult problems. Are the problems related to curing a disease or analyzing the complexity of weather and climate? No, their job is to solve abstract mathematical problems that are very hard to solve. When the solution is found, a new Bitcoin is generated. Then the computers start over on another problem that has no relevance to the world other than creating a digital signature that is being turned into a speculative instrument. Much of the potential energy of that water is converted into computer heat (which requires some of the electricity to power fans to blow the heat out of the building). This is a cash and energy intensive economy with hardly any contribution to life. How does the economy of two eggs for flour at one end of the gradient of wealth transform into an economy of hydroelectric dams overheating nearby buildings as it moves towards the other end of the gradient? What is going on here?
Imagine being high in the Rockies in early summer as the snow is melting and the meadows are opening. Snowmelt, cascading and tumbling down bedrock cliffs, effervesces with bubbles of clean mountain air. Often I simply stick my face in and drink it straight. But this time I fill a bottle.
Now follow that stream down to the Missouri River and then down to the Mississippi and on past the refineries of New Orleans. I fill a second bottle with that water. If I tried selling the two as bottled drinking water, are they of the same value? They both contain the same amount of water and they’ve both come to the same room temperature. Or has something happened to the water as it flowed downstream that has lowered its value as drinking water?
Water has a cycle. When it evaporates, it vaporizes and expands, later condensing into millions of tiny diffused fresh water droplets which begin converging again as they fall. Water has a definite direction of flow – downward – due both to gravity and the Second Law’s stipulation that the direction of spontaneous flow be towards less usable energy. Water flows in the direction that lowers its usable energy. This is true gravitationally and it’s also true chemically as it dissolves molecules it flows past. As the runoff converges, it picks up speed. In sum, the water has a direction of flow; the usable energy within it decreases as the water flows in that direction. The direction of flow and the consequent decrease of usable energy are linked together, two sides of the same coin.
On my rain walks, I work to slow down the rate at which runoff converges so that more of it soaks in higher. I don’t curse the tendency to converge or view it as evil. I accept the pattern as natural; I just want to influence the rate, as trillions of lives before me have done.
We see a similar convergence pattern with money. It tends to flow from individuals into large corporations, banks, insurance companies. It even flows like water from the rural areas, converging downslope onto cities at the mouths of rivers. Why does money flow like this? How does this happen? I’m not asking with any sense of moral outrage. I’m asking more like Galileo intrigued by how things fall. How do the flows of money converge? Does the flow of money tend to concentrate for the same reason that the flow of water tends to concentrate as it flows? I ponder this as I trowel my divergences in the rain.
Just as the bottle of fresh snowmelt drinking water is more valuable than the bottle of industrial delta drinking water, so perhaps what a dollar represents “high in the drainage” is more valuable than what it represents far downstream, concentrated in the midst of a billion more. Might it be that as money “flows” and concentrates downstream, it loses some of its ability to create Possibilities just like water does? That the converging flow and the loss of possibilities are two sides of the same coin?
Part of the pattern with water is because when water converges, it flows faster. We see this with raindrops on windows but it happens also on the land. It speeds up because less of its volume contacts surfaces that resist its flow.
More of the converged stream can flow further from the slowing edges. It can flow faster. Since the water’s kinetic energy is proportional to its mass (which just doubled) and its velocity squared (which just increased), the water has more kinetic energy to erode its channel.
This is a common pattern I see in the fields. A grassy channel whose runoff flows along the surface, through the grass, converges with a similar grassy channel. They meet and immediately, their combined channel cuts down through the sod and the runoff becomes confined within a narrow, eroding channel. Runoff that used to flow parallel to that channel, off to its side, now is bent towards the deeper channel that offers a faster way to flow, creating even more convergence.
We see something similar with money. Hedge funds that usually produce some of the highest rates of return require an initial investment far beyond the financial capabilities of most people. Similarly, banks offer better accounts with higher rates of service for larger deposits. Larger flows of money acquire money at a faster rate.
Similarly, larger flows tend to flow through limited liability companies, capital gains, and off-shore banking (and storage containers in free ports) so that they are proportionally taxed at lower rates. Larger flows lose less of their flow to taxes (evaporation) than smaller flows. Money that comes to me will never go into some off-shore bank account along with billions of other dollars because that is not something I have direct access to nor would want to. But further “downstream”, dollars could go directly there.
People who are moving higher on the Gradient of Wealth bring both more money and more ambition to the higher levels. But at the same time, some of this money will be converging upon ambitions that will direct the money towards investments that deplete The Commons. So, through probabilistic shifts, the converging flow of money will gradually lose its ability to create new Possibilities. For example, a savings account now earns such a negligible rate of interest that its not worth saving. You can get a higher rate of interest by spending your money with a credit card. (2% discount on purchases) so that those who save subsidize those who spend. Without incentive to save, people navigate through life with little financial cushion. Along the way, many get trapped in credit card debt and have to start paying interest at rates that once were condemned as usury by churches. We lose the Possibilities these people might have brought into the world if they weren’t trapped in debt.
But because money is purely symbolic, a looted dollar has the same value as an earned dollar. The inability of the value of money to actually reflect the loss of possibilities as it flows down through the Fifth Dimension is one reason why Adam Smith’s “Invisible Hand” often does not lead to the greater good. If the money is directed towards obtaining “more money than others”, its search for the highest rate of return will lead it to be invested in gray areas that drain the world of possibilities, causing the world to flow Downward faster than solar energy can lift it back up. What we need to do is turn away from this direction. It’s similar to the hard lesson those two boys on the skateboard couldn’t learn as they crashed over and over. You need to start turning the other way earlier than you think. Otherwise the system will swerve out of control.
Shifting direction away from the Gradient of Wealth is not detaching from money. Money is a useful, still-evolving tool that can serve us by easing many exchanges along our way. However, detaching does mean detaching from any assumption that links the worth of a person with their wealth. Having great wealth does not automatically make you a better person or a worse person than others. There are people who gained their wealth through the hard work of making the world a better place. There are wealthy people who got that way by marketing pain-killers as non-addictive or by raiding the pension fund of workers, depriving them of their promised security. Similarly, lacking wealth does not automatically make you a better person or a worse person than others. There are poor people who are poor because they tithe and volunteer much of their time to helping others. There are poor people who conned everyone they came in contact with until they had no one left to con. It is better to discern each person’s current direction while also seeing them as a possible ally who might emerge as we exert our force Towards Upward.
Detaching from the Gradient of Wealth means allowing the gradient to become irrelevant in one’s life. Not letting it shape your judgment of people. Not letting it shape your choices, from the smallest purchases to the biggest life decisions. Not allowing it to tempt you to a good-paying job that you know is unethical or destructive. There’s a wiser direction to navigate by.
One challenge of re-orienting one’s direction is that one will put less energy into maintaining one’s position on the Gradient of Wealth. Therefore, one’s position will probably slip. One will encounter the conditioned fear of falling behind, the fear that those around us will see us as losers. Our economic system fuels this fear. But remember, every play is two plays. Part of the reason one gets caught up in the Gradient of Wealth is because all around us, it seems to be the only direction in town. By detaching, one withdraws some of that shaping energy, weakening its hold within our culture, thus making it easier for others to detach.
The book, Barriers and Bridges to the Renewal of Ecosystems and Institutions, pointed out that when a resource agency manages the resource for only a few variables, the ecosystem gradually grows brittle. Our complex relationship with the living world is increasingly being “managed” for profit and the relationship is growing “brittle”. There is no immediate profit in many of the things that need to be done (like nourishing The Commons) so they are left undone. As population grows and automation reduces jobs and environments degrade, the question of “what are we here for?” grows both more important and more ignored.
I remember how Rachel and Owen went straight to the 30/30 outcome when they were playing the Hand Game. They simply asked each other, “How do we win?” So, one strategy of change is talking aloud with one another “How do we win? What are we trying to achieve here? What are we organizing our relationship around?” This is why seeing Upward Spirals is so vital. Believing the world is doomed to run down will lead to a different discussion of “How do we win?” than understanding that life, over hundreds of millions of years, has created a vast reservoir of Possibilities (from which we emerged) and that we can be part of that ongoing creation. We need to ask: Am I focused on creating “more wealth for all (which will include me)” or having “more wealth than others”. “More wealth for all” leads to actions that enrich The Commons from which the true wealth of Possibilities actually flows. “More wealth than others” can lead to takings that diminish trust and degrade The Commons in the deepest sense.
And let me repeat yet again, this is not an attack on money or the wealthy or inequality. If my hypothesis is correct, the converging flow of money downstream is natural. But it’s also natural that on its own, the Earth would receive only about eleven inches of precipitation per year. Life has discovered the wisdom of recycling as much of that water as possible, thereby more than doubling that “natural” amount. Life has increased the wealth of Possibilities available to all regions, not just downstream. Our culture needs to develop a similar wisdom in regards to monetary wealth and develop creative ways to energetically recycle it in ways that truly strengthen The Commons.
Magic lies in the work that you do with this gift of life. The issue, for me, is replicating with money what life has done in creating the wealth of The Commons. Hide it not under a bushel basket like art in a dark storage container. Hold it high on the slopes where the sun can lift it back into the sky, fresh again. Combine it with the energy of other lives to create structures that can change the rates of flows so that more Possibilities accumulate within The Commons. This is wisdom.
Next Chapter . . . . . Table of Contents
Leave a Reply