Debt and the Tar Sands

Fort McMurray, Alberta / Photo: Kris Krug

by Charles Eisenstein

The Occupy Movement has been characterized by, and criticized for, its lack of focused objectives. Originally gathering around issues of economic inequality and debt, it soon ballooned to include every progressive issue under the sun, and then some. Yet amid the cacophony of proposals and messages, we could always detect a hint of a unifying theme. We sensed that all of these issues are somehow connected; we sensed that we were protesting something. What was that thing? What is it now? What is it about current actions to, say, stop the excavation of Alberta’s tar sands that makes them Occupy actions? What does ecosystem destruction and climate change have to do with financial inequality?

Just as we suspect, both arise from the same source. Inequality and environmental degradation are written into the rules of our financial system on a level so deep they are nearly invisible. To see how, let us start by asking, Why is it that there is money to be made by excavating the tar sands, but not by protecting the wilderness and the indigenous way of life there? After all, money is a mere social agreement, created by human beings. It is a story – a system of interpretations of symbols that defines value. How have we come to assign value to those activities that are destroying Earth?

The answer has to do with how money is created: as interest-bearing debt. At any moment, because of interest, the amount of money in existence is always less than the amount of debt. The only way to avoid defaults, unemployment and concentration of wealth is for new money to be constantly created through further lending. Lending can only happen and loans can only be repaid when there are profitable investment opportunities: the creation of new goods and services. That is, it can only happen in the presence of economic growth. When the economy stops growing, debt rises faster than income, defaults rise, employment falls, and the concentration of wealth intensifies.

To prevent this, politicians across the political spectrum seek economic growth. Ideally, if the economy grows fast enough, the owners of wealth can keep getting richer by lending money at interest – and the borrowers can get richer too, by increasing their revenues faster than the rate of interest. That plan worked pretty well in the 1950s and 1960s, but today it is becoming increasingly apparent that the planet cannot accommodate much more economic growth. As the growth rate has slowed, economic inequality has increased. For a time the developed world “imported growth” by stripping natural resources and social capital from nations that still had a lot of it. Today, though, these sources of growth are running out as well. We are left with the dregs of the barrel: for example, the Alberta tar sands.

The debt crisis and the environmental crisis are thus two sides of the same coin. In the absence of growth, indebtedness rises quickly, and political pressure to squeeze a bit more growth out of nature – to find something, anything, from nature to convert into product – increases. If we build the Keystone pipeline and drill in the Alaskan Wildlife Refuge and cut down what’s left of the rain forests and use up whatever capacity of the atmosphere remains to absorb our wastes, we might be able to force a few more years of growth out of this planet, and temporarily arrest the rise of indebtedness. But unless we can maintain exponential growth forever on a finite planet, the debt pyramid is doomed, and we maintain it only at a worsening cost.

Imagine that you are a debtor and can no longer make your payments. Your creditors, themselves trapped in the logic of money, are ratcheting up the pressure. Surely you could take a second job. Surely you could stop taking vacations, sell your house, eat less, pledge your children’s future as collateral. Surely there must be something in your life that, at whatever cost to yourself, you can convert into money, to keep the payments flowing a little while longer. Such is the dynamic driving austerity and the pillage of the natural commons.

In other words, the system is irremediably broken. Even vast redistribution of wealth, say through higher taxes on large incomes, doesn’t change the underlying dynamic compelling endless growth. And I think many in the movement intuitively recognize the futility of mere tweaks to the system. That intuition, perhaps, explains Occupy’s reluctance to make demands. Any demand that could be framed within the current political discourse (which takes the desirability of growth as a given) is already too small. What we really want is beyond our ability to articulate. But whatever it is, surely a deep change to the money system, with its fool’s choice of debt slavery or ecocidal growth, must be part of it.

Another way to look at it is that the same debt that is driving millions into destitution (and which drove many Occupiers to the streets) is also driving corporations and their stockholders to liquidate every bit of nature they can. The corporations also have debts to service, bond payments to make. So too do the governments that are selling off our commonwealth. All of us are in the grips of the same world-devouring machine that chews up beauty and spits out money.

To be sure, the money machine rests on an even deeper foundation. The story that is money is tied to deeper stories, even more invisible: the defining myths of our civilization. These too are in crisis. That is why, at bottom, Occupy is a revolution in our human being-ness. That is why, in Occupy, the long-sundered worlds of the spiritual practitioner and the social activist are reuniting. And that is why we are able to recognize so many seemingly unconnected issues as arising from a common source. Not all have to do with money and debt, but these lie close to the heart of it.

In the case of fossil fuels, habitat destruction, pollution, resource extraction and climate change, the linkage is clear. These are not separate from the original issues that brought people to the encampments. It is the same issue: the insane conversion of the world into product and profit that serves no one – not 99% of us, and ultimately not the 1% either. “We protest not at our exclusion from the American Dream; we protest at its bleakness.” No one wants a system where, to avoid debt peonage or poverty, we aspire to be among the “winners”: those who enslave the rest toward the destruction of all. The money system as we know it prescribes this desolate choice. That system is crumbling. Let us make sure that when it falls apart, there is still some natural, social, cultural and spiritual wealth remaining from which to build a more beautiful world.

Originally published on

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