Tragedy of the Economy: Cruising on a Single-Hull Economic System

The root of the “tragedy of the economy” (Gieseke, 2011) is embedded in the thin fiat currency model and it is exasperated by the lack of a coherent natural capital accounting system.

The “tragedy of the commons” (Hardin, 1968) is a sub-tragedy of an economic system that this void of knowledge about the function and value of its foundation (a.k.a. ecology).

Few of us want to believe that our economic system was not designed to steer us away from ecological degradation and ecological-induced inflation. That is as uncomforting as knowing the single hull ship we are crossing the ocean in will be traveling though iceberg-littered waters.

Why would we design a single-hull ocean liner?

The decision to construct the Titanic with a single hull was influenced by cost and practical considerations. Building a ship with a single hull was simpler, less time-consuming, and more cost-effective compared to alternative designs, such as double hulls or other reinforced structures.

Why did we design double-hull ocean liners?

The “tragedy of the Titanic” in 1912 highlighted the vulnerabilities of single-hull construction. This disaster, along with subsequent advancements in technology and safety regulations, prompted changes in ship design, including the adoption of double-hull construction and improved safety measures to enhance vessel resilience and reduce the risk of catastrophic accidents.

Why would we design a single-hull economic system?

Unlike a ship, an economic system is an emergent quality of a society. No economic engineer laid out the blueprint and welded it together. An economic system is the outcome of millions of interacts and handfuls of key institutional decisions made along the way.

In so far, no institution has proposed a double-hull economic system that is able to account for natural capital and ecosystem services. It is not as if society actively designed a single-hull economic system, we just haven’t yet designed a double-hull economic system.

Why would we design a double-hull economic system?

We would design a natural capital double-hull economic system because the majority of the entire value of our socio-economic system is based on natural capital and the ecosystem service outputs.

We also need a double-hull economic system because our fiat currency model creates a thick fog around the “tragedy of the commons”. Hardin did see the tragedy-berg in 1968, but few others do today. It is not fun to talk about slowing the economic ship down or changing course. What is the worse thing that could happen? — rhetorically speaking.

How would we design a double-hull economic system?

A double-hull economic system would not depend on a single, relatively thin, fiat currency. It would depend on another thicker, quasi non-fiat currency based on natural capital.

The hull layer would be made from NCU (natural capital unit) that create a global grid. Each NCU has natural capital value to some degree. Governments, corporations, NGOs, utilities, insurers, and citizens could value those NCU they deem the most important to keep the economic ship resilient and afloat.

A NCU accounting system would have the means to create transparency when part of the hull is being degraded and become vulnerable to shocks. Anyone could be on the watch.

How do we build a double-hull economic system?

We can’t. We can’t build a double-hull economic system with the same mindset we built the Titanic. Such solutions are no longer built, but are emergent qualities of society itself. Solutions of the future grow like ecosystems emerge and grow. Instead of a full-scale blueprint of an ocean liner, the design is more like the DNA blueprint for life.

The DNA contains a few simple components that provide the data that can be transcribed, translated, and translocated by what is happening in the environment around it.

EcoCommerce contains the NCU with four natural capital classifications that have the capacity to account for the entirety of global natural capital and the full suite of provisional, regulating, supporting, and cultural ecosystem services.

From this new economic DNA, an EcoCommerce Ecosystem can emerge and the tragedy of the commons and the tragedy of the economy can be avoided by adding trillions of dollars of eco-commerce value to our economic system.

Hopefully we can begin to see through the centuries of economic fog and slightly turn our ship. And we can be guaranteed we will hit several economic icebergs. We need to guarantee we have a double-hull economic system to ensure a bit more resiliency. Unlike the Titanic, we have no viable lifeboats on this planet.

Tim Gieseke manages natural capital and is the author of three books that outline the environmental, socio-economics, and governance of instituting a natural capital accounting system and employing EcoCommerce, a planetary-based economic system.

Collaborative Environmental Governance Frameworks: A Practical Guide (2019)

Shared Governance for Sustainable Working Landscapes (2016)

EcoCommerce 101: Adding an ecological dimension to the economy (2011)