I find it fascinating to read all the comment about wealth as the current financial crisis develops. There is always the presumption that wealth can be created but little about the basis for that presumption. It has been taken for granted for years because the evidence has been there. Many people have seen their paper wealth grow like a weed. Now it is dying and they wonder what went wrong. They wonder whether some more fertilizer will make it grow again. They do not know the difference between spurious paper wealth and real substantive wealth. After all, why should they when the paper wealth brought them all they could desire? Now they will have to learn to make do with what remains of the real wealth.

Society has used intelligence, motivation, skills and the tools they have invented to build up, operate and maintain the structure of civilization by irreversibly using the available natural capital at a high rate. That structure of civilization is the real material wealth of our society. It has been the rock on which the other elements of real wealth – social, cultural, intellectual – have developed. Financial wealth used to represent this real wealth but that is no longer so. The cancerous growth of financial markets in recent decades has ensured a growing disconnect between real wealth and this spurious financial wealth. Naturally, this cancer is now imploding.

The question is how much influence will this implosion have on real wealth. The real material wealth of civilization has been built by using natural capital, which is natural material wealth. Consideration of only one side of the ledger – the real material wealth of civilization – leads to the misunderstanding that is endemic to the human race. We have built up our material wealth at the expense of decimating the wealth of our life support system, the environment. It can be argued, and is a common belief, that we have done a successful job of creating real wealth of society from natural wealth. That argument and belief is based upon the stupid assumption that natural capital can continue to be drawn down ad nauseum. Society is now going to have to face the reality that natural capital is becoming scarce. Most of the natural wealth has been decimated. Society is addicted to using natural capital at a high rate for its development, operation and maintenance. Yet, it is becoming scarce. The symptoms of this malaise, including climate change and fuel, food and water supply problems, are becoming apparent to even our leaders. We now have to face up to the real material wealth of civilization declining. Hopefully sufficient wisdom will emerge to maintain some of the social, cultural and intellectual wealth.

The irony is that money, in spite of its inherent lack of real value, continues to be the driving force of the operation of society. Those who have money can buy a high material standard of living without having to worry about the consequences. The well-off in society are doing a tremendous job of doing more than their fair share of decimating the life support system of civilization! The consequences of this ravaging will only slowly trickle up. There have been a small minority who have amassed financial wealth, often without contributing to the real wealth. They will be the last to power down as the economy contracts. The masses are already paying the price of the decimation of the real natural material wealth.

This discrepancy between real and spurious wealth comes about because of a simple hallucination of humans. We believe that we can ‘make money’. We ignore the fact that limited natural capital evolved slowly over eons under the driving force of insolation. We can thank the sun for making that capital. But we have developed the means to irreversibly use up that natural benefaction with money we have made!