By Greg Chadwick

The greatest mathematical phenomena affecting mankind’s very existence is unknown to the majority of Americans; that of feedback loops, both positive and negative.

Dr. Albert Bartlett states that our greatest shortcoming as a species is our inability to understand the exponential function. However, it might be that we choose not to understand the exponential function simply because it clearly demonstrates that our economic system is doomed to fail; sooner, rather than later.

As a result, we choose not to factor the function into our calculations. Essentially our position has been, “Why should we stop the party when there is still cold beer on tap?” After all, we’re here for a good time, not for a long time.

Tolkien wrote…. “It does not do to leave a dragon out of your calculations, if you live near him.” However, we leave the mathematical dragons out of our calculations so that we can blissfully continue the party until the cold beer suddenly runs out.

The frightening truth about Professor Bartlett’s explanation is that everything appears fine, right up to the last doubling; then all hell breaks loose. The party ends suddenly.

Those who deal in micro solutions and sound bites may be encouraged that our rate of population growth is slowing; however, it should be noted that our present economic system can’t survive unless the growth continues. It is a classic Catch-22, at this juncture in time, we’re damned if we grow, and we’re damned if we don’t.

As the exponential function has begun to play out, feedback loops have begun to kick-in. These feedback loops work on the upside as well as the down side. In theory, so long as our population is small in relative size to our resource base, feedback loops should not pose a major problem.

However, that is not always the case. During the Great Depression the physical system was more than ready to go, there were lots of resources and not many people using them. However, human greed and stupidity fueled the negative feedback loops that produced and prolonged that historical nightmare.

The Great Depression was the most shocking demonstration of the unrelenting stubbornness of negative feedback loops that the world has ever witnessed. While volumes have been written regarding the cause and length of the Great Depression, let there be no mistake, that terrible event endured due to our inability to break the natural progression of a negative feedback loop!

That being said, man has almost no control over negative feedback loops that are caused by bumping into shortages and the associated cost increases that are due to diminishing resources. Feedback loops accelerate the process of depletion and the situation deteriorates quickly. This is the position we are in today. However, unlike the exponential function, we do get some warnings in the form of shortages and price increases before we hit the proverbial wall.

Now that population and economic growth are slowing, our debt and interest based economic system is failing. As the growth continues to slow, the system will deteriorate at an increasing pace. This is the point where negative feedback loops pick up great momentum.

To better picture this phenomena, let’s look at how towns grow. For an extended period of time the growth is slow and gradual and then it explodes. I have personally seen this happen in two communities that I have lived in. In both instances, sleepy rural communities that had stable populations for decades began to experience growth.

This happened as people fled the big city for an area with less population density and a slower pace of life. At first, the population increase is measured, but over time it picks up momentum and seemingly overnight the residents wake up to find that their lovely little community is now four or five times its original size.

So how does this happen? The short answer is feedback loops. It seems harmless enough when a small subdivision comes to town. Many people like it initially because there is more activity downtown, there are more people walking formerly deserted streets, and business picks up for the local merchants. Tax revenues are up and life is good; temporarily.

But what does it take to support these newcomers? They want the same services and amenities of the big city, but in a small town setting. New schools need to be built, more teachers hired, more housing, larger grocery stores, hardware stores, libraries, roads, sewers, water lines, electrical lines and substations, plus all of the people to build, operate, and manage this new infrastructure. This expanding infrastructure fuels more growth as the positive feedback loop intensifies.

Unfortunately, the positive feedback loops that allowed a seemingly insignificant population to explode overnight (will by their very makeup) turn negative and go into overdrive in the opposite direction. In simplistic terms, anything that can’t go on forever doesn’t.

Now the process reverses. Unemployment reduces spending, local merchants lay people off because of the reduced spending, and now this new unemployment further reduces spending. The reduced spending results in lower tax collections, forcing the city to reduce payrolls. This further reduces consumer spending leading to more unemployment.

Large numbers of homes are put up for sale as the unemployed either fail in their mortgages or are forced to relocate. This balloons the housing inventory and stops nearly all new construction. Those involved in construction now find themselves in the eye of the negative feedback loop. I could go on detailing the chain reaction; however, the picture is already clear.

The point is that once the ball gets rolling, momentum quickly makes it unstoppable. Like it or not, we become spectators when we allow things to reach this threshold. Once again, feedback loops work quickly, everything seems fine until we are on the brink. Consider that throwing Trillions of dollars at the problem has had no noticeable effect.

We had several clear warnings of our current plight in the seventies. Had we done something then, we probably could have made orderly changes and maintained a good quality of life without seriously depleting our resource base. But since we failed to act, feedback loops will now run their course.

The good news is that we still have our lives to lead and choices to make. We can make the best of our circumstances and enjoy ourselves, or we can complain and play the role of victim. We still have that choice; use it wisely.