Fleeing Vesuvius: Overcoming the Risks of Economic and Environmental Collapse

The financial crisis that has blighted the world's richest countries since 2008 is a turning point in human history. Many of the contributors to this book believe it marks the end of the period in which incomes could be expected to rise year after year and that we now have to learn to live with economies that shrink rather than grow. The reasons our incomes will shrink is that the natural resources required to enable them to grow can no longer be extracted in ever-growing quantities. Indeed, as this book shows, the financial crash itself was due an irresistible force - the rising global demand for oil - meeting an immoveable object - a static oil supply. Further turmoil can be avoided only if the components of our financial system that developed to suit growth are changed to cope with contraction. For example, our money must no longer be created by profit-driven commercial banks that put it into circulation by lending it to their customers. Instead, electronic money is likely to be given into use and taken back again if people try to save it. In future, businesses will go bankrupt if they continue to finance themselves by borrowing a fixed amount of money that they promise to repay. They will raise the capital they require by selling a new form of bond that, unlike conventional shares, will entitle the holders to a share of the firm's income rather than its profit. No-one will saddle themselves with a mortgage in a world in which incomes shrink. The book suggests a new form of housing finance that can be adopted right away. But Fleeing Vesuvius does not just discuss the financial and economic changes needed to cope with our new situation. It includes two long sections, one on the changes we need to make in the way we think and the other on ways we relate to other people, particularly those living in our own areas. Far more self-reliant local communities will certainly be required as the energy-dependent global economy breaks down. Another section considers the chang

Richard Douthwaite is a columnist for The Irish Times, New Internationalist, and Earthwatch, and author of the influential book, Short Circuit: Strengthening Local Economies in an Unstable World. He lives in Westport, Ireland.

Gillian Fallon has worked as a writer, journalist and editor for 15 years, most recently in academic publishing. She has a particular interest in food security and in the challenges involved in communicating the many complex messages derived from systems thinking to a non-specialist audience. She has been a member of Feasta's Executive Committee since 2006 and lives in Ireland.