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 changes required in way we use the land — how its fertility must be enhanced, how it can absorb greenhouse gases rather than release them and how our settlements should be planned.
Until these changes are made, crisis will follow crisis, each compounding the last, just as earthquake after earthquake damaged the buildings of Pompeii for many years before a massive eruption finally destroyed the city. Our situation is better. If we heed the financial earthquakes and the environmental tremors and rebuild our economy and society on a different basis, we may escape a catastrophic systemic meltdown.
This is a practical and fundamentally optimistic book. Its authors, all leading thinkers in their fields, are not afraid to take a hard look at many of the problems facing humanity and come up with far-reaching solutions. The rest of us will need courage to stop trying to patch up the familiar systems appropriate for an expanding economy, and to follow the escape routes proposed in this book.
"Fleeing Vesuvius is a book of our time [...] This is a must-read for concerned citizens of all stripes around the world."
Richard Douthwaite is an economist and writer with a special interest in climate and energy issues and in local economic development. His best-known book, The Growth Illusion: How Economic Growth Enriched the Few, Impoverished the Many and Endangered the Planet explores the effects that the pursuit of growth has had on the environment and society.
He is a co-founder of Feasta, the Foundation for the Economics of Sustainability, the Dublin-based international network of people who believe that the world's sustainability problems are due to the use of dysfunctional systems and are trying to develop better ones. His current projects include the design and introduction of novel financing arrangements for community energy projects and the management of the Carbon Cycles and Sinks Network which explores ways in which land-based greenhouse gas emissions can be reduced. He lives in Westport, Co. Mayo.
Gillian Fallon studied French and Psychology at university before going to work as a cook, eventually opening a restaurant with a friend. She then re-trained in publishing and 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 currently divides her time between Dublin and Co. Kerry.