The Flaw in the Plan

One of my favorite moments after the financial crisis in 2008 was when Alan Greenspan, the legendary chairman of the Federal Reserve, had to admit that he did not understand how the economy works. Here is a part of a transcript from a congressional hearing on October 23, 2008:


Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to — to exist, you need an ideology. The question is whether it is accurate or not.

And what I’m saying to you is, yes, I found a flaw. I don’t know how significant or permanent it is, but I’ve been very distressed by that fact.


You found a flaw in the reality…


Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.


In other words, you found that your view of the world, your ideology, was not right, it was not working?


That is — precisely. No, that’s precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.

THE FINANCIAL CRISIS AND THE ROLE OF FEDERAL REGULATORS, October 23, 2008. The full transcript is available here.

Oops! To misquote Mike Tyson slightly, everybody has world view until he gets punched in the face. Unfortunately, with great power comes great responsibility, and mistakes made by generals, presidents, CEOs, or the chairmen of the FED have consequences.

It is dangerous when people base their thinking on a flawed understanding of the world. People who believe in UFOs, witches, or weird conspiracy theories should not be allowed to run things. Before the scientific revolution and the discovery of microbes, people used to believe in the spontaneous generation of life. The proof was simple: if you left a piece of meat out in the sun for a while, it would soon be crawling with maggots and worms.

Today, a majority of people, including a large fraction of the ruling class, seems to believe in the spontaneous generation of money. Generations of school children have been taught how to calculate compound interest, but nobody asked where the money was supposed to come from.

In a stunningly absurd “press conference”, which lasted for approximately 90 seconds, the soon to be ex-president of the USA revealed to the world the limits of his mental abilities.

The White House, November 24, 2020

Never mind the 270’000 dead from COVID-19, the fact that millions of Americans have lost their jobs due to the pandemic, and the melting polar caps. As long as the Ponzi-Scheme commonly referred to as the stock market continues to rise, everything is fine.

One of my first textbooks in physics contained an poignant warning: “Never mistake the model for reality!” The illustration was a person devouring the menu in a restaurant. Mainstream economics is a theory about a model. Unfortunately, reality seems to have moved on so that the model does not apply anymore.

Vorhersagen sind schwierig

Im Auftrag des Bundesamts für Umwelt (BAFU) durfte ich einen kurzen Artikel zu «COVID-19 & Umwelt» verfassen. Herausgekommen ist etwas anderes als ich ursprünglich geplant hatte, was meine Hauptthese bestätigt. Denn die Zukunft lässt sich nicht vorhersagen.

1/1 – © BAFU | Giancarlo Mino, collectif Marie-Louise

Hier der Link zum Artikel:

In der gleichen Reihe sind viele spannende Artikel erschienen. Eine vollständige Liste ist hier zu finden:

An Open Letter to the ETH

Patrick Chappatte

A couple of students from the ETH asked me to help them distribute an open letter to the Department of Environmental Systems Science and I feel honored to do so. The letter is available in English and German:

I mean no offense to my Alma Mater, but I am convinced that the ETH suffers from the same problem as all other universities. The classical idea of teaching assumes that professors teach, and students learn. When the students realize that their teachers do not have the answers to the most challenging problems of our time, things get complicated.

In addition, the world is now changing so fast that both academic research and conventional politics will have to step it up a notch or two to stay relevant. As I am currently working on a sustainability policy for our university (, I am well aware of these problems.

I have derived continued benefit from criticism at all periods of my life and I do not remember any time when I was ever short of it.

Winston Churchill

The Power of Imagination

The idea with my recent writeup on “Global Climate Compensation” was that it should be thought-provoking and it does indeed seem to have provoked some thoughts. Thanks a lot for the feedback! I truly appreciate both the positive and negative comments because they allow me to improve the argument. Listen and learn!

Patrick Chappatte

The main points of my article were the following:

  • The world currently does not have a realistic plan for preventing catastrophic climate change. The IPCC-scenarios compatible with less than +2.0°C of global warming contain a ridiculous amount of wishful thinking.
  • There are no indications that it will be possible to prevent Climate Armageddon unless we are prepared to drastically lower our consumption of natural resources, which would reduce the size of the economy, requiring negative growth or Degrowth.
  • This will also require a massive transfer of wealth from the rich to the poor. If the economy is not growing, we need to share available resources in an equitable manner.
  • We are rapidly running out of time.
  • Global Climate Compensation offers a realistic path to a more sustainable future if it could be implemented.

The question, for which I do not yet have the answer, is how to make this happen. What I love about the “Sapiens” by Yuval Harari is that he is very frank about the power of myths or imagination:

These imagined orders are inter-subjective, so in order to change them we must simultaneously change the consciousness of billions of people, which is not easy. A change of such magnitude can be accomplished only with the help of a complex organisation, such as a political party, an ideological movement, or a religious cult. However, in order to establish such complex organisations, it’s necessary to convince many strangers to cooperate with one another. And this will happen only if these strangers believe in some shared myths. It follows that in order to change an existing imagined order, we must first believe in an alternative imagined order.

Harari, Yuval Noah. Sapiens: A Brief History of Humankind (p. 118). HarperCollins.

I am convinced that he is right. Detailed planning will be necessary at some point, but we first have to offer a lot of people an appealing vision for the future. We will never be able to mobilize people under the banners of “complex emission trading schemes”, even if they were to work. I have now given many public lectures over the years and had to learn the hard way how to talk to a mixed audience. One of the easiest ideas to convey is that economic growth is incompatible with saving the planet. Pardon the language, but you simply cannot eat more and shit less! Everyone understands this. The vast majority also agrees that climate change is real. The fundamental problem we have is with materialism and inequality. If we continue to define success in terms of material wealth, we will never solve the problem.

On the other hand, there is no political majority for an egalitarian society. Personally, I do not mind people benefitting from talent and hard work. The problem is when they profit from the exploitation of other people and natural resources. Nobody seriously believes that the salary of a hedge fund manager is in any way related to the work he puts in and the profits from an coal company depend almost entirely on its right to destroy nature. Global Climate Compensation would not be a problem for people who work for a living. It is the “non-working rich” who need to rethink.

When people criticize me for not having a finished plan for saving humanity, my usual response is that in this respect I am in very good company. But, as Richard Feynman said, “Questions that cannot be answered are preferable to answers which may not be questioned”. I am working on it, but we have a long and stony road ahead of us.

Global Climate Compensation – Now or Never!

Since the world still does not have a realistic plan for preventing catastrophic climate change, I have decided to develop one myself:

It is a first draft, but it does merit further consideration. Please let me know if you are interested in contributing. You can reach me under

Patrick Chappatte