Humans As the Intense Predator: Unbalancing the Food-Chain Unsustainably

By 2015, humans—the homo sapiens species in particular—had become “the dominant predator across many systems”; that is to say, the species had become an unsustainable "super predator."[1] We have had a huge impact on food webs and ecosystems around the globe.[2] Moreover, we have been using more of the planet's resources than we should. By August 2015, for example, humans had already consumed the year's worth of the world's resources.[3] In terms of fossil fuels, the consumption has had an impact on the warming of the Earth’s atmosphere and oceans. Behind human consumption are human beings, so the astonishing increase in human population is a major factor. As a virus-like species incredibly successful genetically over the previous five-hundred years, the self-maximizing feature both in terms of population ecology and profit-maximization may be the seed of the species destruction, and thus long-term genetic failure.

According to one study, humans are "particularly intense" when it comes to hunting, and have used powerful killing technology (trawl nets, guns and mechanized slaughterhouses, for example) to dominate other predators. [4] 

Large-scale fishing does not distinguish between fertile adults, weak fish, and the young. (James Watt: Getty Images)

With the efficiency (i.e., profitability) of large-scale fishing businesses, we remove fish at 14 times the rate of marine predators.[5] The research confirms what many scientists had warned for years: If we don't stop overfishing, we may soon run out of animals to catch. The study reports that many fish populations had already been hunted to the brink of collapse, shark populations decimated, and less than 8 percent of southern bluefin tuna left. [6] On land, humans had been killing top carnivores, such as bears, wolves and lions, at nine times their own self-predation rate.[7] By 2015, the food chain as a whole had become terribly unbalanced that thus unsustainable as a whole.

Applying business-efficiency principles to hunting, we can capture adult prey at minimal cost, and so gain maximum, short-term reward. The cost being minimized is both in terms of business and the species. Of the latter, Chris Darimont of the study points out that "advanced killing technology mostly excuses humans from the formerly dangerous act of predation." [8] Because hunters “’capture’ mammals with bullets, and fishes with hooks and nets. . . [Humans] assume minimal risk compared with non-human predators, especially terrestrial carnivores, which are often injured while living what amounts to a dangerous lifestyle."[9] To be sure, working on the deck of a commercial fishing boat in the north Pacific is one of the most hazardous jobs around, but the fishing businesses can externalize at least some of the cost (e.g., insurance).

Even so, by not applying principles from population ecology, the businesses engaged in hunting, fishing, and farming animals have been undermining efficiency, and thus profitability. The study claims that besides the sheer number of animals that humans kill for food being problematic—56 billion farmed animals were at the time being slaughtered annually, “(h)umans focus on adult prey, unlike other predators. A full-grown lion, for example, often opts for the smaller, weaker juvenile zebra rather than an adult. This distinction makes it harder for animal populations to recover as breeding members are removed.”[10] Presumably recovering populations are in line with sustainable profitability.

Tom Reimchen, a co-author on the study, “uses a financial analogy to explain the damaging consequences of hitting adult populations hardest. He calls the adults the system's ‘reproductive capital’—the equivalent of the capital held in a bank account or a pension fund. And he says we are eating into this capital when we should really be living off the interest—the juveniles, which many species will produce in colossal numbers, expecting a good fraction to be doomed from the moment they are born via predation, starvation, disease, accidents and more.”[11] “We are dialing back the reproductive capacity of populations," Darimont said. [12]

The doubtlessly unintentional self-defeating strategies of the businesses mirrors that of the species itself, in that the failure to be prudent in terms of population growth is also self-defeating because the ecosystems, including the Earth’s atmosphere and oceans, get breached beyond repair in terms of being able to sustain our species when it is essentially a maximizing variable rather than tending toward an equilibrium. In short, the wise human species—homo sapiens—is not so wise, after all.

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1 Chris Darimont et al, “The Unique Ecology of Human Predators,” Science, Vol. 349, no. 6250, pp. 858-860.

2 Ibid.

3 Jonathan Amos, “Humans Are ‘Unique Super-Predator’,” BBC News, August 20, 2005.

4 Nick Visser, “Thanks Humanity. Now We’re Unsustainable ‘Super Preditors,” The Huffington Post, August 21, 2015.

5 Amos, “Unique Super-Preditor.”

6 Visser, “Thanks Humanity.”

7 Amos, “Unique Super-Preditor.”

8 Ibid.

9 Ibid.

10 Visser, “Thanks Humanity.”

11 Amos, “Unique Super-Preditor.”

12 Visser, “Thanks Humanity.”

Oil Supply: Problem or Panacea?

Between June 2014 and January 14, 2015, crude oil prices fell by 57 percent. Between November 1985 and March 1986, the prices had fallen by 67 percent.[1] That time, it took nearly two decades for oil prices to rebound. Would it take that long again? The answer has implications for how efficient the market mechanism itself is, and in turn for public policy on energy and global warming.

According to The Wall Street Journal, the discovery of oil in shale rock makes all the difference. The difficult question involves what that difference might be. With less time entailed from discovery to extraction, and less cost relative to the more traditional sources such as off-shore oil, the supply of oil on the market should be able to adjust downward much quicker, resulting in higher crude prices, other things equal. For example, wildcatters in Texas discovered the Eagle Ford Shale in 2008; within only five years, a million barrels a day were going to market.[2] “Faster-reacting shale production could help cut supply more quickly than in the past, restoring market balance without a decadeslong wait.”[3] This assumes the efficient market hypothesis—that suppliers quickly reduce their respective contributions to the market as a result of lower prices.

So it is surprising that the Journal cautions that the faster-reacting shale production does not necessarily “mean prices will rebound soon, or return to the triple-digit levels . . . Price pressure may need to remain on the U.S. oil industry and its lenders for months to rein in supply.”[4] Andrew Hall, who runs a $3 billion energy derivatives hedge fund, wrote to investors that it is unclear how long it would take for American suppliers to cut back due to the lower prices and even what the new price-equilibrium would be.[5]

For one thing, oil producers sunk into contracts would rather get as much revenue as they can, even if they will still lose money. Although shale producers have a shorter timeframe, the short life of a given well means that the producers are under pressure to start new wells in order to cover as much of the initial investment as possible. Put another way, keeping production up is the better of two bad options.

With the tap expected to remain open, the supply of oil from shale was predicted to peak in 2020, after which the annual decrease in oil from liquid sources would be less and less made up by oil from shale. By 2030, the production from liquid sources could be only half of its level in 2014, with no oil left from shale. In short, the lack of a drastic downturn in supply during the last half of 2014 suggests that the American economy might suffer shocks in the 2020s as oil prices skyrocket from dramatically reduced supplies. With alternative energy representing only about 3% of the total in 2014, even increased investment in wind and solar facilities would not counter the anticipated drop in oil supplies.

Had the oil market in 2014 been more in keeping with the efficient market hypothesis—with supplies dropping drastically as the prices of crude drop likewise until the reduced supply pushes the prices back, up at least partially—the anticipated “cliff” in the early 2020s could be either flatter or delayed. Policy makers would have more time to get the economic “up to steam” on alternative sources of energy. Already in 2014, when I was driving across the Midwest, I was stunned by the number (and size) of “wind fields.” Even so, considering that carbon emissions were at the time going in the wrong direction—up instead of down—the continued supply of oil in spite of the lower prices must have been relieving pressure on policy makers to reduce the reliance on fossil fuels. Meanwhile, the lower gas prices gave American consumers the misperception that oil supplies are just fine and a lack of incentive to obviate global warming above the 2C degree threshold.

In short, the lack of an efficient market was forestalling vital public policies concerning both the American economy and climate change. It is not that an efficient market would obviate government action. In fact, just the opposite.

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[1] Russell Gold, “Back to the Future? Oil Replays 1980s,” The Wall Street Journal, January 14, 2015.

[2] Ibid.

[3] Ibid.

[4] Ibid.

[5] Ibid.

Wage Theft: More Companies Flouting Trust

If you are playing by the rules, not trying to cut corners at others’ expense, you need not let the bastards get you down. Of course, if your detractors catch you with your hand in the cookie jar, then blaming them only confirms that a sordid character flaw undergirds the stealing. As a business strategy, accusing union officials of having an agenda simply because they have identified cases of wage theft by the company is not exactly good public relations; in fact, the ploy sends a message that the managers at the helm are more interested in shifting the spotlight onto distractions than “manning up” to take responsibility for the unethical and illegal conduct at the employees’ expense.

The full essay is in Cases of Unethical Business, which is available at Amazon.

Efficiency and Ethics: On the Fairness of High-Speed Trading

Two months into 2012, the SEC announced that it had been examining the trading activities of high-frequency trading firms.  According to the Wall Street Journal, the SEC was “examining, among other things, whether high-frequency firms benefit from delays in the dissemination of prices from various corners of the markets. . . . High-speed firms use direct feeds from exchanges that can give them a leg up on slower traders.” High-frequency traders “can access prices a split second faster through their access to direct feeds.” This is accomplished by placing the trading computers in the same data center that houses the exchange’s computer servers. Just over a year later, the Wall Street Journal reported that high-speed traders were using “a hidden facet” of the Chicago Mercantile Exchange’s computer system “to trade on the direction of the futures market before other investors get the same information.” Even getting the confirmation of a high-speed trade just one to ten milliseconds faster can enable a computer to know the direction a commodity is going and trade on it. According to the Wall Street Journal, the “ability to exploit such small time-gaps raises questions about transparency and fairness amid the computer-driven, rapid-fire trading that increasingly grips Wall Street and confounds regulators.” Both the increasing use of high-speed trading and the problem of accountability from a regulatory point of view raise the stakes in determining the ethics of the practice. 

Has the increasing role of high-speed trading rendered the individual investor a "second-class citizen" in the stock market?

The full essay is in Cases of Unethical Business, available in print and as an ebook at Amazon.com.