By Michael Paton

16 May 2012 – Fengshui, literally wind and water, is generally understood in the property sector in Australia to be a Chinese superstition used for the selection of sites for residences and businesses in terms of their auspiciousness.

Whilst on the surface there is some reality to this understanding, what is not generally realised is that it was originally an empirically-based system of siting of villages and towns in relation to fertility to ensure long term sustainability.

Under this traditional system Shanghai was merely a fishing village; its tidal flows were too strong and it was too close to the typhoons that plague that coast to sustain a large population. Viable long term cities, such as Nanjing and Hangzhou, were situated hundreds of kilometers inland on meandering rivers surrounded by land with deep fertile topsoil.

That Shanghai is now a huge metropolis is entirely due to the advent of modern science, technology and communication systems, which help withstand the vagaries of nature.

However, there is a salutary lesson in the environmental history of China that makes me take pause in lauding such examples of the power of technology over nature.

It is not widely known that China hit the wall environmentally in the 18th century. Even though China is one of the most fertile places in the world, such that it can now sustain over a billion people, and Chinese science and societal systems led the world for over a millennium, famine became so rife there 250 years ago that the only food in whole provinces was the bark of trees and the buttocks of dead bodies.

In his tome on the environmental history of China, Mark Elvin argues that the motive force behind this catastrophe was the logic of short term advantage, epitomised by war.

People were too busy competing against each other for short term gain to consider their surrounds. Vast areas of forests were destroyed with consequent environmental degradation.

The large herds of elephants that roamed northern China disappeared as the environmental sink, on which we survive when humano-centric means fail, was destroyed. Even the development and the upkeep of the Grand Canal with all its excellent hydrological engineering had a devastating environmental effect.

The seeds for this catastrophe, surprisingly, can be seen in fengshui texts as early as the Song dynasty (circa 1100). One writer argues for the return to the ancient practice of taking 13  years of careful observation to decide on the best site and bemoans the practitioners of the day who conduct the “art of swindlers” by dealing merely in good and bad luck to steal money from the people.

The ethic was starting to become that of chance. By the late Ming dynasty (circa 1600) the bestselling book was a fengshui manual, Everything you Need to Know about Siting, which only dealt with good and ill fortune. The ethics of chance held sway as environmental disaster was looming.

Australia was able to be settled by northern hemisphere peoples because of the same modern science that enabled the development of Shanghai, but that science was rooted in a completely different geography than they found in the south.

To their chagrin, in the first year of the First Fleet, all of the plants cultivated in what is now the comparatively fertile Botanical Gardens died.

The general infertility of Australia magnified the repercussions of the logic of short term advantage, and in a comparatively short time span of two hundred years its effects became manifest with salinisation, lack of forest regeneration, and algal blooms in rivers from too much superphosphate in the naturally depleted soils.

But you may well ask what all this historical and philosophical pondering has to do with the sustainability of the property market in Australia.

The point is that the property market as it presently stands is based on the same logic of short term advantage and ethics of chance that had such disastrous consequences for China.

The ethics of chance was at the basis of the Fannie Mae Freddie Mac mortgage fiasco, and the same mindset seems still to be current here in Australia. An example is negative gearing, which enables the propertied to take short term advantage over the unpropertied, leading to a polarisation of society. This mindset has fuelled the increases in the cost of property.

Although coming from different parts of the property spectrum, both a colleague, University of Sydney housing economist Associate Professor Judy Yates, and a cousin, Bill Moss, a former banking and property group director at the Macquarie Bank, have spoken recently of the need for the cost of housing to be no more than 30 per cent of average income to ensure stability of the society.

That this cost for new owners is much more than this in China and around this in Australia at the moment is indicative of an unfolding societal dilemma between the haves and the have nots.

This is ironic in that both China with communism, and Australia with mateship and its attempted negation of class, have sought egalitarian societies over the past hundred years. After all, in Shanghai in the early 1930s, an Armidale, NSW-born-Chinese English language newspaper editor, Vivian Chow, was exhorting Australian-born Chinese to come to China to teach the nascent Chinese republic the egalitarian ANZAC spirit.

The idea that in NSW more than  50 per cent of property is owned by less than 20 per cent of the population is indicative of a growing landed gentry where inheritance may become the basis of land ownership.

This is anathema to any egalitarian spirit and is more akin to the Johnny Appleseed mentality of the US. In Australia, any Johnny Appleseed character would probably have died of thirst in two weeks and all the apple seeds he had planted would have withered and died as well, unless it was a particularly good year.

Unlike the US, it is the general lack of fertility in Australia that is at the basis of our egalitarian culture; we just have had to work together here to survive.

In fact, the lack of what the Chinese would call  “shengqi” or vital energy here was the catalyst for the ritualisation of war between Australian aboriginal groups over the 50,000 years of development of their culture, certainly one of the most “civilised” cultural mores to be found in humanity. The rugged individualism espoused by US culture is much more viable when there is a great deal of water and topsoil.

Pure market theorists would argue that polarisation of society is a good thing because it helps create competition. This may be true for the implausible concept of limitless growth or over the short term, but historically over the long term it has inevitably led to war or enslavement. And war is the epitome of short term advantage; any environmental concerns fly out the window in the struggle to survive.

The long term is relative. It took some three thousand years for a place as fertile as China to see environmental problems; in Australia it took less than 200 years.

I presented a seminar on this topic at an international sustainable development conference in Utrecht a couple of years ago; the general consensus of the audience was that their understanding of long term spanned merely to consideration of grandchildren. They agreed that this wasn’t long enough to ensure sustainable development.

Taking grandchildren into account would probably be the longest thought-span of those in the property market. But much shorter term strategies are the norm.

Gated communities are an example. They may provide individuals with a short term respite from the madding crowds, but they are actually a catalyst for problems over the long term because gating communities only adds to the polarization of society, and the gates become meaningless if the surrounding environment is destroyed. But gated communities are de rigueur in China.

China has become the buzz word for economic growth over the past decade. This growth has been partially based on its development towards scientific and engineering modernity, which has enabled China to feed and house its huge population, and to become a major economic power.

Nevertheless, we should be careful of thinking that modernity allows us to transcend the environment of which we are a part. The effects of the recent tsunami in Japan are a poignant example of this.

China’s economic growth has also been based on its embrace of the international market system. This certainly has its positive aspects, but much of the market involves players trying to win over the short term, and the historical precedents mentioned above should give us pause to reflect on future possibilities.

Fengshui went from being an environmental knowledge system based on observation to a method of site selection for good luck. The ethics of chance became the basis of property selection as China fell apart environmentally.

The lesson we should learn from this is that we can all “play” the property market, but no matter whether the moral stance is Protestant, Buddhist or Hashemite, if we do play the market for short term gain our ethic is that of chance, and our actions could have a long term negative effect for our species, even if our luck is good.

Michael Paton is an honorary associate of the School of Economics at the University of Sydney whose major research interest is the history and philosophy of science in China, especially focusing on dili (the principles of the earth), fengshui (wind & water), and the environmental history of China.

Dr Paton is a co-founder of the Sustainable Management of Organisations Group and former vice president (Asia) of the Australasian Association for the History, Philosophy and Social Studies of Science. In 2010, he was invited by the UN to the World Urban Forum on the sustainability of cities. He advocates a southern perspective.