Diminishing Returns, Energy Return on Energy Invested, and Collapse

What do diminishing returns, energy return on energy invested (EROI or EROEI), and collapse have to do with each other? Let me start by explaining the connection between Diminishing Returns and Collapse.

Diminishing Returns and Collapse

We know that historically, many economies that have collapsed were ones that have hit “diminishing returns” with respect to human labor–that is, new workers added less production than existing workers were producing (on average). For example, in an agricultural economy, available land might already have as many farmers as the land can optimally use. Adding more farmers might add a little more production–perhaps the new workers would keep weeds down a bit better. But the amount of additional food the new workers would produce would be less than what earlier workers were producing, on average. If new workers were paid on the basis of their additional food production, they would find that their wages dropped relative to those of the original farmers.

Lack of good paying jobs for everyone leads to a need for workarounds of various kinds. For example, swamp land might be drained to add more farmland, or irrigation ditches might be added to increase the amount produced per acre. Or the government might hire a larger army might to conquer more territory. Joseph Tainter (1990) talks about this need for workarounds as a need for greater “complexity.” In many cases, greater complexity translates to a need for more government services to handle the problems at hand.

Turchin and Nefedof (2009) in Secular Cycles took Tainter’s analysis a step further,  analyzing financial data relating to historical collapses of eight agricultural societies in operation between the years 30 B.C. E. and 1922 C. E.. Figure 1 shows my summary of the pattern they describe.

Figure 1. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov.

Figure 1. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov.

Typically, a civilization developed a new resource which increased food availability, such as clearing a large plot of land of trees so that crops could be planted, or irrigating an  existing plot of land. The economy tended to expand for well over 100 years, as the population grew in size to match the potential output of the new resource. Wages were relatively high.

Eventually, the civilization hit a period of stagflation, typically lasting 50 or 60 years, as the population hit the carrying capacity of the land, and as additional workers did not add proportionately more output. When this happened, the wages of common workers tended to stagnate or decrease, resulting in increased wage disparity. The price of food tended to spike. To counter these problems, the amount of government services rose, as did the amount of debt.

Ultimately, what brought the civilizations down was the inability of governments to collect enough taxes for expanded government services from the increasingly impoverished citizens. Other factors played a role as well–more resource wars, leading to more deaths; impoverished common workers not being able to afford an adequate diet, so plagues were more able to spread; overthrown or collapsing governments; and debt defaults. Populations tended to die off.  Such collapses took place over a long period, typically 20 to 50 years.

For those who are familiar with economic theory, the shape of the curve in Figure 1 is very similar to the production function mentioned in Two Views of our Current Economic and Energy Crisis. In fact, the three main phases are the same as well. The issue in both cases is diminishing returns ultimately leading to collapse.

There seems to be a parallel to the current world situation. The energy resource that we learned to develop this time is fossil fuels, starting with coal about 1800. World population was able to expand greatly because of additional food production permitted by fossil fuels and because of improvements in hygiene. A period of stagflation began in the 1970s, when we first encountered problems with US oil production and spiking oil prices.  Now, the question is whether we are approaching the Crisis Stage as described by Turchin and Nefedov.

Why Might an Economy Collapse?

Let’s think about how an economy operates. It is built up from many parts, over time. It includes one or more governments, together with the laws and regulations they pass and together with their financial systems. It includes businesses and consumers. It includes built infrastructure, such as roads and electricity transmission lines. It even includes traditions and customs, such as whether savings are held in gold jewelry or in banks, and whether farms are inherited by the oldest son. As each new business is formed, the owners make decisions based on the business environment at that time, including competing businesses, supporting businesses, and the number of customers available. Customers also make decisions on which product to buy, based on the choices available and the prices of these products.

Over time, the economy gradually changes. Some parts of the economy gradually wither and are replaced by new parts of the system. For example, as the economy moved from using horses to cars for transportation, the number of buggy whip manufacturers decreased, as did the number of businesses raising horses for use as draft animals. Customs and laws gradually changed, to reflect the availability of automobiles rather than horses for transportation. In some cases, governments changed over time, as increased wealth allowed more generous social programs and wider alliances, such as the European Union and the World Trade Organization.

In the academic field of systems science, an economy can be described as a complex adaptive system. Other examples of complex adaptive systems include ecosystems, the biosphere, and all living organisms, including humans. Because of the way the economy is knit together, changes in one part of the system tend to affect other parts of the system. Also, because of the way the system is knit together, the system has certain requirements–requirements which are gradually changing over time–to keep the economy operating. If these requirements are not met, the economy may collapse, just as the eight economies studied by Turchin and Nefedov collapsed. In many ways such a collapse is analogous to an animal dying, or climate changing, when conditions are not right for the complex adaptive systems that they are part of.

Clearly one of the requirements that an economy has, is that it needs to be wealthy enough to afford the government services that it has agreed to. Scaling back those government services is one option, but when these services are really needed because citizens are getting poorer and finding it harder to find a good-paying job, this is hard to do. The other option, unfortunately, seems to be collapse.

The wealth of an economy is very much tied to the availability of cheap energy. A huge uplift is added to an economy when the (value added to society) by an energy resource such as oil greatly exceeds its (cost of production). Over time, the cost of production tends to rise, something measured by declining EROI. The uplift added by the difference between (value added to society) and (cost of production) is gradually lost. Some would hypothesize that the falling gap between (value added to society) and the (cost of production) can be compensated for by technology changes and improvements in energy efficiency, but this has not been proven.

Our Economy is Already in a Precarious Position

As I indicated in my most recent post, if a person computes average wages by dividing total US wages by total US population (not just those employed), the average wage has flattened in recent years as oil prices rose. Median wages (not shown on Figure 2) have actually fallen. This is the same phenomenon observed in the 1970s, when oil prices rose. This is precisely the phenomenon that is expected when there are diminishing returns to human labor, as described above.

Figure 2. Average US wages compared to oil price, both in 2012$. US Wages are from Bureau of Labor Statistics Table 2.1, adjusted to 2012 using CPI-Urban inflation. Oil prices are Brent equivalent in 2012$, from BP’s 2013 Statistical Review of World Energy.

Figure 2. Average US wages compared to oil price, both in 2012$. US Wages are from Bureau of Labor Statistics Table 2.1, adjusted to 2012 using CPI-Urban inflation. Oil prices are Brent equivalent in 2012$, from BP’s 2013 Statistical Review of World Energy.

The reason for the flattening wages is too complicated to describe fully in this post, so I will only mention a couple of points. When consumers are forced to spend more for oil for commuting and food, they have less to spend on discretionary spending. The result is layoffs in discretionary sectors, leading to lower wage growth. Also, goods produced with high-priced oil are less competitive in the world market, if sellers try to recoup their higher costs of production. As a result, fewer of the products are sold, leading to layoffs and thus lower average wages for the economy.

In the last section, I mentioned that the economy is a complex adaptive system. Because of this, the economy acts as if there are hidden laws underlying the system, parallel to the laws of thermodynamics underlying physical systems. If oil supplies are excessively high-priced, very few new jobs are formed, and those that are created don’t pay very well. The economy doesn’t grow much, but it does stay in balance with the high-priced oil that is available.

The Government’s Role in Fixing Low Wages and Slow Economic Growth

The government ends up being the part of the economy most affected by slow economic growth and low job formation. This happens because tax revenue is reduced at the same time that government programs to help the poor and unemployed need to grow. The current approach to fixing the economy is (1) deficit spending and (2) interest rates that are kept artificially low, partly through Quantitative Easing.

The problem with Quantitative Easing is that it is a temporary “band-aid.” Once it is stopped, interest rates are likely to rise disproportionately. (See the recent Wall Street Journal editorial,” Janet Yellen’s Greatest Challenge.”) Once this happens, the economy is likely to fall into severe recession. This happens because higher interest rates lead to higher monthly payments for such diverse items as cars, homes, and factories, leading to a cutback in demand. Oil production may fall, because the cost of production will rise (because of higher interest rates), while the amount consumers have to spend on oil will fall–quite possibly reducing oil prices.  If interest rates rise, the amount the government will need to collect in taxes will also rise, because interest on government debt will also rise.

So we are already sitting on the edge, waiting for something to push the economy over. The Affordable Care Act (“Obamacare”) may provide a push in that direction. Inability to pass a federal budget could provide a push as well.  So could a European Union collapse. Debt defaults are another potential problem because debt defaults are likely to increase dramatically, as economic growth shrinks, as discussed in the next section.

Debt is Major Part of our Current Precarious Financial Situation

If an economy is growing, it is easy to add debt. People find it easy to find and keep jobs, so they can pay back debt. Businesses and governments find that their operations are growing, so borrowing from the future, even with interest, “makes sense.”

It is as also easy to add debt if the economy is not growing, but there is an ample supply of cheap oil that can be extracted if increasing debt can be used to ramp up demand. For example, after World War II, it was possible to ramp up demand for automobiles and trucks by allowing purchasers to use debt to finance their purchases. When this increased debt led to increased oil consumption, it greatly benefited the economy, because the (value to society) was much greater than the (cost of extraction). Governments were able to tax oil extraction heavily, and were also able to build new roads  and other infrastructure with the cheap oil. The combination of new cars, trucks, and roads helped enable economic growth. With the economic growth that was enabled, paying back debt with interest was relatively easy.

The situation we are facing now is different. High oil prices–even in the $100 barrel range–tend to push the economy toward contraction, making debt hard to pay back. (This happens because we are borrowing from the future, and the amount available to repay debt in the future will be less rather than more.) The problem can be temporarily covered up with deficit spending and Quantitative Easing, but is not a long-term solution. If interest rates rise, there is likely to be a large increase in debt defaults.

The Role of Energy Return on Energy Invested (EROI or EROEI)

EROI is the ratio of energy output over energy input, a measure that was developed by Professor Charles Hall. To calculate this ratio, one takes all of the identifiable energy inputs at the well-head (or where the energy product is produced) and converts them to a common basis. EROI is then the ratio of the gross energy output to total energy inputs. Hall and his associates have shown that EROI of oil extraction has decreased in recent years (for example, Murphy 2013), meaning that we are using increasing amounts of energy of various kinds to produce oil.

In previous sections, I have been discussing diminishing returns with respect to human labor. Oil and other energy products are forms of energy that we humans use to leverage our own human energy. So indirectly, diminishing returns with respect to the extraction of oil and other energy products, as measured by declining EROI, will be one portion of the diminishing returns with respect to human labor. In fact, declining EROI may be the single largest contributor to diminishing returns with respect to human labor. This will happen if, in fact, low EROI correlates with high oil price, and high oil prices leads to diminished wages (Figure 2). This may be the case, because David Murphy (2013) indicates that the relationship between EROI and the price of oil is in fact inverse, with oil prices rising rapidly at low EROI levels.

Contributors to Declining Return on Human Labor

Human labor is the most basic form of energy. We humans supplement our own energy with energy from many other sources. It is this combination of energy from many sources that is reflected in the productivity of humans. For example, we take it for granted that we will have tools made using fossil fuels and that we will have electricity to power computers. Before fossil fuels, humans supplemented their energy with energy from animals, burned biomass, wind, and flowing water.

What besides declining EROI of fossil fuels would lead to diminishing returns with respect to human labor? Clearly, the same problems that were problems years ago continue to be problems. For example, growing world population tends to lead to diminishing returns with respect to human labor, because resources such as arable land and fresh water are close to fixed. Greater world population means that on average, each gets person less. Oil production is not rising as rapidly as world population, so the quantity available per person tends to drop as world population rises.

Soil degradation is another issue, according to David Montgomery, in Dirt: The Erosion of Civilizations (2007). Declining quality of ores for metals is another issue. The ores that are cheapest to extract are extracted first. We later move on to poorer quality ores, and ores in less accessible locations. These require more oil and other fossil fuels for extraction, leaving less for other purposes.

There are other more-modern issues as well. Growing populations in areas where water is scarce lead to the need for desalination plants. These desalination plants use huge amounts of fossil fuel resources (oil in the case of Saudi Arabia) (Lee 2010), leaving less energy resources for other purposes.

Globalization is another issue. As the developing world uses more oil, less oil is available for the part of the world that historically has used more oil per capita. The countries with falling oil consumption tend to be the ones that recently have had the most problems with recession and job loss.

Figure 3. Oil consumption based on BP's 2013 Statistical Review of World Energy.

Figure 3. Oil consumption based on BP’s 2013 Statistical Review of World Energy.

An indirect part of diminishing returns with respect to human labor has to do with what proportion of the citizens is actually able to find full-time work in the paid labor force, and whether the jobs available are actually using their training and abilities. The Bureau of Labor Statistics calculates increases in output per hour of paid labor. I would argue that this is not a broad enough measure. We really need a measure of output per available full-time worker.

Obviously, there are potential offsets. We hear much about technology improvements and increased efficiency offsetting whatever other problems may occur. To me, the real test of whether there is diminishing returns with respect to human labor is how wages are trending, especially median wages. If these are not keeping up with inflation, there is a problem.

Conclusion

We don’t often think about the return on human labor, and how the return on human labor could reach diminishing returns. In fact, human labor is the most basic source of energy we have. Stagnating wages and higher unemployment of the type experienced recently by the United States, much of Europe, and Japan look distressingly like diminishing returns to human labor.

Stagnation of wages is happening despite attempts by governments to prop up the economy using deficit spending, artificially low interest rates, and Quantitative Easing. Without these interventions, the results would likely be even worse. If QE is removed, or if interest rates rise on their own, there seems to be a distinct possibility that these countries will be reaching the “crisis” phase as described by Turchin and Nefedov.

Historical experience suggests that a major danger of diminishing returns to human labor is that governments costs will rise so high, and wages will drop so low, that it will be impossible for the government to collect enough taxes from wage-earners. In fact, there seems to be evidence we are already headed in this direction. Figure 4 (below) shows that  the US ratio of government spending to wages has been rising since 1929. Government receipts have leveled off in recent years.

Figure 4. Based on Table 2.1 and Table 3.1 of Bureau of Economic Analysis data. Government spending includes Federal, State, and Local programs.

Figure 4. Based on Table 2.1 and Table 3.1 of Bureau of Economic Analysis data. Government spending includes Federal, State, and Local programs.

Adding more health care services under the Affordable Care Act will only increase this trend toward growing government expenditures.

One issue is how the financial benefit of human labor (together with the energy sources leveraging this labor) is split among businesses, governments, and humans. Businesses have the most control in this. If an endeavor is not profitable, they can discontinue it. If cheaper labor is available elsewhere, they can cut hold down wages in countries with higher wages. They also have the option of increased mechanization. Humans and governments both tend to get shortchanged. As the overall return of the system reaches limits, wages of humans tend to stagnate. Governments find themselves with greater and greater costs, and more and more difficulty collecting funds from increasingly impoverished citizens.

Most authors of academic articles assume that the challenge we are facing is one that can be solved over the next, say, fifty years. They also seem to believe that the fixes required are simply small adjustments to our current economy. This assumption seems optimistic, if we are really approaching financial collapse.

If we are in fact near the crisis stage described by Turchin and Nefedov, we will need to do something much closer to “start over”. We need to build a new economy that will work, rather than just “tweak” the current one. New (or radically changed) government and financial systems will likely be needed–ones that are much less expensive for taxpayers to fund. We are also likely to need to cut back on basic services, including maintaining paved roads and repairing long-distance electricity transmission lines.

Because of these changes, whole new ways of doing things will be needed. EROI analyses that have been to date represent analyses of how our current system operates. If major changes are needed, their indications may no longer be relevant. We cannot simply go backward, because methods that worked in the past, such as using draft horses and buggy whips, will no longer be available without a long development period. We are truly facing an unprecedented situation–one that is very hard to prepare for.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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491 Responses to Diminishing Returns, Energy Return on Energy Invested, and Collapse

  1. dashui says:

    Also 2 days ago my father went to a luncheon with some big shots, including Newt Gingrich. The topic was domestic energy and the consensus was that we have huge amounts of Nat gas and shale oil but it is Obama who is stoping us from exploiting them. The figure they gave was 90 billion barrels of oil, of course I said,”you do know that the world uses 1 barrel every 10 days don’t you?” The big shots were also for no gas exports, which is of course resource nationalism.

    • Thanks for these observations. I imagine most of them only know (part of) what they have been told. In fact, they may be gullible enough to believe what they read in the papers.

      Domestic natural gas will not be extracted unless the price is quite a bit higher. Natural gas producers figure that exports will drive the price higher, and also give them a reasonable return for extraction. We will see what really happens–debt collapse could prevent price from ever going high enough.

      By the way, I think you meant to say in your comment that you said, “you do know that the world uses 1 billion barrels every 10 days, don’t you?”

      • DaShui says:

        Actually ex senator Jim Demint is a friend of the family. At least he is a businessman not a lawyer. He, in my living room, said America has 200 years of natural gas. 200 years seems a little too perfect a number. 2000 years no one would believe, 20 years and people would worry, 200 is perfect near enough to be believable, far away enough not to worry.
        Demint also said he was in the market for a 30 foot sailboat, maybe he has been reading D. Orlov, and wants a escape from dc pod?

        • The 200 years of natural gas is based on extra-ordinarily optimistic view of what is available. The truth of the matter is that we can’t get the US price of natural gas up high enough to encourage extraction the gas from US shale formations, even at today’s very low interest rates. This is the reason for the interest in exporting the natural gas. The price might be higher, and the shortage might raise US prices.

          Another issue is that the extraction of this gas is hugely dependent on large amounts of credit being available at very low interest rates. Our current situation is very temporary.

          The technology also is not really exportable to other countries, either. Being able to do this extraction as cheaply as in the US depends on several conditions in the US that are not available elsewhere–plenty of fresh water for fracking, property laws that allow the property owner to get a share of the profits, so the property owner will not object too much to the fracking, and the fact that we already have extensive pipelines in place, enabling this extraction.

          The situation that will stop natural gas extraction is the upcoming crash. This is not factored into any reserve numbers.

          • Danny says:

            This is interesting Gail,
            as Natural Gas is always brought out as a bright spot in the U.S economy…I think were I live Natural Gas has gone up 13 percent; but when I tell people that they are shocked they have no idea….they don’t pay attention. I cringe when I see these giant houses with wasted space and we have been below 0 degrees F for over a week. What will happen with the price of Natural Gas? Will it shoot up eventually….over in the Baakan they are flaring it to get it out of the way…Any government official that ends his or her talk on Government problems will end it with a positive caveat ie….look at how much NG and Shale Oil we have!!! What do you believe the supply of NG to be and is it possible to export it? I remember the last few months of Greenspans reign he was talking about exporting NG…..Thanks Danny

            • If we run into financial collapse, then natural gas will be as much a dead end as oil will be. Our problems will be political and financial, and they will bring down international trade as well. These problems will spill over into natural gas production as well.

              I don’t really expect natural gas prices to rise, any more than I expect oil prices to rise, although I suppose, over the short term natural gas prices may rise. Debt defaults can be expected to lead to lower demand and lower prices, not higher prices.

              I think we will have major problems before the natural gas export facilities ever get built. The reason why producers of natural gas from shale deposits want to export natural gas is because they cannot get a high enough price for natural gas to make extracting it worth their while. (Thus the amount available at current prices is very low.) They think that by exporting it they can get a higher price for it, and perhaps drive the US price higher. In the absence of other problems, this reasoning might work–I am doubtful that it really will work now, though.

        • Lindon says:

          The politicians and the public figures who are part of the establishment will continue to PRETEND that everything is just fine, that BAU can continue forever, right up until the day it stops. I’m betting that secretly, 90% or more of these same individuals (like Demint) are making plans for the inevitable that they know for a fact is coming, perhaps at a time and with a catalyst that they are privy too. The fact that figures like Demint publicly and even privately PRETEND that BAU is safe far into the future means zero — they are just putting on a show. It is all part of the establishment plan to keep the masses calm and unaware, all the better to take advantage of BAU so as to secretly leverage themselves into a position of long-term survival once TSHTF. You and I should be doing the same.

        • xabier says:

          Da Shui

          20 years, 20, 2000:

          For some time now, the EU leaders, when they make a lying statement on ‘recovery’, have used the following formula:

          ‘The rest year will be bad, (and we feel for you!) most of next year will also be like that, but at the very end of next year, Growth Will Be Back!

          Dangle the carrot in front of the starving donkey, but make sure it doesn’t lose hope and die or try to bite you……

          Now we are getting wise to this, a new version has been formulated: ‘The recession is over, but there is still a lot to do!’

          A Stalin said: ‘Things Are Getting Better Comrades!’

    • Lindon says:

      dashui — The Republicans blame Obama for everything, don’t they? Always have. Always will. True or not, deserved or not, everything is Obama’s fault if you ask a Republican. I’m not even an Obama supporter, or a supporter of any particular political party. I’m just making an observation here. He gets blamed for bad weather, for the Mexican hijacking of radioactive material, for — everything. Maybe he deserves it, who knows?

      The take-away from your father’s meeting with the Republican big-shots is that they are part of the establishment and they either truly believe (Cornucopian) that the world will never run out of fossil fuels to burn (they are truly ignorant) or, more likely, they are PRETENDING, engaging in the well-documented establishment attempt to keep the masses calm and in the dark with false predictions and a constant stream of propaganda.

    • Danny says:

      well yes I went to to see former treasury secretary snow speak recently and he is totally drunk on the Shale oil story. If you ever questioned any of this you would be a laughing stock. Politicians are like a beauty pageant contestant…smart ones don’t make it though only the dumb ones make it. I live in Mt and Max Bacchus is the the most dull knives
      in the drawer but he is one of the highest ranking senators….sad but true. The dumber you are the more you advance. ……danny

  2. todd cory says:

    “Oil production is not rising as rapidly as world production, so the quantity available per person tends to drop as world population rises.”

    i think this is supposed to say: Oil production is not rising as rapidly as world population, so the quantity available per person tends to drop as world population rises.

    great assessment… it would be nice if the powers in charge would at least admit the world is finite and a growth based economic system no longer works. but, “the american way of life is not negotiable”… so i assume the train will continue on until it goes off the cliff. wise people are doing what they can to mitigate this.

    • Thanks for the pointing out the typo–I fixed it.

      Admitting the real situation seems out of the question. Commenter “Lindon” said earlier,

      . . . we find ourselves in a somewhat surreal world when the supposed “experts” and “leaders” are denying a reality that so clearly exists.

      The reason, I believe, is because the powers that be simply MUST keep BAU going, at least until they can no longer do so. The academics and the scientists and the beaurocrats MUST “bye in” to this doctrine — the doctrine of “lying one’s ass off to deny reality” — because to do otherwise would bring immediate ridicule and a “mini-collapse” of their own privileged position in society (in other words, they would lose their job and income, most likely). So, what we get is a “leadership” and a mass media that very actively promotes one “reality”, while denying or downplaying any possibility that collapse or breakdown is imminent, or anywhere on the horizen.

      I think this is a pretty good assessment of the situation.

      • circusmaestro says:

        Absolutely. If the “elites” say that the world gonna crash soon, the world gonna crash for sure. It is all about trust in the system! If they say so, people will loose confidence instantly and stop buying stuff which is of course unthinkable for the system itself…. So even if they know that the situation is out of control, they will never never never aknowledge it in public…. they are not paid nor elected to tell such things…. they are elected to keep the system up and running, not to crash it….

  3. kiwichick says:

    @ dashui; ” 1 barrel every 10 days ” ?

  4. DaShui says:

    Let me clarify-

    Maybe For me:1 barrel every 10 days.
    For the world: 1 billion barrels
    every 10 days.

  5. kiwichick says:

    we are still adding 70-80 million extra humans to the planet each year

    the fact that there are over 7 billion of us is the fundamental problem because
    the vast majority of us want to be consumers

    the only scenarios in The Limits to Growth that avoid collapse are the ones
    where population is stabilised

    that means policies to encourage women globally to stop at two children

    no it won’t solve every problem but it is fundamental to bending the curve

    • The scenario that at least temporarily worked in the 1972 Limits to Growth book was based on a much lower population than today. Encouraging women globally to stop at two children (or one) would still be a good idea now, as you say.

      • sheilach2 says:

        The problem with that is irrational belief systems. Even here in the US, we have “leaders” who are fighting tooth & nails to prevent women from having access to birth control or abortion & children from sex education. These ignoramuses have power in many countries all over the world whether christian, islamic or hindu, they make rational actions impossible.
        It is too late to prevent the collapse. We use more & more fossil resources to mine poorer & poorer ores, to grow food on poor soils & yet because of uncontrollable population growth, we are falling further behind in meeting the need.

        Our grain carryovers are shrinking, we have gotten to the point where we are consuming more than we can grow. When we start eating our seed grain, the game will be over.

        With all the information & technology we have had for decades now, why do we continue to ignore the lessons we should have learned from past failed civilizations?

        Why do so many people continue to insist that we are not “animals” & that the laws of physics & geology don’t apply to us? Even most of our so called “leaders” hold these false, insane beliefs.
        As many have said, the best we can do now is to save what non electric tools, open pollinated seeds, low tec. weapons, & technology we have, get to know others who also know what is needed & prepare for the worse. We need to find & preserve those books that will give us the knowledge to live in a new, sustainable way by combining that knowledge with the information we now have about how planetary systems function.

        One thing we need to free ourselves from are these ancient, irrational belief systems as they are our greatest hindrance from acting rationally.

        I think governments will be our worse enemy, they are dangerous to we the people, not supportive.

        • I am afraid you are right. I think at least part of the answer to why this is happening is the reason given by Lindon earlier in the comments is a big part of the problem. He said:

          The reason, I believe, is because the powers that be simply MUST keep BAU going, at least until they can no longer do so. The academics and the scientists and the beaurocrats MUST “bye in” to this doctrine — the doctrine of “lying one’s ass off to deny reality” — because to do otherwise would bring immediate ridicule and a “mini-collapse” of their own privileged position in society (in other words, they would lose their job and income, most likely). So, what we get is a “leadership” and a mass media that very actively promotes one “reality”, while denying or downplaying any possibility that collapse or breakdown is imminent, or anywhere on the horizen.

          So even if those in leadership positions understand the problem, they can’t say anything about it. And as you say, there are a lot of people who are morally opposed to birth control, and even more morally opposed to abortion.

        • Stilgar Wilcox says:

          sheilach2, in the 3rd grade I got in an argument with all the other kids in class one day, in which I said we are animals and they all insisted we are not and back and forth we went. Seemed obvious to me and they did not change my mind then or since, but I’ve met many people that think people are something different. A reflection of that attitude can be seen in the question; if a tree falls but no one hears it, did it make a noise? Well, of course it did, but some people think things only matter if at least someone hears it, and if not they really think it didn’t make a sound. It’s time for a wake up call, titled ‘contraction followed by collapse’. They will all know then we are indeed animals.

    • Paul says:

      You have to be realistic, it’s not “women all over the world” that are responsible for the increase. How are European women with their 1.3 ~ 1.5 fertility rate pushing the population up? Do they have to sacrifice themselves for other nations, say, if Africans give birth to 4 children, must European women give birth to 0.2 children so that the the total birthrate is equalled to 2.1 children per woman? Now that’s fair, huh?

      The problem is related to continental populations and races. It does not matter that you have the Duggars in the West if the average continues below replacement level.

      Don’t treat a complex issue with an universal brush, you will punish those who don’t deserve. When you see the Singers of the world preaching to American students that they are to blame for the world’s misery, and must avoid having children, for me there’s an agenda there. You know who the targets are.

      And, worse yet, WHAT if the population in the West starts to shrink? One would think that the result is just what the likes of Singer wanted, but lo and behold! We have a demographic problem now, it’s time to tear down the borders, because — gasp — we need immigrants!!!

      You cannot win with these people, because they are driven by hatred of you-know-who, not by genuine compassion.

      • Jan Steinman says:

        The impact of a western baby is many times that of a third-world baby.

        It’s been said that every time some celebrity adopts a third-world brown baby, the CO2 burden shoots up by about 50 time what it would have had that baby stayed in the third world.

      • dolph says:

        Paul:
        Yes these are interesting thoughts but let’s understand a few things.

        Mortality is much higher in the developing world. Yes, the growth still outpaces, but it may not for much longer. Yet in the developed world, we somehow think it’s a good idea to spend enormous amount of resources to keep people with failing minds and failing bodies going forever on machines.

        Also, the idea of “infinite growth in all things including population” is in fact a western one, which originated in the capitalist and industrial system. Without these, and without massive fossil fuel agribusiness and aid, the population of third world places would have long ago stabilized.

        It’s easy to point the figure at the the illiterate browns and blacks. It’s much harder to point the finger to the white scientists, priests and celebrities who kept telling you that you need to feed all of them.

      • Unfortunately, I think that allowing immigration and infant adoption is part of our problem as well (even though that I know my own grandparents came here from Norway, because conditions were bad there). Such practices allow people who would otherwise use very little resources to use a lot of resources. It also relieves population pressures in the homelands. Children who would not live without medical treatment are brought to a country where they can live, also adding to world population. Good in some ways, but bad from a world population point of view.

        Globalization, where we outsource what we buy to developing countries, adds a great amount of fossil fuel use to these countries, helping the populations of these countries to expand as well.

      • I live in the deepest darkest heart of the so called Bible Belt in the southern Appalachians, and most of my family, as well as most people I know, are the sort of fundamentalist christians so often ridiculed in forums such as this one.

        ( For what it’s worth , I’m a Darwinist and quite well educated in the physical and biological sciences, and put no stock in Christian or any other dogma.)

        I seldom attend any church services, except weddings and funerals, but i do know quite well what is going on in American christian churches and families; and what is going on is by and large a very far cry from what the mass media and liberal elite would have you believe.

        In respect to population and birth control for instance, in my “Primitive Baptist’ family church, and a couple of nearby “Missionary” baptist churches, and any number of churches associated with the Southern Baptists organization, this is the real story in relation to family size and birth control:

        My great grandparents had very large families, but a lot of infant and childhood mortality and my grand parents somewhat smaller ones, four on my Mom’s side , nine on my Dad’s, for an average of 6.5 .

        My own parents had five kids who lived to grow up.My gray haired siblings and I have seven kids between us for an average of 1.4.

        The next generation of grown up already women in the family are quite adamant that one or possibly two children is all they will ever have , no matter what. they are quire plainspoken in saying the only conceivable way one of them might have a third child is to make a second husband happy by having the third, in the event of being divorced or widowed.

        You can visit as many churches as you like in my part of the world, and you will seldom ever see a woman with more than three kids, and not more than maybe one woman out of a dozen has three. two is the usual number planned for, but just one is a very common choice.

        You can hear a Baptist preacher preach against abortion, premarital sex, and same sex marriage almost any random Sunday, but you will have to attend a one hell of a lot of services before you will ever hear one say a single word about birth control. It wouldn’t accomplish a thing if he did, any more than it has accomplished anything for the Pope for telling the Italians, the Brazilians, and the Poles not to use birth control.

        People like the Duggars are looked on by every Christian I ever met as irresponsible or worse , in the event they have heard of them at all.Only a very ,very few have even heard of them.

        I used to post at The Oil Drum as Oldfarmermac.

        • reply to myself since I forgot something:

          My aunts and uncles all have small families with one exception who has five kids and another who has four. But taken as a group, my parents generation averaged only about 2.4 kids.

          My own generation of cousins mirrors the birth rate of my own siblings- well under two kids per woman.

          I’m quite sure that even those who remain devout church goers will average well under two kids per woman in the rising generations.

        • Thanks for your observations.

          I think that religions as they develop and change, pass on values about family size of the day. But as the external situations changes, some religions are slow to change. The show change of some religions does not stop the population from picking up on the external queues. Not having enough wealth/resources to support a large family greatly decreases a couple’s interest in having a large family. Having plenty of resources encourages large families.

          I am one of seven children, but the large number of children in the family had nothing to do with my parents’ religious views. My mother said, “If I am staying at home with one, I can just as well stay home with several.” My father had a strong interest in having a son (because in Norway, inheritance what through the son, and the son passed on the family name). Unfortunately, the first five were girls, of which I am the oldest. (The last child was unplanned, when my mother was 45.) My parents could afford to raise seven children–in fact, they could afford to send all of us to private colleges, without my mother working and without any of us children ever paying a cent. My mother has a masters degree, and worked up until practically the time I was born–concealed her pregnancy with a lab gown.

          None of my own three children are married, even though the youngest is turning 30 in March.

          My husband has one sister, and only one of her two children is married, even though both of them are in their 30s.

    • Denis Frith says:

      Even if the population were to stabilize in the near future, the infrastructure would continue to use up the limited natural resources. This is an unsustainable process and society will be hard pressed to cope with the withdrawal of the goods and services they have become very dependent on

      • justnobody says:

        People don’t seem to be able to understand the complexity of systems. Obamare care is a perfect example of failure of complexity. Complexity of human invented technology, depletion of natural resources, human survival behaviour leave only one solution to this problem : brutal and rapid collapse of human civilization and probably die off of human. The collapse cannot be managed. We cannot control and managed the collapse of such a complex system. We can barely get obama care web site working.

  6. Michael Kirby says:

    Interesting post. Although I think one element that is missing in the analysis is the effect of increase in efficiency per unit work.

    The efficiency can be in terms of human labor (at a cost of energy). For example a truck is more efficient than horse but uses more energy.

    But it may also be increase in energy efficiency for the same basic technology (better has mileage )

    I think our (American) society has significant improvements that can be made in energy efficiency that would offset declines in energy production efficiency.

    At some point if eroei becomes too high (or too high too fast). The effect you describe becomes catastrophic. But we are not there yet.

    Mike

    • One problem with increased energy efficiency is that it takes increased investment in new vehicles and other devices that use oil. It is not clear that we have the time or the money to do this.

      Another problem with increased energy efficiency is Jevron’s paradox. People tend to spend the income they have earned. If they less on oil for one usage, they will use the money on something else, which probably also uses oil (but perhaps less oil).

      By the way, I think you mean “if EROEI becomes too low.” (rather than too high). Too low EROEI is the problem we seem to be having already. If we were doing better, we wouldn’t have so much of a problem with low wages.

      • Dear Gail,
        Very nice post. I am wondering about your comment that “People tend to spend the income they have earned. If they less on oil for one usage, they will use the money on something else, which probably also uses oil (but perhaps less oil)”.

        Does Jevon’s paradox still apply when we are in a period of declining resources, higher prices, and falling wages? I can see how it applies when our economy is growing and oil is still cheap, but that is no longer the case. Smaller wages and higher prices mean that we can’t buy as much as we used to. Easy access to credit allowed American families to make up the difference for the last few decades but that access has declined. Families are being forced to eliminate or reduce purchases they can no longer purchase.

        If we choose to improve energy efficiency in our home or we buy a Prius, it may not mean that we will use the savings by buying more stuff. It may mean that we don’t have to eliminate things we are already purchasing.

        If you are correct in your analyses of the direction our economy is likely to go, then we are faced with austerity at the least or deprivation due to collapse. If our future is going to be one of declining resources, wages, and payments from government entitlement programs, then having smaller energy efficient homes will mean we don’t need as much money (or resources) to heat and cool our home if we lose our job or the government cuts social security benefits. It seems to me that it is in our best long-term and short-term interest to reduce our consumption of goods and services in order to plan for a future with much less.

        regards,
        Jody

        • I really don’t know to what extent downsizing will be helpful. It really depends on how long the current system “works”.

          My concern is that we will very quickly get to a point where the financial system doesn’t work. If this happens, there may not be many things to buy in the marketplace. The things that will be in the marketplace are likely to be local things that others are willing to trade–used clothing and tools, for example. The electricity system won’t work, and oil, gas, and coal won’t be available. If we live in our houses, it will be without heat, cooling, and probably running water. If people happen to have a some solar panels, they can use them assuming they have them hooked up right–with an inverter and perhaps with back-up batteries. But banks won’t be operating, nor will the Internet, nor fuel stations. Replacing the batteries and the inverter for the solar panels is likely to be a problem, so over time the usefulness of solar panels will become more restricted. Shovels and seed would have been much better investments.

          I am afraid in such circumstance, many people would decide that just can’t continue to live in their current homes, with or without solar panels. They will need a way of getting enough food and water, and will leave their homes to get that food and water.

          The big question is how long our current system lasts. If our current system last a long time, then fixes to downsize could be helpful.

          • Jan Steinman says:

            Sounds like there will be a booming market for services from a time-honoured profession: tinker.

            I fancy myself a tinker. I can hot-wire solar panels. I can refurbish lead-acid batteries. I can re-build many electrical and electronic things. I can maintain a diesel engine — and make fuel for it.

            Just today, someone in our household threw out an expensive 7W LED lamp. “Oh, the inverter’s probably fried,” he said, “You can’t really fix them these days.” I took off the front and noted it was intermittent, that flexing the LED circuit board would make it go on and off. I re-soldered the connections on the circuit board, and all is well.

            That’s not to say that electricity for soldering irons will be available forever. I could heat up a copper soldering iron tip in a fire and still fix things, if I have access to solder and flux. I think I could make the flux from turpentine and pine pitch, and I could probably make turpentine, and the actual solder could be scavenged from old circuit boards, but all this has a cost in the effort needed.

            The survival of the generalists will require a somewhat orderly regression, and I don’t know if that is possible or not. Even the smallest, least expensive consumer electronic item rests on the pinnacle of a pyramid of other technologies. They put microprocessors in electric tea-kettles these days!

            I look at the technology that was available in the first part of the 20th century, and I think, “Yea, I could do that.” It rested on a much smaller technology pyramid, mostly revolving around basic refinement of resource materials, and much of those refined materials are available in dumps and landfills. You won’t necessarily need to mine, transport, and smelt iron ore — all you’ll need to do is re-process existing steel.

            At least for a while. But if we can stair-step down the technology pyramid in a more-or-less graceful manner, there might be a way to proceed.

            At least that’s my theory, and I think it’s as good as anyone else’s, and certainly much more likely than a future with thorium reactors and mining the other planets.

            • An orderly regression might be possible if all of the parts for tinkering can be kept in place. If we lose too much, though, the process just gets frustrating.

              One thought would be if we all decided to aim for a specific lower level of technology–say trains at the level when we first made them–we could perhaps make trains that could be repaired with parts made locally. But no one would agree to step back that far–it would be inconceivable that we couldn’t keep up our current way of doing things.

            • Hi Gail, you mentioned somewhere that ‘nobody would go back that far’ to certain old technologies – like steam for instance? You are not helping by categorizing moving to older technologies as moving ‘back’. Let the remaining oil and derivatives cost $5000 a barrel, and be prohibited from burning for personal transportation and heating. Let plastics not be wasted on luxury leisure items and toys. Deny the ‘needs’ created by marketeers and supplied by manufacturing for profit. Bring back the horses and the horse-drawn canal barges. Plant some more trees NOW – so what if profit is 40 years down the road? (The oxygen will come in handy as well!) Let fossil fuels be used to create their own alternatives.

              Jan Steinman and his friends cannot do everything themselves, but show the people that his skills and wisdom matter more than the skills of CEOs who manipulate power and resources destructively. Their days are over, and not because fossil fuels are getting scarce, but because the people are vermin. Fortunately for them they can become human again when they are forced to do human-sized tasks for other humans. Like the rest of us.

              What will it take the hand-full of governments to accept that a central world government is going to be the only way the population will be brought back to the pre-industrial levels needed for sustainable and humane governance? Human rights? Stupid dreams! What about the right of the human race to survive without wars of ambition, or without leaving disease and starvation to limit population growth in the ‘natural way’ ( by evolution)?

            • Jan Steinman says:

              “Jan Steinman and his friends cannot do everything themselves…”

              It’s frustrating. I feel a strong sense of vorsicht (a fine German word that combines “foresight” and “caution”) and I don’t understand why more people aren’t doing more.

              While agreeing that change will happen, people seem to be in willing denial with regards to their own actions. “Yea, what you’re doing is necessary, but I need to stay in this job for three more years to max out my pension.” AAARRRGGGHHH!!! Pensions are going away left and right! OPEN YOUR EYES, FOLKS!

              That’s just one example. I could write a book on all the excuses for inaction I’ve heard!

              But on another level, I don’t hold EcoReality up as an example or template for everyone to follow. Diversity is important! What I’m trying to do might fail, and something else may succeed. There’s likely to be a large mix of approaches that succeed or fail for a large variety of reasons. A “social darwinism” approach is the most likely to have some success. The days of “one size fits all” civilization is over, thank Goddess!

              “What will it take the hand-full of governments to accept that a central world government is going to be the only way the population will be brought back to the pre-industrial levels needed for sustainable and humane governance?”

              Sorry, we’ll have to agree to disagree on this one.

              I see lots of ways that “population will be brought back to pre-industrial levels.” The pretty ones aren’t possible, and the likely ones aren’t pretty.

              I’m not sure a world government is either possible, nor pretty. I’m convinced that even if it does happen, it would be ineffective. Diversity will win out in low-energy situations.

              A world government is only possible in an energy-rich environment, and any effort to that end is bound to be frustrated by falling energy availability. This is not just some guy expressing an opinion; this is Ecology 101, and civilization is nothing if not the ecology of human interaction.

              But when all you have is a hammer, all the world looks like a nail. Perhaps my bias toward ecology and natural systems overly biases me against human exceptionalism. That’s where diversity comes in — prove me wrong!

            • “A social darwinism” approach is the most likely to have some success.” What characterizes the natural world is the general lack of cooperation between species, and the unpretty existence of food chains. How societies evolve is easy to see, but how the strongest survive without violent domination across borders and anarchism within borders is what defines civilization, at the moment.

              I was brought up in the kind of environment you might appreciate Jan, an old style farm in Devon, England – large underground waterwheel used for milling grain, sawing logs, chopping chaff and sweeds (turnips) – one small Ferguson tractor, etc. My father retired just before they started paying farmers to let the land go to pot, as the only known way to keep food prices high. Different times eh? Or not.

              If population explosion and widespread starvation IS a problem, can it be dealt with by social groups independently unless under local dictators? Solutions are ugly – mostly from the resistance to them.

            • Jan Steinman says:

              “What characterizes the natural world is the general lack of cooperation between species…”

              I disagree.

              In university-level ecology classes, I was taught that competition dominates in high energy environments; co-operation dominates in low-energy environments.

              In tropical biomes, there may be 4-5 flying predators. In arctic and alpine biomes, there are generally just 2 or 3, and they “co-operate” by splitting the “harvest” temporally, a hawk by day, an owl by night.

              “and the unpretty existence of food chains…”

              Again, less true of low-energy biomes than high-energy biomes. Cannibalism, for example, is more prevalent among high-energy biome species, while “opportunivores” are more prevalent in low-energy biome species.

              “If population explosion and widespread starvation IS a problem, can it be dealt with by social groups independently unless under local dictators?”

              Most low-energy social groups have flat, egalitarian social structures, primarily based on age. It’s the high-energy social systems that tend to have deep hierarchies, based on ability to hoard.

              There need not be “dictators” involved in a low-energy situation.

              What is volatile is “changing energy” situations, which is the case we find ourselves in. Then you can see artifacts of both high-energy and low-energy systems.

            • ‘Lack of cooperation between species’ Coexistence yes – occupation of different niches, competing for the same ones. Cooperation in the sense I meant – modification of behaviour deliberately (not instinctively) to allow for that of another if very rare even among primates. And nonexistent between other species.

              Large poor populations are never aware of or concerned with population statistics. If a new category comes into existence – poor, numerous, connected, and cooperative – the situation will evolve, and as someone has mentioned, social norms may evolve to find a way of reducing the population. And I don’t mean reducing the expansion of population.

              When people like us draw on intellectual analyses of natural forces and trends I am afraid we are contributing absolutely zero to the real problems of human survival. But when people also like us – well, you anyway – can spread the message about living with less, then we can justify the space we take up.

              I appreciate your comments Jan.

            • What I thought would happen is that the supporting businesses would not be there to “go back”. In theory, you can get there, but it will take a lot of work, and combined effort of different businesses. The oil won’t be there are any price. The price will be too low, so it won’t be extracted.

            • sheilach2s says:

              Don’t you mean the price will be too high for “consumers” but not high enough to cover the cost of extracting it? At least that’s how I see the problem, the cost of extracting keeps rising but the wages of the remaining “consumers” are either stagnant or declining.
              Also I read today that Bernekki is going to reduce to amount of bond buying the fed has been doing, so here comes the decline of the QE. I wonder how that’s going to play out.
              He believes that the economy is strong enough to continue growth without so much QE.
              Growth?
              what growth? Only the top 1% have seen much growth. In the meantime the gov. is still pushing through TPP that will result in even more jobs being moved to 3rd world rat hole countries with slave labor & no regulations, hence the thick smog in Beijing & their dead rivers.
              We are so very very SCREWED!!
              Dig in “sheeple” here comes the shears!

          • Jan Steinman says:

            “One thought would be if we all decided to aim for a specific lower level of technology–say trains at the level when we first made them–we could perhaps make trains that could be repaired with parts made locally. But no one would agree to step back that far–it would be inconceivable that we couldn’t keep up our current way of doing things.”

            What a lovely thought! How long would a politician last who espoused such a philosophy?

            I try not to buy things with microprocessors in them — and I used to design the damn things! So perhaps there can be a grass-roots movement to simplify our artifacts, and to select for maintainability, rather than for the latest and greatest whiz-bang functionality.

    • Mike,
      I agree with your comment that “our (American) society has significant improvements that can be made in energy efficiency that would offset declines in energy production efficiency.” We don’t seem to be learning that lesson.

      Locally I am seeing the housing recovery in full action. Hundreds of acres of farmland have been cleared this year and construction of small cheaply built single family homes (starting in the 90’s) are slapped up as quickly as possible. The attached double garage is bigger than the main part of the house. Why is it that planners, developers, and bankers still approve of this type of housing? It is a very inefficient a use of current and future resources. JHK discussed the future prospects of urban sprawl so well.
      regards,
      Jody

      • sheilach2 says:

        They keep doing that because that’s all they know what to do to encourage “growth” & make profits. It will fail of course & more valuable irreplaceable farmland will be lost under more concrete.
        That’s not “recovery” that’s just an economists idea of prayer, if they build it “they” will come – NOT.
        Our “planners” are considering approving yet another sure to fail golf course on an even windier part of the coast !
        Does stupidity have any limits? Apparently not.

          • sheilach2 says:

            I hope she can sue more than their pants off. What kind of “logic” are they using to justify posting her off the grid home as “uninhabitable”? Looks habitable to me.

            The portable gas stove inside could be a carbon monoxide problem though as CO2 has a greater affiliation to red blood cells than O2. Those stoves have warnings on them that say for outdoor use only.
            She would be better off perhaps with a vented wood stove for both heating & cooking.

            Where does she get her water if no inside plumbing?
            Does she have a well? Living in Florida, any well might just pump up salt water.

            Certainly living in that home is a far better option than losing her paid for home & existing on the cruel streets, but those city guys probably couldn’t care less, it’s all about power & CONTROL!
            (Note the emphasis on CONTROL!)

  7. Hiruit Nguyse says:

    I am new here. I have been watching your site for a Few Months now. Big fan of JHK…he directed me to your blog some months back. It has occured to me that I have never seen a Graph of Average US Wages Priced in Oil before…similar to the Priced in Gold, (or Oil Priced in Gold) charts for example.
    Since Crude Oil is about 97% of US transportation and a Primary function of our Whole Economy, it seems that a Chart of US Wages Priced in Crude Oil might be an interesting thing to look at.

    Sincerely,,
    HN

    • I am a big fan of JHK too, but don’t always get a chance to read his blog.

      Attached is a chart I made showing the number of barrels of oil that average wages (defined as total wages divided by total population) can buy. There are only five years that the amount dropped below 200. Those were 1979, 1980, 1981, and 2011 and 2012. You can see why we have a problem now. Making the graph was a good idea. I may use it elsewhere.

      Number of barrels of oil the average US wage can buy

      • Hiruit Nguyse says:

        I appreciate that so much…The peak years for one of Businesses coincide with the peak around late 80’s – Early 90’s. I meet so many young Persons Today that have Work experience in the 90’s but have no Idea why they are so Poor Today. Many of these people born in 80s. Now this chart clearly shows the Crushing Poverty that is resulting from Products ( in the Form of Energy…both to Manufacture, and Distribute) including Food, Shelter, & Transportation Falling rapidly away from their paycheck.

        Now if I could just get perople to think in terms of the Energy Embed of a product (that fan belt, those 4 Tyres) instead of just the Dollar Price Tag. The Obverse of this chart is thus your Real Inflation rate.

        Thanks Again.

        HN

        • You are welcome. It was a good idea.

          It is hard to get “real” energy embedded, because our whole system works together. A lot of what we are paying for is embedded energy in things like roads, bridges, electric transmission lines, hospitals, and the world’s education system. All that we can measure is the small fraction that seems to create the goods we use today. But without the whole system, the supposedly “low energy” goods are not possible.

          I think of our human bodies. It is as if we are losing all our blood, and want to save our bodily system. Someone does a study, and determines that hair, fingernails, and toenails are least dependent on blood. Then someone else decides that we will expend huge funds to modify our bodies so that hair, fingernails, and toenails are a much bigger percentage of the total. Does this work? Not really.

          • Another way we can think of ‘our human body’ is to make a virtue of voluntary denial of stuff it does not need, and trusting ourselves to find self-respect in so doing.

      • Ert says:

        @Gail

        Interesting chart (barrel oil with average wage). If may be even more interesting to use the “median wage” instead of the “average wage” – because later is distorted to the upside by the “1%”. The median wage does much better reflect the buying power the “average” citizen has available.

  8. Phil B. says:

    How would American society react in lieu of an economic collapse? One cannot speak with any certainty about such a question, yet it is not purely a rhetorical question. Our society grows more fragmented with each day. We’re increasingly divided based on political views that often lack any congruent beliefs. Many of us are heavily caught in the daily grind of commuting and work. We become isolated from all but our co-workers and co-dwelllers. More and more we see each other as separate, not as a community. The enormous quantity of firearms in our population coupled with mass desperation, and a sense of righteousness and retribution could easily result in a great deal of chaos and bloodshed. It is very difficult to imagine the reaction of the government being anything except a brutal martial law in which citizens would be better off scavenging than seeking refuge with the government.

    • I think part of our problem is that it is quite possible to see to possible fixes to the problems we have today, if a person doesn’t really understand the situation:

      1. Work on climate change, because that appears to be our long-range problem. Use government funds to subsidize intermittent renewables. And give funds to all of the needy, because we have more and more needy.

      2. Fix our financial situation, by cutting back programs.

      I can understand the reasoning behind both of these views. My own background, if I didn’t know what I know today, would lead me to solution (1). (In fact, my husband and children have voted Democrat in every election I can remember. My son and my sister both own Priuses, and other cars in the family were chosen for low fuel use/ low energy use in construction.)

      I can also understand wanting to cut programs, although probably for somewhat different reasons from the reasons some Republicans want to cut the programs. My reason is that there is no possible way we can afford them.

      The fact that there are two possible understandings of our current predicament based on the partial facts given leads to this huge polarization of beliefs. Unfortunately, I am afraid we end up with a financial collapse regardless of which we follow. The route of the Democrats may get us there a tiny bit quicker, but maybe the collapse is so close that it really doesn’t matter.

      The polarization is probably unavoidable, given the two views of the situation. It may look like this polarization is what brings the system down–gridlock on passing legislation of any kind.

      • In relation to the US situation- and it has been well over a decade since I last visited and the polarisation in recent years and guns will restrict where I visit if I do- as a European observer is the US could be a leader given that even in a post peak world it has the technology and ability shown in the space program and Manhattan project- unfortunately capitalism is seen as the free world rather than the route to a highly restricted one.

        What amazes me as an observer is no-one looks to radically reduce the US military machine. what is it? $600- 700 billion, plus veterans, plus proxy armies as part of US aid to Egypt/Israel etc, and the funding of private business- ie- the war machine. There isn’t a country any where near US might. Your article reminded me of the fall of the Roman Empire- in their case it was EROEI concerning the lengths of roads and running out of countries to economically conquer- when they got to Scotland there was neither the slaves or resources or farm land to justify such an investment in the military. and some of the Empire’s methods to stave off collapse were equal to those of today- we haven’t quite adopted the rule that made children follow in their father’s profession but lack of social mobility [another indicator perhaps] is restricting choice.

        stripping the military down to a fifth would free up a lot of debt and buy time. Unless the plan is to conquer to acquire wealth!

        and yes it is amazing that governments commission reports by academics on peak oil/ climate change/ environmental limits, water etc etc and it gets ignored.

        maybe they really think we have time. smart people I know say ‘they will come up with something’ not too sure who ‘they’ are- wizards perhaps.

        • madronehill1 says:

          Hello, Yes, they are expanding things like that at a time that we are running into roadblocks or so called limits on resources. The whole world seems to have taken it for granted that the cheap oil and gas we have enjoyed in the last 75 or so years will continue. What a surprise the world at large is facing, especially the younger generations that expect things to remain the same as their parents generations, I believe we are all in for some changes, but I think they will be slow unless war breaks out in a bad way. But it is going to be a big change ahead for us all.

          It is so easy to get used to the comforts of our economy which relatively cheap oil and we are all used to the comforts including us, a warm shower for example. In the old days the cowboys were lucky to take a bath once a month.

          Let’s face it we are not really ready for what is coming if we cannot get the things we think we need, but you know if you think about it we really could do with much less, and that may be what is ahead. For our generation if we understand this I think most of us will survive and perhaps those that live in the lap of luxury are the most vulnerable to the first leg down.
          Scott

        • Lindon says:

          I think we can all rest assured that the HUGE American military is there to insure two things: 1) A guarantor of safe world trade commons as clearly described in the Joint Operating Environment 2010, and 2) A protector of the United States (and protected nations), a guarantor of order and rule of law in post-collapse America (and protected nations) also as described in the JOE of 2010.

          http://www.fas.org/man/eprint/joe2010.pdf

          For all who doubt: The American military command knows that collapse is coming and they are preparing to deal with that situation. People who think the American government and American military are going to dissolve due to lack of “money” in a post-collapse world need to realize that some things are more important than money — food, shelter, guarantee of safety, commitment to ideals, a common goal to rebuild a better world. The American military will not “fall apart” due to lack of funding. And either will America. We should welcome this reality, because the alternative is local despots and strong men and religious fantatics springing up all across America, imposing their own “rule of law”. And we all know how that would work out.

          • Jan Steinman says:

            “People who think the American government and American military are going to dissolve due to lack of “money” in a post-collapse world need to realize that some things are more important than money… The American military will not “fall apart” due to lack of funding. And either will America. We should welcome this reality, because the alternative is local despots and strong men and religious fantatics springing up all across America, imposing their own “rule of law”. And we all know how that would work out.”

            Replace “America” with “Roman Empire” in that paragraph.

            Don’t you think the ruling elite of other fallen civilizations had similar expectations of exceptionalism? Pray tell, why is this time different?

            Perhaps you are right, and things are different, just this once.

            • sheilach2 says:

              I think the government & military will fail when there is no longer enough fuel to power their war machines & energy intense farming. “Money” is not a resource, it’s a artificial means of exchange for resources, it has no value in itself.
              How many military people will fight to preserve this government when their families are starving?

              For a short time, we could become like N.Korea is now but with the absence of fuel, how long would even the dictatorship of communist N.Korea or China last?

              World governments would become no more dangerous than the people they rule without oil, coal & natural gas to build, maintain & fuel their weapons.
              A return to a “stone age” like economy can’t support large imperial armies. Governments would again be susceptible to civil uprisings & being overthrown if they become too burdensome.

          • As you no doubt noticed, this PDF talks about peak oil, and its limits on oil consumption.

            The peak oil view of how these limits work is wrong–the impact is likely to be much more through the political system and international financial system and international trade. I am not as optimistic as you that the military will be able to work around them.

      • Jan Steinman says:

        “2. Fix our financial situation, by cutting back programs.”

        You paint this as a “Republican” approach, and yet it depends on which programs are cut, no?

        I’m in favour of cutting back the military and corporate welfare. Does this make me a Republican?

        Both the military and the corporatocracy can be seen as arms of the government, as they “govern” what we are allowed or required to do, and yet, neither of them get “haircuts” when the notion of austerity comes up.

        • There are not enough military programs and corporate welfare programs to provide enough dollars. It unfortunately becomes necessary to add programs aimed at individual citizens as well. Corporations also tend to stay out of the reach of the government, through offshore tax havens.

    • Nothing wrong with ‘scavenging’ except the word…

  9. Keith Akers says:

    One interesting facet of Turchin and Nefedov’s book which I don’t see you mentioning, is the idea that the government and the society cannot correct the problem because it doesn’t want to. The situation of the masses starts declining because their wages start falling due to overpopulation. But this actually benefits the elite class because they can hire more and more cheaper labor and thus increase their profits. The system doesn’t collapse until the elite class becomes overcrowded from everyone wanting to be a millionaire, and they start fighting with each other. It is really quite Marxist, and “Secular Cycles” explicitly credits Marx with understanding key things about what drives collapse.

    Because collapse is a political event, as Joseph Tainter also argues, it might be argued that political action could accelerate societal change in the needed direction. In other words, we might have a rational society in which there would be a massive, organized scale-down, sort of like Richard Heinberg’s “Powerdown” scenario. Tainter’s question is, why doesn’t this happen? He seems to be clear that resource shortages (declining EROEI, for example) do not by themselves cause collapse; it is the political collapse that determines the outcome. Turchin and Nefedov seem to answer Tainter’s question by saying that it is the elites who (in effect) cause the collapse. I am not sure I agree with either of them on these points, but this seems to be the argument.

    • Vineyard says:

      Plus, actually has reformulated the model from Secular Cycles, since the model only fit to Agrarian Societies. He presented the new model, which covers the United States, a few months ago, in a book lengh manusscript, which will be his new book, when it’s finished.

      It’s current name is “A Structural-Demographic Analysis of American History”
      http://cliodynamics.info/PDF/SDAAS_Sep17.pdf

    • Those are good points.

      The current situation is that the government is so tied to business (even though they don’t get much in the way of tax revenue from them) that they seem to cheer for increased efficiency in the form of fewer workers. They don’t even object much to jobs being sent overseas, because doing so keeps prices lower for American consumers. And businesses clearly have no problem with lower wages for workers–it helps them get higher profits.

      From what I have seen of recent collapses, I would agree that government collapse seems to play a huge role–although not necessarily in precisely the same way as Turchin and Nefedov suggested. High wages seem to come now from business positions, rather than government positions.

      One of the recent collapses I am thinking of are the collapse of the Former Soviet Union in 1991. The government collapse clearly played a big role. This happened after low oil prices made it non-economic to expand oil production and also cut back funds for the government.

      Other oil related collapses include Egypt and Syria. Even the collapse of Argentina seems to be connected to the drop in oil exports. There were definitely political changes that came to the forefront, hiding the oil problems from view.

  10. http://davecoop.net/seneca.htm has a graph & equation for a hypothetical “Seneca curve” of world crude oil production.

    • Thanks! Yes, I know you sent it to me. It is based on a 20 year crash assumption with respect to oil supply. This is what it looks like.

      David Cooper -Seneca Curve

      Now that I think about the situation, it is not clear to me exactly which aspects of the economy would drop over a twenty year period. For example, oil production might drop more quickly, and population decline more slowly.

      • Aware says:

        David, Gail, and everyone,
        I have followed PO, including PO web sites, for many years, I have grown a little skeptical about seeing new oil production graphs which depict peaks in the next year or two (as this one does) from the date of posting, followed by a very steep decline to zero production in a relatively short time. I wonder what data and assumptions went into the analysis making this graph? I cold imagine a global nuclear war, an asteroid strike, or perhaps a very-high mortality pandemic leading to such a production curve. Short of those situations, I wonder if the graph would feature a drawn-out peak-plateau for a decade or two followed by a ‘fat tail’ production decline function? Or perhaps a steeper decline function, punctuated by secondary and tertiary peaks, such as the case for the United States? A global financial system collapse without recovery would lead to a graph such as this due to the demand crash leading to no money to pay for high-cost production, but I have been very surprised by TPTB’s ability to ‘extend and pretend’, and I am not able to nail down a limit to that charade…the day will come, but perhaps further off than some of us think. Graphs resembling this were in vogue circa 2006-2007, with peaks depicted at 2009, 2010, ’11,’12 and so forth as time went on…

        All tat being said…time is running out for society to prepare for life with much less fossil fuels.

        • The issue I am writing about is not “peak oil”. I am talking about collapse of a financial and political type, that is brought about by the disruptions high oil prices are already bringing to the economy. The collapse doesn’t have anything to do with the amount of oil or gas or coal in the ground–it is more like the collapse of the Soviet Union, only worse. If we lose the political system, we are likely to lose the international financial system and the international trade system.

          Read my full article again, especially the part about complex adaptive systems.

          • Aware says:

            Gail, I truly enjoy your articles, including this one, which I read thoroughly before I posted my comment.

            I think this text was ‘lost in the sauce’ in my post:

            ‘…but I have been very surprised by TPTB’s ability to ‘extend and pretend’, and I am not able to nail down a limit to that charade…the day will come, but perhaps further off than some of us think. ‘

            I imagine the types and magnitude of ‘creative accounting’ and public/private ‘messaging (propaganda) and other measure to maintain control of the situation exceed most of our imaginations.

            I do think the threat of collapse has /something/ to do with the amount of /easy and cheap-to-extract/ oil in the ground…the migration of production to smaller, more widely scattered, and lower-quality resources has been a primary cause of the increased oil prices, along with strong demand from countries such as China and India, and geo-political factors in Iran and Iraq and Vz and other places. In turn, these high prices will likely cause destabilization of political-business systems, leading to difficulty financing ever more expensive FF extraction.

            The resilience (this far and perhaps for another decade or maybe two) of our globalized complex adaptive system has been and may continue to be surprising,

            Unfortunately, the effort spent to maintain some semblance of BAU so far and for as long as that charade holds up would be better spent on transitioning to societal systems better suited for the age of declining FFs. No politicians in power are going to level with the people, because many of the people are not well educated in science, math, and critical thinking, and many are deluded into thinking things will stay the same or even improve – ‘people will invent the ‘next big things and it will be OK”…

            I will summarize my previous post and my point: I do not disagree with your premises, just with the shape of your graph (and the timing of the ‘great decline’ phase of oil). It will be interesting to see how this all plays out.

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