A new theory of energy and the economy – Part 1 – Generating economic growth

How does the economy really work? In my view, there are many erroneous theories in published literature. I have been investigating this topic and have come to the conclusion that both energy and debt play an extremely important role in an economic system. Once energy supply and other aspects of the economy start hitting diminishing returns, there is a serious chance that a debt implosion will bring the whole system down.

In this post, I will look at the first piece of this story, relating to how the economy is tied to energy, and how the leveraging impact of cheap energy creates economic growth. In order for economic growth to occur, the wages of workers need to go farther and farther in buying goods and services. Low-priced energy products are far more effective in producing this situation than high-priced energy products. Substituting high-priced energy products for low-priced energy products can be expected to lead to lower economic growth.

Trying to tackle this topic is a daunting task. The subject crosses many fields of study, including anthropology, ecology, systems analysis, economics, and physics of a thermodynamically open system. It also involves reaching limits in a finite world. Most researchers have tackled the subject without understanding the many issues involved. I hope my analysis can shed some light on the subject.

I plan to add related posts later.

An Overview of a Networked Economy

The economy is a networked system of customers, businesses, and governments. It is tied together by a financial system and by many laws and customs that have grown up over the years. I represent the economic network as a child’s toy made of sticks that connect together, but that can, if disturbed in the wrong way, collapse.

Figure 1. Dome constructed using Leonardo Sticks

Figure 1. Dome constructed using Leonardo Sticks

The economy is a self-organized system. In other words, it grew up gradually over time, one piece at a time. New businesses were added and old ones disappeared. New customers were added and others left. The products sold gradually changed. Governments gradually added new laws and removed old ones. As changes were made, the system automatically re-optimized for the changes. For example, if one business raised its price on a product while others did not, some of the customers would move to the businesses selling the product at a lower price.

The economy is represented as hollow because, as products become obsolete, the economy gradually adapts to the replacement product and loses support for earlier products. An example is cars replacing horse and buggy in the United States. There are fewer horses today and many fewer buggy manufacturers. Cities generally don’t have places to leave horses while shopping. Instead, there are many gasoline stations and parking lots for cars.

Because of the way an economy adapts to a new technology, it becomes virtually impossible to “go backwards” to the old technology. Any change that is made must be small and incremental–adding a few horses at the edge of the city, for example. Trying to add very many horses would be disruptive. Horses would get in the way of cars and would leave messes on the city streets.

The Economy as a Complex Adaptive System and Dissipative Structure

Systems analysts would call a system such as the economy a complex adaptive system, because of its tendency to grow and evolve in a self-organizing manner. The fact that this system grows and self-organizes comes from the fact the economy operates in a thermodynamically open system–that is, the economy receives energy from outside sources, and because of this energy, can grow and become more complex. The name of such a system from a physics perspective is a dissipative structure. Human beings, and in fact all plants and animals, are dissipative structures. So are hurricanes, galaxies, and star formation regions. All of these dissipative systems start from small beginnings, grow, and eventually collapse and die. Often they are replaced by new similar structures that are better adapted to the changing environment.

The study of the kinds of systems that grow and self-organize is a new one. Ilya Prigogine was awarded the Nobel Prize in Chemistry in 1977 for his pioneering work on dissipative systems. One writer (in French) about the economy as a dissipative structure is François Roddier. His book, published in 2012, is called Thermodynamique de l’evolution.

Why Energy is Central to the Economy

If the economy is a dissipative system, it is clear that energy must be central to its operation. But suppose that we are coming from a step back, and trying to show that the economy is an energy-based system that grows as more external energy is added.

Let’s start even before humans came onto the scene. All plants and animals need energy of some kind so that the organism can grow, reproduce, move, and sense changes to the environment. For plants, this energy often comes from the sun and photosynthesis. For animals, it comes from food of various kinds.

All plants and animals are in competition with other species and with other members of their own species. The possible outcomes are

  1. Win and live, and have offspring who might live as well
  2. Lose out and die

Access to adequate food (a source of energy) is one key to winning this competition. Outside energy can be helpful as well. The use of tools is as approach that is used by some types of animals as well as by humans. Even if the approach is as simple as throwing a rock at a victim, the rock amplifies the effect of using the animal’s own energy. In many cases, energy is needed for making a tool. This can be human energy, as in chipping one rock with another rock, or it can be heat energy. By 70,000 years ago, humans had figured out that heat-treating rock made it easier to shape rocks into tools.

A bigger step forward for humans than learning to use tools–in fact, what seems to have set them apart from other animals–was learning to use fire. This began as early as 1 million years ago. Controlled use of fire had many benefits. With fire, food could be cooked, cutting the amount of time needed for chewing down drastically. Foods that could not be eaten previously could be cooked and eaten, and more nutrition could be obtained from the foods that were eaten. The teeth and guts of humans gradually got smaller, and brains got larger, as human bodies adapted to eating cooked food.

There were other benefits of being able to use fire. With time freed up from not needing to chew as long, there was more time available for making tools. Fire could be used to keep warm and thus expand the range where humans could live. Fire could also be used to gain an advantage over other animals, both in hunting them and in scaring them away.

Humans were incredibly successful in their competition with other species, killing off the top carnivore species in each continent as they settled it, using only simple tools and the burning of biomass. According to Paleontologist Niles Eldridge, the Sixth Mass Extinction began when humans were still hunter-gatherers, when humans first moved out of Africa 100,000 years ago. The adverse impact of humans on other species grew significantly greater, once humans became farmers and declared some plants to be “weeds,” and selected others for greater use.

In many ways, the energy-based economy humans have built up over the years is simply an approach to compensate for our own feeble abilities:

  • Need for warm temperature–clothing, houses, heat when cold, air conditioning if hot
  • Need for food–metal tools, irrigation, refrigeration, fertilizer, herbicides, pesticides
  • Knowledge/thinking ability of humans–books, schools, Internet
  • Mobility–airplanes, cars, trucks, ships, roads
  • Vulnerability to germs–medicine, sanitation

A key component in any of these types of adaptations is energy of some appropriate kind. This energy can come in various forms:

  • Embodied energy stored up in tools and other capital goods that can be reused later. Some of the energy in making these tools is human energy (including human thinking capacity), and some of this is energy from other sources, such as heat from burning wood or another fuel.
  • Human energy–Humans have many abilities they can use, including moving their arms and legs, thinking, speaking, hearing, seeing, and tasting. All of these are made possible by the energy that humans get from food.
  • Energy from animals – Dogs can help with hunting and herding; oxen can help with plowing; horses can be ridden for transportation
  • Energy from burning wood and other forms of biomass, including peat moss
  • Energy from burning fossil fuels (coal, natural gas, or oil)
  • Electricity produced in any number of ways–hydroelectric, nuclear, burning coal or natural gas, and from devices that convert wind, solar, or geothermal energy
  • Wind energy – Used in sail boats and in wind powered devices, such as windmills to pump water. Wind turbines (with significant embodied energy) also generate electricity.
  • Solar energy – Most energy from the sun is “free”. It keeps us warm, grows food, and evaporates water, without additional “help.” There are also devices such as solar PV panels and solar hot water heaters that capture energy from the sun. These should perhaps be classified as tools with significant embodied energy.

One key use of supplemental energy is to reduce the amount of human labor needed in farming, freeing-up people to work at other types of jobs. The chart below shows how the percentage of the population working in agriculture tends to drop as the amount of supplementary energy rises.

Figure 2. Percent of Workforce in Agriculture based on CIA World Factbook Data, compared to Energy Consumption Per Capita based on 2012 EIA Data.

Figure 2. Percent of Workforce in Agriculture based on CIA World Factbook Data, compared to Energy Consumption Per Capita based on 2012 EIA Data.

The energy per capita shown on Figure 2 is includes only energy sources that are bought and sold in markets, and thus that can easily be counted. These would include fossil fuel energy and electricity made from a variety of sources (fossil fuels, hydroelectric, nuclear, wind, solar PV). It does not include other sources of energy, such as

  • Embodied energy in previously made devices
  • Human energy
  • Animal energy
  • Locally gathered dung, wood, and other biomass.
  • Free solar energy, keeping people warm and growing crops

Besides reducing the proportion of the population needed to work in agriculture, the other things that “modern” sources of energy do are

  1. Allow many more people to live on earth, and
  2. Allow those people to have much more “stuff”–large, well-heated homes; cars; lighting where desired; indoor bathrooms; grocery stores filled with food; refrigeration;  telephones; television; and the Internet.

Figure 3 below shows that human population has risen remarkably since the use of modern fuels began in quantity about 200 years ago.

Figure 3. World population from US Census Bureau, overlaid with fossil fuel use (red) by Vaclav Smil from Energy Transitions: History, Requirements, Prospects.

Figure 3. World population from US Census Bureau, overlaid with fossil fuel use (red) by Vaclav Smil from Energy Transitions: History, Requirements, Prospects.

Besides more and better food, sanitation, and medicine, part of what allowed population to rise so greatly was a reduction in fighting, especially among nearby population groups. This reduction in violence also seems to be the result of greater energy supplies. In the animal kingdom, animals similar to humans such as chimpanzees have territorial instincts. These territorial instincts tend to keep down total population, because individual males tend to mark off large areas as territories and fight with others of their own species entering their territory.

Humans seem to have overcome much of their tendency toward territoriality. This has happened as the widespread availability of fuels increased the use of international trade and made it more advantageous for countries to cooperate with neighbors than to fight with them. Having an international monetary system was important as well.

How the System of Energy and the Economy “Works”

We trade many products, but in fact, the “value” of each of these products is very much energy related. Some that don’t seem to be energy-related, but really are energy-related, include the following:

  • Land, without buildings – The value of this land depends on (a) its location relative to other locations, (b) the amount of built infrastructure available, such as roads, fresh water, sewer, and grid electricity, and (c) the suitability of the land for growing crops. All of these characteristics are energy related. Land with good proximity to other locations takes less fuel, or less time and less human energy, to travel from one location to another. Infrastructure is capital goods, built up of embodied energy, which is already available. The suitability of the land for growing crops has to do with the type of soil, depth of the topsoil, the fertility of the soil, and the availability of fresh water, either from the sky of from irrigation.
  • Education – Education is not available to any significant extent unless workers can be freed up from farming by the use of modern energy products. Students, teachers, and those writing books all need to have their time freed up from working in agriculture, through advanced energy products that allow fewer workers to be needed in fields. Howard T. Odum in the Prosperous Way Down wrote about education reflecting a type of embodied energy.
  • Human Energy – Before the advent of modern energy sources, the value of human energy came largely from the mechanical energy provided by muscles. Mechanical energy today can be provided much more cheaply by fossil fuel energy and other cheap modern energy, bringing down the value of so-called “unskilled labor.” In today’s world, the primary value humans bring is their intellectual ability and their communication skills, both of which are enhanced by education. As discussed above, education represents a type of embodied energy.
  • Metals – Metals in quantity are only possible with today’s energy sources that power modern mining equipment and allow the huge quantities of heat needed for refining. Before the use of coal, deforestation was a huge problem for those using charcoal from wood to provide the heat needed for smelting. This was especially the case when economies tried to use wood for heating as well.

Two closely related concepts are

  • Technology – Technology is a way of bringing together physical substances (today, often metals), education, and human energy, in a way that allows the production in quantity of devices that enhance the ability of the economy to produce goods and services cheaply. As I will discuss later, “cheapness” is an important characteristic of anything that is traded in the economy. As technology makes the use of metals and other energy products cheaper, extraction of these energy-related items increases greatly.
  • Specialization – Specialization is used widely, even among insects such as bees and ants. It is often possible for a group of individuals to obtain better use of the energy at their disposal, if the various individuals in the group perform specialized tasks. This can be as simple as at the hunter-gatherer level, when men often specialized in hunting and women in childcare and plant gathering. It can occur at advanced levels as well, as advanced education (using energy) can produce specialists who can perform services that few others are able to provide.

Technology and specialization are ways of building complexity into the system. Joseph Tainter in the Collapse of Complex Societies notes that complexity is a way of solving problems. Societies, as they have more energy at their disposal, use the additional energy both to increase their populations and to move in the direction of greater complexity. In my Figure 1 (showing my representation of an economy), more nodes are added to the system as complexity is added. In a physics sense, this is the result of more energy being available to flow through the economy, perhaps through the usage of a new technology, such as irrigation, or through using another technique to increase food supply, such as cutting down trees in an area, providing more farmland.

As more energy flows through the system, increasingly specialized businesses are added. More consumers are added. Governments often play an increasingly large role, as the economy has more resources to support the government and still leave enough resources for individual citizens. An economy in its early stages is largely based on agriculture, with few energy inputs other than free solar energy, human labor, animal labor, and free energy from the sun. Extraction of useful minerals may also be done.

As modern energy products are added, the quantity of energy (particularly heat energy) available to the economy ramps up quickly, and manufacturing can be added.

Figure 4. Annual energy consumption per head (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Wrigley

Figure 4. Annual energy consumption per head (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Wrigley

As these energy products become depleted, an economy tends to shift manufacturing to cheaper locations elsewhere, and instead specialize in services, which can be provided with less use of energy. When these changes are made, an economy becomes “hollowed out” inside–it can no longer produce the basic goods and services it could at one time provide for itself.

Instead, the economy becomes dependent on other countries for manufacturing and resource extraction. Economists rejoice at an economy’s apparently lesser dependence on fossil fuels, but this is an illusion created by the fact that energy embodied in imported goods is never measured or considered. The country at the same time becomes more dependent on suppliers from around the world.

The way the economy is bound together is by a financial system. In some sense, the selling price of any product is the market value of the energy embodied in that product. There is also a cost (which is really an energy cost) of creating the product. If the selling cost is below the cost of creating the product, the market will gradually rebalance, in a way that matches goods and services that can be created at a break-even cost or greater, considering all costs, even indirect ones, such as taxes and the need for capital for reinvestment. All of these costs are energy-related, with some of this energy being human energy.

Both (a) the amount of goods and services an economy produces and (b) the number of people in an economy tends to grow over time. If (a), that is, the amount of goods and services produced, is growing faster than (b), the population, then, on average, individuals find their standard of living is increasing. If the reverse is the case, individuals find that their standard of living is decreasing.

This latter situation, one of a falling standard of living, is the situation that many people in “developed” countries find themselves in now. Because of the networked way the economy works, the primary way that this lack of goods and services is transmitted back to workers is through falling inflation-adjusted wages. Other mechanisms are used as well: fewer job openings, government deficits, and eventually debt defaults.

If the situation is reversed–that is, the economy is producing more goods and services per capita–the way this information is “telegraphed” back to the people in the economy is through a combination of increasing job availability, rising inflation adjusted-wages, availability of new inexpensive products on the market place, and government surpluses. In such a situation, debt is likely to become increasingly available because of the apparently good prospects of the economy. The availability of this debt then further leverages the growth of the economy.

External Energy Products as a Way of Leveraging Human Energy

Economists tell us that value comes from the chain of transactions that are put in place whenever one of us buys some kind of good or service. For example, if I buy an apple from a grocery store, I set up a chain of payments. The grocer pays his employees, who then buy groceries for themselves. They also purchase other consumer goods, pay income taxes, and perhaps buy oil for their vehicles. The employees pay the stores they buy from, and these payments set up new chains of transactions indirectly related to my initial purchase of an apple.

The initial purchase of an apple may help also the grocer make a payment on debt (repayment + interest) the store has, perhaps on a mortgage. The owner of the store may also put part of the money from the apple toward paying dividends on stock of the owners of the grocery story. Presumably, all of the recipients of these amounts use the amounts that initially came from the purchase of the apple to pay additional people in their spending chains as well.

How does the use of oil or coal or even the use of draft animals differ from simply creating the transaction chain outlined above? Let’s take an example that can be made with either manual labor plus some embodied energy in tools or with the use of fossil fuels: shoes.

If a cobbler makes the shoes, it will likely take him quite a long time–several hours. Somewhere along the line, a tanner will need to tan the hide in the shoe, and a farmer will need to raise the animal whose hide was used in this process. Before modern fuels were added, all of these steps were labor intensive. Buying a pair of shoes was quite expensive–say the equivalent of wages for a day or two. Boots might be the equivalent of a week’s wages.

The advantage of adding fuels such as coal and oil is that it allows shoes to be made more cheaply. The work today is performed in a factory where electricity-powered machines do much of the work that formerly was done by humans, and oil-powered vehicles transport the goods to the buyer. Coal is important in making the electricity-powered machines used in this process and may also be used in electricity generation. The use of coal and oil brings the cost of a pair of shoes down to a much lower price–say the equivalent of two or three hours’ wages. Thus, the major advantage of using modern fuels is that it allows a person’s wages to go farther. Not only can a person buy a pair of shoes, he or she has money left over for other goods.

The fact that the wage-earner can now buy additional goods with his income sets up additional payment chains–ones that would have not been available, if the person had spent a large share of his wages on shoes. This increase in “demand” (really affordability) is what allows the rest of the economy to expand, because the customer has more of his wages left to spend on other goods. This sets up the growth situation described above, where the total amount of goods and services in the economy expands faster than the population increases.

Thus, the big advantage of adding coal and oil to the economy was that it allowed goods to be made cheaply, relative to making goods with only human labor. In some sense, human labor is very expensive. If a person, using a machine operated with oil or with electricity made from coal can make the same type of goods more cheaply, he has leveraged his own capabilities with the capabilities of the fuel. We can call this technology, but without the fuel (to make the metal parts used in the machine, to operate the machinery, and to transport the product to the end user), it would not have been possible to make and transport the shoes so cheaply.

All areas of the economy benefit from this external energy based approach that essentially allows human labor to be delivered more efficiently. Wages rise, reflecting the apparent efficiency of the worker (really the worker + machine + fuel for the machine). Thus, if a worker has a job in the economy affected by this improvement, he may get a double benefit–higher wages and plus the benefit of the lower price of shoes. Governments will get higher tax revenue, both on wages (because of the new value chain and well as the higher wages from “efficiency”), and on taxes paid relating to the extraction of the oil, assuming the extraction is done locally. The additional government revenue can be used on roads. These roads provide a way for shoe manufacturers to deliver their goods to more distant markets, further enhancing the process.

What happens if the price of oil rises because the cost of extraction rises? Such a rise in the cost of extraction can be expected to eventually take place, because we extract the oil that is easiest and cheapest to extract first. When additional extraction is performed later, costs are higher for a variety of reasons: the wells need to be deeper, or in more difficult to access location, or require fracking, or are in countries that need high tax revenue to keep local populations pacified. The higher costs reflect that we are using are using more workers and more resources of all kinds, to produce a barrel of oil.

Some would look at these higher costs as a “good” impact, since these higher costs result in new payment chains, for example, related to fracking sand and other products that were not previously used. But the higher cost really represents a type of diminishing returns that have a very adverse impact on the economy.

The reason why the higher cost of oil has an adverse effect on the economy is that wages don’t go up to match this new set of oil production costs. If we look back at the previous example, it is somewhat like going part way back to making shoes by hand. Economists often remark that higher oil prices hurt oil importers. This is only half of the problem, though. Higher costs of oil production result in a situation where fewer goods and services are produced worldwide(relative to what would have otherwise been produced), because the concentrated use of resources by the oil sector to produce only a tiny amount more oil than was produced in the past. When this happens, fewer resources (including workers) are left for the rest of the world to produce other products. The growing use of resources by the oil sector is sort of like a growing cancer sapping the strength of a patient. Oil importing nations take a double “hit,” because they participate in the world drop in output of goods, and because as importers, they miss out on the benefits of extracting and selling oil.

Another way of seeing the impact of higher oil prices is to look at the situation from the point of view of consumers, businesses and governments. Consumers cut back on discretionary spending to accommodate the higher price of oil, as reflected in oil and food prices. This cutback triggers whole chains of cutbacks in other buying. Businesses find that a major cost of production (oil) is higher, but wages of buyers are not. They respond in whatever ways they can–trimming wages (since these are another cost of production), outsourcing production to a cheaper part of the world, or automating processes further, cutting more of the high human wages from the process. Governments find themselves saddled with more unemployment claims and lower tax revenue.

In fact, if we look at the data, we see precisely the expected effect. Wages tend to rise when oil prices are low, and lose the ability to rise when oil prices are high (Figure 5). The cut off price of oil where wages stop rising seems to be about $40 per barrel in the United States.

Figure 5. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

Figure 5. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

What if oil prices are artificially low, on a temporary basis? The catch is that not all costs of oil producing companies can be paid at such low prices. Perhaps the cost of operating oil fields still in existence will be fine, and the day-to-day expenses of extracting Middle Eastern oil can be covered. The parts of the chain that get squeezed first seem to be least essential on a day to day basis–taxes to governments, funds for new exploration, funds for debt repayments, and funds for dividends to policyholders.

Unfortunately, we cannot run the oil business on such a partial system. Businesses need to cover both their direct and indirect costs. Low oil prices create a system ready to crash, as oil production drops and the ability to leverage human labor with cheaper sources of energy decreases. Raising oil prices back to the full required level is likely to be a problem in the future, because oil companies require debt to finance new oil production. (This new production is required to offset declines in existing fields.) With low oil prices–or even with highly variable oil prices–the amount that can be borrowed drops and interest costs rise. This combination makes new investment impossible.

If the rising cost of energy products, due to diminishing returns, tends to eliminate economic growth, how do we work around the problem? In order to produce economic growth, it is necessary to produce goods in such a way that goods become cheaper and cheaper over time, relative to wages. Clearly this has not been happening recently.

The temptation businesses face in trying to produce this effect is to eliminate workers completely–just automate the process. This doesn’t work, because it is workers who need to be able to buy the products. Governments need to become huge, to manage transfer payments to all of the unemployed workers. And who will pay all of these taxes?

The popular answer to our diminishing returns problem is more efficiency, but efficiency rarely adds more than 1% to 2% to economic growth. We have been working hard on efficiency in recent years, but overall economic growth results have not been very good in the US, Europe, and Japan.

We know that dissipative systems operate by using more and more energy until they reach a point where diminishing returns finally pushes them into collapse. Thus, another solution might be to keep adding as much cheap energy as we can to the system. This approach doesn’t work very well either. Coal tends to be polluting, both from an air pollution point of view (in China) and from a carbon dioxide perspective. Nuclear has also been suggested, but it has different pollution issues and can be high-priced as well. Substituting a more expensive source of electricity production for an existing source of energy production works in the wrong direction–in the direction of higher cost of goods relative to wages, and thus more diminishing returns.

Getting along without economic growth doesn’t really work, either. This tends to bring down the debt system, which is an integral part of the whole system. But this is a topic for a different post.

A Note on Other Energy Measures

The reader will note that in my analysis, I am using the cost (in dollars or other currency unit) of energy production, including indirect costs that are hard to measure, such as needed government funding from taxes, the cost of interest and dividends, and the cost of new investment. The academic world uses other metrics that purport to measure energy requirements. These do not measure the same thing.

Caution is needed in using these metrics; studies using these metrics often seem to recommend using a source of energy that is expensive to produce and distribute when all costs are considered. My analysis indicates that high-cost energy products promote economic contraction regardless of what their EROEI or Life Cycle Assessment results would seem to suggest.

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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727 Responses to A new theory of energy and the economy – Part 1 – Generating economic growth

  1. John Steinbach says:

    Gail. This is off topic, but has anyone seen this article by Arun Gupta? It’s making the rounds in all the left wing blogs. He is clearly targeting us & trying to paint us, Naked Capitalism, The Automatic Earth etc as right wing dupes. He sets up so many strawmen, it’s difficult to know where to start countering him.

    Unfortunately there are many on the “left” who will uncritically accept his deeply flawed analysis.

    • Can you leave a link? I haven’t noticed this.

        • Rodster says:

          I read the article but what the author fails to mention or dismiss is the overall decline rates and why energy exploration has shifted from conventional oil to fracking. If we had so much cheap oil and we were not in a decline, why is the US, Russia, SA etc going after shale oil? Because the low hanging fruit has been picked. The author fails to mention that while shale oil has brought production and supplies up, it was a result of zero interest money from the Federal Reserve.

        • richard says:

          Save some time – here is the final paragraph:
          “Oil consumption needs to drop dramatically because of the dangerous planetary effects. But that has nothing to do with peak oil. It’s a matter of how we reorganize our society and economy on the surface of the earth so we stop using the stuff that’s under it.”
          BTW – deja vu
          “(Reuters) – U.S. commercial crude oil stocks last week hit their highest level since 1931 – when the opening of giant oil fields in the United States coincided with the Great Depression to create an enormous glut and sent prices tumbling to just 13 cents per barrel.”
          “The parallels are not exact because production and consumption are so much higher now than in the 1930s. In 1931, stocks of 407 million barrels were equivalent to 160 days of nationwide production, while in 2015, the same stocks are just 44 days of production.”
          “As the leasing frenzy seized the five counties of the field, Kilgore became the center of the boom. In that small town, wells were drilled in the yards of homes and derrick legs touched those of the next drilling unit. One city block in Kilgore contained forty-four wells. Whether in town or on farms, independent operators were compelled to drill wells as quickly as possible to prevent neighboring producers from sucking up their oil.”
          “Within 11 months, no fewer than 1,644 wells had been drilled into the new East Texas field. Oil prices, which had been 99 cents per barrel when Daisy Bradford No 3 was drilled fell to just 13 cents by July 1931.”
          “A group of oilmen in favor of production controls appealed to the governor to declare martial law. On August 17, 1931 the governor ordered the Texas National Guard and the Texas Rangers into the oilfield to shut all 1,600 wells and restore order.”
          “In the 2010s, North Dakota’s Bakken and Texas’ Eagle Ford and Permian Basin have reprised the role of Spindletop, the East Texas field and Saudi Arabia’s mammoth Ghawar. The Bakken, Eagle Ford and Permian have been developed in a far more orderly fashion than the crazy drilling that characterized the East Texas and Spindletop fields.”

    • Quitollis says:

      If he has the average “anarchist” mental age then he probably thinks that anyone who disagrees with him about anything is a “right wing dupe”.

      Do post the link, we could all do with a good belly laugh.

  2. edpell says:

    My prediction is Greece will have a military dictatorship within three years financed by the creditors.

  3. kulm says:

    I think the entire scenario will play like the Bengal famine of 1943.

    with the Japanese army next door, the British colonial govt hoarded rice and refused to release food to the Bengalis. the british raj and Bengal leaders close to the brits ate, and those with no connection to power simply died.

    it will be a repeat. the 1% and its chief minions will enjoy the show of 14/15 of the world dying, in their well-guarded enclaves where those not welcome in there are murdered upon entry.

  4. MG says:

    I would compare the economy to an ecosystem: the more energy it has, the more it is sophisticated. E.g. the tropical rain forest is the richest biological system, as it concentrates the largest amount of the resources and energy in the nature (the energy being especially from the sun, but also from the gravitation etc.).

    The economy is a man-made ecosystem. It uses the stored energy to create a more energy intensive system (i.e it combines the energy of the natural ecosystem + the energy of the wood or fossil fuels, draught animals, man induced chemical reactions etc.).

    When the amonut and the quality of the energy and resouces sinks, then e.g. tropical forest is turned into savannah. The same applies to the man-made ecosystem: the industrial country with less energy turns into the service based economy, i.e. its energy from fossil fuels goes down and the available human energy is used more intensively.

    When the economy based on the human energy lacks both the human energy and the energy from fossil fuels or man induced chemical reactions, then we can say that we have only the natural ecosystem.

    That is why the postindustrial (service based) economies need immigrant workers: this is the resource that is consumed in such economies, instead of burning of fossil fuels…

    That is why we have ” burned out” people…

    • “The same applies to the man-made ecosystem: the industrial country with less energy turns into the service based economy, i.e. its energy from fossil fuels goes down and the available human energy is used more intensively.”

      I don’t think that is quite correct; most industrialized nations had been consuming more energy per capita and in total; so much energy was stored in tools to enhance productivity that, just like farming, the number of workers was continually reduced.

      Service jobs are created to find ways for people not in primary and secondary sectors to consume energy, since the financial system requires constant growth. Without service sector jobs, an economy would consume less and less energy since it would have so much energy stored in productive equipment that only a couple percent of the population would need to work.

      Automation and Globalization change things, as people prefer not to work in factories and prefer not to live in a toxic wasteland, while companies prefer to maximize profit by moving to places with lower taxes, less regulations, and lower wages. This causes more energy to be consumed, since new factories must be built and goods must be shipped further to market.

      • MG says:

        Dear Matthew Krajcik,

        human energy is a matter of fact. My comment is about the depletion of the energy resources. Yes, the industrial nations are the richest ecosystems, because they consume the largest amounts of energy.

        The primary energy production of UK has go down drastically, but thanks to the imports of the energy resources and the immigrants, it is still a rich economy:


        • Do you think the UK is getting richer or poorer since it peaked on energy? I suspect debt is simply masking the decline that would otherwise be occurring.

          I suspect the primary reason for immigration is to have numbers on ledgers to keep social programs looking viable. Adding more people while producing less energy simply makes everyone poorer, faster.

          • MG says:

            Yes, the debt goes up. The rising debt makes posible, that it is attractive to work in Britain for foreigners from poorer countries that do not have the necessary infrastructure etc., their industrial past was too short for building a robust services sector or they simply lack the historical fame of the Britain. The historical trust in the economy is something that makes things continue to function longer than awaited. As the US banknote says: In God we trust.

            • Don Stewart says:

              Dear MG and Matthew
              Chris Martenson has an interview with a woman who worked in Wall Street for a number of years, now writes books saying bad things about Wall Street. I listened to just a minute or two, then got busy in my garden. She said ‘so much more capital became available’ to Wall Street beginning in the 1980s.

              What struck me is that I see capital as something real which can produce output….which clearly did not increase enormously. What she was talking about is digits in a computer which can be traded. As the ‘re-hypothecation’ of every dollar’s worth of real assets up to 10 dollars worth of digital assets took place, we saw an enormous increase in the financial sector of the economy.

              It is unclear to me whether debt can increase production of real goods and services. But it is clear to me that all the re-hypothecated digital assets can conceal a lot of physical deterioration and cause map-investment.

              Don Stewart

            • “It is unclear to me whether debt can increase production of real goods and services. ”

              It should in the near term, then result in less production in the long term, for a net reduction in total production. Unless the debt is used solely to invest in increased production of energy, and all of the investments are wise and work out.

              If you have a ration of two strips of bacon per day, and you borrow one from someone and eat three strips, then tomorrow you must eat only one strip. No new bacon strips (energy) has been created.

              With interest on the debt, for every extra bacon strip you eat, you will have to pay back more than one strip in the future.

              Every debt boom must be followed by a deleveraging bust, and if there are defaults instead of just paying down debt, then someone is losing out, so as a whole everyone ends up with less than if there had been no debt at all.

              We’ll have to see Gail’s next article on debt to see why she believes that energy production must be financed with debt.

            • Don Stewart says:

              Dear Matthew
              This goes back to the silver vs. gold argument in the US in the late 19th century. (And before that, to Andrew Jackson). The US was on a gold standard. The people in the West wanted silver monetized also. There was a lot more silver than gold as a result of new silver mines. Assume that there are resources and people who want to work (both true at the time), but there is a perception that ‘there isn’t enough money’. The US had gone through repeated panics and subsequent depressions. Credit dried up. The silver advocates reasoned that with more money in circulation, the resources and people would be put to work.

              Similar thinking was common during the Depression of the 1930s..although at that time it tended to focus more on the velocity of circulation. ‘Mr. Herbert Hoover, says that now’s the time to buy, so let’s have another cup of coffee, and let’s have another piece of pie’…all sung to a jaunty tune.

              Suppose that, for whatever reason, the banks aren’t lending money, but there are plenty of resources in 2015 and plenty of people who would like employment. Then…can the Federal Reserve create real growth by just forcing money into the system…from QE to helicopter drops?

              My guess is that we have reached the limits to growth in physical terms, and that dropping money from helicopters won’t work. But I don’t think the same thing was true back in 1931 or in 1885.

              We get the same issues with regard to Emerging Markets, right now. US money surged into those markets as the Federal Reserve cut returns in the US to zero. Now, the money is coming back to the US and the economies in those countries are suffering. They have to pay dearly to get US dollars. Did the influx of US dollars actually cause the economy of Brazil to grow more rapidly, or did it merely incite mal-investment? I have no idea.

              Don Stewart

            • This is getting to the heart of the debt side of the equation:

              1. What do we do if borrowers cannot repay their debts?
              2. What do we do if savers refuse to lend?
              3. Should people be forced to do anything, or should people be left to make their own decisions with their property?

              As shown in a video linked on this thread previously, under a theocracy or aristocracy the ruler is the issuer of debt and thus has the power to issue more debt, or to forgive outstanding debt.

              Under our current system, the government tries to force savers to lend by having negative real rates so that savers lose money if they hold on to it. They also believe that we should never have deleveraging. They seem to want the total amount of debt to increase forever. The longer the debt grows, the longer and harsher the deleveraging cycle will be; it seems to me it would be better to have shorter, less intense cycles with a minor recession every few years rather than trying to force growth for decades without ceasing.

              In both of your examples, the people wanted to create inflation by diluting the purchasing power of money; first, by increasing the money supply by adding silver as money, and in the second, by trying to get people to consume more – i.e., spend energy on wants rather than needs. As you dilute the value of money, it forces savers to do something with their money as it loses value.

              On the other hand, in our particular case it does seem we are reaching limits on energy and resources, so the debt part becomes increasingly less important.

            • Don Stewart says:


              ‘In both of your examples, the people wanted to create inflation by diluting the purchasing power of money; first, by increasing the money supply by adding silver as money, and in the second, by trying to get people to consume more – i.e., spend energy on wants rather than needs. As you dilute the value of money, it forces savers to do something with their money as it loses value.’

              They didn’t think they wanted to create inflation. In the days of Andrew Jackson and again during the silver monetization campaign of the late 19th century, they thought they were facilitating growth. Back to the days of Jackson. When the established banks refused to lend money to land developers on the frontier, Jackson chartered new banks which were willing to lend money. These banks were chartered by the States. The developers saw a vast pool of disadvantaged peasants in Europe who were anxious to come to the US and settle on the frontier…but they needed money to make that happen. Jackson’s new banks provided money (and periodically went broke, as did the new railroads and canals). The late 19th century was different. There wasn’t much frontier left, but the inflation of the Civil War (when Greenbacks were printed to pay for the war) was unwinding and farm prices were falling. Debts which had been incurred when farm prices were 100 were very hard to repay when prices had fallen to 80. So the farmers in the Midwest were, technically, seeking inflation (or, more correctly, the sustaining of the previous high prices), but they saw it as the preservation of a way of life: family farming. If the US government decides to intervene to save shale, it will be for similar reasons.

              During the Depression, many people saw the issue as one of hoarding. Those who were fortunate enough to still have a job were socking their money away and not spending it. So the unemployed could not find work. You find this theme in many movies from that period of time. There are even movie trailers where the theaters are encouraging people to spend more money at the movies, and not hoard their money. There is no question that factories and mines and oil fields and even farms were idled, all because of a perceived lack of money. Corn was dumped in ditches because the price had fallen so low that it wasn’t worth transporting to market. In fact, the money supply in the US fell sharply from 1929 through 1933. The issue that Keynes tried to address was: How can it be that we are producing so much less than we are capable of producing? Conventional economics held that such a situation was impossible.

              With Limits to Growth, it seems to me that we are no longer in the situation that Keynes was addressing. Our problem is definitely not lack of money in the US and EU and Japan. I am not sure about countries like Brazil. Brazil and India might be capable of producing much more…if they had the dollars to finance it. I think that the BRICS initiative is a response to the perceived problems that these countries are beholden to the whims of the US to keep their money supply flowing. But I don’t know enough about Brazil and India to judge whether they are facing Limits to Growth in the same way that the US, EU, and Japan are.

              Don Stewart

            • ” The issue that Keynes tried to address was: How can it be that we are producing so much less than we are capable of producing? Conventional economics held that such a situation was impossible.”

              I suspect because debt growth was slowing or reversing.

              “With Limits to Growth, it seems to me that we are no longer in the situation that Keynes was addressing. Our problem is definitely not lack of money in the US and EU and Japan.”

              I don’t think that is true. If people were still able to continue borrowing every increasing amounts, the price of oil would be able to rise indefinitely as demand continually outstripped supply. Everybody is maxed out and deleveraging at the same time, they can’t afford expensive oil because they can’t fuel up on credit cards and mortgages. Countries that have a lot of debts denominated in other currencies are the ones who are going to take it the hardest at first.

            • Don Stewart says:

              Dear Matthew

              For a look at the historical levels of debt from 1929 until the present, do a google search on
              private debt to gdp 1929 us historical

              I particularly recommend the colored chart which you will find in the middle of the page. What it shows is that, in 1929, the debt to GDP levels were considerably lower than they are today. As the depression took hold, and GDP collapsed, debt to GDP levels shot up, mostly because GDP collapsed. Then, with the inauguration of Roosevelt, deliberate increases in government debt began to take hold.

              The debt of corporations was particularly bloated in 1929, but financial institution debt was very small. Household debt today is roughly twice what it was in 1929.

              These statistics DO NOT prove that you are wrong when you state that, in 1929, we hit the limits to debt. You may remember my earlier reference to Chris Martenson’s interview with Nomi Prins. She stated that during the time she worked on Wall Street, ‘the amount of capital increased dramatically’, and my realization that capital means something different to me than it means to her.

              We know that complex adaptive systems tend to adapt and evolve so that throughput is maximized. The throughput of the financial system is debt. So Prins’ observation should not surprise us. Combine human ingenuity, the greed of the bankers, the capture of the regulatory apparatus in Washington and London, and the rise of politicians such as Bill Clinton who truly believed in ‘financial innovation’, and you have the makings of a much bigger credit bubble than 1929.

              We can say that, in 1929, airplanes were flying as fast and as high as they could (at that time), and, similarly, that Wall Street had created as much debt as it could (at that time). By 2007, airplanes could fly faster and higher, and Wall Street could float a lot more debt.

              But let’s construct in our minds another ratio: financial capital to real capital. I suspect that ‘financial innovation’ consists of finding ways to multiply that ratio. Thus, one house sold to a person with a sub-prime debt rating could support a huge infrastructure of debt through the magic of rehypothecation. A modestly profitable natural gas pipeline company could become the asset basis for Enron.

              My guess is that the high leverage ratios we see today (financial capital to real capital) are a physical limit to growth. Since governments and banks and the media are all focused on financial capital, and paying little attention to real capital, we will likely see some process such as John Michael Greer’s Catabolic Collapse. We expect Greece to devote whatever money it can scrounge up to paying its debtors…certainly not using the money to improve the productivity of Greece;.

              Don Stewart

            • Don Stewart says:

              Dear Matthew
              Another thought on the issue of debt and the financial system. After writing my response earlier this morning, I went for a cup of coffee and was reading Mobus and Kalton’s Principles of Systems Science. On page 40 and previous pages they are describing the various scientific threads which woven together now constitute Systems Science. One of them is the work of two Chilean biologists, who worked on ‘the distinctive self-referential feedback loops by which elements of cells continually construct themselves and maintain a shared, bounded interdependent context which they themselves create’.

              So…in a perfect world, we would have a financial system which operated like these systems of cells. Cells would be born and grow and die, and there would be mechanisms to kill cells which go off the tracks. I submit that the financial system is analogous to a group of cells which have lost the negative feedback loops which keep their population under control, and so the body is now a bloated, unsustainable mess. I also submit that the Central Banks have done their best to eliminate the ‘death’ function. The scary fall of Lehman convinced them that, no matter how toxic the system, there was no alternative but to let it continue to metastasize. And it has. The financial system is missing the Death Function.

              I think the suggestion from Systems Science is that, due to our human meddling, the financial system is now a systemic threat to much more than it ever should have been.

              Don Stewart

            • I was trying to think how a debt jubilee could be implemented in a system where the debts are held by private citizens and corporations rather than the King or High Priest.

              The best I could see would be that the government would have to issue a huge amount of new debt, which would be bought up by the central bank. The government would then have to buy up all private sector debt, forgive it, then the central bank in turn forgives the government’s debt (the portion held by the central bank only).

              This would zero the debt of borrowers while making savers whole. Of course, you could not tell people you were going to do this in advance, or they would game it.

              The result would be that all the currency that is promised would enter the system, immediately lowering the value of all the existing currency.

              Probably the ideal time to do this would be after the next Lehman event, when there is $1 Quadrillion in notional derivatives that blow up; just let all those institutions go under, create a new national bank, then roll out the jubilee for private citizens and all non-financial corporations. The national bank would only handle full reserve checking accounts and processing debit payments from the checking accounts, leaving all other financial activity for the private sector.

            • InAlaska says:

              Its not a bad idea and one that I and others have suggested on this site in year’s past. It has been pointed out, however, that by the time the smoke cleared the economy would be in a severe depression or perhaps completely obliterated by fear and chaos. Supply chains would already be disrupted, food shortages, riots, etc. You still get all of the symptoms of collapse. It would have to be incredibly well finessed in order for something like that to be pulled off and still maintain enough confidence in the system so that there would be a system left to benefit from it.

            • Don Stewart says:

              Dear InAlaska and Matthew
              See the chart in this article

              If I read it correctly, only a very small part of banking is actually connected with producing anything. Therefore, it seems that a prudent government would set up, or cause to be set up, a bank which merely facilitated production. It would be prohibited from engaging in the speculative and long term parts of banking. All production financing would be required to transition to the new bank.

              Let the TBTF banks do their thing with derivatives and speculation and long term loans (e.g., mortgages). Some legal changes making ‘possession nine points of the law’ to protect homeowners in the event of bank failure, or failure of all the slicing and dicing shenanigans.

              Probably, before too long, there would be few of the financial behemoths left.

              Don Stewart

            • Don;

              Your link appears broken, all there is, is:

            • MG says:

              Dear Don Stuart,

              yes, the majority of todays wealth is in fact fictitious. Why? Because when the energy production and consumption goes down significantly, the appliances and machines or even buildings, infrastructure, plants, farms etc. loose their value. Without the energy for powering them, they simply become useless rubbish.

              In my opinion, the biggest threat of the deflation is the fall of energy production and consumption. That is why so much money is being “printed” by Japan, was printed via QE by the US and now is going to be printed by the EU: the fear that the bubble of the fictitiuos reality inflated by the energy production and consumption will shrink…

        • edpell says:

          In 10 years The UK will be near zero domestic production.

  5. Don Stewart says:

    Dear Gail and All
    Responding to the shots aimed at permaculture here lately.

    Please see this post:

    Albert Bates points out here that microbes can sequester (entrain) radioactive particles, and that biochar and diatomaceous earth are excellent habitats for microbes. Paul Stamets had previously shown that mycelium could sequester chemical toxins, and Geoff Lawton had shown that microbes could sequester salt in the Dead Sea Valley.

    Whether ‘permaculture’ (really, biological farming of many different denominations) will survive a crash is unknown. What seems likely to me is that biological farming has a better chance than most other options. There are also current experiments with bio-char in the human gut.

    Don Stewart

    • “There are also current experiments with bio-char in the human gut.”

      Charcoal pills are used for alcohol poisoning, food poisoning, and other toxins as a safer solution than inducing vomiting. May need to recolonize the gut bacteria afterwards though.

    • Jarvis says:

      Don I have investigated permaculture and read most of the books you suggested and about to implement what I know. Tomorrow the fallers come to start the process and I should have an 80 ft by 50 garden area underway this spring. I did a practice garden last summer and the soil produced excellent crops. I’ve since added sea weed and charcoal along with other compost in fact our soil now test out at 20% organic matter! I’m located on a lake so water is not an issue. What really surprises me is how many readers are ready to DIP (die in place) if I was living in a city over 50,000 population I would move to the Pacific Northwest . Just don’t all pile onto my island please! Take these facts into consideration: BC produces 93% of its electricity from renewable sources, water is never an issue and with a reduced population it shouldn’t be, I’m a pilot who spent 1000’s of hours flying low level over these vast forests and I know we could support a reasonable sized population using wood as an energy source. The elephant in the blog here what do we do when the great die off begins? I haven’t got that one quite figured out. I own several properties with varying degrees of remoteness so I have options. I’ve even considered loading up a plane and heading off to a remote wilderness for a year or 2 and then return – hope it doesn’t come to that. I would suggest people come to the west coast of BC for a holiday and check out the possibilities – we’ll even give you an extra 30% on your dollar!

      • Don Stewart says:

        Dear Jarvis
        I am delighted that things are going well for you. My experience is that one simply has to dive in.

        Jean-Martin Fortier, a market gardener at the other end of Canada, was here last week. He and his wife began to farm their acre and a half about 2003. They made some mistakes, but kept good records so they could track results, and experimented intelligently. Mostly use very simple tools, along with a BCS walk behind tractor. He now has soil organic matter of 14 percent. When your soil organic matter is that level, it solves so many other problems. They gross about 130,000, and net about 45 percent of that by being frugal and meticulous. He read Bill Mollison’s book on Permaculture before he started designing his farm. He located his beds around a reclaimed building where rabbits had been grown. He calculated how much time a worker would lose walking to a toilet at the far end, versus walking to a centrally located building. He figures 30 minutes per day of saving. Mollison would be proud.

        Good luck with your ventures…Don Stewart

        • Jarvis says:

          Jean-Martin is my hero. Probably the best book you recommended! A little tip from a pilot: aviation fuel keeps for 5 years so keep a supply for the BCS tractor. There are ten of us in my extended family with 2 sons and 4 grandsons and the wives are no slouches either. My daughter in-law and son have a 5 acre farm and seem to be going the self sufficient route and 2 two days ago my daughter in-law neutered 6 of their 11 piglets born 3 weeks ago. It’s amazing what you can learn on YouTube! All the pigs are doing fine but the helping husbands are a little nervous.

          • Jan Steinman says:

            “the pigs are doing fine but the helping husbands are a little nervous.”

            I love demonstrating my elastrator tool to guys. The women chuckle, and the guys all cringe.

        • garand555 says:

          Don said: “I am delighted that things are going well for you. My experience is that one simply has to dive in.”

          Ain’t that the truth! I live in an arid climate (9″ precip/yr,) so I decided that it would be better for me to grow things in depressions rather than on a level surface or in raised beds. I don’t waste nearly as much water, and now that my soil is actually soil, I don’t have to worry about standing water for long periods of time. This year, I’m taking that to an extreme with potatoes just to see if it works. I dug out a 1′ deep area, and instead of hilling up around the potatoes after they start to grow, I’m just going to backfill. If you ask later in the summer, I’ll tell you how it works out for me, though this is more of a desert thing and would probably be bad in an area that gets a lot of precip. It’s the first time I’ve dug more than a couple of inches for a few years, and I was surprised to see how much better the soil was.

          My big thing is that I want to be able to grow crops with zero industrial input if need be. For me, being where I am, that means no soil additives like seaweed, because that has to be shipped in several hundred miles. If I can’t get it locally, I don’t want it. As it stands, I can get more manure than you can shake a stick at, and I’m not too picky about what goes into the compost. There are a lot of trees in my area, so there is a lot of rotting wood and a lot of leaves. I also try to make sure that crop residues go back into the soil, one way or another. I figure if TSHTF, digging a series of trenches in your fallow fields and placing your outhouse over them, then burying them after moving to the next trench will be in order so that you don’t wash all of that phosphorous out to sea.

          Another thing that I’ve been doing is getting multiple cultivars whenever I can for a given annual, then not worrying about keeping the cultivars true. I don’t really care if my yellow squash crosses with a white scalloped squash. I care that the resulting offspring thrives and tastes good. I’d rather have a genetically diverse population than one specific set of traits, and I tend to let natural or semi-natural selection tell me what does well here and what does not rather than forcing my opinion of how things should grow on the plants. I don’t worry about things like whether the PH of my soil is right for the particular cultivar or if clay is better than sand or vise versa. I just let the plants die if conditions aren’t right or it isn’t resistant to a local disease, and save seeds from the cultivars that do well. I also let them cross willy-nilly and don’t save seed (this can be accomplished by simply ripping out the offensive plant!) if something tastes horrid.

          Yet another thing that I’ve been doing is picking cultivars that were originally cultivated in my area or in a similar climate. I even have some melon seeds that were originally cultivated by a now non-existant pueblo that was less from a mile away from where I am sitting. I have another from just a few miles away too. People say that these melons are bland, but I only watered them once last July and while they were a slightly different texture than a cantaloupe from the store, they were far sweeter and had a much more robust flavor. Tepary beans is another that I really like. I would pick them over common pintos any day, and some cultivars of teparies are dry farmed in the Sonoran desert! Give them a little more water, and they really produce. They are small beans, slightly larger than lentils, but one bush (they can vine if there is something to climb,) will easily produce 300 beans. For those of you who live in more arid climates, I recommend these 100%.

      • Jan Steinman says:

        “… if I was living in a city over 50,000 population I would move to the Pacific Northwest . Just don’t all pile onto my island please!”

        Looks like Jarvis and I have gone through a similar analysis, with perhaps one difference: I decided I couldn’t do it alone. So if you want to come to the PNW, and want some seasoned mentors to help you, look us up!

        I think a strong sense of community will be even more important than location in the coming years. It’s going to take a strong group commitment to “mutual provision” as the conventional economy goes away. The “forty acres and a mule” approach might just work for a young family; it is not going to work for an aging boomer couple, whose kids have gone off on their own. (It just might work for a multi-generational strong nuclear family.)

  6. Stefeun says:

    Has anyone seen the latest by Nafeez Ahmed?

    “I’ve just published my first major investigation supported by crowdfunding via my INSURGE INTELLIGENCE project, a two-part story on the intersections between the US military industrial complex and Silicon Valley focusing on two entities: Google and the Pentagon’s Highlands Forum:

    How the CIA made Google – part 1

    Why Google made the NSA – part 2

    Among the revelations is that Google co-founder Sergey Brin was partly funded by a US intelligence community program set up by the CIA and NSA called the ‘Massive Digital Data Systems’ (MDDS) initiative, which was co-managed by the MITRE Corp. and Science Applications International Corporation (SAIC). The lead manager of the project, Prof. Bhavani Thuraisingham who is currently direct of the Cyber Security Research Institute at the University of Texas, Dallas, told me that she and her colleague in charge of MDDS, Dr. Rick Steinheiser of the CIA’s Office of Research & Development, met Brin every three months for the period from 1996 to 1998, during which Brin received MDDS funding.
    The story is starting to get noticed, though so far the mainstream media has remained studiously silent about what is in reality a huge story – clear and unimpeachable documentary evidence and testimony that Google’s Sergey Brin did receive a modest amount of seed-funding from the CIA and NSA, through their MDDS initiative, and that Brin had regular briefings with representatives of the US intelligence community from 96-98. (…)”

    Read more here on The Cutting Edge:

  7. Don Stewart says:

    Dear All
    I previously mentioned that Toby Hemenway is scheduled to talk about ‘Liberation’. Here is the brief description…Don Stewart

    Toby Hemenway: Liberation Permaculture (1HR)
    Permaculture offers more than a path to a sustainable and just food system. It can move entire segments of our society off the radar screens of state oppressors and help return equality, abundance, and justice to people while restoring healthy ecosystems. This talk, being premiered at Permaculture Voices, will tell you how. If you’ve appreciated Toby’s series on permaculture and civilization, you’ll want to see this significant new chapter.

    • VPK says:

      We will see how much ‘permaculture’ remains after the collapse

      • Don Stewart says:

        Will anything that isn’t ‘permaculture’ survive?
        Don Stewart

        • VPK says:

          Sure, It’s called ‘The Law of the Jungle”
          have a nice day

          • “VPK Will anything that isn’t ‘permaculture’ survive? Don Stewart
            Sure, It’s called ‘The Law of the Jungle””

            That is not exactly a means of producing food. Most places will be hunted to zero wildlife, and petro-agriculture will disappear. Long Pork is not a sustainable food supply.

            • VPK says:

              Tongue in check expression.

            • garand555 says:

              If it comes down to that, I’m not sure that most places will be hunted down to zero wildlife. Unless you are an experienced hunter, it’s not always exactly easy. I suppose it depends on the speed of the decline. If we wake up to broken supply chains one morning, I expect that a lot of people will try to hunt unsuccessfully and starve to death before a lot of wildlife is wiped out. If it is a gradual breakage in supply chains, then, yes, wildlife is not going to fare very well for long.

            • VPK says:

              I suppose you all do not have the expression “Law of the jungle” in your culture.
              “The law of the jungle” is an expression that means “every man for himself,” “anything goes,” “survival of the strongest,” “survival of the fittest,” “kill or be killed,” “dog eat dog” and “eat or be eaten,”. The Oxford English Dictionary,[1] defines the Law of the Jungle as “the code of survival in jungle life, now usually with reference to the superiority of brute force or self-interest in the struggle for survival.” It is also known as jungle law or frontier justice.
              The phrase was used in a poem by Rudyard Kipling to describe the obligations and behaviour of a wolf in a pack. However, this use of the term has been overtaken in popularity by the other interpretations above”.
              Turnball wrote of this in his work “The Mountain People”
              cited Turnbull’s study saying:
              “ “There is no better or more heartbreaking example of the alienation of the human capacity to love than the story of the Ik tribe of Uganda. Colin Turnbull in his book Mountain People documents how Milton Obote nationalized traditional hunting lands as national park for European tourists, and prevented the Ik from hunting in their traditional hunting grounds. After a couple of generations of starvation conditions, the Ik, originally a cooperative, child loving tribe, became a group of selfish cruel people who don’t trust or help anybody. They would desert children at an early age and one story Turnbull tells is how after abandoning a baby to be eaten by wild animals the animals were hunted an [sic] eaten.
              Claude Steiner

            • Except frontier justice generally means everyone is armed, and there is less violence and more politeness than in mainstream urban society.

              As for “dog eat dog”, such a state of existence would only last as long as it takes for human populations to fall in line with available resources.

            • VPK says:

              Looks like you ignored my comment and what it stated.
              No problem, par for the course.

  8. If I recall it corectly in this very moment humans occupy/transformed 40% of the global natural ecosystem.

    Now Russia plans to award people of excellance (retired heavy industry workers, army veterans, ..) by 1ha of farmable property in the hinterland. But if you look into that’s pretty tiny amount of acreage, perhaps it’s meant as homesteader starter option or garden plot only, not real farming in mind. Russia controls something like 1/6th of landmass, so even after exluding permafrost wilderness and alike, that 1ha is not very much.. I’d say 2-6ha has been sort of the western minimum per family for decent living in the 18th century, above 10ha it was bordering on luxury (kids into upper schools) and 25ha and more meant almost local small scale nobility status.

    • Christian says:

      Where did you got that, world? FSU did used this kind of prices as well (but with a dacha on it). 1 ha could be worthy if rainy or irrigated, according to the soil, etc.

    • Jan Steinman says:

      “Russia plans to award people of excellance (retired heavy industry workers, army veterans, ..) by 1ha of farmable property in the hinterland.”

      Interesting… a “Kins Domain” amount of land… wonder if this is the influence of Vladimir Megré.

      • VPK says:

        Some ‘reward” asking these ‘retired’ folks to eek out an Existence in the depopulated hinterland. Russian leaders are very concerned that Asian Chinese will spill over the the border to take over these areas. Much like what Is occurring here in the united States will our illegal issue. Maybe they should first outlaw their mail oder Russian bride trade.

  9. edpell says:

    Xabier, Ukraine already is Iraqi/Libya/Yemen in Europe.

    Has anyone made I ranking of nations based on what fraction of their energy supply is domestic? OK maybe two dimensional scatter plot one axis percent domestic and the other axis KWHr per capita.

  10. deathbyungabunga says:

    Wheres Wee Willy Waldo?

    • Rodster says:

      You mean Wee Willy Winky or did Paul change his username again? 🙂

      • edpell says:

        Yes, we miss you Paul, you make the rest of us look like optimists.

        • VPK says:

          Paul’s hanging with Debbie the Downer.

        • Rodster says:

          I happen to agree with a lot of what he says. But I also understand Gail’s POV that some of her readers are younger people and reading what Paul has to say can scare the crap out of anyone growing up.

          • VPK says:

            I’m terrified.
            Paul or WWW gave his farewell rant last post by Gail-
            You can read it there toward the end.
            Basically, he called us all with views other than his own as blind fools.
            Of course, he justified his position by writing he agrees with Gail’s assessment of our situation.
            So, do not count on him visiting these pages again, unless he appears with a new avatar.

            • Rodster says:

              Then please enlighten us all and tell us how we get out of this mess?

            • VPK says:

              Yo, read his last comment post, Bro, than come here and talk.
              See his attitude and let us all hear what you got to bring, OK

          • VPK says:

            Here we go again!
            As Gail likes to write…”It’s already baked in the cake’
            Good luck

            • Rodster says:

              So then he is correct which is why i’m having difficulty understanding your point of “i’m terrified” if Paul or WWW is correct about what COULD transpire.

            • VPK says:

              Yo, read Bill McKibben’s ‘Terrifying New Math” article on Global Warming.
              A number of folks, including yourself, Paul went over the top in his panic mode.
              Hey Dude, fact is we ALL are going to die, just a matter of when, where and how.
              So what. fact is we are not going to stop burning fossil fuels by choice. Fact is humans ain’t going to stop breeding and fowling the nest by choice.
              So why is this Paul so upset, I wonder…he should be like be the most laid back blok here and just chuckle at us all for our misguided notions on ‘How to get out of this mess’
              Still his swan song goodbye made me pee in my pants, I laughed so hard.

            • Jan Steinman says:

              “fact is we are not going to stop burning fossil fuels by choice. Fact is humans ain’t going to stop breeding and fowling the nest by choice.”

              Maybe, maybe not.

              Suffice to say there are some of us who have chosen not to do such things.

              This seems to me to be the primary difference between humans and yeast cells. As far as I know, there are no yeast cells that choose not to consume all the energy they can and procreate all they can. But perhaps I simply haven’t met the right yeast cells, or perhaps they quickly become “selected out” of the gene pool.

            • Rodster says:

              “A number of folks, including yourself, Paul went over the top in his panic mode.”

              *Sounds like you just did.*

              It’s so nice when the pot calls the kettle black. Btw, my comments have been restrained compared to what you just wrote. In fact on several occasions in response to Don Stewart wanting to try different approaches to counter what’s coming, I actually encouraged him to try. Trying something different is better than NOT trying. Whether it will make any difference, remains to be seen.

  11. Rodster says:

    Here’s a group of individuals who tried an experiment, go off-grid. They wanted to share their story. They prepared and created a group of like minded individuals. To say the least, it was brutal and some even suffered, health wise. Post fossil fuel world, it will be difficult if not impossible to maintain the current worlds population who have been domesticated by the central planners.


    • Don Stewart says:

      Dear Rodster
      My observations, for what they are worth. There are a number of collapse possibilities. One set of possibilities is outlined by Orlov. Here is my set of possibilities:

      1. Some people will understand how to use our remaining fossil fuels and metals and other non-renewable resources to get more energy from renewables such as fertile soil, photosynthesis, the use of gravity, etc. These people will outcompete those who are totally dependent on industrial patterns of production. If the collapse is fast, those dependent on industrial patterns will die in large numbers. If the collapse is slow, then more people will copy the practices which shift energy to renewables and decrease energy from fossil fuels. In either case, it seems apparent that governments and most global corporations must collapse, so that they do not drag all of us down. The emergence of new social organizations will be difficult in any event.

      2. Hunting and gathering has been the most energy efficient system under which humans have lived. Gardening is the system which produces the maximum surplus of energy. If society regresses to hunting and gathering, in an impoverished ecology, then very few humans will survive…maybe a hundred thousand. If society regresses to the gardening stage, perhaps 500 million will survive, with a disproportionate share being people who are gardening today, or remember how to garden, or have family members who garden.

      3. A gardening society is pretty complex. Going it alone is very difficult. To build a gardening society requires a new paradigm in terms of cooperation to achieve group objectives. It is likely that there will be a bottleneck event, with only those capable of operating in the new environment surviving.

      4. The range of adaptations required in a worst case is daunting. For example, the number of ticks and lice and other noxious critters that have to be dealt with. Hairy primates spend about 30 percent of their time grooming each other. Humans apparently evolved hairlessness to make themselves less attractive to the bad guys, which freed us from spending so much time grooming. But, in a village, the pests build up to intolerable levels in a dozen years or so. That is one reason that villagers adopt slash and burn agriculture and move every dozen years. Going as far back as slash and burn is one reason for my very low estimate of hunter and gatherer population. From hunting and gathering, as a gardening society begins to get itself organized, the energy surplus begins to increase and population can grow and permanent settlements can be sustained if ecological principles are followed. If ecological principles are not followed, then any gardening society will fail and join the long list of failed societies.

      5. A recent scholarly study found that increased production has required an increase in capital, as well as energy. Beginning a new ‘eco-village’ on land with no built capital is very hard. The simplest thing for the individual to do is to join a functioning eco-village. Of course, this is a chicken and egg problem. With the additional problem that the world is willing to pay very little for an eco-village living on practically nothing in terms of fossil fuels. And most of the people who think they want to live in such eco-villages really don’t understand what they are getting into. My conclusion has been that most people are best served by seeking a home with some land (say, a 1950s suburb) and to learn to garden that intensively, and to steadily build up the natural and built capital of that land as well as the knowledge and habits required to get the most production from the land. In addition, don’t quit your day job. The modern world imposes many monetary costs, and the Officials are not amused when you don’t pay your taxes. Plus, all your neighbors will regard you as peculiar.

      6. Jan Steinman is an excellent spokesman for the ‘join an eco-village’ options.

      Could write volumes, but this is enough…Don Stewart

      • Don Stewart says:

        Dear Rodster
        Also, I would like to recommend reading this book to anyone contemplating the difficulties of establishing a self-sufficient community:

        ‘The Land Breakers
        by John Ehle
        4.37 of 5 stars 4.37 · rating details · 104 ratings · 22 reviews
        A motley band of characters makes its way into a high mountain valley in northwestern North Carolina to tame the land or to be consumed by it. Five years of struggle to create a community ensue, in which part of the struggle is just to survive. This is the story of late 18th century life in an untamed country.’

        Ehle grew up in Asheville, the son of a reasonably prosperous insurance man…he’s not a mountain man. However, he was descended from one of the first families that settled in the mountains of North Carolina. He either heard stories, or else he did excellent research.

        You will find, for example, that many of his subjects wish they had never left the relative comforts of Virginia for the very hard life of a homesteader. Today on this blog, we tend to assume that fossil fuels are the great divide. But in 1775, neither settled Virginia nor wilderness North Carolina had fossil fuels. The divide was between an established society with rules and roles and built capital and ‘civilization’, and a wilderness which had none of those things. The wilderness was hospitable to the ‘savages’, but if you wanted to make your living farming, then you had to rearrange Nature to suit your chosen occupation. And that was hard. In addition, the people attracted to the mountains did not easily form the types of communities which they had left behind in Virginia.

        Ehle was a playwright, and reading his book is like watching a play or a movie. You get a very visceral sense of what the challenges were (and might yet be in the future).

        Don Stewart

      • Jan Steinman says:

        “Jan Steinman is an excellent spokesman for the ‘join an eco-village’ options.”

        Glad one of us thinks so!

        That must have been on a Wednesday. Because, Sunday through Tuesday, it all seems like such a good idea, while Thursday through Saturday, it all seems like crap. On Wednesday, I almost find some balance.

        In her workshops, Diana Leafe Christian notes that, “Forming an intentional community is the longest, most expensive self-help course you will ever take.”

        I’d say more, but the sun is shining and the greenhouse is calling me.

    • Jan Steinman says:

      In the real word, there won’t be a month-long involuntary commitment to the psych ward when one can’t cope any longer!

      It seems the entire experiment was more an experiment in binary thinking, rather than surviving collapse. “Either it’s full-on collapse, or we’re cheating” sounds like a recipe for failure! If, for example, you decide early on that one must do away with all governance issues, why be surprised when you get what you ask for?

      There’s lots one can to to be more prepared, short of turning off the entire world (except for the local planning council, it would seem).

  12. Don Stewart says:

    See article explaining connection between restructured debt and the bond bubble and derivatives.


    It’s never been about the citizens of Greece or fairness or punishing bad behavior. It’s about saving the highly leveraged financial system.

    Don Stewart

    • edpell says:

      It is a bad financial system, run by bad people, the failed banks and their incompetent management need to be punished by being put out of business and into jail. Glass-Steagall needs to be reinstated.

      • Sorry to burst the bubble, simply will not happen.
        We have to acknowledge the human nature, psycho/sociopats get always to the top, moreover there is high correlation between people with “wrong” ideas/ideals/modus operandi and wealth, I know it pains me to the core as well, but wrong doing and stupid people attract wealth, it’s like a law. These are simply effects of the herd socializing humanoids with the power of fire/fossil fuels interacting with the natural world.

  13. Look at this graph from SWIFT, should China keep this dynamics of roughly 160% y/y move up the ladder of top world currencies, it might get to ~20% in roughly 4-5yrs. That’s on paar with their media annoucements of replacing dollar before 2025, so by 2020 they must be in the club of top3 in nominal terms. Obviously it could go exponentially faster or bit slower, but I see no world reset before they reach this aprox. 15-20% share milestone, among USD and EUR. http://deutsche-wirtschafts-nachrichten.de/2015/01/29/chinas-yuan-stoesst-unter-die-top-5-der-welt-waehrungen-vor/

  14. edpell says:

    We need international bankruptcy rules. I say if 50%+1 of the citizens of a nation vote to repudiate the debt then it is done. Just because the bought off politician promise to pay you back it should not enslave the citizens.

    • Jan Steinman says:

      “Just because the bought off politician promise to pay you back it should not enslave the citizens.”

      Here, here!

      Harper just gave Canada away to China, in secret trade agreement talks, with no public debate, indeed, not even with consent of his own majority in Parliament. And I, who strive to live lightly on the Earth, should “own” a part of that?

      This is why I have a problem with Quitopolis’s vehement rejection of the new Greek government’s stance, because he believes “the people” were complicit in Greece being where it is today.

      In one sense, he’s right: we are all complicit to some degree in the plight we’re in, even though for most of us, it was via passive assent. (“Why should I vote against these bastards? My tummy’s full!”) And yet, when it comes down to it, the “Golden Rule” still holds sway: He who has the gold makes the rules.

  15. edpell says:

    Greece needs to pivot to the BRICS. Repudiate the debt. Work with China to expand the port of Piraeus, build train lines into eastern Europe, transit Russian natural gas to Yugoslavia and eastern Europe. Install some Russian nuclear power plants. Build for the future forget about the politicians of the past who piled money in Switzerland.

  16. Quitollis says:

    Syriza is going to trash Greece. The head of the Eurogroup Dijsselbloem today told their new finance minister “no way!” to halving Greek public debt. Syriza now insists on a meeting with the leaders of the countries, even though they have already independently said no way to a debt write off. Greece will end up in default, without EU support and shut out of the international markets by March. It will be interesting to see what happens to the Greek banks on Monday.


    Greece’s Varoufakis: ‘No debt talks with EU-IMF troika’

    Greece’s new left-wing finance minister says his government will not negotiate over the Greek bailout conditions with the “troika” team from the EU and IMF.

    Yanis Varoufakis said he was rather seeking direct talks with eurozone leaders, to try to cancel more than half the money Greece owes.

    He was speaking after meeting Jeroen Dijsselbloem, head of the Eurogroup – the eurozone finance ministers.

    Mr Dijsselbloem said Greece should stick to its reform commitments.

    He said Greece and the Eurogroup had a “mutual interest in the further recovery of the Greek economy inside the eurozone” and warned against Athens acting unilaterally in its efforts to renegotiate its bailout.

    Greece has endured tough budget cuts in return for its €240bn (£179bn; $270bn) bailout, agreed in 2010 with the “troika” – the European Commission, International Monetary Fund (IMF) and European Central Bank (ECB).

    The BBC’s Mark Lowen in Athens says there was little warmth between the two men at the news conference, with Mr Dijsselbloem making a brusque exit.


    Juncker rejects Greek debt write-off

    European leaders have been quick to respond to Tsipras’ rhetoric. In an interview with Le Figaro on 29 January, Jean-Claude Juncker said there was “no question of cancelling the Greek debt”.

    “The other countries of the eurozone will not accept it,” the Commission President stressed.


    Greece Sets Up Cash Crunch for March Telling EU It’s Over

    (Bloomberg) — Finance Minister Yanis Varoufakis said Greece won’t seek an extension of its bailout agreement, setting the government on course to enter March without a financial backstop for the first time in five years.

    The standoff could see Greek banks effectively excluded from European Central Bank liquidity operations and the government with no source of funding, having rejected EU aid while still shut out of international markets.

    Greek bonds tumbled, with the yield on three-year government debt rising 148 basis points to 18.76 percent at 5:43 p.m. in Athens.

    While Varoufakis said he intends to balance the budget, the proposal hinges on the euro area and the European Central Bank agreeing to write down Greece’s public debt, a suggestion that has been met with skepticism by officials across the rest of Europe.


    The game is up. It’s time for Greece to leave the eurozone and move on

    It’s time for Greece to leave the euro, default on its debt and move on. I write this with a heavy heart as the short-term consequences for ordinary Greeks could be disastrous, but there is now no other practical way out.

    Syriza is serious about change and simply will not honour the country’s debts or stick to international agreements. Germany is equally serious about not accepting a debt write-off. A N24/TNS poll shows that 43pc of Germans are unwilling to negotiate debt relief or a longer loan repayment schedule with Greece. As to Brussels, the European Commission president Jean-Claude Juncker has said that “there’s no question of writing down Greek debt”. The stand-off will escalate, and escalate further. Neither side will blink, which means that a Grexit and default is now almost inevitable.

    At least 77pc of Greek government debt is owned by official bodies or governments, according to Open Europe, rather than the private sector, so a massive default won’t be catastrophic for private institutions. Anybody with any sense will have seen this coming, and sold as much Greek debt as they could get away with.

    Sadly, Alexis Tsipras, the new prime minister, is a delusional socialist. He doesn’t want to privatise state assets and leads a party that doesn’t accept economic reality.

    • Jan Steinman says:

      “Sadly, Alexis Tsipras, the new prime minister, is a delusional socialist. He doesn’t want to privatise state assets and leads a party that doesn’t accept economic reality [emphasis mine].”

      As if he were the only one! What were they thinking when they loaned Greece all that money, under terms that guaranteed social unrest? Is this some sort of game? “Let’s see how much we can squeeze them before they revolt?”

      It just goes to show that the banksters live in a totally unreal world, totally disconnected from the people they impact with their decisions.

      • Quitollis says:

        Lets not pretend that this fits into an “evil bansters vs the poor innocent people” narrative.

        The European countries and institutions did their best and at great cost to themselves to support Greece after it was trashed by unsustainable social spending and tax avoidance.

        The Greeks hid their true financial status and they never should have been allowed into the Euro in the first place. The Greeks en masse have lied, cheated and stolen their way through the Eurozone and now they will find their way to the exit.

        • Jan Steinman says:

          “Lets not pretend that this fits into an “evil bansters [sic] vs the poor innocent people” narrative.”

          I would not pretend such a thing!

          Let’s not pretend that Greek populace is responsible for this, either!

          • Quitollis says:

            The grey market in Greece makes up 25% of the economy. That is not “banksters” [sic] or multinationals, that is Greeks themselves. Tax avoidance would have made up 1/3 of Greece’s budget deficit. Corruption is wide spread in Greece, it is not an elite problem. Greece as a whole is responsible for its situation not “banksters”. Greeks had much higher living standards inside the Euro than ever before and if they had played their cards right they could have been a prosperous country but instead they knowingly ran up huge debts in social spending and privately while buying German cars and French perfumes and not paying their taxes. There is no way out of that, Greece as a whole must take the blame. We cannot always look for some “elite” to blame as if people are innocent children who don’t know any better.

      • edpell says:

        Jan, the government banks loaned money so Greece could payoff the private global banks, so the global ultra rich took zero loss. The loss was transferred to the citizens of the nations that were used by the private rich to save their money. Too bad the citizens do not have government that serve them. Rather the governments serve the global ultra rich.

        • Quitollis says:

          Right and the citizens would have been much better off if the banks had all crashed because of exposure to Greece debt. Then they would have had a government that served them instead of the ultra-rich.

          Fortunately the governments have shifted exposure so that our banks wont all crash when Syriza takes Greece to default.

    • Don Stewart says:

      Dear Quitollis
      ‘Sadly, Alexis Tsipras, the new prime minister, is a delusional socialist. He doesn’t want to privatise state assets and leads a party that doesn’t accept economic reality.’

      I read Tsipras’ ‘open letter to German citizens’ a couple of days ago. It struck me that he was right on target. The country is bankrupt….just as a business can go bankrupt. When a business goes bankrupt, those who have lent money to it lose their claims. The business is reorganized, if possible, in a court. Everything starts over. The old management is fired, and new management is brought in. Tsipras interprets his election as ‘firing the old management’.

      So far as austerity working, and growth returning, Tsipras pointed out that the only ‘growth’ resulted when prices fell faster than production fell, so clever people can calculate that ‘real production increased’.

      As someone who is far away from Greece, it seems to me that he is exactly right. It also seems that the European politicians are delusional…unless they are just playing negotiation games.

      The lesson I draw is that loaning money to governments who are spending it on non-capital items is simply stupid. As Tsipras said, the money was given to the banks, and did not benefit the Greek people.

      Don Stewart

      • Quitollis says:

        Well we will find out who is “delusional” and who is “right” when Greece gets kicked out of the Euro and is excluded from the international markets.

        Their economy will be trashed and no one will lend to them again. That is what happens if you take other people’s money and then refuse to pay it back.

        Tsipras is indeed deluded if he thinks that he can avoid that by playing with inapplicable bankruptcy metaphors. This is the real world and Tsipras does not get to reinvent the terms of business.

        He is playing negotiation games like a silly child who lives in a world of his own and he is about to lose in the real world very very badly.

        Sadly the Greeks will suffer immensely because of his silly leftist games.

        Of course the EU loans benefited Greeks, their economy would have crashed years ago otherwise. Have you not been paying attention?

        Wait and see when Greece exits the Euro and their economy falls apart. Maybe then you will realise the benefit of those loans.

        • Don Stewart says:

          My guess is that the European Aristocracy is so adamant about Greece is that they know that if Greece simply walks away from its debts, then people will begin to generalize. We all know that Europe as a whole is bankrupt. Same for the US. The only question is whether the debts are defaulted the ‘correct way’ through monetary inflation or the ‘not sporting’ way through outright default. As I look at their situation, it seems to me that Greece has to choose default. The ECB has been generating deflation for them, so the inflation angle is not possible. If they exit the Euro, and the ECB is successful in inflating the Euro relative to the Greek currency, then the debt grows even larger.

          If people begin to look closely, and conclude that Europe is broke, and withdraw their money and their votes, then things get desperate for the bureaucrats.

          Don Stewart

          • Quitollis says:

            Don, we seem to be speaking to cross purposes. My concern was how countries can act in a sensible manner to try to make the best of the current capitalist situation. I am not interested in anti-establishment rhetoric about getting the “aristocrats and bureaucrats”. Europe is not bankrupt and neither is the US. Whether Greece defaults is their own business and they will have to deal with the consequences of their own decision. Our banks are no longer exposed in the same way as before and it would hurt Greece a lot more than it would hurt us. The Greeks voted for Syriza, let them deal with the consequences.

            • Don Stewart says:

              I guess it depends on one’s definition of ‘bankrupt’. In the strict sense, one isn’t bankrupt until no greater fool can be found to lend one money. But I am using the term in a broader sense to mean that the debts can never be repaid. If they can only be repaid with inflation plus luck, then I don’t consider that ‘fiscally sound’. Was Weimar solvent?

              I think one of Gail’s messages is that the human race is bankrupt. Dead men still walking.

              I don’t think trying to discuss it in terms of ‘liberals’ and ‘conservatives’ makes any sense. Conservatives spend money they don’t have on military adventures and propping up banks. Liberals spend money they don’t have propping up life-styles which we can’t afford. A vanishingly few in number are willing to look at reality.

              Don Stewart

            • Jarle B says:

              Hear, hear!

            • edpell says:

              Neither the US nor the EU are able to supply their own energy needs.

            • Jan Steinman says:

              “<Europe is not bankrupt and neither is the US."

              Bankruptcy is a legal status of a person or other entity that cannot repay the debts it owes to creditors. — Wikipedia

              So I guess, in one sense, you are right: neither US nor Europe has legally been declared insolvent.

              But c’mon, now — surely you aren’t arguing that the US and Europe are not de facto insolvent? I can’t speak to Europe so much, but the US is currently paying over half its income in interest, it’s retirement plan is nearly insolvent, with zero savings, using current income from a smaller number of younger people to support a larger number of older people, “borrowing” non-renewable resources from future generations, etc.

              This inter-generational debt troubles me the most. 30-40 years from now, impoverished future generations will curse our memory. By this measure, we are morally bankrupt, if not actually insolvent in terms of cash, which we can simply print more of.

              If it walks like a duck and quacks like a duck, does it really matter that no court has ruled that it is a duck?

        • Greek Olive Farmer says:

          If a bank or a person is stupid enough to loan money to an entity that is unlikely to pay them back, then they will have to live with the consequences.

          This is what you call risk management.

          Nobody put guns to the heads of the bankers and forced them to loan to the Greeks.

          They made bad decisions. Too bad for them.

          Greece needs to default. But that cannot be allowed because it will collapse the banks that loaned them the money. And more or a worry is the fact that if the Greeks are allowed to walk on their debt, there will be a series of countries looking to follow including Portugal and Spain.

          This is what is known as moral hazard.

          • interguru says:

            While Greece’s collapse was caused by bad governance ( a euphemism for corruption and incompetence ), Spain and Ireland were well governed but brought down by their bank’s reckless ( a euphemism for corrupt. gangster behavior ) behavior.

            Their governments had good policy.

            If you don’t believe me check this 2006 National Review cover article, praising Ireland for it’s good economic policy (http://www.nationalreview.com/articles/218835/irish-economic-miracle-reuven-brenner )

            How did Ireland go from being among the poorest places in Western Europe to one of the richest? How did it attract the headquarters of 1,000 international companies? How did it come to rank, by some measures, among the EU’s top 15 original members? With per capita GDP estimated at $37,800 (U.S.), Ireland is now tops in Western Europe.
            The Irish deserve applause for initiating drastic fiscal and regulatory changes that have gone against the trends set by the EU’s more sclerotic members. But it would be misleading to infer that any society can now emulate these policies and expect similar success. There’s more to the Irish lesson.

  17. Don Stewart says:

    Dear Gail and All
    Having proven that my crystal ball is very clear,

    I am going to hang up both my joke making apparatus and hang out my ‘Forecasts….10 cents’ shingle. You skeptics should have listened to me yesterday.

    ….But, maybe….the world will collapse this afternoon and you won’t be able to find a judge to enforce your short….maybe I’ll just stick to lecturing my wife about the ills of the world.

    Don Stewart

  18. Don Stewart says:

    Dear Gail and All
    Here is an excellent video from Geoff Lawton exploring a 50 year old permaculture site in Hong Kong.

    The video is an excellent vehicle for thinking about and discussing the nature of infrastructure, the use of industrial materials to increase the utility for humans of photosynthesis, and gravity as used to control water, and chemical forces such as are used in the reed bed sewage treatment plant. Note the use of metal steps to make the very steep site more available to humans. I imagine that many of the heavy stones were also moved with diesel equipment. Note the ‘revolutionary’ pots near the end of the talk…made from plastic.

    Geoff’s final words are about the encroachment of industrial China and the contrast between that devastation and the living abundance of the garden. He holds up the garden as a picture of what our ‘sustainable’ future should look like.

    So let me pose some questions for your contemplation:
    1. Do you think that humans have the ability to re-orient themselves toward working with nature and finding much of their enjoyment in nature, and away from industrially produced products as exemplified by industrial China?
    2. How would you calculate the EROEI of one of the plastic pots that Geoff demonstrates? Is it mostly about oil wells, or mostly about photosynthesis?
    3. How would you calculate the value of the reed bed sewage system?
    4. How would you calculate the value of the biochar stove? (Assume the biochar has a life of a thousand years.)
    5. If we all lived in gardens like this one, how might the world change? Would there be any emergent properties?
    6. The Hill’s Group model derives its coefficients from the world the way it works now. How might those coefficients change if the world came to look like this garden?

    Don Stewart
    PS I see Toby Hemenway is scheduled to deliver a talk with ‘Liberation’ in the title. For extra credit, ponder the garden and the feeling of being free.

  19. Quitollis says:

    Oil and gas exploration expenditure is expected to fall by 30% this year at the price of $60 a barrel according to Cowen & Co. WTI is now at $44 and Bank of America Corp estimates that Brent could go to $30 within months.


    ‘Big Oil’ Cuts $20 Billion in Five Hours to Preserve Dividends

    More than 30,000 dismissals have been announced across the oil industry as companies shrink budgets, according to a tally by Bloomberg News. Exploration and production spending will fall by more than $116 billion, or 17 percent, on weaker oil revenues, according to an estimate from Cowen & Co.


    Global oil and gas exploration spending to slide 17 pct -Cowen

    Jan 7 (Reuters) – The world’s oil and gas exploration companies are expected to cut capital expenditures 17 percent this year as a deep slump in crude oil prices takes a toll on budgets, according to a survey by Cowen and Company released on Wednesday.

    The survey, based on an average oil price of $70 per barrel, estimates that global exploration and production expenditures will slide 17 percent to $571 billion.

    If oil prices average $60 per barrel, spending should drop by 30 percent to 35 percent, according to the survey of 476 oil companies.

    Crude oil futures traded in New York closed under $50 per barrel on Wednesday, weighed down by weak global demand and growing supplies.


    Big Oil Gets Serious on Cost Cuts in Worst Slump Since 1986

    $31 Brent

    The direction of the oil market shows companies probably need to prepare for the worst. Bank of America Corp., noting the speed global oil inventories are building, forecast Thursday that Brent futures are set to fall to as low as $31 a barrel by the end of the first quarter from about $48 now. That’s even lower than the $36.30 seen during the depths of 2008’s financial crisis.

  20. Don Stewart says:

    Dear Gail and All

    This is not your typical internet come-on. This is not about Asian women who are dying to meet you. This is not about getting rich selling cleaning products door-to-door. This is a legitimate, guaranteed fool-proof way to take money from the rich and put it in your own deserving, but bare, pockets.

    Exhibit 1:

    So we can see that those with money to gamble in the stock market are betting that oil prices are going to increase substantially in the not too distant future.

    Exhibit 2:

    Scroll down in the comments quite a ways and find shortonoil’s comment:

    Of the 4598 wells in the Bakken, through 05/12 that we reviewed, the average cost of drilling was $53/barrel. Oil has now fallen to $45.50/ barrel. The petroleum industry has lost $trillions in stranded assets over the last eight months. After this you won’t be able to get investors close to shale again with a pitch fork. But the hype goes on, and on, and on ……….

    The real problem is that as the price goes down, production will go down. The process of delivering petroleum products to the end consumer now consumes more than half of the oil produced. That ratio grows daily. The largest portion of demand is now from the producer, but their demand is ever declining as their production declines. Price, and demand are attempting to balance where no balance is possible. In this scenario demand can never catch up with production. There will always be more oil on the market than the market can absorb at that price. What many are now calling a “glut” in the market is actually a systemic crisis were demand can no longer balance with supply.

    This determination flows directly from of the Etp model. 2012 was the energy half way point for petroleum production. It was the point were it required one half of the energy content of a unit of petroleum to produce it, and its products. Petroleum will never again be able to supply more energy to the economy than it consumes during its production process.

    Peak Oil is often described as the point where production reaches its absolute maximum rate. A better description would be the point where production can no longer be increased. That point was reached in 2012; but because of Central Bank Monetary policy that allowed energy to be channeled from other sources that would have otherwise not been unaffordable, some production increase continued for another two years. That appeared as massive debt formation by the industry.

    We are rapidly approaching the end of the oil age; the point where the industry can no longer continue to supply petroleum for a price that the consumer can afford to pay. With bumps, and some jumps price will continue its long term descent. Production will follow it downward.


    The price of petroleum is now at a level where more than a third of world production is taking place at a per unit lose. That, of course, is not a sustainable situation. As industry infrastructure depreciates out, and cash flows go negative production will fall precariously. At this point much of the industry is operating on the embedded energy of its assets. That can not continue for long. At what point this translates into a world wide financial crisis that can not be controlled can not be determined with precision. The inevitability of this occurring can, however, no longer be in doubt.


    Scroll a little more and find:

    Hi Short – do you have source for: “The process of delivering petroleum products to the end consumer now consumes more than half of the oil produced.” Thanks.


    It is called the Etp model. It is an equation of state derived from a Second Law Statement: “The entropy rate balance equation for control volumes”. Through the calculation of entropy formation in the petroleum production system it allows for a determination of the energy required to produce petroleum, and it products. Etp stands for Total Production Energy.

    The model is verified through a number of methods. Which includes an almost perfect correlation to the historic price of petroleum. That curve can be seen here:


    The model was used to predict “this” almost a year ago:


    Scroll down some more and find:

    The undisputable fact is that the *cheap* stuff is now almost all extracted and burned, and our 250 year fossil fuel ‘industrial party’ cannot now survive as it has, on the more*expensive* stuff. ?
    If the petroleum industry loses the lines of credit it needs to maintain production the future of post industrial civilization doesn’t look good! The problem is that oil can’t go to $88, at least not for more than for a very short period, or the economy would completely collapse:
    This is what they call damned if you do, damned if you don’t.

    So…here is the guaranteed money maker….for all you guys who believe that the Hill’s Group is on target and the Zero Hedge article isn’t completely out to sea. We can pretty safely assume that Zero Hedge doesn’t grasp the workings of the Hill’s Group model. So they are assuming that the price of oil company stocks reflects about what Daniel Yergin might project for the future of oil.
    But if you now know that oil is never going to be above 60 dollars again, then you know that ‘the market’ is vastly overpricing oil industry stocks…not just because of a temporary ‘glut’, but even more due to systemic causes
    The solution is to sell short. Can you, with the couple of hundred dollars of walking around money that you can redirect into stock speculation, hope to lock horns with the big boys? Why not? They have ill-gotten gains, and that money should rightfully be in a better place. I cannot imagine that the celestial plan for the universe would have it any other way.
    Why not use Gail’s projections rather than the Hill’s Group? Simply because Gail thinks this is all going to be ancient history in a few months or a year. That wouldn’t do at all. We have to be able to rely on contracts, such as shorts, to actually pay off. And when we get the trillion dollars, we want it to be real money…not confederate bills.

    Don Stewart

    • Jan Steinman says:

      “if you now know that oil is never going to be above 60 dollars again”

      Woa, that’s a pretty big “if.”

      Didn’t you get the memo? America is on the mend! “The Great Recovery” is in process. Employment is up. SUV sales are out-pacing small economy cars. Industrial production is up.

      I’ll readily agree, that on average, oil is going to continue to decline. But “on average,” a stadium full of 40,000 destitute, unemployed people who have come to see Bill Gates give a talk is a stadium full of millionaires.

      So low energy prices will spur economic recovery, then the American economy will hit a “glass ceiling” as oil prices climb, perhaps to $200 this time, before crashing once again. Lather, rinse, repeat — only lower each time.

      Meanwhile, at $200 (or even $100!) all the short-sellers will have margin calls, and lose a lot of money. Count me out. I’m still waiting for the recovery of the farmland market so I can make my killing… NOT! 🙂

      • Creedon says:

        I love your post Don, but I also would be scared to death of selling short. Making money on the future price of a commodity. I have always had a problem with that.

        • Don Stewart says:

          It’s sometimes a mistake go take me seriously…Don Stewart

          • I think you brought up a good overview of the situation, there are two basic scenarios.
            1. Ongoing bumpy plateau, i.e. ~$200 oil “guaranteed” on the next upswing
            2. Global perma-demand crash, i.e. low oil prices for ever

            The first option is tradable even with trivial 3x ETF (no special tools needed), but don’t be greedy and bail out sooner (say right after $150-160), they can freeze the markets any second, so your milage may vary.

            The second option however indicates that some regions will have to fall harder/sooner than others in terms of relative demand destruction, again that’s also tradable short term with some caution, perhaps you have to use some specific proxy industries with volatility.

            In conclusion, money are too expensive for such gambling, there are other ways how to invest resiliently those little savings in times of transition. Remember the PTBs already own it all now, they can kick the table of world markets any second, don’t be the last victim..

            • Yep baby,
              Chevron the energy company yesterday announced end of stock buyback program, so it’s indeed freefall time from now on. Apparently some insiders and/or smarties will make the next killing profit out of it as well..

  21. VPK says:

    The new Greek government is making good on its platform promises. Reinstating pensions, minimum monthly salary, health care benefits, sect. The Guardian has an article posted.
    These boys mean Business! Who will blink first, that is the question.

    • edpell says:

      What does the balance sheet look like? Taxes in versus benefits out? Taxes in versus benefits plus debt interest out? Facts please.

      • VPK says:

        The fact of the matter is one main reason Greece got into this mess is a good portion of the tax base DID NOT pay their taxes owed and most were happy to feel justified in not doing so because everyone was doing it. Now we are in a situation where the who will be holding the bag for this ‘oversight’, the people or the creditors.
        Who will blink first.
        suppose if you desire more ‘facts’, just do goggle search or wait for ‘world’ to add his knowledge.
        Very interesting. I like the manner in which those ‘radicals’ are playing their dealt hand of cards.

        • edpell says:

          I have no problem with the banker taking the “haircut” this time.

        • Quitollis says:

          Right, so the Greeks don’t pay their taxes and you think that the tax payers and savers of other countries should pick up their debts for them. It is not enough that they cheat and steal off their own country, you think that they should now get to cheat and steal off other countries too as a reward. Those “creditors” are the governments and banks of other countries who hold money from the tax payers and the savers.

          If the Greeks kept the tax money then let them pay it now. If they spent it, then that is their look out.

        • Quitollis says:

          The main creditors of Greece are the tax payers of Europe.

          14 countries contributed 52 billion euros to the Greek Loan Facility in 2010 on the understanding that Greece would make structural changes, cut public expenditure, balance the books and repay the money, to which Greece agreed and took the money.


          The EFSF loaned an additional 120 billion to Greece in 2012. The EFSF had itself to borrow the money on the open market so that it could lend it to Greece, with the guarantee of the tax payers of the other Euro zone counties.

          So, for instance German taxpayers are exposed to $40 billion in Greek debt and the German banks just $181 million

          Now Syriza comes along, reverses the changes and says that they do not want to pay the money back. That is theft, which is no surprise seeing as the Greeks en masse have been stealing off their own country the whole time.

          The tax payers of Europe do not deserve to have their money stolen by the Greeks.

          • SlowRider says:

            Contrary to what most people think, the Euro is NOT a burocratic experiment. It was designed since the 70’s to be the new reserve currency when the dollar collapses, backed by the economies of a continent that could do without international trade. The transition should have happened already, but the Chinese trade surplus gabe the dying dollar another decade of structural support.
            Only in that light do these events make sense. They allow all the deflation they can, they accept to lose small battles here and there, in order to maintain the currency block. What they SAY is just smoke and mirrors. Some small countries may be allowed to exit. But not Italy or Spain, that’s why Draghi now pulled the “bazooka” of bond purchases. He is the smartest banker out there. The Germans give the Euro a stable core, but they are completely clueless, and their people take most of the suffering in the form of artificially low living standards in an undervalued currency.

            • Sorry, but you sure sound like another one falling into that church cult of “friend of friends” who gather at certain blog for years, debate and make excuses why stuff in their saint scriptures didn’t happen after several decades of delay.

              In terms of Europe, as you correctly said it was a deliberate plan then, however, thing do change, you can’t compare the A class category of leaders, strategists and politicans of the late 1960’s, 1970s and the low life cretineous replacement of today like Sarkozy, Hollande, Baroso, Schulz, Merkel etc.

              Simply, they inherited the wonderfull gift of European integration after WWII and due to mismanagement, hubris, corruption, cowardess, stupidy and strong US (+global bankster viruses like Draghi) lobbying it is now all unraveling into abyss and hated by the inhabitants as we speak.

            • SlowRider says:

              Church cult??? I admit these are not all my own ideas but from different places, but I’m not sure what you mean.
              Anyway, all this crying about the ECB destroying our future. It is defending the Euro without much prejudice in either direction (Germany unhappy, Greece unhappy…) because the Euro one day will be in urgent need. The dollar is hyperinflating beyond belief, wait until nobody wants it, where can they go? To the Chinese Yuan? The Brazil Real? The Russian Ruble? The Swiss Franc? The JPY? The British Pound? Only the Euro is ready, no other currency has the capacity.

            • Wink wink.
              Is it a mere coincidence that reknown banskter lobbyist and former tax evasion ministate PM Juncker has become head of EU commission? The same for (ex)goldmanite Draghi, or that polish joke with no language skills yet full of silly anti russian pedigree etc. It started before with the membership of UK and other mistakes, like pushing prematurely EUR for too mnay states before further gradual integration..

              The EU was perhaps long time ago a project for more independent entity for the european nations, now it’s a parody, hollow empty can, serving the global banksters, sick joke in the plain sight..

  22. Niels Colding says:

    Debt/credit/loans = creation of money with no counterpart in energy but in the expectation that the expanding energy global/local energy production will sooner or later catch up.Ok, if global energy production in fact grows (which it has done very rapidly since steam engine) but disasterous if global energy production shrinks. If energy prices rise faster than energy production the net energy in fact shrinks. Maybe that is what happens now.

  23. Niels Colding says:

    In some sense, the selling price of any product is the market value of the energy embodied in that product

    You should extend this to – “In every respect the selling price of any product is the market value of the energy embodied in that product”

    Money is a proxy of energy!

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  25. Don Stewart says:

    Dear Gail and All
    There have been allegations about the Post-Carbon Institute and its perspective on ‘renewable energy’. Here is an excellent interview with David Fridley, a Post-Carbon Fellow:


    The interview takes almost an hour. For those of you who don’t want to take the time to listen, I will state that Fridley covers just about all the bases that have been discussed here. If there are complaints about what he says, I suppose they might center on two elements:
    1. He talks mostly from a physics perspective rather than a financial perspective, although he does allude to the financial collapse of our complex society. As a physicist, he takes climate change seriously, as well as depletion.
    2. Near the end of the interview, and in response to the conclusion that we are going to have to live on a renewable energy budget, with much lower total energy, and a restructured society, Fridley and the interviewer agree that it will require a paradigm shift, and for which there are psychological barriers. Fridley says that, based on other paradigm shifts, it probably requires the death of those holding the old paradigm for the new paradigm to gain sway.

    Statements like the second point above tend to infuriate a number of commenters here.

    If I may be permitted a private opinion. I think the last sentence above is likely to involve a bottleneck event. Those who refuse to amend their ways are likely to die in disagreeable ways. Those who have seen the handwriting on the wall, and amended their ways, stand a better chance of making it through the bottleneck. I have no strong opinions about whether any vestiges of the fossil fuel economy can survive the bottleneck. I hope so, because some fossil fuel products are quite useful in conjunction with photosynthesis and gravity for jobs such as producing food, and managing water.

    Don Stewart

    • edpell says:

      Don, in physics it is said a new idea takes over one funeral at a time. I agree completely people will not change they will die.

  26. Stefeun says:

    The Guardian, Fri Jan.23:
    “As inequality soars, the nervous super rich are already planning their escapes
    Hedge fund managers are preparing getaways by buying airstrips and farms in remote areas, former hedge fund partner tells Davos during session on inequality
    Davos 2015: overriding pessimism over growing inequality”

    “With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.”

    A taste of Elysium?

  27. Don Stewart says:

    Dear Gail and All
    Some interesting reading about Bakken and things in general. Particularly see shortonoil’s comments following the article….Don Stewart


    • Thanks! I would agree with shortonoil’s comments. Capping of wells with concrete is not a permanent matter. I don’t know if they “only last 20 years” or if a few of them start leaking that soon, and others start leaking later on. I don’t think it is possible to permanently cap wells–nature conspires against us.

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  30. Quitollis says:


    The second season of the ABC serial Resurrection concluded this week, and it touched on Finite World issues.

    The plot involved people coming back from the dead in an American town and it was very sensitive about the situations and family relationships that it placed people in and how they felt about it and reacted to the situation.

    It explored issues of compassion, tolerance and solidarity.

    The season culminated with a struggle to stop a child from being born to a returned mother, because Preacher James feared that it would herald the end of the world. “And the dead shall rise.” He shared a vision with a policeman of locusts swarming out of the earth. A government statistician had detected that a mass return of millions of the dead was about to take place.

    The policeman fights to protect the mother and the child is born. Then we saw a TV screen of a news report of millions of returned all around the world. A camera shot is shown with retuned people gathered as far as the eye could see.

    Of course it immediately suggested to me an unsustainable situation. What if all the dead came back, and kept coming back? What would people do then? Obviously resources would not suffice.

    Then the action moved to a year later and the black policeman was head of the Bureau of the Returned. He lectured on the importance of tolerance and solidarity. He is then shown going to a dinner with his white girlfriend and other couples who helped the baby be born. They drink wine, laugh and all is well. It was like a secular Last Supper, without all that bigoted Christianity.

    It was a standard ending to current US serials, almost identical to True Blood, which ended with human-vampire couples, black-white, gay, straight couples all sitting down to dinner together, having defeated the nasty Christian bigots.

    The scene shifted to the mother putting the baby to cot, singing to it about love. It was a typical narrative and a typical ending, the triumph of solidarity and tolerance over bigotry. It is the narrative that Hollywood is pushing in all of the current serials that I follow. And then we saw locusts crashing against the window pane of the baby’s room and the season ended. Wow!

    In other words, humans with their tolerance and solidarity are a plague of locust! The scene suggested that it would be the end of the world after all. It suggested that the PC (and Hollywood) narrative of tolerance and solidarity without regard to issues of sustainability, is a catastrophe in the making. Humans will flood the world and end it. The current dominant human values have defected not merely from religion but from Nature. Babies born in a social context of tolerance and solidarity is a problem that cannot be dismissed with PC slogans.

    Likely the third season will be cancelled.

    The series is available for download on torrent sites like https://kickass.so


    • edpell says:

      Gee, I hoped they played the ad with the black husband baking cookies while the mildly Asian wife runs to see the TV of football with the slightly black child stands by and watches.

      Though I was outraged by the idea of a heterosexual couple it should have been two daddies or two mommies. They color mix was a classic.

    • If you have lots of cheap energy with which to exploit resources (or new worlds available to settle), then compassion for everyone “works”. (Or if people die off quickly, regardless of how many seem to be saved, as seemed to be the case in Nordic regions, then perhaps you can have compassion for others, and not worry about fighting–you can barely hold your own.) In other cases, we need some excuse for wars against neighboring people. The reason given can be religious or it can be resources. The effect is similar, though. It is one of the forces that keeps population from rising too fast. Having multiple wives seems to be a way that promotes rapid rise in populations, because rich men who can afford more wives can then have more children. Poor men could never afford many children.

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  32. antred says:

    Gail, your articles are always very informative and a good read, but I’m thinking the Leonardo sticks picture has run its course. 😛

  33. dorji yangka says:

    wow madam Gail, wonderful, thoughtful and imaginative!
    you should be teaching sustainable futures in the universities world wide!
    feeling the real diminishing returns in my heart when I go through your post!

    I feel the Leonardo sticks banging on my common sense which is not so common as your priceless thoughts! Keep posting and educating people like me!
    Your posts are making sense of the happenings around our mother Earth.

  34. Quitollis says:

    Oh dear, the ink has hardly dried on the Greek ballot papers and the leftists are already conceding that their government is liable to fall and the Golden Dawn take over. LOL


    Less than 24 hours after sweeping a new leftist government to power on a mandate of hope and change, Greek voters have woken with fresh fears for the future. Syriza’s choice of coalition partner, the [far] right-wing Independent Greeks, has alarmed many of its supporters. Having celebrated their historic electoral win with abandon, Syriza voters now concede their new government may not survive long. And if the far left fails, some fear, it will only allow the far right to rise.

    • Quitollis says:

      Oh dear, and on the other hand, a Syriza success would cause the far right to rise in northern Europe and the left in southern. The EU centrists may find themselves between a rock and a hard place.



      Unfortunately, an explicit Greek debt write-off would cause more problems in Europe than it solved. Three main negative effects could be expected. First, it would cause a political backlash in northern Europe, which would strengthen far-right and nationalist parties. Second, far-left and anti-capitalist parties would gain credibility in southern Europe and would press for similar debt writedowns, as well as much expanded social spending — something that would lead to a collapse in market confidence. Third, the breakdown in trust between members of the EU that would follow a Greek default — even a negotiated default — would make it much harder to keep the EU together.

      • VPK says:

        Listened to the BBC last night. Interviewed Greek voters and shared their comments.
        One retired citizen claimed his pension was cut by close to 60% and others can not afford to heat their homes or adequate food. One young person said she voted for the lefties because things couldn’t possibly get worse and does not care if they lack experience. At least They may not be corrupt.
        Personally, I do not blame the people for their anger or revolt.
        These are indeed dangerous times ahead

        • What I found fascinating is that people won’t even bother to vote for change UNLESS first reaching and crossing beyond a point at which streets are full of beggars, soup lines, unemployment above 30-50% etc. Why is it almost always like that for milenia, are people just gullible and stupid choosing “short term comforts of can kicking” to the bitter end? Syriza won because also many semi conservative leaning “little” people had enough, little farmers, producers, and professionals.

          Now Syriza is a broad colation of various lefty and greeny streams, indeed even some older and neo marxists inside. But the overall leadership today is somewhat of international bourgeois pedigree, i.e. salon commies (for lack of better comparison think alike FDR/Kennedys), not street ranging and raging radicals. As announced pre election they will deliver immediately in terms of providing some basic level of social/humantarian safety net, for roughly extra EUR12B. That’s ok.

          However, the most interesting is the delivery of the second phase, are they going to nationalize some industries and banks, push for crazy hairbrain scenarios like default yet keeping eurozone membership, or dance slowly towards full scale grexit etc. ??

          Things are piling up quickly, some sort of change is also coming soon to UK, Spain, and possibly even France. That spells ungovernamble mess on the EU level, so there could be a moment of who panics first panics best, northern affluent countries might crash the project on their own volition.

          • VPK says:

            Much thanks for your insight.

          • richard says:

            “push for crazy hairbrain scenarios like default”
            I’d suggest starting from the position that debt that cannot be repaid will not be repaid. In these situations the Creditor and the Debtor are both parties to the Contract, and placing value judgements on inevitable outcomes is unhelpful. Surely the capitalist view of the default should be that the Creditor got it wrong and will be wiser next time around?
            An alternative view is that Greece is just at the leading edge of the debt deflation that increases in science and technology have encouraged over the most recent 300 years. If others see Greece default and then stage an economic recovery, expect to see a series of defaults by other countries.

    • Quitollis says:

      Oh dear, the Greek banks are already crashing. Syriza’s basic leftist attitude seems to be “when do we want it? NOW!” which is childish. The world does not work like that.

      Plato would be aghast at the behaviour of the modern Greeks. They seem intent on proving that democracy is indeed organised and unconstrained human desire running amok without the constraints of reason and courage. The lefties are animated by appetite, feeling, like an irrational, needy child.

      The troika tried to impose some common sense on Greece but the Greeks wont stand for it.




      Together, they’ve have lost between a third and half of their value since Syriza was elected this weekend. It appears that shareholders are not warming to the idea of a radical left-wing government. The incoming Syriza government has already been laying out its programme this morning, including halting privatisations and layoffs, and hiking the minimum wage by 10%.

      Banks lost more than 10% of their share value on Monday and Tuesday, but today is even worse.


      • Michael Jones says:

        I’ve read a number of articles concerning the election. One claimed that Germany will relent and allow the bailout of the Greek state to preserve the illusion of the European union and single currency. The is be a bad example for the other needy countries that will expect the same treatment. What a mess, as they say.

        • As mentioned before, things are brewing up inside the new reich “unexpectedly” now, Greece, Hungary, Slovakia, Cypruss, Ireland, Austria, Italy, UK.. are about to openly questioning the EU core strategic decisions and fracture along various lines. In ways this never happened up to current date.

          Evidently, Frau Merkel is playing some game of lately, take that strong anti russian language and actions, yet most of the business circles are not for santions. It is probably for several reasons, perhaps even incl. some dirt on her from DDR past, but most likely it’s some sort of overall can kicking german cover plan, how to keep the circus running (cheap euro goooood for exports) till the last minute and in the meantime also keep on keeping to prepare for likely desintegration in which new deutsche mark or nord euro would be a strong substance way above 1.4 USD FX.

          The way things progress the 2020 boundary seems given, although Gail´s 2015-2016 timeframe might be bit too early, too ambitious given the can kicking nature of humanoids.

      • edpell says:

        Have the Greeks been reading Gail’s posts?

        They would know a country with zero indigenous energy, modest farm land, and no significant international trade is not going to recover.

        On the other hand they should know no one will repay debt. So either repudiate the debt or enjoy the ride and take on lots more debt. Neither approach matters.

        • Because they have so many islands, they use a lot of oil. (Oil is easy to transport.) Oil is also useful in the tourist industry. The Greek economy cannot operate with high oil prices.

          • As I mentioned previously, the Greek economy has been in fact heavily subsidized by the west for centuries, for strategic reasons due to maritime location/gateway at the south eastern flank of Europe, but also just for the naive romanticism of the “credle of democracy” and its historical sights, all aspects which were more than idolized by renaissance and enlightment in the west. Naturaly, the local elites in large part just capitalized on it and based fantastic dynastic lifestyles on very shoulders of such unique situation for poor country, while the industries were more or less neglected, and why not enjoying that dolce vita. The industries are not that much scattered among the islands, but concentrated on the mainland, so that’s not the major point.

            Should we put this to the extremes, it’s quite likely that had the west poured for past 200-300yrs the same amount of money and support into say Bulgaria or Romania instead the results today of relative development status would be apparently much different. Who knows..

            What I found interesting lately is that Russian effort to redesign South tream into Greece/Turkish Stream in which scenario Greece will become a gas hub for the Balkans and parts of Central Europe, both within the EU. That means income in hard currency (some sort of fossil currency of the future), plus geopolitical clout etc. So, that makes it clear, why Syriza might be of the opinion to play it hardball for the longrun, i.e. pushing for default on most of the debts while remaining inside EU/EUR. Remember in 2-3yrs the Ukraine will likely be a hellhole of several failed/failing states/provinces with no gas transfer fee income.. and those southern EU countries dependent on this doomed pipeline will be siding with Greece/Russia. It appears to me, someone is playing chess.

            • xabier says:

              Russia and Greece is a natural alliance: Greece and Northern Europe, not at all.

              Yes, a chess game. But how many will suffer for it?

              After WW2, the anti-imperialist US assisted in the destruction of the European empires (past their time anyway) now, the US informal empire sows destruction and destabilisation.

              ‘Dominion is a wind of change, and power a deceptive lightning’. Al -Hariri, 14th century.

              Ukraine? It will be Iraq in Europe if we are not lucky.

            • Quitollis says:

              We will have to wait and see how the Greco-Russian relationship plays out. Perhaps Greece will leave the Euro but remain in the EU. Greece made big mistakes running up such debt to finance leftist social spending but that does not mean that it wants to now make the worse mistake of anchoring itself to Russia against Europe.


              Greece On Board With E.U.’s Sanctions Policy Against Russia

              … The victory of the anti-establishment Syriza party in Greece had been widely seen as giving a big boost to dogged but previously unsuccessful efforts by Russia to drive a wedge between members of the European Union and undermine the bloc’s sanctions policy.

              In the end, however, Greece backed away from strong statements denouncing sanctions and joined other countries in the 28-member bloc in a unanimous vote in favor of expanding a list of sanctioned individuals, mostly Russians, and of work to prepare “any further action” to pressure combatants to respect a stillborn truce agreement from last year.

      • Oh dear! It is the financial systems of the weakest countries that crash first. Thanks for the links!

      • Creedon says:

        Greece is still a long way from becoming a truly sustainable country. Think about it. What would that entail? They have no oil. They are a rather arid country. The ecology there could probably only support many fewer people if they were to truly live from the ecology of the place. Is there any place in the world that has made the transition from an industrial society back to being truly sustainable. We on this web site are focused on collapse from the vantage point of having lived our lives in the industrial era. The true goal should be to transform forward to a truly ecologically sustainable world. One thing that, that would almost certainly mean is many fewer people. Once population resets to a sustainable level then we can think of how we can support ourselves from the ecology of the place. http://www.doomsteaddiner.net/blog/2015/01/25/a-way-back-to-eden/

        • Quitollis says:

          Wise words, Creedon but no transition will happen until the collapse. Like you said, billions are going to die. Likely TPTB have no choice but to just keep BAU going for as long as possible. “Politics” is just a game of BAU to play until the collapse happens. Individuals and groups are free to make their own plans for survival but there are no guarantees.

          • Creedon says:

            Define collapse. Is Libya in collapse. Is Syria in collapse. You are saying Greece is not really in collapse. Is the Sudan in collapse. Apparently as long as the majority of the industrial world stays intact we do not truly have collapse because the parts of the world in worse shape can be somewhat sustained by the parts of the world that are doing a little bit better. JMG says that the future is already here it is just unevenly distributed. I am trying to find where the front lines of the future are. I know some people who pretty much live a much simpler, permaculture life in a rural area. I would say that they are in the fore front of the new world order. It would all tell me that despite our preoccupation with this subject on the website, we are still quite early in the process. We just see the process a little bit sooner than most people.

      • richard says:

        “As archon, Solon discussed his intended reforms with some friends. Knowing that he was about to cancel all debts, these friends took out loans and promptly bought some land. Suspected of complicity, Solon complied with his own law and released his own debtors, amounting to 5 talents (or 15 according to some sources). His friends never repaid their debts.”

  35. edpell says:

    I prefer Ted Turner’s buy lots of land and protect it versus Bill Gates’ solve the worlds problems (disease mostly) and then the over population (finite world) issues will just vanish.

    As for those who say how will the rich hold what they have when TSHTF? I think Ted will do just fine.

    • garand555 says:

      I seriously doubt that. He owns a huge ranch in my state, and he’s viewed as an outsider. That’s a lot of land to protect from hundreds or thousands of miles away when your wealth on paper goes up in smoke and you have little to offer the locals to keep it safe.

  36. VPK says:

    Two interesting stories
    NPR reported that the Bill and Melinda Gates foundation predicated that the poor in the world would see the greatest improvement in living standards in the next decades ahead.
    The Diane Rehm Show on NPR had an interview of author Levi Tiller man about his book
    The Great Race for the car of the future. The electric car was discussed and the tremendous progress in that field. If I were not a reader of these pages I would feel very good about the future of human society.
    Also Richard Heinberg just wrote a paper that was published on counter currents website that also promotes the idea of a soft landing regarding the translation from a high energy state to a low level one.
    No wonder everyone is just about asleep regarding collapse.

    • Don Stewart says:

      Dear VPK and All
      When I read Richard Heinberg’s actual writings, and compare them to the allegations on this site that he is some sort of foolish optimist, I am always puzzled. Here are some quotes from the referenced article. I will leave the reader to draw their own conclusions…Don Stewart


      the fossil fuel party is indeed over

      a recent study by Weissbach et al. compared the full-lifecycle energy economics of various types of power plants and found that once the intermittency of solar and wind energy is buffered by storage technologies, these sources become far less efficient than coal, natural gas, or nuclear plants; indeed, once storage is added, solar and wind fall “below the economical threshold” of long-term viability, regardless of the falling dollar price of panels and turbines themselves.

      As solar panels get cheaper, more homes and businesses install them; this imposes intermittency-smoothing costs on utility companies, which then raise retail prices to ratepayers. The latter then have even more of an incentive to install self-contained, battery-backed solar and abandon the grid altogether, leading to a utility “death spiral.”

      Yet renewable energy technologies currently require fossil fuels for their construction and deployment, so in effect they are functioning as a parasite on the back of the older energy infrastructure. The question is, can they survive the death of their host?

      It is possible to electrify much of our transportation, and electric cars are now decorating showrooms. But they have a minuscule market share and, at the current growth rate, will take many decades to oust conventional gasoline-fueled automobiles (some analysts believe that growth rate will soon increase dramatically). In any case, batteries do not do well in large, heavy vehicles. The reason has to do with energy density: an electric battery typically is able to store and deliver only about 0.1 to 0.5 megajoules of energy per kilogram; thus, compared to gasoline or diesel (at 44 to 48 MJ/kg), it is very heavy in relation to its energy output. Some breakthroughs in battery storage density and price appear to be on the horizon, but even with these improvements the problem remains: the theoretical maximum energy storage for batteries (about 5 MJ/kg) is still far below the energy density of oil. Neither long-haul trucking nor container shipping is ever likely to be electrified on any significant scale, and electric airliners are simply a non-starter.

      The promise of biofuels as a direct substitute for petroleum was widely touted a decade ago, but we hear much less on that score these days. It turns out that enormous subsidies are needed because the processes for producing these fuelsare highly energy intensive. This goes for second-generation cellulosic ethanol and biodiesel from algae as well. Research into synthetic biology pathways to biofuel production remains in its infancy.

      But if we produce hydrogen with renewable energy, that means making H2 from water using solar or wind-based electricity; unfortunately, this is an expensive way to go about it (most commercially produced hydrogen is currently made from natural gas, because the gas-reforming process is inherently more efficient and therefore almost always cheaper than electrolysis, regardless of the electricity source).

      will the quantity of energy available in our renewable-energy future match energy demand forecasts based on consumption trends in recent decades? There are too many variables to permit a remotely accurate estimate of how much less energy we might have to work with (we simply don’t know how quickly renewable energy technology will evolve, or how much capital investment will materialize). However, it’s good to keep in mind the fact that the energy transition of the 19th and 20th centuries was additive: we just kept piling new energy sources on top of existing ones (we started with firewood, then added coal, oil, hydropower, natural gas, and nuclear); further, it was driven by economic opportunity. In contrast, the energy transition of the 21st century will entail the replacement of our existing primary energy sources, and it may largely be driven either by government policy or by crisis (fuel scarcity, climate-induced weather disasters, or economic decline).

      we need to entertain the likelihood that energy supplies available at the end of the century may be smaller—maybe considerably smaller—than they are now.

      During the coming energy transition, we will be shifting from energy sources with a small geographic footprint (e.g., a natural gas well) toward ones with larger footprints (wind and solar farms collecting ambient sources of energy).

      The potency of fossil fuels derives from the fact that Nature did all the prior work of taking energy from sunlight, storing it in chemical bonds within plants, then gathering those ancient plants and transforming and concentrating their chemical energy, using enormous heat and pressure, over millions of years. Renewable energy technologies represent attempts to gather and concentrate ambient energy in present time, substituting built capital for Nature’s free gifts.

      The result: we would have green energy technology, but not the energy means to maintain and reproduce it over the long run (since every aspect of the renewable energy deployment process currently relies on fossil fuels —particularly oil— because of their unique energy density characteristics).

      What if renewable energy optimists are right in saying that solar and wind are disruptive technologies against which fossil fuels cannot ultimately compete, but renewables critics are correct in arguing that solar and wind are inherently incapable of powering industrial societies as currently configured, absent a support infrastructure (mines, smelters, forges, ships, trucks, and so on) running on fossil fuels?

      In inquiring whether renewable energy can solve the climate crisis at essentially no net economic cost, Koningstein and Fork may have been posing the wrong question. They were, in effect, asking whether renewables can support our current growth-based industrial economy while saving the environment. They might more profitably have inquired what kind of economy renewable energy can support. We humans got by on renewable sources of energy for millennia, achieving high levels of civilization and culture using wind, sun, water, wood, and animal power alone (though earlier civilizations often faced depletion dilemmas with regard to resources other than fossil fuels). The depletion/climate drawbacks of fossil fuels ensure that, as the century progresses, we will indeed return to a renewables-based economy of some sort, running on hydropower, solar, wind, and a suite of other, more marginal renewable sources including biomass, geothermal, wave, microhydro, and tidal power.

      But in many instances it may be unaffordable to adapt either the energy source or the usage system; in those cases, we will simply do without services we had become accustomed to.

      This may be the renewable future that awaits us. To prepare for that likelihood, we need to build large numbers of solar panels and wind turbines while also beginning a process of industrial-economic triage.

      Reconfiguring civilization to operate on less energy and on energy with different characteristics is a big job—one that, paradoxically, may itself require a substantial amount of energy. If the necessity of expending energy on a civilization rebuild coincides with a reduction in available energy, that would again mean that our renewable future will not be an extension of the expansive economic thrust of the 20th century. We may be headed into lean times.

      • “Neither long-haul trucking nor container shipping is ever likely to be electrified on any significant scale, and electric airliners are simply a non-starter.”

        Trolley trucks may be a far better idea than trying to use batteries:

        ” if we produce hydrogen with renewable energy”

        Supposedly, gamma radiation from nuclear waste naturally splits hydrogen, and additives are put in to suppress this effect; there was an article somewhere about trying to instead use catalysts to increase this effect, as an efficient source of hydrogen fuel.

      • I think Ricahrd Heinberg has come a ways. He still has some things to learn, though. He is a diligent follower of mainstream “peak oil” thought, with a few thoughts picked up here.

        • Don Stewart says:

          One thing I like about Richard is that he gives the reader the best shot that both sides of any argument can make. He doesn’t just adamantly insist that PV panels are stupid, or that they are bound to save civilization. He treats the reader like an intelligent person who can make up their own mind.

          He is also open to new ideas and technologies, while maintaining a healthy skepticism. For example, consider Richard’s likely reaction to this TED talk.


          At 12:30, you see the experiments which demonstrate brain-to-brain communication in rats and monkeys. The result is communication and a sort of cooperation with minimal infrastructure and energy expenditure. Stay tuned to the end for the latest results for humans.

          Is technology on the verge of radically reducing the energy requirements for civilization? Will something like this be a dead end, or open up new avenues? I expect Richard would give a thoughtful answer, and a tentative one.

          You may remember that George Mobus identified better cooperation as essential to the survival of a species that looks something like us. Might technology accelerate that movement in ways we have not anticipated? How many people 300 years ago anticipated the enormous increase in cooperation which has been facilitated by industrialization and globalization and corporations?

          I think that if one reads the criticisms of Richard carefully, a lot of them turn on his lack of dogmatism.

          Don Stewart

          • It is hard to know when to change one’s views, when real-world data and other types of analyses suggest old peer-reviewed analyses are not really right, or perhaps not sufficiently all encompassing. This is especially the case when your employer clearly has a particular set of views, and many of your readers would like some form of salvation.

            • Don Stewart says:


              ‘when your employer clearly has a particular set of views, and many of your readers would like some form of salvation.’

              Does that explain why Richard so frequently reprints your articles?

              Don Stewart

            • I don’t think Richard Heinberg reprints my articles. His blog is Museletter. http://richardheinberg.com/category/museletter He does frequently mention my posts in his articles, and even when he doesn’t, it is clear that my looking at a particular source jogs his memory that perhaps he should look at those references as well. Richard is directly hired by the Post Carbon Institute, as part of one of its programs. http://www.postcarbon.org/fellows/ He is on the board of directors of the Post Carbon Institute, and receives wages from them. http://www.postcarbon.org/about-us/board/

              Richard weighs the evidence differently than I do, and is not aware of some aspects of our current problem (in particular, the networked economy issue and exactly how financial problems are connected with our current problems). He is very good at producing educational materials that pull together information from a variety of sources. He describes himself as an “educator,” something he is very good at.

              The Post Carbon Institute also operates the site Resilience.com. The name of the site indicates its focus. Resilience is operated by a different set of folks, shown at this link. http://www.resilience.org/info/team In fact, Kristin Sponsler on that list worked simultaneously (on an hourly pay basis) at The Oil Drum and at Resilience, from 2011 to 2013. So all of these organizations are tightly linked.

              The Oil Drum did not want quite a few of my articles, because they did not match standard beliefs (although they did allow quite a few through, after a fair amount of “back and forth” discussion). Resilience would automatically pick up Oil Drum articles, but not my articles separately.

              Resilience for a time did not publish my articles. At some point I remembered that Resilience has a “donate” button. If a person takes his or her article, and fills out an appropriate information screen, they are pretty good about putting up the article in question. I have been using the “donate” button for a while now, and they have been putting up my posts. I even found one article up, before I formally “donated” it. I have been pleasantly surprised that they seem to take pretty much all the articles I submit. I haven’t really checked though to see whether all of my posts are there, though.

              In many ways, I don’t have a problem with Richard. He takes the parts of the problem he understands and puts together educational material based on them. He does mention my materials as well. It may be that as I explain some of the financial aspects to a greater extent, he will incorporate those aspects into his analyses as well.

              Resilience is the only site that copies my articles that has this submission requirement. Other sites just copy my articles without such a requirement.

            • Don Stewart says:

              I don’t pretend to know the ins and outs of these organizations. What I do know is that when Post Carbon wants money, it is Richard who asks for it. While they have many Fellows, it seems that Richard is the mainstay.

              Resilence reprints a lot of your stuff, including this current piece. If Richard was trying to stifle your expression, I doubt your articles would appear in Resilience.

              Resilience, by it’s very nature, is dealing with an ill-formed subject. While you may be absolutely certain that you can foresee the future in glorious Technicolor, there are plenty of smart people who do not agree with you. It is my opinion that you sell yourself short when you feel compelled to attack people who are telling stories which have much in common with your story, but stop short of your ultimate doomerism.

              I want to tell you a little story from Rob Dunn’s book The Wild Life of Our Bodies. The story is about how two different populations independently gained the enzymes humans need to use cow’s milk. Dunn asks if there had to be a bottleneck event for the enzymes to spread through these populations, and concludes that a bottleneck is, indeed, a requirement. (There are other evolutionary developments which also require bottlenecks.) Things had to get very hard and lots of people had to die to enable the necessary genes to become prevalent in certain populations.

              Is that an example of Resilience? Is the glass half-full or half-empty or was the whole thing just a disaster which is measured by the count of dead bodies? Those are philosophical or religious or existential questions, rather than scientific questions. The science just tells us what happened…it doesn’t put a value on it.

              I believe that you and I and Richard and many others all believe humans are about to experience a bottleneck event. You may object that what you see is extinction. Quibbles aside, whatever comes out the other side of the bottleneck MUST have its origins in something from before the bottleneck. Nature doesn’t create from nothing…it adapts and evolves. Therefore, it seems to me, that I want to listen to a broad range of opinions, and try to select wisely, about those behaviors which might get some of us through the bottleneck. That is a Value. I personally have a zero chance of getting through the bottleneck due to my age, if nothing else.

              I think that listening to other opinions with respect is probably a requirement for anyone who hopes to contribute to the emergence of the new order after the bottleneck. If you are certain that extinction is our future, or that you have nothing to contribute to the Resilience program, then we are just on different sheets of music.

              Don Stewart

            • I hope I never said Richard was trying to stifle my expression–I certainly didn’t mean it.

            • Jan Steinman says:

              It’s a big tent, and none of us have a perfect crystal ball.

              I think diversity of approaches is good for what ails us. Those on the “burn it all up” side are very good at splitting their opposition, and those who like to lead an examined life are very good at slinging arrows at those who should be allies.

              Thanks for your even-handed approach to those you disagree with, Gail!

            • Don Stewart says:

              Dear Jan
              I want to make one final observation. Rob Dunn, in The Wild Life of Our Bodies, has a discussion of human preferences as resulting from ancient environments. For example, we like sugar, fat, and salt for reasons which were evolutionarily important, but now give us chronic disease. Dunn quotes the statistic that Americans have more acreage devoted to lawns than to corn .

              On page 199 he says:
              ‘Culture, of course, can influence how we respond to different tastes, just like different scenes. We can learn to love snakes, just as we learned to love the stimulation provided by coffee, even though it is bitter. Our aversion to snakes and our attraction to sugars, salts, and fats are the murmurings of our history, but such murmurings can be quieted. Our universal fears and ambitions have been our fate, but they need not be. Whatever the right action might be…our taste buds (will not lead us there).’

              So we can agree that most humans like to look at lawns, which keeps a massive industry in business spreading destruction. And conventional Economics and Politics and Entertainment claims that The Best of All Possible Worlds results when everyone follows their tastes. BUT, there are some people who have latched onto a different meme. There is a YouTube with Janaia Donelson and Richard Heinberg from 7 or 8 years ago. Janiaia is interviewing Richard in his inner-suburb yard in Santa Rosa. He and his wife have converted it in to a productive Permaculture design.

              Assume a bottleneck event happens in the next few years. Is it not true that having an aversion to useless lawns and a love of a productive permaculture yard will be an adaptive response? Whatever may be the truth about the fine points of any forecast of the future, is not the value that Richard is promoting by his actions worth more than disputes over small matters?

              Don Stewart

        • Olsen says:

          Satish Musunuro Writes: ..The dominant narrative of social and cultural progress, technological development and improvement in the human condition breaks down upon closer examination. We need a new set of lenses to look through and understand where we have been, where we are and where we are headed. What we thought of as exceptions are in fact the rule. Despoliation of the environment is not an exception but the very basis of civilization. Urban growth is not a panacea but the characteristic signature of a malignant process. You and I, friends, are not unlike cancer cells ravaging our host planet day in and day out. What makes it worse is there’s no escape from it all. We can’t help but be part of this process with everything we do. Such are the times we live in.

          • edpell says:

            You and I have no choice. The elite have chosen to refrain from using bio-weapons to right size the human population. They do have a choice. It continues to surprise me that they refrain.

          • edpell says:

            I cringe every time I hear a politician both left and right talk about the need to spend spend spend on MORE infrastructure so we can dissipate more resources faster. more more more now now now faster faster….

        • VPK says:

          At this point I must address a few words to “collapsitarians” or “doomers,” who say that only utter ruin, perhaps extinction, awaits us, and that renewables won’t work at all. They may be correct in thinking that the trajectory of society this century will be comparable to the collapse of historic civilizations. However, even if that is the case, there is still a wide range of possible futures. The prospects for humanity, and the fates of many other species, hang on our actions.

          What’s needed now is neither fatalism nor utopianism, but a suite of practical pathways for families and communities that lead to a real and sustainable renewable future—parachutes that will get us from a 17,000-watt society to a 2,000-watt society. We need public messages that emphasize the personal and community benefits of energy conservation, and visions of an attractive future where human needs are met with a fraction of the operational and embodied energy that industrial nations currently use. We need detailed transition plans for each major sector of the economy. We need inspiring examples, engaging stories, and opportunities for learning in depth. The transition to our real renewable future deserves a prominent, persistent place at the center of public conversation.

          Gail. obviously, he does recognize as you do the financial aspect to undertake this transition

          • Don Stewart says:

            ‘You cannot serve both God and Mammon.’ Richard isn’t the first guy to say that.
            Don Stewart

            • VPK says:

              Unfortunately neither our political leaders and public policy discussion is far from what Richard stated in the above. Actually, the opposite is being promoted.
              I’m a student of Roman Imperial era, especially the crisis of the 3rd century, which followed a somewhat “recovery” of state by Diocletian and various reforms. It is an interesting story, one that is board that can not be dealt with here. I can expect the government of today will undertake some of the same harsh measures to ensure order and preserve the “state”. We are witnessing much of what happened back then, the extreme wealthy shunning financial burdens, “debasement of the currency”, resource depletion, increasing military expenditures (at least here in the USA), environmental degradation, ect.
              It will not be a pretty transition.

  37. Pingback: News from the last week | Analyze economy

  38. vegeholic says:

    All of us were ecstatic when capitalism, markets, and free enterprise triumphed over the evils of central planning represented by the Soviets in 1989. Is it time to rethink our deep seated prejudices here? Individual economic freedom permitted, even encouraged, everyone to extract, exploit, and consume at the maximum rate possible, while giving the least regard to how waste was being disposed of. We now see where this philosophy has gotten us. Might not some enlightened central planning have a chance to take a longer view than personal gratification, and steer people towards more sustainable practices in terms of procreation, resource use, waste dumping, etc. Of course it is sacrilegious to contemplate such concepts. Maybe we should not really own property, with the right to dig it all up and squander the resources. Maybe political freedom combined with economic constraints would provide a model with a future. I only bring this up because, some small subset of us will have to emerge from the rubble and start over. It has been a grand experiment but we should not shrink from drawing unpleasant conclusions.

    • “Individual economic freedom permitted, even encouraged, everyone to extract, exploit, and consume at the maximum rate possible,”

      The communists tried to consume, they just weren’t good at it. They make more pollution and environmental degradation, and have less to show for it.

      ” Might not some enlightened central planning have a chance to take a longer view than personal gratification”

      Maybe if the central planner is an immortal machine god. You know the difference between America and China? America has a 4 year electoral cycle (but with mid-terms) and China has a 10 year electoral cycle. Do the Chinese have a longer view? It seems the answer is no:

      “Maybe we should not really own property, with the right to dig it all up and squander the resources.”

      Some views are that the only property you can own is something man has created. You can have temporary exclusive access to a piece of land for a recurring fee, but cannot own it indefinitely.

      “I only bring this up because, some small subset of us will have to emerge from the rubble and start over. It has been a grand experiment but we should not shrink from drawing unpleasant conclusions.”

      Don’t worry, without industrial technology and fossil fuels, people of the future will have much reduced ability to destroy everything. Of course, having a more conservative rather than consumptive world view will certainly be helpful; I think this should come from people choosing, rather than a central authority dictating. You’re free to try to convince anyone of your ideas.

    • Jan Steinman says:

      I’m with you on the evils of speculative ownership, but you lost me on the benefits of central planning.

      As a follower of Garrett Hardin, I actually think ownership has certain advantages that unfortunately do not manifest themselves in our day and age.

      Think of what would happen if there were a way to make ownership last much, much longer: people would actually take care of things they own, as those things are their means of production.

      Well, there is a way to make ownership last much, much longer! And what’s more, it’s inevitable! It’s called deflation!

      This is why the real estate market seems to be in better shape than it actually is: people take their property off the market, rather than sell it at a loss. (Of course, the damn fools are just waiting for the “market recovery” that may never happen, but the end result is the same if you are farming: the land is worth more to you as your means of production than it is as speculative value.)

      • MG says:

        As regards the deflation, I am affraid that when the seller wants to sell the land according to the past upward curve and the buyer has not got enough money to buy the given land, it is the sign of something much worse: the implosion and the subsequent abandoning the land due to the lack of energy for cultivating it. This regards especially the areas that started to be agriculturally exploited during the fossil fuels age. We will not have energy to cultivate as much land is it is now. That is the future of the mankind.

        • Great exchange of ideas and scenarios.
          Given the situation now we should be about to enter cyclical deflation into agri commodities and farm land, that would mean acregae prices falling at least 40-60% etc. However, we might be rather about to enter larger/longer/deeper overall reset cycle, in which the rich will have to park even more money into land. I guess Salatin is partly of the latter scenario in which skilled managers will be hired on mutli decade perhaps mutli generational contract to cultivate these properties (and organize sales and labor). That’s more or less rehash to previous stage of feudalism.

          • MG says:

            worldofhanuman, I am affraid that the purchasing power will be so low that there will not be much people who will be able to buy agricultural products. Already now we have the situation when these big owners of land need subsidies, so that their production is cheap enough for selling to the people…

            • I guess my post was about different model though.
              Let me explain, today you need subsidies, because of the entire chain of “oil war on on agriculture” incl. heavy machinery and concrete buildings on credit, long distance delivery, and all that crap. The future model I mentioned will be more distributed more regional, more manual, 20-30% of pop returned to agriculture at least in the first phase, when cities are still somewhat populated. So in this model, you have got your “nobility” owning several farms of say 200acreage size and bigger, in early years could be still those “jetset international elite aka never to be personally identified” and their hands-on hereditary managers on the farm. And former city folk now working and living on these farms and in related crafts. As times goes by and world shrinks smaller again, the elite is pushed to go local and choose permanent dominion from which to operate several of these farms.

            • MG says:

              Dear worldofhanuman,

              I think that the main reason of slavery or serfdom was keeping the agricultural land cultivated. Otherwise the forest could take it back. We were on the upward path. On the way down, there is not enough energy to fight the soil degradation and the depletion of human resources. Anyway, big farms were made possible by the use of machinery and fertilizers, pesticides, insecticides etc.

              When somebody is tied to the land via serfdom or slavery, then his or her energy is spared for keeping the land fertile – his or her work and faeces and the faeces of the domestic animals are directed into the specific field to keep its productivity. Large scale farming will have no economic meaning, as the people will be so poor that there will not be persons who will be able to buy the production from such big farms and the productivity of such big farms will be much lower without machinery and fertilizers, pesticides, insecticides etc. There will not be big surpluses to sell, anyway. Maintaining large farms simply will not be possible.

              Such model of big industrialized farms collapsed in my mountaineous country after the fall of the Soviet Union when the subsidies were too low. Without the subsidies from the EU for e.g. mowing the abandoned pastures, the percentage of forests would be bigger and bigger.

            • Jan Steinman says:

              “Without the subsidies from the EU for e.g. mowing the abandoned pastures, the percentage of forests would be bigger and bigger.”

              I hope you’re right.

              But I fear you’re wrong. Humans have a voracious appetite for forests. David Holmgren said, “Civilization is preceded by forests, and followed by deserts.” How will people stay warm when they can’t use fossil sunlight?

              If you look at historical forest cover, it steadily declined until fossil sunlight came on line, and only then, it began to recover. (The same with whales, which I fear we may once again turn into lamp oil.)

              A reversion to the mean is inevitable.

            • You are right too.

            • I agree with you MG. Our current system depends on the big energy subsidy we have.

            • MG says:

              Jan Steinman,

              you are right. During the Medieval Ages, the forest coverage of my country was much lower. The predominant way of using the agricultural land was pastures for sheep. But the people needed the wood to be able to survive the cold winters. The amount of wood and warm clothes (e.g. from sheep skin and wool) was more important for survival than food.

              That is why neither large farms, nor such a big portion of arable land have any future in my country.

              Howere, it is true, that the big portion of the wood was used also for ores and metals processing. So you are right about the deforestation in the future. But I am sure that some hell of a tropical forest will not be possible to beat without the fossil fuels.

            • Perhaps that’s just misunderstanding, I see previously unhappy and impoverished city folk turning to local manual farm labor and living under the umbrella of landscape reconstruction practices, but not in the style of ancient world slavery-drudgery, more clever approach is known and could be applied with the kickstart leverage of existing machinery and the last availability of fossil fuels.

              I’m of the opinion “large scale farms” of the future (small to midsize on today’s agrobiz scale) can easily feed aprox. 10-30% of the needed civilizational overhead in science, religion, gov, military, ..

              On this blog it has been demonstrated in numerous examples how to do it (mulch and no till, high intensity grazing etc). However, it is indeed possible that events from the volatile edge of shifting towards down sloping debt/energy path might dislocate any attempts, which I’m indicating here. In my book, there is “enough of everything” at least to attempt such proviso experiments in the following decades at many locations, definately not everywhere. My outlook for the 2035-2100 phase is more negative though in the sense of less regions capable to navigate through this transformation, i.e. much smaller pockets of population capable going forward.

            • MG says:

              Dear worldofhanuman,

              I think that many people still think in the framework of fossil fuel era. The truth is that the use of fossil fuels brought better healthcare which in turn caused rise of the population to such levels that the land was not able to feed them and meat became an occasional food. That is why large farms originated.

              In the Medieval Ages, the various pests and illnesses kept the population down. Because of this, there was no problem with meat at that time.

              Basically, the food will not be the main problem in the future, but the energy delivered by the humans. This counsciously directed energy needed for cultivation and keeping the land fertile.

              When you are ill, you lack the energy. When the life expectancy of the population is low, then also the depth of the knowledge acquired over time for directing this human energy is lower, so the energy is not directed in an efficient way.

              We see the examples from the past, when the areas needed to be resettled due to the drastic fall of the population, caused by the epidemics and the poor health. And they were resettled from the more productive/fertile regions. As we have less such fertile regions now, the voluntary resettlement makes no sense. That is why slavery and serfdom was used to keep the land productive.

              Now, when the age of cheap and abundant oil ends, we have agricultural subsidies that work as replacement for this slavery and serfdom.

            • MG says:

              Based on the abovementioned, the depleting industrial countries need the resettlement in the same way as the depleting agricultural countries. Otherwise they finish like Japan…

              As the industrial countries have more energy at the disposal, the direction of the resettlement goes from the agricultural countries to the industrial countries, not in the opposite direction.

    • garand555 says:

      We’ve had quite a bit of central planning in the US for quite sometime now. It is not nearly as hard as it was in the USSR, but this is not a free market economy. Try selling unregulated food to a supermarket or starting a bank without going though the process of getting all of the licenses and charters required by the government. Try selling raw milk across state lines. Before Obamacare, you were not allowed to purchase health insurance across state lines, the insurance companies had to set up shop in your home state. Now, I have no clue how that works, but Obamacare is certainly central planning.

      That’s not to say that pure, 100% free markets will work, but to think that you can plan the economy and actually maintain control over it indefinitely is pure hubris. It is far too complex for people to predict even for somebody who is truly objective on the matter. We are better off figuring out which resources ought to be protected from excessive extraction/destruction, protecting them, then leaving it at that as far as central planning goes.

    • Quitollis says:

      Pentti Linkola has been talking about this for decades. Some call it “eco-fascism”.


      It is not so much about centrally planning mass production, which is just organised “greed” or organised human desire.

      In his opinion the population needs to crash right back down, to maybe a few hundred million. And it must then be kept at that level.

      Central planning is then aimed more at keeping the human population in check, especially their reproduction and their effect on the environment.

      So he would have eco-police to enforce a low population level and to keep an eye on technology.

      It is about enforcing a radical regression in human society, not about fine tweaking mass production through the state.

      People can then go fishing or hunting or grow their own crops. They will naturally depend on their own skills and those of their families and friends. There is no need for the state to interfere as long as people live a sustainable lifestyle.

      If people cannot manage then they will die. That is good because it helps to keep down the population.

      It is also eugenic because Nature will naturally select those people who can cope for themselves. It would reverse the dysgenic effect of industrialism and state welfare where the state mass breeds the urban lower classes and keeps them alive with medicine and welfare.

      In his opinion most people would not choose such a scenario. People naturally don’t really care about other species or the environment or at least they would not sacrifice their own comfort.

      So peak oil is a good thing from his perspective. The human population will have no choice but to crash.

      Maybe we can then learn some of the lessons of this era and then plan better for the future, with eco-police.

      • Quitollis says:

        On the news right now, what issues do people care about in the coming election?

        NHS ‘most important issue’ suggests BBC/Populus poll

        “environment/ transport” is in ninth place, below everything that would impact the wellbeing and comfort of people.

        People naturally care about their own wellbeing. They would happily plunder the planet to extinction. The masses would never opt for a sustainable society.

        Democracy is organised mass human desire.

        That is why “central planning”, ie. undemocratic eco-police, would be necessary.

        Leftyism is the most obnoxious organised human greed.

        “We are ALL so important and we will ALL have everything that we want. We want it NOW! That is the only MORAL position.”

        • “People naturally care about their own wellbeing. They would happily plunder the planet to extinction. The masses would never opt for a sustainable society.”

          The people are not blank slates that choose. They are indoctrinated from early childhood on through the rest of their lives for hours per day to desire and consume. I suspect without television and advertisement and education people will desire less. Without the ability to make things far away, people will be more concerned with their immediate surroundings not becoming a wasteland.

          Eco-Police is a form of socialist/statist thinking. Just imagine a War on Pollution or War on Desertification modeled after the Wars on Drugs, Terror and Poverty.

      • garand555 says:

        Even doing what I posted above, with simply ensuring that we don’t engage in wanton resource destruction would take some amount of energy. Taking it to the next level, and keeping an eye on technology would take even more. It would require the very thing that it is keeping an eye on. It would be self defeating. It is also a recipe for something that would morph into a draconian police state that loses sight of its goals. Being faced with the decision that we may have to let some people starve to death because you only have enough for you and yours and they had 6 kids when they could only support 3 is bad enough. We don’t need to add jackboots to the equation.

        As for hunting and fishing, you would be surprised at how well people with stone age technology can decimate animal populations. I much better like the idea of interlocking city/country fingers combined with managed hunting and fishing. In the end, we have to realize that we are part of nature, and it is the natural world which sustains us. If we can do that and have some form of industrial comfort at the same time, I am all for it. If we have to revert back to stone tools, then so be it.

      • Quitollis says:

        One can see a continuity with Plato in the eco-fascist writings of the Finnish philosopher Pentti Linkola, particularly with The Republic, which is a foundational text of the Western philosophical tradition.

        The three proper social classes correspond to a tripartite division of the soul into reason, courage and appetite. Each class is naturally dominated by one aspect of the soul.

        Thus the wise rulers, the courageous soldiers/ police and the appetitive masses.

        So a future eco-fascist society will select and breed the three classes.

        It will gather the wise rulers and the spirited police. They are always relatively few in number. The masses naturally don’t care about anything but the satisfaction of their own desire. The state will breed the rulers and maintain their wise and courageous stock.

        The eco-police must encourage and enforce moderation on the masses.

        The masses naturally desire their own wellbeing and the satisfaction of their own appetites. Democracy is organised and unconstrained human desire. It is anarchy in the soul and in society.

        The rulers must enforce a limit of the reproduction of the masses, limit their technology and their impact on the environment.

        The state will limit the masses and subject them to natural selection, so as to protect the environment and to improve the worker breed.

        I will quote a text that gives an overview of The Republic.



        Divisions of the State

        The principle of specialization thus leads to a stratified society. Plato believed that the ideal state comprises members of three distinct classes: rulers, soldiers, and the people. Although he officially maintained that membership in the guardian classes should be based solely upon the possession of appropriate skills, Plato presumed that future guardians will typically be the offspring of those who presently hold similar positions of honor. If citizens express any dissatisfaction with the roles to which they are assigned, he proposed that they be told the “useful falsehood” that human beings (like the metals gold, silver, and bronze) possess different natures that fit each of them to a particular function within the operation of the society as a whole. (Republic 415a)

        Notice that this myth (Gk. μυθος [mythos]) cuts both ways. It can certainly be used as a method of social control, by encouraging ordinary people to accept their position at the bottom of the heap, subject to governance by the higher classes. But Plato also held that the myth justifies severe restrictions on the life of the guardians: since they are already gifted with superior natures, they have no need for wealth or other external rewards. In fact, Plato held that guardians should own no private property, should live and eat together at government expense, and should earn no salary greater than necessary to supply their most basic needs. Under this regime, no one will have any venal motive for seeking a position of leadership, and those who are chosen to be guardians will govern solely from a concern to seek the welfare of the state in what is best for all of its citizens.

        Having developed a general description of the structure of an ideal society, Plato maintained that the proper functions performed by its disparate classes, working together for the common good, provide a ready account of the need to develop significant social qualities or virtues.

        •Since the rulers are responsible for making decisions according to which the entire city will be governed, they must have the virtue of wisdom (Gk. σοφια [sophía]), the capacity to comprehend reality and to make impartial judgments about it.
        •Soldiers charged with the defense of the city against external and internal enemies, on the other hand, need the virtue of courage (Gk. ανδρεια [andreia]), the willingness to carry out their orders in the face of danger without regard for personal risk.
        •The rest of the people in the city must follow its leaders instead of pursuing their private interests, so they must exhibit the virtue of moderation (Gk. σωφρσυνη [sophrosúnê]), the subordination of personal desires to a higher purpose.

        When each of these classes performs its own role appropriately and does not try to take over the function of any other class, Plato held, the entire city as a whole will operate smoothly, exhibiting the harmony that is genuine justice. (Republic 433e)
        We can therefore understand all of the cardinal virtues by considering how each is embodied in the organization of an ideal city.

        Wise Decisions
        Courageous Actions
        Farmers, Merchants, and other People
        (Moderated Desires)

        Justice itself is not the exclusive responsibility of any one class of citizens, but emerges from the harmonious interrelationship of each component of the society with every other. Next we’ll see how Plato applied this conception of the virtues to the lives of individual human beings.

        The Virtues in Human Souls

        Remember that the basic plan of the Republic is to draw a systematic analogy between the operation of society as a whole and the life of any individual human being. So Plato supposed that people exhibit the same features, perform the same functions, and embody the same virtues that city-states do. Applying the analogy in this way presumes that each of us, like the state, is a complex whole made up of several distinct parts, each of which has its own proper role. But Plato argued that there is ample evidence of this in our everyday experience. When faced with choices about what to do, we commonly feel the tug of contrary impulses drawing us in different directions at once, and the most natural explanation for this phenomenon is to distinguish between distinct elements of our selves. (Republic 436b)

        Thus, the analogy holds. In addition to the physical body, which corresponds to the land, buildings, and other material resources of a city, Plato held that every human being includes three souls (Gk. ψυχη [psychê]) that correspond to the three classes of citizen within the state, each of them contributing in its own way to the successful operation of the whole person.

        •The rational soul (mind or intellect) is the thinking portion within each of us, which discerns what is real and not merely apparent, judges what is true and what is false, and wisely makes the rational decisions in accordance with which human life is most properly lived.
        •The spirited soul (will or volition), on the other hand, is the active portion; its function is to carry out the dictates of reason in practical life, courageously doing whatever the intellect has determined to be best.
        •Finally, the appetitive soul (emotion or desire) is the portion of each of us that wants and feels many things, most of which must be deferred in the face of rational pursuits if we are to achieve a salutary degree of self-control.

        In the Phaedrus, Plato presented this theory even more graphically, comparing the rational soul to a charioteer whose vehicle is drawn by two horses, one powerful but unruly (desire) and the other disciplined and obedient (will).

        On Plato’s view, then, an human being is properly said to be just when the three souls perform their proper functions in harmony with each other, working in consonance for the good of the person as a whole.

        Rational Soul (Thinking)
        Spirited Soul (Willing)
        Appetitive Soul (Feeling)

        As in a well-organized state, the justice of an individual human being emerges only from the interrelationship among its separate components. (Republic 443d)

        Plato’s account of a tripartite division within the self has exerted an enormous influence on the philosophy of human nature in the Western tradition. Although few philosophers whole-heartedly adopt his hypostasization of three distinct souls, nearly everyone acknowledges some differentiation among the functions of thinking, willing, and feeling. (Even in The Wizard of Oz, Dorothy’s quest depends upon the cooperation of her three friends—Scarecrow, Lion, and Tin Woodsman—each of whom exemplifies one of the three aspects of human nature.) Perhaps any adequate view of human life requires some explanation or account (Gk. λογος [logos]) of how we incorporate intellect, volition, and desire in the whole of our existence.

        In the context of his larger argument, Plato’s theory of human nature provides the foundation for another answer to the question of why justice is better than injustice. On the view developed here, true justice is a kind of good health, attainable only through the harmonious cooperative effort of the three souls. In an unjust person, on the other hand, the disparate parts are in perpetual turmoil, merely coexisting with each other in an unhealthy, poorly-functioning, dis-integrated personality. Plato developed this theme in greater detail in the final books of The Republic.

        • edpell says:

          How about ruling class those with the money, design and maintenance of the robotic factories, robots. The first class filled by humans. The second class filled by humans for now. The third class produces things, distributes things, provides services, kills as ordered to, polices as ordered to. Humans of appetite need not apply that role is filled by the ruling class a hereditary class. The second class will be paid the minimum needed to maintain the class. They should be thankful they are not eliminated. The only question is how to quietly eliminate the humans of appetite who are not hereditary rich.

      • InAlaska says:

        Eco police just wouldn’t work. That is imposing a 21st century worldview onto a desired future condition that calls for a paradiggm shift in human attitudes toward the environment. External enforcement would not work. I think what would work is a global catastrophe (climatological, ecological) so devastating that it leaves an indelible mark on our customs and morals for thousands of years to come. In other words, a moral shift in our thinking so that it would be culturally taboo to waste food and resources and life on earth. Ownership, ambition, greed and exploitation would be shameful qualities to be weeded out of the gene pool. This (and not the eco-police) would be the only way we can ever live “sustainably” on this Earth for any length of time.

        • Jan Steinman says:

          “a moral shift in our thinking so that it would be culturally taboo to waste food and resources”

          Spot on!

          It worked for those who lived through the Great Depression, and to a lesser extent, on their children. Then the Baby Boomers seemed to lose it.

          I dream of a world where “frugal” and “thrifty” become universally respected and admired qualities, where people compete to conserve resources just as much as they compete to expend them today.

          My Mom remembers, as a young university student, a bunch of her and her friends, passing around a single teabag that they would each dip in a cup of boiling water in order to share some tea. Now that’s frugal!

          • Quitollis says:

            LOL, that is how I always make tea. I can’t bear stewed tea.

            Try drinking nothing but dirty water for a week. Everyone used to do it all the time.

            Frugal, a cup of Indian tea all round, lol.

          • xabier says:


            The old chap who taught me bookbinding used to say with some pride that he was ‘a parsimonious sort of man.’ Born in the 1920’s to an unskilled working man who fought at Gallipoli. To his dying day he used a knife which his father had made for him 60 years before, worn almost to nothing but still good, and carried the wallet his father had carried in the trenches. I can’t exaggerate just how much money I have saved, and profits I have made, by following his example.

            He never washed his hands when working, as it might ‘wash the luck off’. How old is that idea I wonder?

            Another saying; ‘You don’t charge for everything that you do’. Not the essence of consumer capitalism!

          • Jarle B says:

            “I dream of a world where “frugal” and “thrifty” become universally respected and admired qualities, where people compete to conserve resources just as much as they compete to expend them today.”

            Your dream will come true in a not to distant future…

        • Quitollis says:

          Well, I am not entirely convinced by Linkola, although I agree that hierarchy and eugenics are always a good idea, and we don’t want the lower classes sprawling and making a mess of the place. And I certainly do not find appealing your desire to root out “ownership, ambition, greed and exploitation”. Those qualities are essential to human life. You both sound like prissy monks to me, Plato too.

          I do not doubt that the British state will remain in control of this island. It will just adapt. Likely we will have to fight it out for all that we can get after the collapse. Nature will push us into resource wars and the British lion will grow some claws again out of necessity. Really, I am OK with that. After all, we had our Empire before industrialism.

          Plato has some important insights but I prefer Nietzsche. All life is will to power.


          259. To refrain mutually from injury, from violence, from exploitation, and put one’s will on a par with that of others: this may result in a certain rough sense in good conduct among individuals when the necessary conditions are given (namely, the actual similarity of the individuals in amount of force and degree of worth, and their co-relation within one organization). As soon, however, as one wished to take this principle more generally, and if possible even as the FUNDAMENTAL PRINCIPLE OF SOCIETY, it would immediately disclose what it really is—namely, a Will to the DENIAL of life, a principle of dissolution and decay. Here one must think profoundly to the very basis and resist all sentimental weakness: life itself is ESSENTIALLY appropriation, injury, conquest of the strange and weak, suppression, severity, obtrusion of peculiar forms, incorporation, and at the least, putting it mildest, exploitation;—but why should one for ever use precisely these words on which for ages a disparaging purpose has been stamped? Even the organization within which, as was previously supposed, the individuals treat each other as equal—it takes place in every healthy aristocracy—must itself, if it be a living and not a dying organization, do all that towards other bodies, which the individuals within it refrain from doing to each other it will have to be the incarnated Will to Power, it will endeavour to grow, to gain ground, attract to itself and acquire ascendancy—not owing to any morality or immorality, but because it LIVES, and because life IS precisely Will to Power. On no point, however, is the ordinary consciousness of Europeans more unwilling to be corrected than on this matter, people now rave everywhere, even under the guise of science, about coming conditions of society in which “the exploiting character” is to be absent—that sounds to my ears as if they promised to invent a mode of life which should refrain from all organic functions. “Exploitation” does not belong to a depraved, or imperfect and primitive society it belongs to the nature of the living being as a primary organic function, it is a consequence of the intrinsic Will to Power, which is precisely the Will to Life—Granting that as a theory this is a novelty—as a reality it is the FUNDAMENTAL FACT of all history let us be so far honest towards ourselves!

          • xabier says:

            If the ‘lower classes’ you often refer to are going to be like the pretty peasant girls of Spain, (Italy, Poland, Sweden, France, Bohemia, etc) before industrialisation, they can sprawl about as much as they like. We could bring back the old costumes on feast days, too.

            But one suppose you mean the modern post-industrial ‘welfare class’, which it must be agreed is not a pretty sight, urban or rural.

            As for a resurgent British Empire, not much chance of that I should say – although geo-strategically it’s an interesting spot, mostly being conquered from the East as the last stop before the Atlantic, but every now and then exercising a reverse influence (as in the conversion of Europe to Christianity in the Dark Ages), like Ireland.

            The poet Robert Frost concluded that the great human urge was to interfere, not necessarily to control and dominate. He might have had a point: Stone-Age people do seem to sit around a lot talking about one another. Mostly, people want to give and receive attention, which is just as worthy of study as power dynamics.

        • deathbyungabunga says:

          “a moral shift in our thinking so that it would be culturally taboo to waste food and resources and life on earth. ”

          Agree with a serious caveat. Morals are a human construct as flawed as the rest.

          My belief is that our species as talented and clever as we are with many noteworthy achievements unmatched by any specie on this earth is fundamentally deficient in a quality.
          That quality remains undefined but it is the antitheses to separateness.

          Words are fundamentally inaccurate. We think in words. Our constructs are built with flawed material.

          We are in essence all mad.

          The conception of the quality that ends our separateness can not and will not be framed in constructs that work against the very nature of development of that quality. That conception IMHO opinion will be borne out of something much much greater than our constructs. Call it evolution. Call it the divine.

          Victor Hugo works touch a essence that is relevant to what I speak of.

          How can one work toward a new quality and sanity?

          These are my actions. I am by no means perfect in implementing them

          First while acknowledging that language is the primary achievement of our series with great benefits and joy it must also be acknowledged that WORDS HAVE NO SUBSTANCE IN THE REAL WORLD.

          Second always accept. Separateness and our attachment to our word constructs causes us great pain. Acceptance works toward the quality we are deficient in. Compassion works toward the quality we are deficient in. Humbleness works toward the quality we are deficient in.

          We can no more imagine a world where we belong than a amoeba can imagine being a mouse.

          Fear is a human construct.
          Love is the divine.

  39. Keith Akers says:

    Dear Gail: some time ago I recall someone (possibly you!) saying that you were writing a book. Is this still in the works, or is what you were going to put in your book now finding its way to your blog instead? If I cite you, it might be easier (depending on the context) to cite a book rather than a blog.

    • You are right–citing a book is easier than a blog. I need to work on a book, but my knowledge keeps growing and conditions keep changing. I am not good at doing two things at once. Hopefully a book will come together sometime.

      In the meantime, I get lots of requests to please use this or that chart in such and such text book. And some articles/books do cite Our Finite World articles with respect to other contents of posts.

  40. Don Stewart says:

    Dear Gail and All
    A few thoughts prompted by The Hill’s Group model and this post by Robert Rapier:

    Rapier takes the position that more shale oil production (and, I suppose, more oil sands production) are good things in terms of economic growth. But Mr. Hill has explained here that neither shale nor tar sands are good sources of net energy, and may be negative.

    It may be that the last few years have seen a bubble in misallocation of assets into tar and shale. If so, money has moved from investors and banks and insurance companies into the hands of the tar and shale industry, which has essentially squandered the money. The money might as well have been spent paying people to dig holes and fill them up again. During a bubble, it is very easy to convince everyone that perpetual motion has been discovered and fortunes are to be made.

    Boone Pickens is saying about the same thing as Rapier.

    Everyone who has worked in a corporation knows that you get what you measure. We measure barrels of oil. Therefore, we get barrels of oil…even when they don’t make any thermodynamic sense.

    If The Hill’s Group model is true, then many things we think we know have to change.

    Don Stewart

  41. edpell says:

    If solar PV is so good have you installed solar PV in your yard to make your electric with batteries to store for nights and cloudy days? If not, why not? You say it is cheap. Have you add liquid fuel making from electric it is a well understand technology. You can use it to power your cars. If not, why not?

  42. So if we run out of easily accessible energy, the economy as we know it stops.
    Fortunately for the long term there is no sign we are running out of energy – the sun will shine for a few billion years.

    The technology of the day makes different forms of energy economical. Hunter gatherers can gather twigs and dead trees. Stone tools let them cut standing trees. Charcoal fires lead to iron and then steel tools. These axes and picks cut down trees and dig up coal which leads to more abundant and cheaper steel, copper and aluminum for wires and generator motors. The steel pipe used for drilling rigs meant wells for agriculture and the discovery of oil and gas reserves.

    Technology keeps advancing and that determines what is economical. You can’t extract “cheap oil” with stone or even basic hand forged steel tools – talk of an oil based economy even in the early 1800s would have seemed like an impossible dream to most. Solar must seem that way to most people today – given the way it’s growing exponentially and its cost is halving every several years, it has to be factored in as a future cheap energy source. I’ve yet to see any credible analysis that we’ll run out of silicon or the sprinkling of rare earths needed to produce solar panes – every price increase in materials seems to have been met with process efficiencies that use less of them.

    Technology is also about efficiency – we start with inefficient use and progress to more efficient uses of energy. Lighting, air conditioning/heat pumps, engines are familiar improvements. Catalysts and biotechnology leading to more efficient energy conversion like producing hydrogen or converting energy into liquid fuels. Need liquid fuel for engines, aviation or chemicals? Oil fuels are economically efficient now, but gas to liquid/coal to liquid can readily substitute, and especially if more efficient processes/catalysts come into play.

    It’s a finite world and a person’s needs are finite – one only needs so much energy in the form of food to live, energy for heating, cooling and refrigeration and energy to move around. This blog seems predicated on oil being the only source of energy and that cheap energy is a requirement for economic activity. At other points in human history, oil would not have been a cheap energy source, it would have been closer to space age technology. We need consistent, predictable sources of energy and if our energy supply is consistent our economy will adapt to it.

    We’re better adapted now with oil substitutes and efficiency. I’m sure the next ten or twenty years will be “interesting” with ups and downs in non-renewable energy, and untapped renewable energy sources and storage, and perhaps nuclear will look more attractive, more stable and ultimately cheaper. In physics, energy is energy.

    • “You can’t extract “cheap oil” with stone or even basic hand forged steel tools – talk of an oil based economy even in the early 1800s would have seemed like an impossible dream to most.”

      That is pretty much what happened; the oil came bubbling out of the ground on its own, they dug the first ones with picks pretty much.

      “This blog seems predicated on oil being the only source of energy and that cheap energy is a requirement for economic activity.”

      No, our current system depends on oil. Any disruption to oil supply leads to catastrophe. Those solar panels are made with vast amounts of oil and coal. The premise is that instead of burning 1 unit of coal/oil per year for 25 years, you burn 10 units today and hopefully get 1 unit per year over 25 years back in energy from solar.

      A big part of the problem is that people want to use electricity on-demand rather than on-supply, so you need to add batteries. So you burn 10 units of coal/oil today to hopefully store the 1 unit per year over the next 25 years. So now you have invested 20 units of energy in one day to provide 25 units of energy over 25 years.

      Since each generation of panels and batteries is new, they have new unknown mean-time between failures.

      “We’re better adapted now with oil substitutes and efficiency. In physics, energy is energy.”

      We’ll see how quickly 7.x Billion people can adapt to producing food 100 times more efficiently.

      • Yep, ever seen the latest large capacity battery modules disected apart? It’s full of fine blackish sheets, very fragile in many respects to last next ~20yrs. In comparison to available machines and biomass I’d not bet my life/hood on such fragile toy. Obviously if money are not problem, one can get decent PV – battery system today as form of luxury “backup” among other great gadget things. But hardly way forward.

  43. moraymint says:

    Terrific stuff as usual Gail. I hope you don’t think I’m being impertinent by sharing with you and your followers my own thoughts on this subject …

    ‘Where’s This Heading?’


    • edpell says:

      I love Nigel Farage, go UKIP. Love his speeches in the EU parliament.

    • Don Stewart says:

      Dear moray mint
      Thanks for the link. I have recently been studying The Hill Group material, so it was fresh in my mind, when I followed a link someone posted about the Greek election. As I was listening to all the earnest political chatter, it occurred to me that the Greeks are not being presented with any realistic choices at all. All realistic choices begin with the fact that the debts will never be repaid, no matter how severe the austerity. If the debts are defaulted, then the rest of Europe will insure that Greece suffers painfully. Nobody is telling them these truths.

      Don Stewart

      • Quitollis says:

        That is life, I am afraid, Don, for individuals and for nations. If you run up debts then you have to pay them back. And if you don’t, then no one lends to you again. That is life. Money doesn’t grow on trees. The lefty Syriza seems to think that everyone else is going to pay their bills for them. It will be entertaining to see this one play out.

      • Well, perhaps the Greeks will have to fall on the altar (chopping block) of “greater good” of the entire European continent, because serious grexit will definitely make likely wider and speedier reshuffle inside EU/EUR zone. In response the richest most powerfull northern block (Finland, Germany, Austria, Netherlands, ..) would circle the wagons, consider forming hard euro block immediately and leaving the rest in the abyss, this could even bring about regional chaos like northern italy wanting to join them separetly etc. Obviously in next step EU bureaucracy would not survive it in current highly centralized form either. Another sub-option is falling back onto national currencies again, which has been leaked as official working “B” scenario already during that 2011-12 euro crises..

        For most Europeans this is win win.. bring it on please..
        And Americans will get few more years of can kicking “calm before the storm” out of it as well..

        In terms of the debt, pls. look at it in context, Greece has been proped up by western money for centuries, against Ottoman later Turks, then not to get too close with theo Soviets/Russia etc. Lately, it was mostly german influence which pushed those stupid multibillion loans for tanks and submarines on the credit, the greeks on the street didn’t ask for it, could walk away from those debt schemes as they should. Syriza is certainly not a radical party they are right from communists and anarchists.

    • Thanks! Interesting post.

      I have been using Angus Maddison’s spreadsheets of GDP per capita from Year 1 onward, but I hadn’t run across the statement you made:

      The renowned economic historian Angus Maddison – a world scholar on quantitative macroeconomic history, including the measurement and analysis of economic growth and development – estimates that up until the 19th century a doubling of economic wellbeing per capita only occurred every 3,000 to 4,000 years. However, from around 1820 onwards this doubling of economic wellbeing accelerated at warp speed to every 50 years or so. Since the 1950s the doubling of our economic wellbeing further accelerated to a rate of every 30 years: that is over 100 times faster than during the millennia prior to the discovery of fossil fuels and the industrial revolution that fossil fuel energy facilitated.

      Can you tell me where you get the statement “up until the 19th century a doubling of economic wellbeing per capita only occurred every 3,000 to 4,000 years”? I hadn’t run across it before. Is it from a web site, or from one of his books? Or is it calculated based on the implied growth rate from Year 1 to 1820–something I can calculate myself?

  44. Don Stewart says:

    Dear Gail and All
    George Mobus has an interesting post:

    Some interesting comments, also….Don Stewart
    PS I’ll answer my own question to George.

    If all of us, or a group of us, or a tribe of us, or a family of us, or an individual, hope to build a decent life in the world that is around the corner, then we need to be thinking in terms of Systems. One of the great assets of the Mobus and Kalton book is that it seamlessly integrates biology, brains, bodies, machines, computers, and communications. With energy flows animating everything. I can’t think of a better discipline for ‘retro thinking’ than studying the M&K textbook.

    • Thanks! I did buy a copy of the M&K textbook. I think I see some inner workings of the system that Mobus and Kalton don’t, so I come to somewhat different conclusions.

  45. Very good on the ground analysis of the Greek situation and possible after election EU wide outcome made just few hours before the election. The author even mentioned “deep state” remnants of the cold war, i.e. code word for potential of NATO sponsored coup again. Mind you, this is from mainstream western media channel, perhaps the greek situation is not that trivial impactwise matter afterall, amazing. Watch the video inside as well.

  46. Don Stewart says:

    Dear Mr. Hill
    I have been rereading your work very carefully. I find these words:

    ‘by the early 2020’s an increased use of petroleum will no longer add to GDP. It will become more cost effective for society to begin limiting its use of petroleum as the use of petroleum transitions from a GDP enhancer to a GDP reducer.’

    Separately, you estimate that Light Tight Oil is either a break-even or negative in terms of energy production.

    Let’s explore the ‘limiting its use of petroleum’ scenario for a little while. Suppose that we, as a society, succeeded in reducing the petroleum content of some activity. For example, the resurrection of car-pools rather than everyone using a single occupancy car.

    It seems to me that the result of the car-pool scenario is good for society, but bad for GDP. GDP is increased when consumption increases…regardless of whether the consumption was sane or insane. As GDP decreases, the ability of people and governments and corporations to repay debt declines. So it seems that the sane behavior which will be forced upon us by 2020 will also result in bankruptcies, given our high degree of leverage. On the other hand, if we use monetary or legislative or military tricks to keep forcing up oil consumption, we will steadily lose more money and end up in the same bankruptcies. War with Russia is not a solution.

    Do I have this figured out correctly?

    Thanks…Don Stewart

    • edpell says:

      I’m getting into this internalizing costs. Car pooling internalizes cost. Of course, bankers, politicians, corporations are parasites that live off of externalized costs. It is a question of which class will benefits and which looses.

  47. Pingback: A new theory of energy and the economy – Part 1 – Generating economic growth |

  48. Don Stewart says:

    Dear Gail and All

    This relates somewhat to The Hill Group model and the notion of placing a cost on the society which produces gasoline at the pump.

    ‘No society has the money to buy, at market prices, what it takes to raise children, make a neighborhood safe, care for the elderly, make democracy work or address systemic injustices. Instead, such work is (co)produced in domestic and social arenas of life, with different organisational structures and criteria’

    I observe that fossil fuels have given a significant number of Americans the financial clout to TRY to buy those very things. And the high cost of the society which is required to produce a gallon of gasoline which the The Hill Group calculates is partly a function of our attempt to substitute markets for the ‘domestic and social arenas of life’. I argue that one effect of the decline of fossil fuels is that only those who are able to reformulate the ‘domestic and social arenas of life’ will likely survive.

    Dmitry Orlov recently commented on the social and domestic cohesion of the hispanic community where he lives in Boston.

    Don Stewart

  49. Jay Kolin says:

    Hi Gail, I always look forward to your articles. There seems to be a lot of turmoil now in the currency markets. Do you have any insight on this?

    • With the US not doing QE and other countries doing QE, the tendency is for the US dollar to rise and other currencies to fall in value. Other countries in fact like this effect–it is easier to sell their exports. But it makes it defaults on dollar-denominated debt more likely, and it makes it very hard for US companies to sell their products abroad. Emerging markets are especially affected, with less investment likely because of the falling currencies. This all plays into the financial market collapse that I see as pretty much inevitable, in the not too distant future.

      I am not sure I have enough to say on this topic to write an article about right now, but thanks for the idea.

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